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1 2 -----------------------------------X 3 In the Matter of 4 The Trusteeship Proceeding
Of Local Union 1001 6 Docket Number 03-21T 7 -----------------------------------X 8
Hilton Palmer House 11 November 12, 2003
9:00 AM 13 14 15 B e f o r e: 16 PETER F. VAIRA, ESQ. 19 INDEPENDENT HEARING OFFICER. 20 21 22 23 24 25 2
1 APPEARANCES: 2 Messrs. THOMAS & ASSOCIATES 6 By: ROBERT M. THOMAS, JR., Esq., of Counsel 7 10 BY: MATTHIAS A. LYDON, Esq., of Counsel 12 Messrs. FARACI & FARACI 15 BY: PETER S. FARACI, Esq., of Counsel 16 17 PRESENT: 18 KATHLEEN M. NAGLE, Esq., Messrs. Vaira & Riley 19 20 21 22 23 24 25 3
1 THE INDEPENDENT HEARING OFFICER: Mr. 2 O'Rourke, you may take the stand here again. 3 THE WITNESS: Yes, sir. Thank you. 5 previously called as a witness on behalf of the 6 Petitioner, having been duly sworn, was examined and 7 testified as follows: 8 FURTHER DIRECT EXAMINATION 9 BY 10 MR. THOMAS: 11 Q. Good morning, Mr. O'Rourke. 12 A. Good morning, sir. 13 Q. Yesterday before we -- yesterday before we 14 interrupted your testimony we had covered your 15 background and qualifications and some history of 16 organized crime in Chicago, some of your prior 17 testimony in the Chicago District Council case and the 18 Bruno Caruso case, and then we talked at length about 19 the seven informants whose information is relevant 20 here. 21 So with that as background I want to pick up 22 where we left off and ask you on a name by name basis 23 to relate to us what the informants have told you about 24 specific individuals who have either officer positions 25 or some history with Local 1001. 4
1 So starting -- I think we started to touch on 2 Nick Gironda, the current Business Manager. And I 3 doubt any of us can remember the specifics of what you 4 started to say there, so why don't we start at the 5 beginning with Mr. Gironda. 6 How many of the seven informants had 7 something to say about Mr. Gironda? 8 A. Six. 9 Q. Okay. And which were they? 10 A. Informant Number 2, Informant Number 5, and 11 Informant Number 12, Joe Granata, Robert Cooley, and 12 Guy Bills. 13 Q. And what would be easiest for you in terms of 14 how to summarize that information, on a name by name 15 basis or simply summarizing the collective data. 16 A. Probably the collective data. 17 Q. Why don't you go ahead and tell us what 18 you've learned from these six people. 19 A. The six people all independently advised me 20 that they knew Nick Gironda, that he was a relative, 21 they believe a cousin of Bruno Caruso and Frank Caruso 22 and of the Roti, R-o-t-i, family and 26th Street. That 23 they knew that he had been involved as a Chicago -- LCN 24 associate. That he was brought into the Union and 25 given a paid job by Bruno Caruso, and that he was a 5
1 close friend and obviously relative of Bruno Caruso. 2 And when Caruso was ousted from the Union, that he was 3 the heir apparent to continue the influence of 26th 4 Street Chinatown in the Union. 5 Q. When you say 26th Street Chinatown, you mean 6 that crew? 7 A. That crew, yes, sir. 8 Q. Now in the Trusteeship complaint there's 9 reference to Mr. Gironda having served as a bagman, 10 accepting cash payments for jobs on behalf of Frank 11 "Tootsie Babe" Caruso and for Bruno Caruso and also 12 reference to his being investigated as part of a City 13 of Chicago no-show job investigation. Do your 14 informants have anything to say concerning those 15 matters? 16 A. Yes. Informants 2 and 5 indicated that they 17 knew Gironda from the old days and that he used to be 18 the individual who would collect money for jobs. If 19 you want to get a job in Streets and San and get into 20 the Union, then you had to pay money, and that it was 21 collected normally by Gironda and then delivered to the 22 Carusos. 23 Q. And concerning the City of Chicago no-show 24 job investigation, do you have any information on that? 25 A. Yes. The records reflected that Mr. Gironda 6
1 had been involved in a scandal in the City of Chicago 2 no-show jobs case. I don't have all the details of it. 3 I don't recall it now. But it was documented in the 4 record. And that he was in a non-paying position with 5 the Union at that time. And after he was suspended he 6 was brought in by Bruno Caruso and given a paying job. 7 Q. Suspended from his job with the City of 8 Chicago? 9 A. That's my understanding, yes, sir. 10 THE INDEPENDENT HEARING OFFICER: I want to 11 direct your attention to -- everybody here to the 12 opinion -- my opinion in the Bruno Caruso case. And as 13 it's referenced to that it was quite a bit of 14 discussion between me and all the lawyers about the 15 meaning of that, and there was an Inspector General's 16 investigation -- Inspector General of the City of 17 Chicago, and had to do with Nick Gironda and one of the 18 Carusos, not Bruno, I think put on a no-show -- I mean 19 put on no pay while they investigated no-show job. The 20 details are there. So if you want to read that, it's 21 in that opinion. It's coming back now. And I will 22 direct you to it. 23 MR. THOMAS: And that is in the record and I 24 don't plan on going into any further depth with Mr. 25 O'Rourke. 7
1 BY MR. THOMAS: 2 Q. All right. Anything else on Mr. Gironda, Mr. 3 O'Rourke, before we move on? 4 A. No, sir. 5 THE INDEPENDENT HEARING OFFICER: What's the 6 "old days"? 7 THE WITNESS: Before he was the Business 8 Manager in the 90's. 9 THE INDEPENDENT HEARING OFFICER: And your 10 informants, how did they deal with him? How do they 11 know this? 12 THE WITNESS: They know it from personal 13 experience and from talking with other members of 14 organized crime familiar with people in the 26th 15 Chinatown Crew. And according to the informants it was 16 common knowledge and discussed. 17 BY MR. THOMAS: 18 Q. What you just did, Mr. O'Rourke, is helpful. 19 And that is to the extent that you can specify where 20 information comes from, one of the particular sources 21 that obviously is helpful to all of us. 22 A. Yes, sir. 23 Q. Clearly you can't do that in every instance. 24 Moving on then to Mr. DeChristopher, the 25 current Secretary-Treasurer. Do any of the seven 8
1 informants, have any of them relayed any information to 2 you concerning Mr. DeChristopher? 3 A. Yes, sir. 4 Q. Which ones? 5 A. Informants Number 2, 5, 12, and 17. 6 Q. And what information, if any, have they 7 related to you? 8 A. They've indicated that Sam DeChristopher was 9 very close with Bruno Caruso and Frank Caruso and that 10 he was put into the position through their influence, 11 and that he was associated with not only the 26th 12 Street Chinatown Crew, but the North Side Crew as well. 13 That he was not an active participant in organized 14 crime activities but was -- according to the informants 15 would do favors and follow their directions and ensure 16 that things ran smoothly at the Union, help out 17 individuals who needed help on instructions of 18 organized crime, individuals such as Caruso. 19 Q. Now the North Side Crew, is that the same as 20 the Elmwood Park Crew? 21 A. Yes, sir. 22 Q. So the Trusteeship complaint references the 23 Elmwood Park Crew. That's the same thing as the North 24 Side Crew that you mentioned? 25 A. Yes, sir, that's correct. 9
1 Q. Robert Chianelli is the incumbent Recording 2 Secretary, if my information is correct. Do your 3 informants say anything about Mr. Chianelli? 4 A. Yes, sir. 5 Q. Which ones? 6 A. Informants 2, 5, and 12. 7 Q. And what information, if any, have they 8 related to you? 9 A. They indicated that they recognized Mr. 10 Chianelli. One informant, Number 5, referred to him as 11 "Bobby Chi". They said that he, in their opinion, was 12 an organized crime associate and had done favors for 13 organized crime and knew a lot of people, was 14 connected. 15 Q. Floyd Grogan is the current Vice President of 16 Local 1001. Have any of your informants said anything 17 about Mr. Grogan? 18 A. None of them knew Mr. Grogan except one who 19 said that -- Informant Number 5, who said that he 20 thought Mr. Grogan was friendly with the mobsters in 21 the Grand Avenue Crew, Joey Lombardo, Jr., a man named 22 Jimmy Martin, and another individual by the name of Sam 23 Cozzo. But they could provide no specific information 24 other than that. 25 THE INDEPENDENT HEARING OFFICER: That's the 10
1 extent of your information on that? 2 THE WITNESS: Yes. 3 BY MR. THOMAS: 4 Q. Victor Roa is a current member of the 5 Executive Board. Do any of your informants have any 6 information on Victor Roa? 7 A. Yes, sir. Informants Number 2, 5, and 12 all 8 indicated that they knew Mr. Victor Roa and that they 9 considered him part of the 26th Street Chinatown Crew 10 as an associate, and that he was again very close with 11 the Carusos and a number of other individuals from that 12 neighborhood. He formerly lived in the neighborhood. 13 MR. THOMAS: Now, Mr. Vaira, at this point 14 I'm going to shift from the current group of officers 15 to the list of names of people on whose behalf Pension 16 and Welfare contributions were made. And we won't 17 necessarily go exactly in this order, but those names 18 are listed on Exhibit Number 7 in your book. 19 THE INDEPENDENT HEARING OFFICER: Let me just 20 go back to -- now you inquired of your group of 21 informants and cooperating individuals. How recently 22 -- I think you testified earlier that it was in October 23 that you -- not visited but talked to them? 24 THE WITNESS: October and November, yes, sir. 25 THE INDEPENDENT HEARING OFFICER: Okay. And 11
1 what was the form of your question? What did you ask 2 them? 3 THE WITNESS: I asked them -- I presented 4 them with the names of the officers and then the list 5 of 33 people. And I went down the list and mentioned 6 each name and spelled it, and would indicate the 7 approximate location of the person's address and their 8 age, and asked them if that name meant anything to 9 them, if they knew that person. 10 THE INDEPENDENT HEARING OFFICER: And your 11 responses were, as you related to us, that they said 12 that they were -- as you've described earlier, the term 13 I've used as a layman is "connected". 14 THE WITNESS: Yes, sir. They'll say he's a 15 "connected guy" or "he knows a lot of people" or "he's 16 with those people". If they knew. A lot of them they 17 didn't know. Quite a few. Willie Bates they didn't 18 know. Gibson they didn't know. Quite a few they did 19 not know and they would say that. In some cases they 20 said the name sounded familiar, but they would need a 21 photograph. And so I didn't go any further than that 22 because we didn't have photographs. 23 THE INDEPENDENT HEARING OFFICER: Go ahead. 24 MR. THOMAS: All right. Mr. Vaira, I ask 25 that we all turn to Exhibit 7, which would help to 12
1 follow the names that I'm going to ask him about. 2 BY MR. THOMAS: 3 Q. All right. Let's start, Mr. O'Rourke, with 4 Bernard Spano who appears -- he's the third to last 5 entry on the second page of Exhibit 7. 6 What do you know -- before we talk about the 7 informants, what do you know about Mr. Spano, if 8 anything? 9 A. Bernard Spano was a member of Local 1001 for 10 many years and he was -- I can't recall his exact 11 position now. He had throat cancer and he committed 12 suicide after he had left and retired from the Union. 13 His brother, who is Michael Spano, Michael 14 Spano was a long time member of the Cicero Crew under 15 Joe Ferriola and Rocky Infelise, the two most recent 16 bosses. Mike Spano then became in effect a lieutenant 17 running Cicero. And he was the subject of this 18 indictment, which got a lot of press here in Chicago, 19 of corruption in Cicero where they involved the Mayor 20 of Cicero and several other individuals. They were all 21 tried and convicted in Federal Court. Michael Spano. 22 THE INDEPENDENT HEARING OFFICER: Including 23 Spano? 24 THE WITNESS: Yes, including Spano. He's now 25 in prison. 13
1 His other brother was Paul Spano. Paul Spano 2 was Grand Flash Cartage which was the -- in effect the 3 headquarters of the Mob in Cicero, and Paul Spano was 4 closely involved with Joe Ferriola and Rocky Infelise. 5 I believe he is now living in Florida. 6 And there was another brother who was 7 involved in the Projectioner's Union. And according to 8 the informants -- and that would be 2, 4, 12, 17, Joe 9 Granata. All indicated that they knew Bernard Spano is 10 an organized crime associate affiliated with the Cicero 11 Crew along with his brothers, but he was the individual 12 in the Union. 13 MR. THOMAS: For the record, Mr. Vaira, the 14 Union's records, as reflected on Exhibit 1, indicate 15 that Mr. Bernard Spano was an Auditor for Local 1001 16 from 1987 to 1999, approximately 12 years. 17 BY MR. THOMAS: 18 Q. All right. Anything else on Mr. Spano? I 19 think you said 2, 5, 12, 17 and Granata? 20 A. Yes, sir. 21 Q. Anything else on Mr. Spano? 22 A. No. 23 Q. Sam Caifa? 24 A. Yes, sir. 25 Q. C-a-i-a-f-a, if I'm not mistaken. 14
1 MR. LYDON: Wait a minute. 2 MR. THOMAS: It's C-a-i-f-a according to the 3 chart. That may be the correct spelling. 4 BY MR. THOMAS: 5 Q. And according to the Union's records he was 6 an E Board member from 1984 to 1992, is that your 7 understanding? 8 A. Yes, sir. 9 Q. Which of the informants had anything to say 10 about Mr. Caifa? 11 A. Informants 2, 5, 12, 17, and Joe Granata all 12 indicated they knew Sam Caifa very well. His nickname 13 was "Chink" Caifa. He resides in the Taylor Street 14 neighborhood near Taylor and Laflin. And one of the 15 informants -- two of the informants, 5 and 17, 16 indicated he often hung out or frequented a place 17 called Chicago Auto Sales -- Chicago Credit Auto Sales 18 located on the 1100 block of South Western Avenue where 19 he sometimes played cards with Joey Lombardo and other 20 old time mobsters. And it was also alleged that he ran 21 a small Italian social club someplace in the same 22 general vicinity which was frequented by bookmakers and 23 mobsters, old timers. That he was a Chicago Outfit 24 associate for many years. 25 Q. Anthony Caliva, C-a-l-i-v-a. And was Mr. 15
1 Caliva a member or an officer -- actually I can help 2 you out with the chart here. 3 According to the records he was the Vice 4 President from 1970 to 1982. Does that sound correct? 5 A. Yes, sir, I believe that's correct. I 6 believe he's deceased. 7 Q. All right. And what if anything have your 8 informants told you about Anthony Caliva? 9 A. Informant Number 5 and Joey Granata indicated 10 they knew Tony Caliva when he was alive, and that he 11 was known to them as a Chicago Outfit associate. 12 Q. We'll come back at the end to the names that 13 your informants don't know anything about. I just want 14 to make sure we get that on the record. 15 But sticking for the moment to the names that 16 your informants have something to say about. Briatta 17 -- there's three Briattas, B-r-i-a-t-t-a, Joseph, 18 Louis, and Michael Briatta. These were all members of 19 1001. What if anything did your informants relate to 20 you concerning these individuals? 21 MR. LYDON: I mean you're looking at three. 22 We're lumping three together. 23 BY MR. THOMAS: 24 Q. We'll do one at a time. Okay. Joseph 25 Briatta. 16
1 A. Joseph Briatta is also now deceased. 2 Informants Number 2, 5, and 12 indicated that they knew 3 him. He was from the Taylor Street neighborhood. He 4 was part of the Briatta family. And they were well 5 known in the area as organized crime associates for 6 many years. 7 Q. And how about Louis Briatta? 8 A. Louis Briatta, Informants 2, 5, and 12 knew 9 Louis Briatta. They called him "Louie the Barber". He 10 ran a barber shop, I believe, on Polk and Aberdeen, and 11 it was a hangout for mobsters -- old time mobsters for 12 many years. And I believe his daughter married Mayor 13 Daley's brother. 14 Q. Michael Briatta, Sr.? 15 A. Michael Briatta, Informants Number 2, 5, and 16 12 all indicated he was again part of the Briatta clan, 17 if you will, and that he was known to be an organized 18 crime associate. 19 Q. I know I'm going to mispronounce this name. 20 Neil Cacciottolo, former member of the Executive Board. 21 What if anything did your informants tell you about Mr. 22 Cacciottolo? C-a-c-c-i-o-t-t-o-l-o. 23 A. Yes. Informants Number 5 and 17 indicated 24 they knew Neil Cacciottolo to be an organized crime 25 associate. He's also an old timer, and I believe he's 17
1 dead now. 2 Q. Another deceased member is -- listed on the 3 list is Fred Colasanti, C-o-l-a-s-a-n-t-i. 4 A. Yes. 5 Q. Did your informants relate anything to you 6 concerning him? 7 A. Informant Number 5 and Joey Granata knew Fred 8 Colasanti, recalled him, and said he was an organized 9 crime associate, and the others did not. 10 Q. There are two people with this last name. 11 Ronald Crivellone and Thomas Crivellone, 12 C-r-i-v-e-l-l-o-n-e. Did your informants have anything 13 to say about either of those gentlemen. 14 A. Yes. Starting with Thomas Crivellone, who is 15 now deceased, Informants Number 2, 5, 12 and Joey 16 Granata recalled him as being an organized crime 17 member. He was the individual who was up for the job 18 and instead was aced out, if you will, by Joseph 19 Spingola on orders of Tony Accardo and Jackie Cerone. 20 And that was attested to by Joey Granata and testified 21 to in the other hearing. 22 THE INDEPENDENT HEARING OFFICER: That's a 23 couple of years ago here. 24 THE WITNESS: Yes, sir. But that's who he 25 is. He's now dead. And they indicated he was an 18
1 organized crime individual. Ronald Crivellone is a 2 relative of his. Some indicated it was his son. I'm 3 not sure about that. But Informants 2, 5, 12 and 17 4 all stated that they also knew him and that he was also 5 an organized crime associate. 6 BY MR. THOMAS: 7 Q. Thank you. 8 THE INDEPENDENT HEARING OFFICER: These 9 individuals that you have here, they all come from -- 10 it seems they all come from the same neighborhood 11 around Taylor Street. 12 THE WITNESS: Not all of them do. 13 THE INDEPENDENT HEARING OFFICER: Not all of 14 them do. Okay. 15 THE WITNESS: Many of them do, but not all of 16 them. 17 BY MR. THOMAS: 18 Q. All right. Daniel DeLuca, D-e-L-u-c-a? 19 A. Yes. 20 Q. Is deceased. Former Auditor and E Board 21 member; is that right? 22 A. Yes, correct. 23 Q. What if anything have your informants said to 24 you about him? 25 A. Informant Number 5 was the only informant 19
1 that knew him, and he recalled him. He said he's 2 deceased. He's an old timer and he was known to that 3 Informant Number 5 as an organized crime associate. 4 Q. Alexander Maggi, M-a-g-g-i, also deceased, 5 and former E Board member? 6 A. Yes. 7 Q. What if anything did your informants say? 8 A. Informant Number 5 and Joey Granata recalled 9 Alexander Maggi, who is deceased. Indicated he was an 10 old timer and he was an organized crime associate known 11 to them. 12 Q. Frank Roti, Jr. -- the Frank Roti that's 13 listed on the color coded chart which is Exhibit 7, is 14 that the person you know as Frank Roti, Jr.? 15 A. Yes, sir. 16 Q. What relation is he or was he to the Alderman 17 Frank Roti? 18 MR. LYDON: There is no Alderman Frank Roti. 19 BY MR. THOMAS: 20 Q. Fred Roti? 21 A. Fred Roti, yes. He was a relative of Fred 22 Roti. I believe he was a cousin of Fred Roti, and he's 23 part of the Roti family from 26th Street. And the 24 Informants Number 2, 5, 12, 17, Joey Granata and Guy 25 Bills all knew him and identified him as a member of 20
1 the Chicago organized crime for many years along with 2 his other family members, including the Carusos and so 3 on. 4 Q. And he was a member of the E Board at Local 5 1001? 6 A. Yes, sir. 7 Q. According to the chart, Pension contributions 8 were made on his behalf from 1982 to 1998. 9 THE INDEPENDENT HEARING OFFICER: A question 10 about Guy Bills. Guy Bills has been dead about two 11 years. 12 THE WITNESS: Yes, sir. 13 THE INDEPENDENT HEARING OFFICER: When did 14 you speak to Guy Bills about Frank Roti? 15 THE WITNESS: Right before he died. About a 16 week before he died I spoke with him. But I had 17 debriefed him extensively about all these people at the 18 time. There's a report to that fact. 19 THE INDEPENDENT HEARING OFFICER: Any 20 particular reason why you would be asking Guy Bills 21 about Roti who is -- 22 THE WITNESS: Yes, sir. At the time -- I 23 went back and reviewed it. At the time we had a 24 listing of all of the current and past officers and E 25 Board members, Auditors of Local 1001. So we went 21
1 through each one of them with Guy Bills as we started 2 our investigation back in 1996. And then repeatedly 3 thereafter I would go back over the list with him. And 4 at that time he identified Frank Roti, Jr., to be a 5 member of organized crime known to him. And he was 6 from the 26th Street Chinatown neighborhood and had 7 been part of that crew. So this -- that information is 8 old, but it follows along with what the other 9 informants have indicated. 10 BY MR. THOMAS: 11 Q. Next name is Michael Spignola? 12 THE INDEPENDENT HEARING OFFICER: I think 13 there's a problem. There's a misspelling. I think 14 it's S-p-i-n-g-o-l-a. I think it's Spingola. 15 MR. THOMAS: Then they're reversed on the 16 charts. 17 THE INDEPENDENT HEARING OFFICER: The rest of 18 the charts it's spelled. There's a history on the 19 front of who served what time and it's spelled 20 correctly there. 21 BY MR. THOMAS: 22 Q. And according to the -- 23 THE INDEPENDENT HEARING OFFICER: Take a look 24 at the first chart that the GEB has put. He has a 25 history of the officers. And yes, it's the -- 22
1 MR. THOMAS: It has it as N-G, Spingola. 2 THE INDEPENDENT HEARING OFFICER: That's what 3 it is. 4 MR. THOMAS: So both Exhibit 1 as well as 5 Exhibit 7 is S-p-i-n-g-o-l-a? 6 THE INDEPENDENT HEARING OFFICER: Yeah, 7 Spingola. 8 BY MR. THOMAS: 9 Q. O'Rourke, Mr. Michael Spingola was Recording 10 Secretary to the Union from '72 to '82, is that your 11 information? 12 A. Yes, sir. 13 Q. What if anything did the informants tell you 14 about Michael Spingola? 15 A. Michael Spingola was the son of Joseph 16 Spingola who was the President Business Manager of 17 Local 1001, after having been selected, according to 18 Joey Granata and the others, at the Galewood Funeral 19 Home over Thomas Crivellone. 20 Q. Selected by whom? 21 A. On the orders of Tony Accardo and Jackie 22 Cerone. 23 THE INDEPENDENT HEARING OFFICER: Which one 24 are we talking about? 25 THE WITNESS: This is the father, Joseph 23
1 Spingola. 2 THE INDEPENDENT HEARING OFFICER: The father 3 was, from the information I recall, and the -- is that 4 there was a big sit down at the funeral home. 5 THE WITNESS: Yes, sir. 6 THE INDEPENDENT HEARING OFFICER: And 7 somebody summoned Spingola. He sat upstairs while the 8 boys sat downstairs figuring out, and they called him 9 down and anointed him. 10 THE WITNESS: Yes, sir. Joe Granata went up 11 on orders and got him and brought him back down. And 12 then he became the President and Business Manager of 13 Local 1001 and also the Chicago District Council. This 14 is his son -- 15 THE INDEPENDENT HEARING OFFICER: Okay. 16 THE WITNESS: -- Michael Spingola. And 17 Informants Number 2, 5, 12, 17, and Joey Granata all 18 indicated that he was also an organized crime 19 associate. He's been out of the Union for at least ten 20 years and is in private industry. 21 BY MR. THOMAS: 22 Q. A deceased member who served as an Auditor 23 for a period of time, Anthony Orrico, O-r-r-I-c-o. Did 24 your informants have anything to say about Mr. Orrico? 25 A. Yes, sir. Informants 2, 5, 12, 17 and Joey 24
1 Granata all indicated that they recalled him, knew him, 2 and that he was, in their view, an organized crime 3 associate. 4 Q. Michael Cardilli, C-a-r-d-i-l-l-i. I don't 5 have in my notes any reference to an officer position. 6 Do you know whether he was just a member of the Local 7 or an officer? 8 A. I'm not sure. He was in the Union for a 9 period of time and then he also became an official with 10 the Chicago Transit Authority. 11 Q. I beg your pardon. The chart does show that 12 he was an Auditor from 1972 to 1986. 13 A. Yes, sir. 14 Q. What if anything did your informants tell you 15 about Michael Cardilli? 16 A. Informants Number 2, 5, 12, 17, and Joe 17 Granata all recalled him and stated that they knew him 18 to be an organized crime associate. 19 Q. James Capasso is listed currently as an 20 Auditor and has been an Auditor for -- well since 1984 21 for Local 1001. Is that the same Capasso that was 22 testified about yesterday? 23 A. Yes, sir. 24 Q. And what's his full-time job? 25 A. James Capasso is the Executive Director of 25
1 the Laborers' City Pension Fund which handles the 2 Pensions and Welfare for Streets and San and workers 3 throughout the City of Chicago. 4 Q. And has he held that position at the same 5 time that he's been an Auditor at Local 1001? 6 A. Yes, sir. 7 Q. What if anything have your informants said 8 about James Capasso? 9 A. Informants 2, 5, 12 and Joey Granata all 10 indicated that they knew Jimmy Capasso and that he was 11 associated with the Elmwood Park Crew of the Chicago 12 Mob and that he was an organized crime associate. 13 Q. Current Auditor for Local 1001 is Nick 14 Cataudella, C-a-t-a-u-d-e-l-l-a according to this, 15 Cataudella. Do I have that name right? 16 A. Yes, sir. 17 Q. C-a-t-a-u-d-e-l-l-a. Current Auditor of 18 1001. What if anything have the informants said about 19 Mr. Cataudella? 20 A. Nick Cataudella, Informants Number 2, 5, 12, 21 17, Joey Granata and Guy Bills all identified Nick 22 Cataudella and knew him. He was the brother of 23 Salvatore Cataudella or "Salli" Cataudella, who was 24 part of the enforcement crew for the Cicero Mob under 25 Joe Ferriola and later Rocky Infelise. One of my 26
1 cooperating witnesses was James "Dukey" Basile, 2 B-a-s-i-l-e, who wore a wire targeting the Infelise 3 Crew. And he was a former fellow enforcement officer 4 with Nick -- with Salli Cataudella. Cataudella was a 5 member of organized crime, and this is his brother. 6 His brother, Nick Cataudella, was also in the 7 Cicero Crew. He operated for a time a business called 8 Body Shop on Grand, which was on Grand Avenue west of 9 Austin. And this was a meeting place for bookmakers 10 and mobsters, and he was under investigation by myself, 11 when I was an FBI agent, and other agents in the squad. 12 He also used to run a card game or have a card game in 13 the basement of his home on the north side, and they 14 would discuss various Mob activities and crimes. At 15 the time they had an informant that was invited to the 16 card crime and used to provide information. So Nick 17 Cataudella was very familiar to me and he was also 18 familiar to all these various informants who knew him 19 to be a member of organized crime. 20 Q. And he's currently serving as an Auditor for 21 Local 1001; is that correct? 22 A. Yes, sir, that's correct. 23 Q. We've talked about Robert Chianelli. We've 24 talked about Sam DeChristopher, Anthony Esposito, 25 former Recording Secretary. You don't need that 27
1 spelled, do you? 2 What if anything have your informants told 3 you about Anthony Esposito? 4 A. Informants 2, 5, 12, 17, Granata and Guy 5 Bills, when he was alive, all identified Anthony 6 Esposito as a relative of Frank Esposito or "Frankie X" 7 who was a well known top official in the Laborers' 8 Union who is now dead. Anthony Esposito, I believe, is 9 also dead. And they all knew him to be an organized 10 crime associate. 11 Q. William Pape was an Executive Board member 12 until 1993, going back as far as it looks like 1980. 13 What if anything have your informants told you about 14 Mr. Pape? 15 A. Informant Number 5 and Joey Granata recalled 16 Mr. Pape, and they indicated they knew him to be an 17 organized crime associate. 18 Q. So I just want to list the ones that your 19 informants don't have any information on so that we can 20 make sure the record is complete on that. 21 Starting with Exhibit Number 7, you have a 22 copy of it. Let's make sure you're looking at the -- 23 if we go down Exhibit Number 7. We'll do this both for 24 this chart as well as for the officer chart in Exhibit 25 1.
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1 If my notes are correct, Willie Bates was not 2 mentioned; is that right? 3 A. That's correct. 4 Q. Okay. Nicholas Cantone? 5 A. That's correct, no one knew him. 6 Q. Floyd Grogan? 7 A. None of the informants or cooperating 8 witnesses knew him except Informant Number 5 who 9 believed that he was associated with the Grand Avenue 10 Crew, knew Joey Lombardo and so on, but had no 11 specifics. 12 Q. Michael Larmon, L-a-r-m-o-n. 13 A. None of the informants knew anything about 14 him, didn't know his name. 15 Q. Sorry. I think I skipped one. Nick Cantone? 16 THE INDEPENDENT HEARING OFFICER: You 17 mentioned Nick Cantone. 18 MR. THOMAS: I did? I'm sorry. Thank you. 19 BY MR. THOMAS: 20 Q. James Pilas, P-i-l-a-s? 21 A. None of the informants knew anything about 22 him. 23 Q. Ramon Schaeffer? 24 A. Again, none of the informants knew the name 25 or knew anything about him. 29
1 Q. And Julius Battaglini. 2 A. Again, none of the informants knew anything 3 about him and could not comment. 4 MR. LYDON: Excuse me just a minute. Julius 5 who? 6 THE WITNESS: The second one on the list. 7 MR. LYDON: I'm sorry. 8 MR. THOMAS: I think it's two T's, although 9 on the chart it says -- B-a-t-t-a-g-l-i-n-i is correct. 10 BY MR. THOMAS: 11 Q. So of the 33 recipients that are listed on 12 Exhibit Number 7 -- to be more precise. The 33 people 13 on whose behalf contributions were made, your 14 informants had relevant information -- organized crime 15 information concerning approximately how many of these 16 33? 17 A. I'm sorry. I haven't added them up, but I 18 think -- I'm not sure. 19 Q. Well if we counted up the ones that they 20 didn't have anything to say about. 21 MR. LYDON: What about Commissioner John 22 Wilkin? 23 MR. THOMAS: I thought I did, but I'll put it 24 on. 25 THE WITNESS: 22. 30
1 BY MR. THOMAS: 2 Q. 22 of the 33 -- 3 A. Yes, sir. 4 Q. -- they had substantive information? 5 A. Yes, sir. 6 Q. I may have neglected -- thank, Mr. Lydon, for 7 pointing this out. If I did neglect to mention John 8 Wilkin, was he one of the ones that your informants had 9 no information on? 10 A. That's correct, yes, sir. 11 Q. So roughly, maybe even exactly, two-thirds of 12 the names listed on this chart, according to your 13 informants, are connected. 14 A. Yes, sir. 15 Q. Then turning to Exhibit Number 1 in the first 16 volume. If we just look at the current 2003 officers, 17 Auditors, E Board members, District Council members, 18 District Council Representatives. Could you give us a 19 rough breakdown of how -- what percentage of these 20 people your informants have indicated are connected and 21 what percentage roughly are -- that they didn't have 22 any information on. 23 A. Well they didn't have any information on 24 Nathaniel Gibson, Paul Reed, Debbie Pucillo-Ferraris. 25 Q. But she just came in replacing Victor Roa, 31
1 correct? 2 A. I believe so, yes. Willie Bates, Robert 3 Gibson. 4 Q. So even in the current 2003 slated officers, 5 I mean would you say -- 6 MR. LYDON: Object. Argumentative. 7 MR. THOMAS: I haven't asked the question 8 yet. 9 MR. LYDON: I'm sorry. 10 BY MR. THOMAS: 11 Q. What allocation would you say, according to 12 your informants that we're talking, half, third, 13 quarter? 14 THE INDEPENDENT HEARING OFFICER: You can 15 answer it, but I can make the calculation myself. 16 MR. THOMAS: Let me rephrase it if I could. 17 BY MR. THOMAS: 18 Q. Mr. O'Rourke, in terms of positions of power 19 in the Local, do you have an opinion as to whether the 20 positions of power are today under the influence of -- 21 MR. LYDON: I object to that. 22 MR. THOMAS: -- the Outfit? 23 THE INDEPENDENT HEARING OFFICER: I sustain 24 it. 25 BY MR. THOMAS: 32
1 Q. Mr. O'Rourke, as an expert in organized 2 crime, have you reached any conclusions concerning any 3 Mob influence on Local 1001? 4 A. Yes, sir, I have. 5 Q. What are those conclusions? 6 A. Going back starting with Joseph Spingola, 7 Ernie Kumerow, Bruno Caruso, who was ousted from the 8 Union, to Nick Gironda, who is Caruso's cousin. And at 9 the present time the Chicago Organized Crime Syndicate 10 has been able to influence organized crime through the 11 President and Business Manager, and then according to 12 the informants through Sam DeChristopher and James 13 Capasso, Robert Chianelli, all of whom have positions 14 as officers in the Union. 15 Q. And in addition to the specific names that 16 you've run by the informants, did the informants tell 17 you anything about the Local as a whole, as an entity? 18 A. Yes, sir. 19 Q. What is that? 20 A. All of the informants advised me in almost -- 21 would almost lecture me that I had to understand that 22 it was common knowledge amongst the organized crime 23 members and associates on the street that Local 1001 24 belonged to organized crime, that they were able to 25 influence the officers over the years, influence the 33
1 conduct of the Union. That it was extremely important 2 to organized crime, this particular Local, because it 3 had influence and control over Department of Streets 4 and Sanitation which was able to supply jobs to 5 organized crime members and relatives and friends. 6 That it also put them in a position of power with the 7 City of Chicago, and that they worked closely with the 8 1st Ward, when it was in existence, Pat Marcy and Fred 9 Roti and John D'Arco, when he was alive, Pat Marcy when 10 he was alive. And this was a power base for organized 11 crime. And that was commonly understood by all of 12 these informants who reported to me that was their take 13 on it, their information. 14 Q. What time frame are we talking about? 15 A. Time frame would be -- probably predates 16 Spingola, but from '68 to the present time. 17 Q. And in terms of the recent years, have you 18 detected any change in tone or commitment to that 19 statement that this is a controlled Local? 20 A. No, sir. 21 THE INDEPENDENT HEARING OFFICER: Let me 22 question that. I mean is this his opinion or is this 23 what he's -- let's talk about the last three years 24 let's say. Are you asking him is it his opinion under 25 control of the last three years or is it his relation 34
1 of statements from these individuals. 2 MR. THOMAS: It's really both. And I'll 3 break this down if that would be helpful. 4 BY MR. THOMAS: 5 Q. In the last three years, Mr. O'Rourke, has 6 your opinion changed at all concerning organized 7 crime's influence over Local 1001? 8 A. No, sir, it has not. 9 Q. And when you debriefed the informants 10 concerning these issues, have they indicated any 11 lessening or backing off of organized crime control 12 over 1001? 13 A. No, they have not. 14 Q. And have you specifically asked them in your 15 recent conversations about that issue whether it's 16 still a controlled Local? 17 A. Yes, I have. 18 Q. Have you seen any evidence in the last two to 19 three years of efforts on the part of the Local to 20 eradicate corruption in the form of organized crime 21 influence after the findings of the CDC and the Bruno 22 Caruso opinions. 23 A. No. It was widely publicized, the hearings, 24 and some press accounts about Bruno Caruso and the 25 influence of organized crime, and there's been no 35
1 activity at all to -- while he was in office was -- 2 after the Chicago District Council hearings it was 3 widely publicized, and especially within the Union, of 4 organized crime influence in the Chicago District 5 Council which was put into Trusteeship. John Matassa, 6 who had been on the Chicago District Council, was 7 ousted and others, and Local 1001 made no effort to 8 take any action against Bruno Caruso or any of the 9 other individuals. 10 Q. Have you ever seen -- 11 THE INDEPENDENT HEARING OFFICER: Matassa was 12 not a member of -- 13 THE WITNESS: No, sir, but he was a part of 14 the Chicago District Council. 15 THE INDEPENDENT HEARING OFFICER: He's a 16 member of Local 2. 17 THE WITNESS: That's correct. 18 THE INDEPENDENT HEARING OFFICER: Business 19 Manager. 20 BY MR. THOMAS: 21 Q. Mr. O'Rourke, in recent years, let's say from 22 1997 forward, have you seen any evidence of contestable 23 actions at 1001 in the form of opposition slates of 24 candidates or dissent in the ranks against the Union's 25 leadership. 36
1 A. No, sir, I have not. 2 Q. How far back does the pattern of uncontested 3 elections go at 1001? 4 A. It's my understanding it goes back 20 or 25 5 years, back to the time of Joseph Spingola. 6 Q. Have you had experience, Mr. O'Rourke, in 7 interacting with representatives of Local 1001 8 concerning ongoing investigative needs. 9 A. Yes, sir. 10 Q. Could you comment please on the extent to 11 which Local 1001 has cooperated with your investigative 12 efforts. 13 MR. LYDON: I object and ask that this be 14 more particularized. I mean this question is pretty 15 vague. 16 THE INDEPENDENT HEARING OFFICER: Give me 17 some idea what we're talking about. Mr. O'Rourke has 18 been in this business and working on this general 19 subject of Laborers in Chicago for some time, and as 20 the witness testified many times. So I think Mr. 21 Lydon's point is well taken. Particularize this issue. 22 MR. THOMAS: Okay. 23 THE INDEPENDENT HEARING OFFICER: What do you 24 mean by cooperation? Did they welcome him? Did they 25 hide the books? Or they talk to him -- 37
1 MR. THOMAS: I'll try to break it down. 2 MR. FARACI: Can we go off the record for a 3 couple seconds here? 4 THE INDEPENDENT HEARING OFFICER: Yeah. 5 MR. FARACI: I would like to have a little 6 conversation and then we can discuss where he's going 7 with this. 8 MR. THOMAS: The floor is yours. 9 MR. FARACI: Can we have a little discussion 10 about it? 11 THE INDEPENDENT HEARING OFFICER: Mr. Lydon, 12 what do you say? 13 MR. LYDON: Fine. 14 MR. THOMAS: We're off the record. 15 (Whereupon a discussion was had 16 off the record after which the 17 following proceedings were had:) 18 THE INDEPENDENT HEARING OFFICER: Let's go on 19 the record. 20 MR. FARACI: Over the last couple of days I 21 have received a couple of different letters from Mr. 22 Luskin with regards to whether or not individuals from 23 the Local were fully cooperating. All along my advice 24 has been to the members of Local 1001 and employees 25 that they're to cooperate with anyone, and that if they 38
1 needed to be presented for interviews, we would present 2 them for interviews as officers and employees of the 3 Local. I think that's where he's trying to go with 4 this, that they weren't cooperating, and going to talk 5 about different advice that I may have given them to 6 not cooperate. I don't know. 7 MR. THOMAS: I'm not going to get necessarily 8 into Mr. Faraci's advice. But if Mr. Faraci is going 9 to tell you that he's been advising these people to 10 cooperate with investigators, then there's a real 11 serious miscommunication here, because the record is 12 that all the people who are on my witness list who I 13 want to appear tomorrow were -- I asked the 14 investigators to A, deliver subpoenas, and B, ask them 15 substantive questions prior to their testimony about 16 this. To a man they said, "On the advice of our 17 attorney we refuse to talk to you." To a person they 18 said that. That is not cooperation. 19 There is in fact an exchange of letters 20 between Bob Luskin and Peter Faraci. Mr. Faraci says 21 to Mr. O'Rourke, "Please don't talk to any of these 22 people without going through me first." Mr. Luskin 23 then sends a letter saying, "Sorry, Mr. Faraci, you 24 don't represent them individually, you represent the 25 Local, and there is an affirmative duty to cooperate. 39
1 You can't give them this advice." 2 I don't necessarily need to bring Mr. Faraci 3 into the record through Mr. O'Rourke's testimony, but 4 if the Local is going to say that they're cooperating 5 and that they're trying in good faith to eradicate 6 organized crime, there would be no reason to withhold 7 documents or refuse to accept subpoenas or refuse to be 8 interviewed by the Inspector General when in fact there 9 is a specified express duty for them to cooperate in 10 the EDP. 11 MR. FARACI: If I could be addressed. The 12 letter he's making reference to from Mr. Luskin was 13 sent to my office yesterday when we were in these 14 proceedings, the most recent one. And I think it's 15 also important to note that we've -- there's been an 16 ongoing investigation of Local 1001 for six or seven 17 years. From the beginning when Judge Leighton and I 18 got involved in this matter, we have cooperated 19 completely with the Inspector General's Office in 20 providing documents. Had anyone needed -- had they 21 wanted to take the deposition of any of these 22 individuals or interview them, we've been clear in the 23 past, "Just give us a call and we'll set that up." 24 THE INDEPENDENT HEARING OFFICER: I think we 25 might be getting distracted here, gentlemen. As far 40
1 back as these investigations have gone, I remember a 2 very fine lawyer, Sherman Carmel, represented the 3 Unions, and I think Sherman sometimes -- I think 4 Sherman may have had the same rule, "You want to talk 5 to them, I want to be there," or something like that. 6 MR. THOMAS: But that's not proper. It may 7 have been his position. It's not proper. 8 THE INDEPENDENT HEARING OFFICER: And I don't 9 know what to say about the position of advocacy here 10 and what the attorneys are allowed to do. I think we 11 can make too much of this. The evidence as it is, and 12 if they're coming in and turning books over to you or 13 their lawyer wants to be with them, I don't make too 14 much of that. I don't make too much -- 15 MR. THOMAS: What the lawyer says and what 16 the witnesses say are two different things, very 17 different things. And we'll -- some of these people 18 are going to be on the stand tomorrow and we can get 19 into it. And I can also call Mr. O'Rourke and Mr. 20 Scigalski who can talk about what these people have said 21 to them recently and over the years, which is highly 22 indicative of lack of cooperation. 23 THE INDEPENDENT HEARING OFFICER: I don't 24 want to get too far off the track of this. By their 25 nature it's sort of us against them usually, and 41
1 there's some reluctance of -- I'm looking for what this 2 means. You have a bunch of fellows you represent here 3 who are getting pensions and supposedly they don't have 4 jobs, or there's some allegations to that effect, and 5 what their real jobs are is the question. I think we 6 can get -- I know your position about whether or not 7 their cooperation or dragging their feet and so forth. 8 But I realize there's a duty to cooperate under EDP, 9 you're supposed to come in and so forth. And if it 10 turned on that I would be glad to hear it. I don't 11 want to make too much of this. Gentlemen, I'm not 12 moved either way as to what's going on. 13 MR. THOMAS: I do understand with respect to 14 Trusteeship proceedings there's perhaps a different 15 standard, but the sole point I'm trying to make here is 16 that to the extent that the Union is saying that, "Well 17 if we were ever Mobbed up in the past we're not Mobbed 18 up now. We've turned a new leaf. We're getting rid of 19 the bad guys," et cetera, et cetera. There's a lot of 20 behavior that is inconsistent with that. 21 THE INDEPENDENT HEARING OFFICER: And some of 22 that may be lawyering and -- 23 MR. LYDON: In light of the charges I think 24 it is lawyering. When you look at what's going on here 25 at the moment and the accusations that are made, I mean 42
1 seeking the advice of a lawyer almost seems to be the 2 prudent thing to do. 3 MR. THOMAS: Mr. Lydon doesn't know the 4 facts. And I appreciate your position, but the 5 evidence of what Mr. Faraci is saying and the evidence 6 that these agents would put on is distinctly different. 7 MR. FARACI: It's not different in the sense 8 that these people are all members of the Local. They 9 are all officers of the Local or employees of the 10 Local. And with that regard they're entitled to have 11 counsel and to talk with us. In the past it's been the 12 procedure. And I think Mr. O'Rourke could also say, 13 "This only happened a day or two ago when these took 14 place." But I think it's not even the proper time to 15 bring these up. If these were things that you're 16 talking about bringing allegations against these 17 individuals for individual charges, that would be at 18 another time and another place. 19 MR. THOMAS: And it may be. And Mr. Luskin 20 has asked me, you know, very clearly to make it known 21 that this could be the grounds for discipline. In 22 fact, that's part of what his letter to Mr. Faraci 23 said. But for purpose of Trusteeship the limited point 24 I'm trying to make is that to the extent that the Local 25 is making the claim that there's no evidence of recent 43
1 Mob activity or recent Mob control, the refusal to talk 2 to investigators across the board -- and these are not 3 people who are saying, "I would like to talk to my 4 attorney." These are people saying, "I will not talk 5 to you on the advice of my attorney." 6 THE INDEPENDENT HEARING OFFICER: The 7 attorney being Mr. Faraci. 8 MR. THOMAS: Mr. Faraci. And that's not what 9 Mr. Faraci is saying he's advised them. 10 THE INDEPENDENT HEARING OFFICER: Here's what 11 I don't want to get into. And sometimes we run into 12 this when we have -- when there's a corporation. The 13 corporate counsel say "We can't talk to my -- ten 14 thousand of my workers," but they gather them up and 15 say, "You don't represent them all." And then there's 16 some question whether you can or cannot and whether 17 somebody should have given them separate counsel. 18 In this particular situation here I don't 19 think we have to get into that, and I'm not going to be 20 moved one way or another about are they turning records 21 over, are they dragging their feet at this point 22 because you could have some substantive issues here, 23 and there's some things that we have to deal with to 24 meet head on. If there's any -- there may be -- there 25 is no reflection on Mr. Faraci, but if he's acting as a 44
1 lawyer or is doing -- I don't want to have to rule on 2 that right now. 3 MR. THOMAS: I'm not asking you to rule. 4 THE INDEPENDENT HEARING OFFICER: I'm going 5 -- if I have to I will, and those are some dicey 6 issues. You've been in corporations investigations 7 where that comes up often. So -- I'm referring to Mr. 8 Lydon. 9 MR. THOMAS: Well -- 10 THE INDEPENDENT HEARING OFFICER: So my 11 ruling is -- tell me what you want to say. Just give 12 me an offer of proof. 13 MR. THOMAS: My offer of proof -- well, let 14 me back up. 15 The statement that I'm conveying specifically 16 on behalf of Mr. Luskin, which is embodied in his 17 letter, is that the GEB Attorney is not going to accept 18 the representations that it is acceptable for attorneys 19 for individual recipients of subpoenas to refuse to 20 talk to investigators whether -- you know, if the 21 Local's attorney -- even if you take Mr. Faraci at his 22 word that he's merely saying, "Come through me first," 23 that's not what the witnesses say. But even if you do 24 take that position, the investigators have a right to 25 talk to Union members when they're doing their 45
1 investigations, and that's the principle that we want 2 to articulate. In terms of the relevance of this point 3 to this particular proceeding -- 4 THE INDEPENDENT HEARING OFFICER: This 5 particular witness too. 6 MR. THOMAS: -- it is limited to the notion 7 that nothing has changed here. That if the Local is 8 saying that, "We've turned over a new leaf since Mr. 9 Caruso's been gone, there would be no reason for them 10 to refuse to talk to investigators, refuse to cooperate 11 with the investigation. We've had people who literally 12 would put their hands behind their back when subpoenas 13 were being delivered because they wouldn't touch it and 14 so forth. 15 THE INDEPENDENT HEARING OFFICER: All right. 16 I can see where this could lead us. It could lead us 17 for hours on discussion on an evidentiary point that's 18 not going to tip the scale here. So I would suggest -- 19 I have your offer of proof. I'm declining, just as a 20 matter of organizational and discretion, that I don't 21 need to hear it, especially with the wrong witness. If 22 you want to make a big thing of it, you've got to make 23 sort of a big presentation. And Mr. O'Rourke here is 24 just testifying that he's talked to -- he went to talk 25 to some people. They weren't interested to talk to 46
1 him. 2 MR. THOMAS: That's fine. I think to the 3 extent that I need to get into this point at all, these 4 people are going to be on the stand tomorrow, so we'll 5 have a chance to -- 6 THE INDEPENDENT HEARING OFFICER: Gentlemen, 7 how long I've been doing this with Unions. Generally 8 if you go into the Union Hall and if you look -- even 9 look or smell like you're from the government, 10 everybody runs out the door. Nobody wants to talk to 11 you. They hide under the table or whatever. I know 12 that it's sort of us against them. It's not good, but 13 it's a philosophy. If we have to particularize it and 14 show us purpose for, so forth, you can, but I don't 15 think we need to do it here, okay? 16 MR. THOMAS: I understand you and I'm 17 certainly willing to abide by that. And I want to be 18 fair to the Local and say that, you know, to the extent 19 that this persists, this -- Mr. Luskin has written them 20 a letter saying this could be grounds for individual 21 disciplinary cases. 22 THE INDEPENDENT HEARING OFFICER: There is an 23 issue as to who can -- who should represent individuals 24 and can be the counsel for the Union, represent the 25 individuals, and what sort of advice that counsel can 47
1 give them, and you can get into some dicey areas there, 2 but I don't think we need to do that here. 3 MR. THOMAS: Let me check my notes. I think 4 we're done. 5 BY MR. THOMAS: 6 Q. Mr. O'Rourke, is there anything else you 7 wanted to add to your testimony? 8 MR. LYDON: I object to that. I don't know 9 what that means. I would like a more definite 10 question. 11 THE INDEPENDENT HEARING OFFICER: Mr. 12 O'Rourke, I have a question to ask you. How many of 13 these individuals who are subjects, how many of them 14 were described by -- what's the lawyer who flipped, 15 what's his name? 16 THE WITNESS: Cooley. 17 THE INDEPENDENT HEARING OFFICER: Cooley. 18 Did Cooley describe any of them -- I think you said one 19 or two. 20 THE WITNESS: Yes, I believe. 21 THE INDEPENDENT HEARING OFFICER: I heard 22 once I think. 23 THE WITNESS: Yeah, I believe it's just one. 24 THE INDEPENDENT HEARING OFFICER: Okay. 25 That's all. Thank you. 48
1 MR. THOMAS: Nothing further. 2 THE INDEPENDENT HEARING OFFICER: Now I 3 understand, Matt, you're going to cross examine him at 4 a later time. 5 (Witness excused.) 6 MR. LYDON: Yes, sir. 7 MR. THOMAS: Mr. Vaira, this would be a good 8 time to take a break. We have Mr. Levinson on deck. 9 He's in San Diego. He's going to testify by phone. It 10 may make -- he's expecting our call at 11:00 Chicago 11 time. 12 THE INDEPENDENT HEARING OFFICER: It's 7:30 13 out there now. 14 MR. THOMAS: So he's expecting our call in a 15 half hour, but we could call him and tell him we're 16 ready sooner. I think if we could have fifteen minutes 17 now that would be helpful. 18 THE INDEPENDENT HEARING OFFICER: Absolutely. 19 (Whereupon a break was taken 20 in the proceedings after which 21 the following proceedings were 22 had:) 23 THE INDEPENDENT HEARING OFFICER: Good 24 morning, Mr. Levinson. Mr. Levinson, you're coming in 25 here over a speaker box, and logistically I think the 49
1 lawyers are going to have to crowd around the speaker 2 box like it's the old radios in the 1920's. Everybody 3 sat around and listened to the Lone Ranger. 4 So you are being called by Mr. Robert Thomas, 5 the GEB Attorney, who I'm sure you're familiar with. 6 Let me tell you who the attorneys in the room 7 are. Representing Local 1001 is Matt Lydon, from 8 Winston & Strawn, and Mr. Sam Mendenhall from the same 9 firm, and Peter Faraci from his own firm Faraci & 10 Faraci. And you have me and my associate Kathy Nagle, 11 and you spoke to Mr. Maria who is assisting Mr. Thomas. 12 So I'm going to turn it over to Mr. Thomas -- and 13 there's some members of the Union in the audience. 14 Okay? So it's a public hearing. 15 So Mr. Thomas, you come over here. We're 16 going to end up sitting all around here I think with 17 our chairs. 18 Since you are not here in person, we can't 19 have the court reporter swear you in. The GEB Attorney 20 will send you the transcript and we'll ask you to have 21 a notary to notarize it and verify it, okay? 22 THE WITNESS: Yes. 23 THE INDEPENDENT HEARING OFFICER: So keep 24 that in mind. 25 I have a group of lawyers here all standing 50
1 around with their tablets in their hand here. And 2 gentlemen, you might as well get a chair. No use 3 standing around here. 5 called as a witness on behalf of the Petitioner, was 6 examined and testified as follows: 7 DIRECT EXAMINATION 8 BY 9 MR. THOMAS: 10 Q. Mr. Levinson, this is Bob Thomas. How are 11 you? 12 A. Very good. 13 Q. For purposes of this testimony, even though 14 the court reporter hasn't administered an oath, we will 15 assume that you will be given the oath at the end of 16 the testimony. So let me advise you that you should 17 treat this with the same amount of seriousness as if 18 you were in the room and having been just given an 19 oath, okay? 20 A. Yes. 21 Q. Mr. Levinson, how are you employed? 22 A. I am the principal partner of the firm of 24 Q. How long have you been the principal of that 25 firm? 51
1 A. It was about 14 years ago. Before that there 2 was a successor firm. 3 Q. What is your field? 4 A. Accounting. I'm a certified public 5 accountant. 6 THE INDEPENDENT HEARING OFFICER: You're a 7 certified public accountant? 8 THE WITNESS: Yes, I am. 9 THE INDEPENDENT HEARING OFFICER: And you're 10 licensed in Illinois? 11 THE WITNESS: Yes, I am. 12 BY MR. THOMAS: 13 Q. Prior to your forming that firm, what other 14 companies or firms did you work for? 15 A. I was a partner with Kupferberg, Goldberg, 16 and Mimon for one year. 17 Q. You may have to spell that for the court 18 reporter. 19 A. They call it KGM. 20 Q. And let's go back to -- when did you complete 21 college? 22 A. I completed college in 1966. 23 Q. And did you get any advanced degrees? 24 A. Yes. I have an MBA from the University of 25 Chicago in 1980. 52
1 Q. An MBA from the University of Chicago. 2 A. Concentrating in finance, yes. 3 Q. And how about with respect to your accounting 4 credentials. 5 A. My accounting credentials, I have been an IRS 6 Agent, and for the last almost 30 years I have been in 7 accounting. Of those about 25 of them have been as a 8 principal or a sole proprietor. 9 THE INDEPENDENT HEARING OFFICER: A Special 10 Agent -- this is Mr. Vaira. Special Agent or Revenue 11 Agent. 12 THE WITNESS: I was a Revenue Agent. That 13 was in the late 1960's. 14 BY MR. THOMAS: 15 Q. When did you get your CPA license? 16 A. In 1971. 17 Q. Focusing on the last, I think you said, 14 18 years when you've been with this firm. 19 A. Yes. 20 Q. Generally speaking, what types of clients 21 employ your firm? 22 A. About 80 per cent of our clients are related 23 to the Taft-Hartley field. They would be Labor Unions 24 and organizations, usually collectively bargained, that 25 are set up by the Unions and the contractors. And they 53
1 may include Welfare Funds, Pension Funds, 2 Apprenticeship Funds, LMCC's, Vacation Funds, ERISA 3 Funds and non-ERISA Funds related to Labor Unions. 4 Q. And has that 80 per cent ratio been 5 approximately the balance from the inception of your 6 firm? 7 A. Yes. 8 Q. So to what extent do you have to familiarize 9 yourself with the legal landscape governing these Funds 10 and these Taft-Hartley entities. 11 A. To the extent I chose to -- actually I'm in 12 the field and I have to be fully aware -- I'm not an 13 attorney, but I have to be fully aware of the laws 14 relating to the field totally, and I could do that in 15 working in a very narrow area and I've chosen that 16 narrow area to practice. 17 Q. When you are asked by a Pension Fund, let's 18 say, to do an audit of an entity that you -- turns out 19 you already represent or have already done auditing 20 work for, what is your standard practice of how you 21 handle that? 22 A. As a standard practice I have a series of 23 people and a series of work programs that are kept to 24 and adhered to. It's somewhat different per groups of 25 Funds that I may handle, but within a group of Funds we 54
1 follow certain directions, and those directions are 2 provided to us by the Administrator for the Trustees. 3 Q. Well I guess before you get to those details, 4 do you notify the prospective client that you've done 5 auditing work for the entity that's to be looked at? 6 A. I'm not sure what you mean by that, but it -- 7 maybe if I just told you the way it works. We are 8 provided the, usually contractors, the signatory to 9 perform the audit, and our procedure then is to contact 10 the signatory entity to let them know they're being 11 audited. 12 Q. Suppose that signatory entity that you're 13 going to audit is one that you've just done an audit 14 for. 15 A. You mean a certified audit? 16 Q. Yes. 17 A. As opposed to a payroll audit. 18 Q. What I'm getting at is the potential conflict 19 situation. Are there circumstances where you notify 20 the client that's hiring you to do an audit that you 21 may have a conflict? 22 A. Immediately I would do that in all cases. 23 THE INDEPENDENT HEARING OFFICER: Mr. 24 Levinson, the facts and situations would be like this: 25 Local 8 of the Plumbers' Union, you have just audited a 55
1 certified audit, and then along comes the District 2 Council of the Plumbers' Union and wants you to do an 3 additional audit of that particular Union. Do you have 4 -- you probably have a conflict doing an audit of a 5 client. What do you do with that? 6 THE WITNESS: Certainly if it isn't 7 disclosed, immediately I would disclose it. Let's say 8 I am the certified auditor. If you're hiring me for 9 something specific, you have to realize that I've 10 already performed a certified audit. Although a 11 certified audit allows me to be independent, I would 12 never -- I guess I could go further. I would never 13 have the same staff if it was known that I did both. I 14 would never have the same staff do the payroll audit. 15 BY MR. THOMAS: 16 Q. Mr. Levinson, directing your attention to the 17 summer of 2002. 18 A. Yes. 19 Q. Were you approached by the Laborers' Pension 20 and Welfare Fund here in Chicago to undertake any 21 assignments? 22 A. Our firm was, yes. 23 Q. What was the assignment? 24 A. The assignment was to audit 1001 for the 25 period beginning, I believe, in May of '02. 56
1 Q. For the period beginning May of '02? 2 A. Excuse me. I don't know if I remember all 3 the dates because I don't have the file here in front 4 of me. 5 Q. Understood. As you -- I'm jumping ahead a 6 little bit. But did this project take on several 7 different phases? 8 A. By the way, it was May of '02. Yes, it did. 9 It did take on several different phases. 10 Q. So the initial was more limited and then it 11 grew from there? 12 A. Yes. 13 Q. Okay. We're going to go through the paper 14 with your colleague who will be here in person, so I'm 15 not going to try to do all the exhibits with you on the 16 other end of the phone line. But let me ask you to put 17 in your own words what the initial assignment, as you 18 understood it, was. 19 A. The initial assignment was to examine the |