RICO Trusteeships After Twenty Years: A Progress Report (James Jacobs)

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The RICO Trusteeships after Twenty Years: A Progress Report

James B. Jacobs, Eileen M. Cunningham, and Kimberly Friday*

The use of federal civil RICO¹ suits to purge organized crime from international, regional, and local unions is one of the most ambitious efforts at directing sociolegal change in U.S. history.²Since the first case, United States v. Local 560, International Brotherhood of Teamsters³in 1982, the U.S. Department of Justice (DOJ) has ﬁled twenty such suits against unions that typically have been dominated, sometimes for decades, by La Cosa Nostra (LCN) organized crime

*Mr. Jacobs is Chief Justice Warren E. Burger professor of Constitutional Law and the Courts and Director, Center for Research in Crime and Justice, New York University School of Law. Ms. Cunningham and Ms. Friday are third year law students at New York University School of Law. The authors wish to thank Robert Stewart, the co-teacher of our fall 2002 seminar on Labor Racketeering and Union Democracy. He shared his vast knowledge and experience but cannot be held responsible for our errors.

1. Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961–68 (2000).

2. The Attorney General has authority to sue for equitable relief to prevent violation of RICO under 18 U.S.C. § 1964(a), which provides:

The district courts of the United States shall have jurisdiction to prevent and restrain violations of section 1962 of this chapter by issuing appropriate orders, including, but not limited to: ordering any person to divest himself of any interest, direct or indirect, in any enterprise; imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in the activities of which affect interstate or foreign commerce; or ordering dissolution or reorganization of any enterprise, making due provisions for the rights of innocent persons.

The government’s attack on labor racketeering has a long history, going back to Thomas Dewey and even earlier. However, the modern attack on labor racketeering dates to the mid1970s and is inextricably connected to the general attack on organized crime. See JAMES B. JACOBS ET AL., BUSTING THE MOB: UNITED STATES V COSA NOSTRA (1994).In the early 1970s, the FBI and DOJ attacks on organized crime focused on organized crime’s role in gambling. But that effort faltered, perhaps because judges and the public could not get excited about exposing gamblers. After the assassination of Jimmy Hoffa in 1975 (immediately labeled a “mob hit”), the organized crime control effort started to focus intensely on organized crime’s role in labor racketeering. That focus was reinforced by the Senate Permanent Subcommittee’s hearings on the matter. See PRESIDENT'S COMMISSION ON ORGANIZED CRIME, THE EDGE: ORGANIZED CRIME, BUSINESS, AND LABOR UNIONS (1985) [hereinafter THE EDGE]; James B. Jacobs & Elizabeth Mullin, Congress’ Role in the Defeat of Organized Crime, 39 CRIM.L. BULL. 269 (2003).

3. 581 F. Supp. 279, 115 L.R.R.M. (BNA) 2829 (D.N.J. 1984), aff ’d, 780 F.2d 267, 121 L.R.R.M. (BNA) 2121 (3d Cir. 1985).

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families.⁴Every one of these suits⁵has resulted in a court-ordered or negotiated trusteeship;⁶most of the suits and/or trusteeships have purged at least some mob connected union officials and restored at least some elements of union democracy.

There is a vast literature on the capacity of courts to successfully reform public institutions.⁷However, unlike efforts to reform jails, mental hospitals, prisons, and schools through federal court litigation, the extraordinary legal effort to reform “mobbedup” local, regional, and (inter)national unions has gone practically unnoticed by legal commentators.⁸Three of these DOJ civil RICO union lawsuits involve international unions that for decades have been dogged by charges of organized crime racketeering.⁹From the famous U.S. Senate McClellan Committee hearings in the late 1950s, to the President’s Commission

4. See infra Table I. The most recent such suit was ﬁled in April 2002 against Hotel Employees and Restaurant Employees International Union (HEREIU) Local 69 (N.D.N.Y.). Any enumeration inevitably involves some subjective judgments. For example, in 1990 the federal government brought one omnibus civil RICO suit against half a dozen International Longshoremen Association NYC area locals, the settlement of which involved three separate trusteeships. More significantly, we do not place on our list the many “derivative trusteeships” that were generated from the RICO trusteeships imposed on the three international unions. See infra Table II.

5. Only two trusteeships were imposed after trial. The first was the path-breaking case against IBT Local 560. See James B. Jacobs & David Santore, Liberation of IBT Local 560, 37 CRIM.L.BULL. 125 (2001). The second was the Philadelphia Roofers case. United States v. Local 30, United Slate, Tile and Composition Roofers, Damp and Waterproof Workers Association, 686 F. Supp. 1139, 128 L.R.R.M. (BNA) 2580 (E.D. Pa. 1988).

6. We are using the term “trusteeship” generically. Sometimes the trustee is called a “monitor,” “liaison officer,” “special master,” or “ombudsman.” Some trustees have a specialized title to reflect their function, such as “investigations officer” or “elections officer.” In fact, each RICO union trusteeship has been individually created with its unique package of powers, duties, and resources.

7. See, e.g., LINO A. GRAGLIA, DISASTER BY DECREE: THE SUPREME COURT DECISIONS ON RACE AND THE SCHOOLS (1976); GERALD N. ROSENBERG, THE HOLLOW HOPE: CAN COURTS BRING ABOUT SOCIAL CHANGE? (1991); Donald L. Horowitz, Decreeing Organizational Change: Judicial Supervision of Public Institutions, 1983 DUKE L.J. 1265 (1983); James B. Jacobs & Kristin Stohner, Ten Years of Court Supervised Reform: A Chronicle and Assessment, 6CAL.CRIM.L. REV. 3 (2004); Susan Sturm, Resolving the Remedial Dilemma: Strategies of Judicial Intervention in Prisons, 138 U. PA. L. REV. 805 (1990).

8. But see Michael J. Goldberg, Derailing Union Democracy: Why Deregulation Would Be a Mistake, 23 BERKELEY J. EMP.& LAB. L. 137 (2002); Michael J. Goldberg, An Overview and Assessment of the Law Regulating Internal Union Affairs, 21 J. LAB.RES. 15 (2000); Michael J. Goldberg, Cleaning Labor’s House: Institutional Reform Litigation in the Labor Movement, 1989 DUKE L. J. 903 (1989); Clyde W. Summers, Union Trusteeships and Union Democracy, 24 U. MICH. J.L. REFORM 689 (1991); Kenneth R. Wallentine, A Leash Upon Labor: RICO Trusteeships on Labor Unions, 7HOFSTRA LAB. L.J. 341 (1990).

9. See United States v. Int’l Bhd. of Teamsters, No. 88 Civ. 4486 (DNE) (S.D.N.Y. 1988) [hereinafter IBT Int’l]; United States v. Edward T. Hanley, Hotel Employees and Rest. Employees Int’l Union, and Hotel Employees and Rest. Employees Int’l Union Gen. Executive Bd., Civ. No. 95–4596 (D.N.J. 1995) [hereinafter HEREIU Local 54]; United States v. Laborers’ Int’l Union of N. Am. (consent decree reached before ﬁled) [hereinafter LIUNA Int’l]. In addition, an omnibus 1990 civil RICO suit was ﬁled against some half dozen New York/New Jersey–area locals of the International Longshoremen’s Association (ILA), an international union. See United States v. Local 295, Int’l Longshoremen’s Ass’n, No. 90 Civ. 0963. See also THE EDGE, supra note 2.

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on Organized Crime (PCOC) in 1986, to the Senate Permanent Subcommittee on Investigations’ many hearings in the 1970s, 1980s, and 1990s, corruption and racketeering have been constantly exposed in the International Brotherhood of Teamsters (IBT), Hotel Employees and Restaurant Employees International Union (HEREIU), and Laborers International Union of North America (LIUNA).¹⁰The 1988 RICO suit against the IBT general executive board resulted in a trusteeship that, in modified form (an “independent review board”), is still in effect.¹¹The DOJ drafted a RICO complaint against the LIUNA general executive board that it threatened to ﬁle; to avert this, LIUNA agreed to sign a consent decree in February 1995 that called for the implementation of a remedial plan orchestrated by a former federal prosecutor, and the government retained the option to ﬁle the consent decree in the future if the union’s compliance with the terms of the agreement faltered.¹²A RICO complaint against the HEREIU general executive board was ﬁled in September 1995;¹³on the same day, HEREIU and DOJ entered into a consent decree providing for a government sponsored trusteeship.¹⁴

Each of the three civil RICO suits against an international union has produced a trusteeship (or its functional equivalent) that, in turn,

10. See THE EDGE, supra note 2; James B. Jacobs & Ellen Peters, Labor Racketeering: The Maﬁa and the Unions, 30 CRIME & JUSTICE: A REVIEW OF RESEARCH 229 (Michael Tonry, ed. 2003). See also Jacobs & Mullin, supra note 2.

11. On March 14, 1989, U. S. District Judge David N. Edelstein entered a consent decree in IBT Int’l that provided for the creation of an independent review board (IRB) that would begin operation after the 1991 general election for IBT officers. The IRB, which began in October 1992, succeeded the independent administrator and the investigations officer. Id. Pursuant to the Consent Order, the IRB has three members: one the Attorney General appoints; one the union appoints; and the third member is selected by the other two. Id.

12. LIUNA Int’l. (never ﬁled). Although the complaint was not ﬁled, we still include the LIUNA International case in our list of twenty since LIUNA unconditionally consented to the government ﬁling a signed consent agreement, which included a trusteeship, if it was not satisfied with the union’s internal reform effort. Id. Former DOJ prosecutor Robert Luskin has served as the general executive board (GEB) attorney for the internal reform effort. Correspondence from Robert Luskin (Nov. 2003) (on ﬁle with author). In this position, Luskin acts as an in-house prosecutor responsible for investigating and removing corrupt individuals from LIUNA. Id. Luskin hired three other officers: an inspector general to work on investigations with the GEB attorney and monitor compliance with LIUNA’s “Ethical Practices Code”; a hearing officer to act as an internal judge hearing disciplinary cases brought by the GEB Attorney; and an appellate officer hearing any appeals of the hearing officer’s decisions. Id. LIUNA also hired an Election Officer to monitor the 1996 and 2001 elections. Id.

The appointment of Douglas Gow as inspector general went a long way towards erasing the difference between this “inhouse” DOJ monitored trusteeship and a court imposed trusteeship. Before retirement, Gow had been a high-ranking FBI agent and his FBI and other law enforcement contacts assured that the LIUNA reform team would have excellent intelligence information about organized crime influence in the union.

13. HEREIU Int’l., Civ. No. 95–4596.

14. Similar allegations have been made against the International Longshoremen’s Association, but to date the DOJ has not brought a civil RICO suit against that international union. In 1990 the government brought an omnibus RICO case against a slew of the ILA’s locals with jurisdiction over the New York/New Jersey port. See United States

v. Local 1804–1, Int’l Longshoremen’s Ass’n, AFL-CIO, 732 F. Supp. 434 (S.D.N.Y. 1990).

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has uncovered corruption and racketeering in some affiliated locals that the international has placed in trusteeship.¹⁵ Arguably these “derivative trusteeships” could be counted as RICO trusteeships since they resulted, albeit indirectly, from a DOJ civil RICO suit. Nevertheless, we have decided not to include them in Table I, infra, on the ground that “a trustee appointed solely by the union lacks the authority conferred by court appointment, does not possess subpoena power, and can be subject to charges of recrimination and political vendetta. Federal law enforcement agencies are statutorily prohibited from disclosing certain information to a union trustee or to the union’s own internal disciplinary process that is essential to any reform effort. Furthermore, the period of the trusteeship [imposed by an international union] is presumed valid only for a period of 18 months.”¹⁶

Except in two instances, all of the RICO-generated trusteeships of mob-dominated union locals involve affiliates of the IBT, ILA, LIUNA, and HEREIU;¹⁷ the two exceptions are Local 30 of the United Slate, Tile & Composition Roofers Union in Philadelphia, and the Carpenters District Council in New York City.¹⁸Moreover, almost all of the RICO cases deal with union locals in the New York City metropolitan area;¹⁹some exceptions are the United Union of Roofers, Waterproofers and Allied Workers, Roofers Local 30 in Philadelphia; HEREIU Local 54 in Atlantic City; HEREIU Local 69 in Buffalo, New York; LIUNA Chicago Laborers’ District Council (CLDC); and LIUNA Local 210 in Buffalo, New York.²⁰Still, this pattern does not warrant the conclusion that

15. See infra Table II. IBT Int’l, No. 88 Civ. 4486; HEREIU Int’l, Civ. No. 95–4596; LIUNA Int’l, (consent decree reached before ﬁled).

16. United States of America and Laborers’ Int’l Union of N. Am. by and through Robert Luskin, in his official capacity as Gen. Executive Bd. Att’y v. Constr. & Gen. Laborers’ Dist. Council of Chicago and Vicinity, an affiliated entity of the Laborers’ Int’l Union of N. Am., 99 C 5229 (N.D. Ill. 1999) (Compl. at 105–06). The Labor Management Reporting and Disclosure Act of 1959 (LMRDA), 29 U.S.C. §§ 401–531 (2000), popularly known as the Landrum-Griffin Act, provides relief against internal trusteeships imposed for improper purposes. Under this section, a labor organization’s trusteeship over a subordinate local union is presumed valid for a period of eighteen months from the date of its establishment. See id. § 464(c). After the expiration of eighteen months, however, the trusteeship will be presumed invalid unless the labor organization can show by clear and convincing proof that the continuation of the trusteeship is necessary. See id.

17. See infra Tables I & II.

18. United States v. Local 30, United Slate Tile and Composition Roofers, No. 87– 7718 (E.D. Pa. 1987); United States v. Dist. Council of NYC and Vicinity of the United Bhd. of Carpenters and Joiners of Am., No. 90 Civ. 5722 (S.D.N.Y. 1990). Racketeering has been documented in other unions, such as the Union of Painters and Allied Trades, International. See, e.g., Riga v. American Painting Co., Inc., 1986 WL 9248 (E.D. Pa Aug. 25, 1986); see also Local 46 Laundry Workers (Chicago, IL), Local 110 Motion Picture Operators Union (Chicago, IL), Local 136 Machinery Movers (Chicago, IL), Local 18 Operating Engineers (Cleveland, OH), Ironworkers Local 17 (Cleveland, OH). See also PETER F. VAIRA &DOUGLAS P. ROLLER, ORGANIZED CRIME AND THE LABOR UNIONS (1978).

19. See infra Table II.

20. Local 30, United Slate Tile and Composition Roofers, No. 87–7718; United States v. Edward T. Hanley, No. 90–5017 (D.N.J. 1990); Constr. & Gen. Laborers’ Dist. Council, 99 C 5229; United States v. LIUNA Local 210, No. 99 CV0915A (W.D.N.Y. 1999).

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labor racketeering is limited, for the most part, to the New York City area. A great deal of labor racketeering has been documented in Boston, Buffalo, Chicago, Cleveland, Detroit, Kansas City, Milwaukee, Philadelphia, and San Diego.²¹Racketeering has been exposed in other major unions as well, including the Laundry Workers, the Motion Picture Operators Union, the Machinery Movers, the Operating Engineers, and the Ironworkers.²²

Evaluating the impact of these RICO suits and trusteeships is no easy matter. A few trusteeships clearly have successfully purged the influence of organized crime and have transformed unions that had been run like dictatorships rooted in intimidation, violence, and exploitation into properly functioning organizations with competitive elections and accountability to the rank-and-file.²³ Other trusteeships have failed to break the hold of the organized-crime-dominated regime.²⁴In the majority of cases, it is too soon to reach a definitive conclusion on success or failure.²⁵

There is very limited systematic documentation or evaluation of the governmental and judicial effort to reform corrupted unions through civil RICO suits. For the U.S. Attorney considering what relief to ask for, for the judge contemplating what relief to grant, and for the newly appointed trustee charged with formulating a reform strategy,

21. In his affidavits for the government in the litigation against the IBT general executive board, former IBT General President Roy Williams explained that in the exercise of his previous duties as president of IBT Local 41 in Kansas City, he took directions from organized crime boss, Nick Civella. JACOBS, supra note 2, at 169. Williams claimed he did not know Civella was involved in the Maﬁa until he was taken blindfolded to a warehouse and threatened with harm to himself and his family. Id. at 189–90. Williams went to Jimmy Hoffa for advice, and Hoffa reportedly told him, “‘Roy, it’s a bad situation . . . You can run, but you can’t hide. My advice to you is to cooperate or get your family killed. Roy, these are bad people. And they were here a long time before you and me came. And they’ll be here a long time after we’re gone. They’ve infiltrated into every big local union, every conference and pension fund—even the AFL-CIO! I’m tied as tight as I can be.’” Id. at 190–91. See also JAMES NEFF, MOBBED UP: JACKIE PRESSER’S HIGH-WIRE LIFE IN THE TEAMSTERS, THE MAFIA, AND THE FBI (1989) (providing extensive information about organized-crime-sponsored labor racketeering in Cleveland, Detroit, and Kansas City); 132 CONG.REC. S. 10909 (daily ed. Aug. 8, 1986).

22. VAIRA &ROLLER, supra note 18.

23. The clearest cases of success are the trusteeships of HEREIU Local 54 (Atlantic City) and the Mason Tenders District Council of Greater New York. Telephone interview with James Flanagan ( July 2002) (notes on ﬁle with author); telephone interview with Lawrence Pedowitz (Nov. 2002) (notes on ﬁle with author). Another clear case of success was IBT Local 560, where, after a long struggle, the union made an absolutely clean break from the old regime. See James B. Jacobs & David Santore, Liberation of IBT Local 560, 37 CRIM.L. BULL. 125 (2001).

24. Remedial trusteeships have failed most clearly in the Philadelphia Roofers case, ILA Locals cases, including Local 1588 and Local 1814, and LIUNA Local 6A case. For information about the Bruno/Scarfo family in Philadelphia and Atlantic City, see THE EDGE, supra note 2, at 76–81; JOHN GUINTHER &FRANCIS FRIEL, BREAKING THE MOB (1990); JOSEPH SALERNO JR.& STEPHEN J. RIVELE, THE PLUMBER (1990).

25. Some progress has been made in the trusteeships over the Carpenters Union, LIUNA International, and the Chicago Laborers District Council, but we would not conclude that success has been achieved. See Jacobs & Stohner, supra note 7.

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there is no best practices manual, no compendium of past judicial orders and consent decrees, and no explanation, much less critique, of the varied strategies that have been tried in the past. There is no academic scholarship or government report on how to define and measure success in reforming a mob-dominated union.

This article seeks to begin the arduous process of assessing the extraordinary and ongoing twenty-year history of civil RICO litigation aimed at reforming mobbed-up unions. First, it seeks to identify all the RICO cases and trusteeships. Second, it begins to collect information on key variables that may determine success or failure. Third, it attempts to initiate discussion on evaluating RICO-generated union trusteeships.

I. The Trustees

In the majority of cases, formal selection of the trustee has been left up to the presiding judge, with both the government and the union making recommendations. In almost all cases, one of the government’s nominees has been chosen;²⁶no trustee has been appointed over the government’s objection.²⁷Often the trustee is appointed after the consent agreement has been ﬁled with the court; however, in some cases the trustee has been explicitly named in the consent agreement itself. For example, the NYC District Council of Carpenters’ consent decree named both the investigations and review officer (IRO) and the members of the Independent Hearing Committee.²⁸

One of the most arresting facts about the government’s twenty-year legal attack on labor racketeering is that the trustees, chosen to reform mob-controlled unions, are almost all former federal prosecutors, usually with experience investigating and prosecuting organized crime.²⁹For example, Ed Stier, trustee for ten years in the first civil RICO labor racketeering case, had previously been both a state and

26. In the Chicago Laborers’ District Council case, for example, Robert Bloch, formally nominated by LIUNA International, had the DOJ’s strong support and approval. See NAT’L LEGAL AND POL’Y CTR., UNION CORRUPTION UPDATE (Sept. 10, 2001). Similarly, in the LIUNA Local 210 case, the international union appointed Gabriel Rosetti to be the trustee; the DOJ then consented to have Rosetti serve as RICO trustee as well. Stephanie Mencimer, Ex-FBI official Pulls at Union’s Infamous Roots; Laborers Fight Corruption from the Inside Out, WASH. POST, June 7, 1998, at A1.

27. For example, in the HEREIU Int’l case, the judge received three names from the government and three from HEREIU. HEREIU’s nominees were allies of president Edward Hanley. The government told the judge that if one of the union’s nominees was chosen, the government would cease cooperating and would prosecute the suit. One of the government’s suggestions, Kurt Muellenberg, a former head of the DOJ’s Organized Crime and Racketeering Section, was appointed. Interview with anonymous Department of Labor official (Aug. 7, 2002) (notes on ﬁle with author).

28. Consent decree, District Council of Carpenters (March 4, 1994); United States

v. Dist. Council, 778 F. Supp. 738 (S.D.N.Y. 1991); United States v. Dist. Council, 941 F. Supp. 349, 154 L.R.R.M. (BNA) 2281 (S.D.N.Y. 1996).

29. See infra Table III.

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federal prosecutor.³⁰Thomas Puccio, trustee in the IBT Local 295 case, was former head of the federal Organized Crime Strike Force in Brooklyn.³¹Of the three members of the Independent Review Board in the IBT International case, one, William H. Webster, was a former FBI director, another, Charles Carberry, a former assistant United States attorney, and the third, Michael Holland, the elections monitor, a labor lawyer.³²Kurt Muellenberg, former head of the Department of Justice’s Organized Crime & Racketeering Section, served as trustee in the HEREIU International case, and is currently serving as trustee in the HEREIU Local 69 case.³³Only a few, like Gabriel Rosetti Jr. in LIUNA Local 210 and Robert Bloch in the Chicago Laborers’ District Council (CLDC), had significant prior experience in labor law.³⁴

It is not surprising that former federal prosecutors should be chosen as trustees in civil RICO cases involving labor racketeering. These cases, while civil in form, are part and parcel of federal law enforcement’s attack on organized crime. These labor racketeering cases are won in the remedial phase, not at the trial or with a favorable decree. The prosecutors have a clear idea of what they want to accomplish— the eradication of organized crime elements from the union and the establishment of healthy union governance that will resist future

30. Harold Ackerman first chose Joel Jacobson, a career union official, to be the Local 560 trustee. See Jacobs & Santore, supra note 5. After a year, Judge Ackerman replaced Jacobson because he had not moved vigorously to purge organized crime figures and their associates from the union. See id. Perhaps Judge Ackerman’s unhappy experience with a trustee drawn from the ranks of organized labor influenced decision makers in later cases to choose their trustees from the ranks of former federal prosecutors.

31. See Tom Robbins, The Clean-Up Man: Chic Ex-Prosecutor Makes a Bundle Overseeing Teamsters Local, VILLAGE VOICE, April 18, 2001.

32. Jacobs & Peters, supra note 10, at 245, 247. In addition, Holland was the first elections officer in the triumvirate trusteeship appointed to implement the consent decree in the IBT Int’l case. Holland’s successor was Barbara Quindel, a labor lawyer. Hearings on Invalidated 1996 Teamster Election: Hearings Before the Subcomm. on Oversight and Investigations of the House Comm. on Educ. and the Workforce, 105th Cong. 254–60 (1997). See Table III infra.

33. However, a few trustees have been drawn from the ranks of those with other backgrounds. James Flanagan, the trustee for HEREIU Local 54, was a former deputy director of the New Jersey Division of Gaming Enforcement. Flanagan, supra note 23. It is notable that the Division of Gaming Enforcement was authorized to certify unions involved in the Atlantic City gaming industry as free of corruption and racketeering as part of the attempt to keep organized crime out of Atlantic City casinos. Id. This position, therefore, gave Flanagan considerable knowledge of unions and labor law, and contacts within the FBI and Department of Labor. Id. Gabriel Rosetti, Jr. the trustee for LIUNA Local 210, was a LIUNA member for over thirty years. Mencimer, supra note 26, at A1. Robert E. Bloch, the trustee for the LIUNA Chicago Laborer’s District Council, was an attorney in private practice who had previously served as counsel to LIUNA International. NAT’L LEGAL AND POL’Y CTR., UNION CORRUPTION UPDATE (Aug. 16, 1999). However, Bloch was assisted in his trusteeship by another court-appointed monitor, Steven Miller, who had previously served as the chief of the Special Prosecutions Section of the U.S. Attorney’s Ofﬁce for the Northern District of Illinois. NAT’L LEGAL AND POL’Y CTR., supra note 26.

34. Mencimer, supra note 26, at A1; NAT’L LEGAL AND POL’Y CTR., supra note 33.

intrusions by racketeers. But how to get there is less clear, varying with the particular facts of each situation. Thus, the federal prosecutors press for appointment of a trustee in whom they have complete confidence; that means a person who understands organized crime and who can work smoothly with the FBI and Labor Department³⁵ investigators.³⁶

III. The Trustee’s Powers

The trustee’s powers emanate from the court’s order/decree or from the court-approved consent agreement. In some cases, consent decrees have given the trustee all the powers of all the union’s officers, in effect, the power to administer the union, including negotiating contracts, handling grievances, and initiating collective action, including strikes.⁴⁵ This type of all-powerful trusteeship, resembling the trustee

39. See infra Table IV.

40. The Philadelphia Roofers Local 30/30B decree established a “decreeship” with an indefinite term. Judge Bechtle believed that success could be achieved only by convincing the rank-and-file and the racketeers that court supervision would last as long as necessary to solve the problem. Local 30, 686 F. Supp. at 1163, 1168.

41. See infra Table IV.

42. See infra Table IV.

43. United States v. Mason Tenders Dist. Council of Greater New York, 1994 WL 742637 (S.D.N.Y. Dec. 27, 1994).

44. HEREIU Int’l, Civ. No. 95–4596; see also Union Democracy, Part VII: Government Supervision of the Hotel Employees and Restaurant Employees International Union: Hearings Before the Subcomm. on Employer-Employee Relations of the House Comm. on Educ. and the Workforce, 105th Cong. 18–19 (1999) (statement of Kurt W. Muellenberg, Esq., former monitor of the HEREIU).

45. For example, Trustee Robert Bloch in the Chicago Laborers District Council trusteeship negotiated a new three-year labor contract that provided for higher wages, better benefits, and, for the first time, a grievance procedure. Press Release, U.S. Dep’t of Justice, Consent Decree Allows Federal Court to Supervise Purge of Organized Crime from 19,000 Member Chicago Laborers’ Council (Aug. 12, 1999).

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in a corporate bankruptcy, might not be effective in the union context;⁴⁶the trustee has to spend a high percentage of time keeping the union going rather than working on organizational reform.⁴⁷On the other hand, the all-powerful trustee is in a position to earn the confidence of the rank-and-file by administering the union to his or her advantage. The trustee will be assisting the membership to achieve its goals rather than functioning solely as a policeman. If the budget permits, trustees who find themselves in this position usually hire a seasoned union official to handle the day-to-day running of the union, while the trustee concentrates on investigations, discipline, elections, and communications with the rank-and-file. Where the trustee could not, or would not, delegate administrative responsibilities, the trusteeship foundered.⁴⁸

Obviously, too little authority can doom a trusteeship.⁴⁹ Trustees need the power to remove from union ofﬁce, subject to court review, and to expel from the union, those officers who have embezzled union funds, taken bribes from employers, and are members or associates of, or who knowingly associate with, members or associates of organized crime.⁵⁰

The consent decree in the IBT International case gave the Trustee Administrator the authority of the IBT general president solely in the area of discipline.⁵¹As per the IBT constitution, this was sufficient

46. In liquidations under the Bankruptcy Code, it is routine for trustees to be appointed in order to protect the liquidating company’s assets and the interests of lawful creditors. See 11 U.S.C. §§ 701–704 (2000). Trustees are less often appointed in Chapter 11 reorganizations, but they may be appointed where there is a threat of management fraud or gross incompetence. See 11 U.S.C. §§ 1104–1108 (2000).

47. In the LIUNA Local 6A trusteeship, Trustee Eugene Anderson and his assistant, Robert Gaynor, spent so much time supervising the daily administration of the union that they didn’t have time to interact directly with union members. Eugene Kiely, Local 560: Proof Is in the Vote; Election Is Test of U.S. Efforts to Clean Up Teamsters, THE RECORD, Nov. 27, 1988, at A2. It is difﬁcult, Gaynor said, “to gain their confidence and convince some to take an active role in the union.” Id.

48. In the Philadelphia Roofers Local 30/30B case, Robert Welsh was the only person responsible for enforcing the court’s decree. United Union of Roofers, Waterproofers and Allied Workers, AFL-CIO v. Composition Roofers Union, Local 30, United Union of Roofers, Waterproofers and Allied Workers, AFL-CIO, 2003 WL 2125067 at *3 (E.D. Pa. March 28, 2003). This trusteeship was far from successful; the International had to impose an emergency trusteeship only two years after the court imposed decreeship ended.

Id.

49. One of the weakest trusteeships (in terms of legal basis) was the Philadelphia Roofers Local 30/30B case. There, the decree provided the monitor with the power to oversee negotiations, but not take part, and granted no power to remove corrupt members of the union. Local 30, 686 F. Supp. at 1172–73. The judge did not want to displace the elected union officials’ responsibility to run the union all together. Id. at 1168. “The court [is] . . . leaving the Union institution and its present leadership in place, but . . . removing from Union control those areas of activity which the Union has misused in the past.” Id.

50. Trusteeships have differed with respect to allocating the authority to decide whether an officer or member has knowingly associated with members or associates of organized crime. Though this power has been challenged on the ground that it violates freedom of association and smacks of totalitarianism, the power itself has been upheld in every case.

51. United States v. Local 1804–1, at 4–5 (consent judgment for Local 1804–1).

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authority to expel union members, not just officers, for bringing dishonor and disrepute to the Teamsters.⁵² Judge Edelstein agreed; the Second Circuit affirmed.⁵³

The trustees in the LIUNA Local 6A and HEREIU Local 54 cases had authority to bar from union elections candidates who knowingly associated with organized crime figures, but lacked power to expel such individuals from the union.⁵⁴Disappointed ofﬁce seekers continued to influence other union members and to turn up at union meetings, thereby sustaining the atmosphere of intimidation that had prevailed for decades.⁵⁵

The flip side of the power to ﬁre and expel is the power to hire and appoint. The union trustees have usually had the power to hire members of the union staff, including, importantly, business agents.⁵⁶ The trustee can demonstrate that a new regime is in place. Cleaning house is an important signal of a clean break with the past. It also provides opportunities for new leadership. The danger is that making snap hiring decisions risks appointing people who are incompetent, unpopular, or otherwise not likely to be effective leaders. Another problem is that the rank-and-file may deeply resent having their officers chosen, or imposed, by “the government.” officers chosen in this way, seen as “government men,” have not been able to function effectively. It is therefore highly desirable for the union members themselves to be involved in selecting new officers.

Trustees typically have the authority to examine all books and records, and to compel sworn statements by officers, agents, representatives, employees, and members. In many cases the trustees have authority to review all contracts or proposed contracts and to veto improper expenditures.⁵⁷The corrupt regime may have accelerated its contracts with cronies before the trustee assumed his position, in effect providing generous golden handshakes to as many members of the hereto-fore-dominant clique as possible. The trustee must also scrutinize the

52. Id.

53. United States v. Int’l Brotherhood of Teamsters, 745 F. Supp. 908, 135 L.R.R.M. (BNA) 3079 (S.D.N.Y. 1990), aff ’d, 941 F.2d 1292, 138 L.R.R.M. (BNA) 2219 (2d Cir. 1991).

54. See United States v. Local 6A, 86 Civ. 4819 (1987); United States v. Hanley, 1992

U.S. Dist. LEXIS 22192 (D.N.J. Dec. 3, 1992) (affirming Monitor’s decision to ban certain candidates from elections, but declining to expel the candidates from the union), aff ’d, United States v. Hanley, 6 F.3d 78 (3d Cir. 1993).

55. Flanagan, supra note 23.

56. Organizers recruit, organize employees, and perform certain election-related tasks. Business agents represent Union members. Their responsibilities include negotiating labor contracts, administering the grievance-arbitration process, ﬁling unfair labor charges, and making decisions regarding strikes and other actions against employers.

57. In the case of Roofers Local 30/30B, Judge Bechtle’s decree stated, “[t]he court will establish direct control of all matters within the jurisdiction of the Union that require the expenditure of any funds of the Union or any affiliated entity for the transfer of any of its assets.” Local 30, 686 F. Supp. at 1172.

430 The Labor Lawyer 430 (2004)

payroll for no-show workers, improper reimbursements, and other fraudulent expenditures.

In some cases, the power to bring suit on behalf of the union has enabled trustees to obtain reimbursement for exploitations of the union’s assets. For example, in the Mason Tenders District Council case, Monitor Lawrence Pedowitz ﬁled lawsuits against former officers and trustees, recovering $12 million of the $15 million in assets lost due to their malfeasance.⁵⁸Ron DePetris, trustee over IBT Local 851, also recovered money for that local.⁵⁹These two cases strongly suggest that every trustee should have the authority to sue those who have victimized the union and its pension and welfare funds. Such suits enable the trustee to gain credibility with the rank-and-file.

RICO trustees are almost always empowered to implement and monitor elections. Holding a fair and competitive election is an important step in the union’s rehabilitation process. In many mob-dominated unions, there has not been a fair election in the memory of any living union member.⁶⁰The trustee must promulgate rules for candidates getting on the ballot as well as voting procedures.⁶¹

IV. The Terms of the Trustee’s Employment⁶²

At first blush, it might seem advantageous to have a fulltime trustee, given the enormous challenge of reforming a corrupted union. However, it is very difﬁcult to recruit a fulltime trustee from the ranks of private sector law firm attorneys with prior federal prosecutorial or organized crime control experience. The attorney would have to take an extended or indefinite leave from his or her law firm and perhaps a diminution in pay. More importantly, a union trusteeship is not a step

58. Impediments to Union Democracy: Hearing Before the Subcomm. on Employer-Employee Relations of the House Comm. on Educ. and the Workforce, 105th Cong. 79–87 (1998) (statement of Michael S. Bearse, General Counsel, LIUNA).

59. DePetris, seeking to recover Local IBT 851 assets that had been dissipated and misappropriated, ﬁled two civil RICO claims against freight-forwarding companies and Local 851’s former secretary-treasurer. JAMES B. JACOBS, GOTHAM UNBOUND 172–74 (1999). This was the first time a court-appointed monitor initiated a suit to recover civil damages on behalf of a labor union for past corruption. Id. DePetris settled for more than $3 million for the financially struggling union. Id.

60. While the 1995 rank-and-file election of the New York District Council of Carpenters officers was the first in 121 years, it resulted in the reelection of the incumbent officers. See Kenneth C. Crowe, Hammering Away at the Incumbent, NEWSDAY, July 18, 1995, at A31.

61. The election rules have special significance for unions with a history of racketeering. As Judge Edelstein commented, “election rules must not be viewed in a vacuum, but instead placed in their proper context. This Court has reiterated that the [IBT] Consent Decree is a unique attempt to cleanse this union. These election rules are the linchpin in that effort. This Court will only approve election rules that will guarantee honest, fair, and free elections completely secure from harassment, intimidation, coercion, hooliganism, threats, or any variant of these, no matter under what guise.” United States v. International Brotherhood of Teamsters, 742 F. Supp. 94, 97, 134 L.R.R.M. (BNA) 3178 (S.D.N.Y. 1990).
62. See infra Table VI.

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along a career path. Years later, when the trusteeship is terminated, the lawyer/trustee would have to reconnect with his old firm or find a new one. There would be no business and no clients to bring to the firm. He certainly could not count on being appointed trustee in another labor racketeering case since there are few such cases and the judges and U.S. Attorneys often prefer to appoint someone they know.⁶³Realistically, if the RICO suits required fulltime trustees, they would have to look to another pool, perhaps retired prosecutors, or more likely career union officials; the latter would not enjoy the trust and support of federal law enforcement agents, who probably would not share investigative information with them.⁶⁴Thus, the trustees mostly serve on a part-time basis, compensated at an hourly rate. Hours per week might vary from thirty or more at the beginning of the trusteeship to ten or less as the trusteeship matures, the specific number of hours left to the trustee’s discretion.⁶⁵

Compensation is an important issue. Big firm lawyers bill their time at $200–$500 per hour, rates that are staggering to union members. Some of the trustees have earned as much as $250,000 per year for their work as part-time trustees.⁶⁶Ironically, trustee compensation occasionally exceeds the salaries of the allegedly corrupt union officials whom the RICO prosecutors condemned as receiving bloated and unjustified salaries indicative of racketeering.⁶⁷ The trustee’s wages have often drawn criticism from those who oppose the trusteeship on other grounds, and in some cases, may have undermined the trustee’s legitimacy in the eyes of the union’s members.⁶⁸For example,

63. Interview with anonymous Department of Labor official (Aug. 7, 2002) (notes on ﬁle with author).

64. The failure of Joel Jacobson, the first trustee in the Local 560 case, to function effectively serves as an example. However, officials have often served effectively as “deputy” monitors that aid the trustee with the day-to-day running of the union and relations with the rank-and-file. For example, Steve Hammond, a longtime LIUNA member, served in this capacity in the MTDC trusteeship, and Henry Tamarin, a HEREIU vice president, served in this capacity in the HEREIU Local 100 trusteeship. See Mason Tenders Local 59 v. Laborers’ Int’l Union of N. Am., 924 F. Supp. 528 (S.D.N.Y. 1996); Interview with Mary Shannon Little, court officer for the Local 100 trusteeship (Nov. 2002) (notes on ﬁle with author). Another example is Frank Jackiewicz, a retired official of New Jersey Teamsters Local 843 and former secretary and chief contract negotiator of the Brewery Workers joint local executive board of New Jersey. Jackiewicz was appointed by Judge Ackerman to assist Ed Stier in the day-to-day administration of IBT Local 560. STIER, ANDERSON &MALONE, LLC, supra note 23, at 367.

65. The trustee typically has to present his weekly or monthly billing to the judge for approval, but we know of no case of a judge rejecting the trustee’s bill; doing so might be tantamount to a vote of no confidence requiring the trustee’s resignation. The trustee himself decides how many hours are necessary.
66. According to Carl Biers, Kurt Muellenberg made $296,000 a year for his work during the HEREIU trusteeship. Carl Biers, Monitor Airs Hotel Union’s Dirty Linen, UNION DEMOCRACY REV. NO. 121.

67. Robbins, supra note 31, at 22.

68. For an extreme example of this kind of criticism, see id.

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the IBT went to court to protest the $350 hourly rate billed by Frederick Lacey as “administrator” in the triumvirate trusteeship in the IBT International case.⁶⁹

The trusteeship’s budget typically involves more than just the trustee’s wages. Trustees are usually authorized to hire fulltime or part-time staff and consultants. Not uncommonly, the lawyer-trustee hires a law firm associate as an assistant.⁷⁰In some cases, the international union assigns an officer, acceptable to the trustee, to assist with collective bargaining, grievance handling, and routine administration while the trustee concentrates on audits, investigations, and elections.⁷¹

One would expect that a trusteeship over an international union’s central ofﬁce and administrative appointees would require more time, personnel, and resources than a trusteeship over a local union. Certainly, that intuition is confirmed in the case of the IBT International trusteeship that originally was comprised of three trustees and their staffs.⁷²After 1992, a three-person Independent Review Board (IRB) involved a fairly large scale operation including the continuation of the original investigations officer who, under the IRB, has a staff of two fulltime lawyers and six to eight fulltime investigators.⁷³According to IBT general president James P. Hoffa, IRB costs the IBT approximately $8–9 million per year.⁷⁴LIUNA estimates that it spends $5 million per year on the remediation effort led by Robert Luskin, plus a hearings officer and appeals officer.⁷⁵By contrast, the trusteeship over the HEREIU International’s central ofﬁce was a much smaller and cheaper operation.⁷⁶

69. United States v. Int’l B’hd. of Teamsters, 1992 WL 297489, 153 L.R.R.M. (BNA) 2430 (S.D.N.Y. Oct. 6, 1992).

70. Eugene Anderson (LIUNA Local 6A) hired his law firm associate, Ronald Gaynor, to assist him. Interview with Eugene Anderson (Aug. 5, 2002) (notes on ﬁle with author). Robert Bloch, the CLDC trustee, named a law firm partner to an important position in the Chicago Laborers’ Pension Fund. NAT’L LEGAL AND POL’Y CTR., supra note 33.
71. For example, in the Mason Tenders District Council case, LIUNA officer Steve Hammond assisted Lawrence Pedowitz. See Mason Tenders Local 59, 924 F. Supp. 528. Similarly, in the HEREIU Local 100 case, Henry Tamarin, a HEREIU vice resident, assisted monitor Mary Shannon Little. Little, supra note 64. Tamarin also assisted trustee James Flanagan in the reform of HEREIU Local 54 in Atlantic City. Flanagan, supra note 23.

72. STIER, ANDERSON & MALONE, LLC, supra note 23, at 305.

73. Id. at 302.

74. Steven Greenhouse, Teamsters Push to End Decade of Supervision, N.Y. TIMES, Aug. 14, 1999, at A1 (stating that the trusteeship had cost the IBT $82 million, or about $8–9 million per year).

75. The internal reform process had cost about $35 million by September 1999. Mark Murray, Labor on Patrol, NAT’L J., Sept. 4, 1999, at 2489.

76. Kurt Muellenberg, retired from the Department of Justice and not seeking a second career in the private sector, agreed to a $190 hourly rate. Muellenberg, supra note 36.

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Covering the costs of a RICO trusteeship often presents a major problem.⁷⁷ The trusteeship is installed over a union whose coffers have been plundered by racketeers and by litigation costs. Generously funding the trusteeship could bankrupt the union or require dues increases that would cause the rank-and-file to abandon it. In a few cases, financial assistance has been obtained from the international union, a much deeper pocket.⁷⁸However, some trusteeships have foundered due to inadequate funding (e.g., LIUNA Local 6A).

V. The Trustee’s Training

Ideally, a new trustee should have general knowledge about organized crime, labor unions, labor racketeering, and, very importantly, the history of previous efforts to reform mob-dominated unions. He should also know about the specifics of the case at hand: the history and politics of the targeted union, its relationship to its International and to the employers for whom its rank-and-file work, and, most importantly, who the racketeers are and the means by which they have dominated and exploited the union, its pension and welfare funds, and its membership.

One does not learn about labor racketeering in law school.⁷⁹ Indeed, the subject is barely, if at all, touched on in standard labor law courses. While there are a few books on the history of labor racketeering,⁸⁰the literature is remarkably thin, given the durability of the problem. There is no manual on how to reform a corrupted union local, district council, or International or on how to organize and implement a trusteeship.

There has been surprisingly little formal or informal contact among the trustees. Indeed, Judge Bechtle in the notorious Roofers Local 30/30B case in Philadelphia instructed his trustee (liaison officer)

77. In this respect, union trusteeships differ from prison trusteeships. In the prison cases, the judge is dealing with a department of state government that can much more easily absorb the costs of a trusteeship than a beleaguered local union. Moreover, a judge could more easily hold a state officer in contempt for failing to pay the trustee to bring prison conditions to a constitutional level than hold someone in the union in contempt for not being able to come up with enough funds.

78. For example, the IBT Local 851 decree states that while the local must set up a fund from which the trustee can draw, the International will add to the fund where necessary. Consent decree, United States v. Int’l B’hd. of Teamsters Local 851 (consent decree reached before ﬁled) (Sept. 12, 1995).

79. To our knowledge, Professor Jacobs’ (with retired DOJ prosecutor Robert Stewart) NYU School of Law seminar in fall term 2002 is the only seminar on the subject to be offered at a law school.

80. See NEW YORK STATE ORGANIZED CRIME TASK FORCE, CORRUPTION AND RACKETEERING IN THE NEW YORK CITY CONSTRUCTION INDUSTRY (1988); JOHN HUTCHINSON, THE IMPERFECT UNION: A HISTORY OF CORRUPTION IN AMERICAN TRADE UNIONS (1970); PHILIP TAFT, CORRUPTION AND RACKETEERING IN THE LABOR MOVEMENT (1958); SIDNEY LENS, THE CRISIS OF AMERICAN LABOR (1959); MALCOLM JOHNSON, CRIME ON THE LABOR FRONT (1950); HAROLD SEIDMAN, LABOR CZARS (1938).

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not to have contact with trustees in other cases lest their mistakes infect the Roofers’ remediation.⁸¹ Remarkably, no conference has ever been convened to “debrief ” the trustees and to memorialize their experiences. Because the trustees are, to some extent, in a competitive situation with respect to future appointments, they may be reluctant to talk about their trusteeships, especially while they are ongoing. They also may feel bound not to reveal information that law enforcement agents, prosecutors, or the judge consider confidential. Their reports have not been assembled in any retrievable way and, in our experience, are usually difﬁcult to obtain. Thus, it is likely that a new trustee would be unaware of what strategies have succeeded and failed in previous cases.

Typically, the newly appointed trustee is briefed by the federal prosecutors who have investigated the union and drafted the complaint, but the “briefing” may be no more than one or more informal discussions over lunch. Of course, the newly appointed trustee can read the RICO complaint and the settlement agreement and any other available legal documents, including previous indictments. Because practically all of the suits have settled before trial, there are no trial transcripts and rarely pretrial depositions. Still, the new trustee will assume his role with a clear understanding of the prosecutors’ perception of the problem, or, more accurately, of the symptoms of the problem—e.g., mob influence, bloated salaries, ghost employees, and missing funds. What the prosecutors may not be able to convey, because they themselves may not know much about it, is the union’s politics, culture, and organizational environment, including the nature of the parent union and of the employers for whom the rank-and-file work.

It is unlikely that the judge will be able to add much to the prosecutors’ briefing because the union trusteeships almost always result from negotiated settlements. Without a trial, the judge herself will not be well-versed in the union’s problems, except as presented by the prosecutors, and the judge may be insufficiently involved in the case to take much “ownership” over the structure and strategy of the trusteeship which, to a large extent, is negotiated by the parties.⁸²

In the few instances where civil RICO suits against unions have gone to trial, the judge has had significant influence over the trusteeship. After a yearlong trial in the IBT Local 560 case, Judge Harold Ackerman, appalled by the history of the union’s corruption and racketeering,

81. Telephone interview with Robert Welsh, special master, Roofers Local 30/30B, in Philadelphia, Pennsylvania (Nov. 25, 2003) (notes on ﬁle with author).

82. One striking exception is Judge David Edelstein, who, despite presiding over a consent agreement in IBT Int’l, became absolutely committed to reforming the IBT. Judge Edelstein supported the government’s interpretation of the agreement in dozens of decisions and in some cases rejected the government’s position because it was not strong enough (such as with the government proposed rules for the 2001 election).

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became strongly committed to the trusteeship’s success.⁸³Judge Ackerman characterized the case in the following way: “Beneath the relatively sterile language of a dry legal opinion is a harrowing tale of how evil men, sponsored by and part of organized criminal elements, infiltrated and ultimately captured Local 560.”⁸⁴

The trustee, for good reason, is likely to be suspicious of existing union officers. After all, these officials, if not part of the corrupt clique that exploited the union for many years, may have been complicit with, or at least acquiesced in the interests of, the labor racketeers. The integrity of the International union’s officers will also be uncertain. If the rank-and-file see the new trustee “cozy up” to the national officers, much less the local officers, they may quickly conclude that the trusteeship is just for show and that nothing will change.

In a few cases, the new union trustee has been approached by rank-and-file members, usually “dissidents,” who have been bold enough to challenge the ruling clique publicly. While some dissidents undoubtedly convey useful information, others have their own axe to grind; the savvy trustee needs to evaluate all allegations and tips very cautiously.

If the trustee is going to learn more about the union, particularly about corrupt individuals and schemes, the information will probably have to come from DOL and FBI investigators, who might or might not continue working on the case after the nego