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INDEPENDENT HEARING OFFICER APPENDIX B IHO MARCH 12,2003 ORDER
In the Matter of James McGough v. Terry Bohne, Juan Hernandez, Reggie Robinson, Chuck Auriemma, Rufus Chapman, Martin Gonzales, Yahn Mann, Richard Caravetta, Ramon Zarate, Leonard White, Alonzo Wimberly, Chris Maxwell, Dave Buccini Local Union 2, Brookfield, IL Laborers' International Union of North America Independent Hearing Officer Docket No.: 03-04TB Decided: March 12, 2003 ORDER AND MEMORANDUM PROCEDURAL HISTORY This Order and Memorandum addresses whether James McGough, the Charging Party, has demonstrated good cause why certain trial board charges should not be dismissed for failure to file them within 90 days, as required by Article XII, Section 1 of the Uniform Local Union Constitution (Constitution). James McGough originally filed omnibus charges against current and former members of the Executive Board of Laborers' International Union of North America (LIUNA) Local Union 2 (Local 2) with General Executive Board (GEB) Attorney Luskin in May 2002. The charges were subsequently amended and refiled on November 12, 2002. The General President referred the charges to the Independent Hearing Officer (IHO) for a trial board hearing because the Charged Parties were disqualified to serve on the Trial Board. See letter from Terence M. O'Sullivan, General President, to Peter F. Vaira, Independent Hearing Officer, of 1/24/03 (IHO Dkt. tab 2). The IHO ruled that McGough's trial board charges did not meet the specificity requirements of the Labor Management Reporting and Disclosure Act (LMRDA) for disciplinary charges filed against a union member. See IHO Order of January 30, 2003 (IHO Dkt. tab 3). Given the number of charges involved, on February 13, 2003, the IHO held a pretrial hearing for demonstration of probable cause for the 100 charges filed. At the hearing, the IHO reviewed each charge with McGough for sufficient particularity and probable cause. The Charged Parties were permitted to attend the hearing and make arguments regarding McGough's probable cause presentation. The IHO dismissed all charges against all parties except for Charges 2, 3, 9-12, 32, 40, 49-51, 78, and 86. See IHO Order of February 25, 2003 (IHO Dkt. tab 6). 2 In the Matter of James McGough v. Terry Bohne, et al. 2003 On March 6, 2003, the IHO held a hearing in which McGough was given the opportunity to demonstrate to the IHO why Charges 2, 3, 9-12, 32, 40, 4951, 78, and 86 should not be dismissed as time-barred pursuant to Article XII, Section 1, of the Uniform Local Union Constitution. The Charged Parties were permitted to attend the hearing and make arguments regarding McGough's presentation of good cause. DISCUSSION
The LIUNA 2001 International Convention amended Article XII, Section 1 of the Constitution as follows:
The IHO has previously addressed the application of the amendment in In the Matter of Rex Eaton v. Richard Yost, IHO Order and Memorandum, 02-07TB (August 21, 2002). At the hearing on March 6, 2003, McGough averred that he first had knowledge` or reason to know of certain alleged fiscal improprieties after the outside auditor's report given to the membership in March or April 2002. Therefore such related charges were timely filed as they were filed within 90 days of the date when McGough could have had knowledge of the alleged incident. McGough also averred that with regard to other allegations, he reported the incidents to the Inspector General or the GEB Attorney and he was instructed to not file trial board charges regarding the Local 2 Executive Board during the then ongoing investigation„ of former officers Terry Bohne, Reggie Robinson, and Richard Caravetta. Such related charges were also timely filed as McGough had just cause for not bringing the charges within 90 days of the alleged incidents. Charges Against Auditors McGough presented several charges against the auditors of Local 2. These charges present a problem of constitutional interpretation. Article IV, Section 4, G of the Constitution states as follows: 3 In the Matter of James McGough v. Terry Bohne, et al. 2003
In this matter, the Local Union has consistently employed an outside certified public accountant for at least the past ten years. Thus, the auditors are relieved of their duties by the Constitution. McGough contends that notwithstanding the foregoing constitutional provisions, because the auditors were receiving $200 per month, they should have been required to perform some audit services, and should have caught the improprieties alleged by McGough, otherwise they were holding no-show jobs. There is little guidance on the role of the auditors in the policy statements of the LIUNA General Presidents, nor are there any decisions on the subject by the GEB Hearings Panels. The position of auditor is an anachronism of LIUNA, adopted into the Constitution when the local unions operated as fraternal brotherhoods, with little or no professional outside assistance. The evolution of the labor movement and the passage of the Labor Management Reporting and Disclosure Act effectively rendered the auditor position far different than originally intended. Although it appears that funding a position which has no power or duties is not a good use of funds, the IHO holds that auditors are not required to perform any functions once the local has retained a certified public accountant. Hence, the auditors cannot be faulted for not discovering the items listed in this charge. Page 4 is being rescanned and will be added later. 5 In the Matter of James McGough v. Terry Bohne, et al. 2003
Charge 10: Caused an employee to become indebted in excess of $2000 as prohibited by Sec 503 of LMRDA. (see outside auditor's report for 2001) and LM-2 for 2001.
Charge 11: Allowed Reggie Robinson to use his union credit cards for personal business. See $400 cash advance on union credit card on Christmas eve at 8p.m. at Marshall Fields.
Charge 12: Attacked John Burke while speaking at a union meeting. Ramon Zarate had to be physically restrained from physically attacking John Burke at the November 2001 union meeting.
Charge 32: Did not require the auditors to perform their duties and facilitated "no show jobs". The auditors of Local 2, (Wimberly, Maxwell, and Buccini) each received $200/mo and made no attempts to audit from March 2001 through March 2002 in dereliction of their duties to detect financial fraud and unauthorized loans.
6 In the Matter of James McGough v. Terry Bohne, et al. 2003
Charge 40: Failed to notify suspended members of delinquency of their dues prior to their suspension and failed to notify of suspensions when made as required by the Local 2 Wendell Hawkins' decision. IHO Ruling: Charge is dismissed as to all parties for failure to state an offense. Conduct complained of in Charge 40 is in compliance with current LIUNA policy. The Local Union has no duty to notify a member that he or she is suspended for failure to pay dues on time. The individual member is required to keep informed as to his or her status, and to insure that dues are paid on time. The decision of In the Matter of Local 2 (Wendell Hawkins), IHO Order and Memorandum, 01-02P (February 23, 2001) does not require the member to be notified of his or her suspension. Charge 49: Increasing salaries unconstitutionally without the required approval of members at two consecutive meetings. The year-end bonus of 10% constitutes a salary increase and it was not voted on at two consecutive meetings as required by LLUC, Article X, Section 6. IHO Ruling: Charge stands as to Chapman and Gonzales. Charge dismissed to all other parties. McGough is directed to file a statement of full disclosure on the specifics of this charge. The statement should include the date of the two increased salaries in 2001, proof that the increases were not voted upon as required by the Constitution, and how Chapman and Gonzales were involved in the approval of these increases. Charge 50: Increased salaries more than once in one fiscal year. IHO Ruling: Charge stands as to Chapman and Gonzales only. Charge dismissed to all other parties. McGough is directed to file a statement of full disclosure on the specifics of this charge. The statement required for Charge 49 may also incorporate this Charge. Charge 51: Increased salaries without amending the bylaws that prohibited a salary increase before March 2002.(See Local 2 bylaws) 7 In the Matter of James McGough v. Terry Bohne, et al. 2003 IHO Ruling: Charge stands as to Chapman, Gonzales, and Hernandez only. Charge dismissed to all other parties. McGough is directed to file a statement of full disclosure on the specifics of this charge. The statement should include the date the salaries were increased, whose salaries were increased, what Local 2 by-law prohibited the increase, and what role Chapman, Gonzales, and Hernandez played in the salary increases. Charge 78: Deprived member McGough to his full share in Union self-government and attempted to extort late payment fee from McGough for unfair and malicious suspension. IHO Ruling: Charge stands as to Chapman, Gonzales, and Hernandez. Charge dismissed to all other parties. McGough may present evidence relating to this charge limited to the circumstances surrounding the July 21, 2001 meeting. Local 2 is directed to give McGough access to the Executive Board and General Membership meeting minutes for July 2001. Charge 86: Failed to obtain competitive bids on major expenses and did not inform Local 2 members whenever they sought the approval of LIUNA's Inspector General for expenditures. IHO Ruling: The portion of the charge regarding failure to submit competitive bids stands only as to Chapman and Gonzales. All other parties are dismissed as to that portion of the charge. The remaining allegation pertaining to failure to inform the membership of consultation with the Inspector General is dismissed as to all parties. This charge is limited to the remodeling of the Local 2 union hall in 2001. The allegations made by McGough relating to the purchase of jackets and the Christmas party are not subjects of this count and are hereby dismissed. CONCLUSIONS 1. Charges 2, 3, 10, 49, 50, 51, and 86 stand as to Chapman and Gonzales only and are dismissed against all other parties. Charges 9 and 78 stand as to Chapman, Gonzales, and Hernandez only and are dismissed against all other parties. Charge 12 stands as to Zarate only and is dismissed against all other parties. 2. Charge 40 is dismissed in its entirety as to all parties. 3. Charges 8, 11, and 32 against the auditors are dismissed in their entirety. 8 In the Matter of James McGough v. Terry Bohne, et al. 2003 DECISION Charges 2, 3, 9, 10, 12, 49, 50, 51, 78, 86 stand. Charges 8, 11, 32, and 40 are dismissed. McGough is directed to file his statement of full disclosure with the IHO and Chapman, Gonzales, Hernandez, and Zarate by April 15, 2003. The hearing on the merits of the charges against Chapman, Gonzales, Hernandez, and Zarate is scheduled for May 1, 2003. The Supervisor for Local 2 is requested to permit McGough to examine the Executive Board and General Membership meeting minutes for July 2001. The Supervisor for Local 2 is requested to submit to the IHO the following documents: the outside auditor report for the year-end audit 2001; the Executive Board and General Membership meeting minutes for July 2001, November 2001, December 2001, March 2002, and April 2002. This is not a final Order, and is not appealable to the Appellate officer. Appellate rights do not arise until a final order on all charges is issued by the IHO.
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