REPORT TO THE GENERAL EXECUTIVE BOARD
INTERNATIONAL BROTHERHOOD OF TEAMSTERS
REVISED FOR PUBLIC RELEASE

 

RE: INVESTIGATION AND EVALUATION OF ALLEGATIONS AND CHARGES CONTAINED IN THE APRIL 2004 REPORT OF STIER ANDERSON, LLC, TO THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS

July 13, 2005                                                                                EDWARD A. MCDONALD
MICHAEL GILBERT
DECHERT LLP
30 ROCKEFELLER PLAZA
NEW YORK, NY 10112

 

 

 

TABLE OF CONTENTS

 

Page

INTRODUCTION ......................................................................................................................... 1

PART ONE: THE CHICAGO INVESTIGATIONS WERE NOT “SHUT DOWN”...........    ...... 11

 PART TWO: EVALUATION OF THE REPORT’S “CONFIDENTIAL” SOURCES

AND THEIR CRITICAL INFORMATION..........................................................   ......... 13

 

A.        INTRODUCTION ........................................................................................................... 13

 

B.         RELIABILITY PROBLEMS WITH THE SOURCES AND THEIR
INFORMATION - IN GENERAL .................................................................................. 15

C.        “CONFIDENTIAL” SOURCE A..........................................................................  .......... 18

 

(1)        The Investigators’ Disparaging Descriptions of D’Amico - and What They
Told Stier Anderson..................................................................................   ........... 20

(2)        What Stier Anderson Knew About D’Amico’s Background and his Motive
to Fabricate........................................................................................................... 21

(3)        D’Amico’s Contradictory Stories About Paying (and not Paying) a Bribe.....       .... 23

 

(4)        D’Amico’s Allegations about the Outfit and Related Events.....................       ......... 27

 

D.        “CONFIDENTIAL” SOURCE B .................................................................................... 30

 

E.         “CONFIDENTIAL” SOURCE C .................................................................................... 31

 

F.         “CONFIDENTIAL” SOURCE D.................................................................................... 33

 

G.        “CONFIDENTIAL” SOURCE E .................................................................................... 35

 

H.        “CONFIDENTIAL” SOURCE F..................................................................................... 37

 

I.          CONCLUSIONS ABOUT THE SIX “CONFIDENTIAL” SOURCES AND
THEIR INFORMATION................................................................................................. 38

PART THREE: EVALUATIONS OF THE IBT’S DECISIONS IN RESPONSE TO
STIER ANDERSON’S RECOMMENDATIONS CONCERNING
INVESTIGATIONS IN CHICAGO................................................................................ 39

A.        INTRODUCTION ........................................................................................................... 39

 

B.         STIER’S ROLE IN THE IBT’S NEGOATIONS WITH THE U.S. ATTORNEY
AND STIER ANDERSON’S FUTURE WITH THE IBT .....................................  ......... 42

C.        PROJECT RISE: STIER ANDERSON’S FAILURE TO MEET THE IBT’S  EXPECTATIONS............................................................................................................ 43

(1)        Failure to Meet Scheduling Commitments ..............................................    ............ 43

 

(2)        Unrealistic Promises About Obtaining Receiving Information From The
FBI ....................................................................................................................... 45

(3)        Disappointment with the Development of the RISE Code of Conduct ........       ...... 47

 

(4)        Questions About “Perception and Reality”.......................................................... 50

 

(5)        Escalating Costs................................................................................................... 51

 

D.        THE IBT’S DISSATISFACTION WITH STIER ANDERSON’S
INVESTIGATIVE WORK APART FROM CHICAGO ............................................... 52

(1)        Stier Anderson’s Problematic Use of Surveillance.......................................   ....... 52

 

(2)        Other Stier Anderson Investigations That The IBT Leadership Found Troubling.............................................................................................................. 54

E.         THE CHICAGO INVESTIGATIONS ............................................................................ 60

 

(1)        Introduction.......................................................................................................... 60

 

(2)        The Two Authorized Investigations in Chicago ..........................................    ........ 61

 

F.         THE REPORT’S “INDEPENDENT CORROBORATION” .......................................... 63

 

G.        THE TIMING OF THE REPORTS FROM THE “CONFIDENTIAL” SOURCES 
AND THE RELEASE OF THE APRIL REPORT......................................................  .... 82

INTRODUCTION

In September 1999, the International Brotherhood of Teamsters (the “IBT” or the “Union”) retained the law firm of Stier Anderson & Malone (“Stier Anderson”) to assist in developing a program of reform that would ensure that all vestiges of organized crime and corruption were removed from the Union.  The IBT leadership expected that the implementation of the reform program would foster a culture within the Union that would be intolerant of corruption and would result in the elimination of the requirement of oversight by the IBT’s Independent Review Board (the “IRB”).  That requirement had been imposed in 1989 as a result of a consent decree resolving a civil RICO action that the United States Department of Justice had brought against the Union and its General Executive Board in the United States District Court for the Southern District of New York in 1988.

After their retention, the Stier Anderson lawyers organized investigators, advisors, and IBT representatives to participate with them in what was called Project RISE for “Respect, Integrity, Strength and Ethics.”  Project RISE had two objectives:  creating for IBT members a code of conduct that would include an effective enforcement process and completing a nationwide survey or “field study” of IBT locals that would result in a report on the current state of corruption and organized crime within the IBT.  The Stier Anderson team worked throughout 2000 and into 2001 drafting a code of conduct and enforcement procedures with the expectation that the Department of Justice would be persuaded that the code and its enforcement process could effectively replace the IRB.  Investigators working with Stier Anderson also conducted “field studies” of IBT’s local unions, focusing on approximately 80 locals with troublesome histories. In October 2002, they published a 641 page report entitled “The Teamsters:  Perception and Reality - An Investigative Study of Organized Crime Influence in the Union” (“Perception and Reality”) that not only described the current state of the IBT, but also detailed the IBT’s history of corruption and influence by organized crime.

From the time of Stier Anderson’s retention, Edwin Stier, the firm’s senior partner, was unstinting in his praise for IBT General President James P. Hoffa and his leadership team and their commitment to anti-racketeering reform.  For example, on March 28, 2000, in Congressional testimony about the IBT’s efforts at reform, Stier said, “I must say that throughout this process [of working with the IBT to initiate an anti-racketeering program], I have been extraordinarily impressed by the honesty and commitment of Mr. Hoffa [and] the other officers of the International Union … who have contributed so much to this effort.”  By the time “Perception and Reality” was issued in October 2002, Stier went so far as to say, “Our study has found that organized crime is no longer a problem it once was in the Teamsters.  The days of the Teamsters being synonymous with organized crime are over.  The Teamsters are no longer dominated or heavily influenced by organized crime.  Today’s Teamsters are committed to keeping organized crime out of the Union” (IBT October 2, 2002, News Release, at 1), and “The difference [in the IBT] between now and the 1980’s is absolutely dramatic; there’s a 180 degree difference. In terms of its attitude toward corruption, you couldn’t have a more dramatic difference.” (New York Times, October 3, 2002, at A20).  The Report’s Executive Summary also states, “What marks a radical change from the past [for the IBT] … is a genuine commitment to anti-racketeering reforms coupled with a realistic ability to carry them out …  ” (“Perception and Reality:” Summary of Findings, at 19-20), and “Already, the self-policing being undertaken by the Teamsters places the Union in a leadership role among labor organizations and compares favorably with the internal compliance systems of most business corporations and other private entities.”  (Id., at 23-24).

As Project RISE proceeded, the IBT leadership began to authorize the Stier Anderson attorneys and investigators working with them to conduct investigations into allegations of corruption in certain local unions.  These investigations were independent of Project RISE and were referred to within the leadership as “special investigations” or “General Counsel investigations.” In early 2002, General President Hoffa authorized Stier Anderson to conduct investigations at two locals in Chicago.  In 2002 and 2003, Stier Anderson proposed additional investigations in the Chicago area relating to other locals.

In April 2004, Stier Anderson issued a Report concerning their on-going and proposed investigations in Chicago entitled “Report and Recommendations:  Issues Concerning Chicago Organized Crime Infiltration of Teamster Entities and Attempts to Undermine IBT Anti-Racketeering Reforms” (the “Report” or the “April Report”).  The Report paints a picture of the IBT leadership very different from what Stier Anderson had previously depicted.

The Report claims that beginning in September 2003, Stier Anderson investigators received information from six individuals “who were in positions to know” and who are referred to as “confidential” sources A through F that “the Chicago organized crime family -- known as the Chicago ‘Outfit’ -- had concluded that its interests in Teamster matters were threatened by IBT investigative activities [being conducted by Stier Anderson] and had ordered those activities shut down.”  The Report goes on to state that the “confidential” sources reported, “This objective would be accomplished by influential current and former union officials, including the current president of Joint Council 25 [John Coli] and the executive assistant to the IBT general president [Carlow Scalf].”  The Report also says that “confidential” sources claimed that “[Former Joint Council President Bill] Hogan, the JC25 President, and the Executive Assistant are key figures behind attempts to shut down IBT investigations in Chicago.”

The Report is then confusing and, in some places, inconsistent in describing its conclusions about the charges attributed to the six sources and about the corroboration that exists for their claims.  On the one hand, the Report repeatedly cautions against a rush to judgment:  “The IBT investigative team does not assume that information from intelligence sources is accurate” and “The identification of certain issues in this report does not reflect a conclusion that misconduct has actually occurred.”  The Report calls for a “full investigation” to determine whether the informants’ allegations are true.  On the other hand, the Report contains statements expressing conclusions about the informants’ charges and about certain decisions that the IBT leadership made in 2003 and 2004.  However, certain conclusions are repeated with shifting emphases; and it is often unclear just what the Report means to say.  

First, concerning the commitment of the Hoffa leadership team to reforming the IBT, the Report states, “During the past year, and especially since June 2003, it has become increasingly obvious that the IBT’s leadership’s commitment to the reforms symbolized by Project RISE has wavered.” This finding of “wavering” is quite different from harsher statements elsewhere in the Report on this point.  For example, the Report says, “There is substantial evidence to support”…“[the] perception that has taken root among both supporters and opponents of reform that the IBT’s top leadership no longer supports [the anti-racketeering reform] program and will not permit anti-racketeering investigations to threaten the most powerful remaining organized crime influences in the Union, which are centered in the Chicago area.” The Report goes on to say, “The IBT’s 2003-2004 refusal to confront serious issues of organized crime influence and corruption in the Chicago area represents the failure of a crucial test of its commitment to its professed racketeering reform program” and “The reform agenda proclaimed by IBT leaders a short time ago has turned on its head.”  The Report ends with: “[C]ontinuing to represent that the Union is committed to reform under the present circumstances could be viewed as a fraud on union members, government agencies, and the public.”

Second, the Report states that “covert inquiries and analysis of intelligence information and other evidence produced independent corroboration of the intelligence sources and leaves little doubt that, whether emanating from the Outfit or not, there have in fact been attempts to shut down or severely restrict [Stier Anderson] investigations in Chicago.”  The Report later definitively asserts that on February 24, 2004, all anti-racketeering investigations in the Chicago area had been “shut down.”

Third, according to the Report, primary responsibility for “shutting down” the Chicago investigations lies with the IBT General President’s Executive Assistant, Carlow Scalf, who “in response to pressure from certain Chicago Teamster leaders,” including the current and former presidents of Joint Council 25, John Coli and Bill Hogan, was “using his influential position to sabotage the IBT investigative team.”  The Report also says, “The combined efforts of the executive assistant [Scalf], the JC 25 president [Coli], and their allies succeeded in bringing about the complete shut down of Chicago investigations in 2004.”  The Report leaves little doubt that Stier Anderson contends that the Chicago organized crime group, the Outfit, was behind efforts to impede reform and “shut down” the Chicago investigations.  Indeed, in addition to finding corroboration for the six “confidential” sources and their reports about the Outfit ordering that the investigations be “shut down,” the Report repeatedly raises the specter of the “infiltration of Teamster entities by the Chicago organized crime family” and states, “If the current shutdown of IBT anti-racketeering efforts in Chicago is allowed to stand, the reason for it will be obvious to both Teamsters and outsiders: the continued influence of the Chicago Outfit and the culture of corruption that has flourished in that area for as long as the Union has.”

The Hoffa leadership team was extremely disturbed by the April 2004 Report, especially since the leadership is adamant that they remain steadfast in their commitment to reform.  They note that they paid Stier Anderson and their associates approximately $15 million dollars in connection with the reform effort, while still paying for the work of the IRB as required by the Consent Decree; they authorized Stier Anderson to conduct field studies of 80 IBT locals, to conduct intensive special investigations at over 15 locals, to devote substantial resources to the creation of an IBT code of conduct, and to prepare a detailed report on the status of corruption in the Union; and they also cooperated extensively with the IRB and multiple law enforcement agencies.

The leadership also takes issue with the charge that the Stier Anderson investigations in Chicago were “shut down” with the obvious implication that the leadership sought to conceal evidence of wrongdoing.  They contend that what the Report claims was the “shutting down” of the investigations in February 2004 was actually the leadership’s decision that the investigations remain “on hold” while Stier Anderson prepared a report justifying their proposals and describing the status of their extensive investigative activity. Moreover, while the leadership did reject certain proposals as unwarranted and chose not to permit Stier Anderson to embark on other costly, long-term investigations, they did not seek to cover up anything:  in fact, they referred all the proposed investigations to either the IRB or appropriate law enforcement agencies.

Finally, the leadership team has very different explanations for why they responded the way they did to Stier Anderson’s proposals for Chicago. First, although no agreement had been finalized, by September 2003, the IBT leadership was more optimistic than ever before that the United States Attorney’s Office for the Southern District of New York (the “Southern District”) would agree to accept an alternative enforcement process that would replace the IRB. The IBT leadership strongly believed that any new enforcement program would not include a role for Stier Anderson.  Therefore, the IBT leadership was of the view that it would make no sense to allow Stier Anderson to commence complex, long-term investigations in Chicago only to be replaced if and when a new enforcement program was accepted by the United States Attorney’s Office.

In addition, by September 2003, the IBT leadership had grown dissatisfied with the Stier Anderson team and the work that they had done both on Project RISE and in their investigations of locals outside of Chicago.  In short, they felt that despite paying approximately $15,000,000 in fees and expenses for the Stier Anderson lawyers and their investigators, the prompt results that Stier Anderson had predicted in 1999 had not been achieved.

The IBT leadership was also disappointed with Stier Anderson’s performance in Chicago. Even though the law firm had been authorized to conduct investigations at two Chicago locals in early 2002, they had virtually nothing to show for their efforts 18 months later.  Moreover, the IBT leadership believed the additional investigations that Stier Anderson recommended were, in some cases, based on information of dubious reliability and, in other cases, were impractical, unreasonably broad in scope, duplicative of IRB and other investigations, and potentially extremely costly.

Shortly after the Stier Anderson Report was issued, the IBT General Executive Board, at the General President’s recommendation, retained Dechert LLP to “investigate allegations made in [the Report] concerning interference in investigations being performed by the Stier Anderson firm and otherwise to evaluate that report and advise IBT and its officers concerning what additional action should be taken concerning the allegations and matters contained in that report.”  The General Executive Board also formed a three-member Committee of Board members, Robert Bouvier, Jack Cipriani and Chuck Mack, to whom we reported.  Within days of our retention, Stier Anderson terminated its relationship with the IBT.

During the following several months, we sought to get to the bottom of the Stier Anderson allegations described above.  We interviewed virtually everyone who might provide us with relevant information, including General President James P. Hoffa, General Secretary Treasurer C. Thomas Keegel, General Counsel Patrick J. Szymanski, Executive Assistant Carlow Scalf, Joint Council 25 President John Coli, and IBT officials in headquarters in Washington, D.C., and in Chicago. Despite the lack of cooperation from Stier Anderson, we were also able to interview all six of the so-called “confidential” sources and the four Stier Anderson investigators who had worked on the Chicago matters.  In addition, we reviewed countless documents, records and reports concerning the subjects of the April Report.  We did not seek to interview any of the Stier Anderson lawyers believing that it made little sense to do so in light of the firm’s refusal even to respond to our initial request for cooperation and the bitterness and hostility that Stier persistently displayed in his correspondence with the IBT and in his public statements about the Report and the reasons for his firm’s resignation.

We provided the General Executive Board a 183 page report detailing our findings and conclusions on March 17, 2005. Since our report contained confidential information and highly sensitive descriptions of ongoing, non-public investigations, the Board determined that it would not be appropriate to release the report to the public in its entirety.  The Board requested that we prepare an abbreviated version of the report describing our investigation and the critical findings that we made without references to confidential and sensitive information.  

In what follows, we present our abbreviated report.  In Part One, we describe, albeit in an abridged fashion, our finding that the Chicago investigations proposed by Stier Anderson were never “shut down” in the first place.  Perhaps most importantly, in Part Two, we describe in detail our analysis of the foundation of the April 2004 Report, the information provided by Stier Anderson’s six confidential sources.  We have concluded that there was no basis to credit the information that the sources provided and in light of what the Stier Anderson team knew about the sources, it is entirely unclear why they ever accorded any weight to what the sources had said and why they even repeated their allegations.  In Part Three, we review certain aspects of the history of the relationship between the IBT and Stier Anderson to provide a context in which to evaluate the leadership’s decisions in late 2003 and 2004 that the April Report asserts were tainted by “sabotage.” While the April Report contends that the leadership’s actions constitute “independent corroboration” for what the sources reported, we have concluded and demonstrate below that the IBT leadership, given its four year experience with Stier Anderson, had good reason to be dissatisfied with the firm’s performance; and in light of these reasons, they responded in a reasonable and responsible way to Stier Anderson’s investigative proposals. We also review certain of the specific events upon which the April Report relies as corroboration for the sources’ reports, and we describe our finding that none of the items of “independent corroboration” provide any support for the charges in the April Report.  Finally, we review the timing of the April Report in an effort to come to some understanding of why the Report - with its inflammatory and poorly supported allegations - was ever released at all.

PART ONE: THE CHICAGO INVESTIGATIONS WERE NOT “SHUT DOWN”

At the outset, it is important to state that the April Report’s critical allegation that Stier Anderson investigations in Chicago were “shut down” is simply not true.  The Report identifies investigations involving seven locals in Chicago and two IBT members that were supposedly “shut down” by the IBT leadership as a result of a plan of obstruction orchestrated by the Chicago Outfit and carried out by Carlow Scalf and his Teamster allies in Chicago.  The clear implication of this charge is that the Outfit and Scalf succeeded with their “sabotage” when the Hoffa administration, fearful of what the investigations would reveal and no longer committed to anti-racketeering reform, especially in Chicago, capitulated.  Based on our review of correspondence between the IBT leadership and Stier Anderson, as well as our interviews of members of the leadership, it is clear to us that, contrary to the charges in the Report, the IBT did not “shut down” investigations in Chicago in 2004, as Stier Anderson contends.

In February 2004, when the IBT leadership and Stier Anderson were having discussions about the various investigative proposals, the leadership accepted Stier’s suggestion that Stier Anderson prepare a report describing the status on their investigations and justifying their recommendations.  At that point, the leadership did not “shut down” any investigations.  The IBT leadership determined, understandably, that on-going investigations should be placed “on hold” pending the completion of the report. When Stier Anderson provided its Report to the IBT, the leadership was certainly surprised by the explosive nature of its allegations.  The Report also contained recommendations for certain investigations that were being made for the first time.  The leadership recognized that in light of the reasons that we describe in this report, Stier Anderson did not have a long-term future working for the IBT and that it made no sense for them to proceed -- except for work on one long-term matter that appeared close to resolution.  At that point, the leadership did not “shut down” the other investigations; they did not attempt to conceal wrongdoing at Chicago IBT locals; and they did not act in a way that was inconsistent with their stated commitment to reform.  Indeed, the leadership directed Stier Anderson to refer all of the investigative matters described in the April Report to the IRB, which had successfully conducted countless investigations of IBT locals, as well as to the Department of Labor and appropriate law enforcement agencies.  This was hardly a decision that resulted in the “shutting down” of investigations and the covering-up of wrongdoing.  

Finally, it is important to note that the purpose of our investigation was not to draw conclusions about the substance of the various allegations of corruption within local unions that Stier Anderson cites in their Report.  Our findings that the IBT leadership’s reaction to Stier Anderson’s recommendations was not tainted by “sabotage” and that the IBT leadership did not abandon its commitment to reform, as Stier Anderson claims, should not be read as a conclusion that there is no corruption or wrongdoing in any of the locals referred to in the Report.  The entire Report – including, of course, all of the allegations of corruption within local unions that Stier Anderson describes – is in the hands of the United States Attorney’s Office and the IRB.  None of those allegations have been ignored or “swept under the rug,” as Stier Anderson implies.  It is simply not the case that Stier Anderson is the only entity capable of addressing those issues.  It is our understanding and our expectation that to the extent Stier Anderson presents valid allegations or issues that require further investigation at any local, those matters will be addressed by the IRB, by other government agencies and/or by the IBT itself.

 

PART TWO: EVALUATION OF THE REPORT’S “CONFIDENTIAL” SOURCES AND THEIR CRITICAL INFORMATION

A. INTRODUCTION

At the heart of the allegations about the IBT leadership’s abandonment of its commitment to reform, the influence of the Chicago Outfit with high-level Chicago Teamsters and Carlow Scalf, and the improper “shutting down” of Chicago area investigations is information from the six supposedly “confidential” sources that investigators working with Stier Anderson began to receive in September 2003. The sources, who are identified in the Report as Sources A through F, are presented as reliable and knowledgeable about developments in Chicago IBT and organized crime circles.  According to the Report, they informed the Stier Anderson investigators that “the Outfit had concluded that its interests in Teamsters matters were threatened by [Stier Anderson] investigative activities and had ordered those activities shut down.” The sources also reportedly said that the Outfit’s “objective would be accomplished by influential union officials, including the JC 25 President [John Coli] and the Executive Assistant [Carlow Scalf], who would use their positions to stop IBT investigations in Chicago.”  Elsewhere in the Report, “confidential sources” are reported to have said, “[Former Joint Council 25 President Bill] Hogan, the JC 25 President, and the Executive Assistant are key figures behind the attempts to shut down IBT investigations in Chicago.”

This “confidential” source information is critical to the Report’s conclusions and recommendations.  Indeed, despite the lip service that the Report pays to the need for a full scale investigation of what the sources said, a fair reading of the Report leads to the unmistakable conclusion that the information from “confidential” sources A-F is the very foundation upon which the Report stands and that the Stier Anderson team has accepted the “confidential” source information as true.  Therefore, we have provided a detailed report of our analysis and conclusions about the source information.

Assessments of the credibility of the sources and the reliability of the information that they provided are essential to determining whether their allegations are worthy of belief.  Therefore, we sought within days of our retention to obtain from Stier Anderson the confidential appendix that they cite in the Report as containing the statements of the so-called “confidential” sources upon whom they relied.  The Stier Anderson firm did not respond to our letter requesting the confidential appendix. Instead, Stier wrote to IBT General Counsel Patrick J. Szymanski on April 28, 2004, to inform him that he refused to release the confidential appendix to us.  He claimed that providing the confidential appendix to us “under the present circumstances would compromise the union’s ability to carry out its obligations under the Consent Decree, as well as its commitment to police itself.”  Even though he had never spoken to anyone at our firm, he suggested that we were “biased in favor of protecting the general president’s political or personal interests,” that “the true purpose” of our request was “to allow the general president’s office to obtain access to the confidential information for reasons that will not bear scrutiny,” and that the “personal safety” of those sources who would be identified in the confidential appendix “may be at stake.” While we considered interviewing Stier and his attorneys as part of our investigation, his complete lack of cooperation, his refusal even to respond to our correspondence, his unfounded disparaging comments and the bitterness and hostility that he repeatedly exhibited in his correspondence with the IBT and in his public statements about the Report and his firm’s resignation led us to conclude that any further attempts at contacting him and other Stier Anderson attorneys would be unproductive.

We did not obtain the confidential appendix from Stier Anderson.  Nonetheless, we did obtain the reports that were prepared of the interviews that former FBI agents working with Stier Anderson lawyers had conducted with the six “confidential” sources.  Even more important, not only did we interview the four Stier Anderson investigators who participated in the Chicago investigations, we were also able to interview all six of the sources, five in person and one by telephone. Remarkably, we learned that four of the six individuals, who are described as “confidential” sources and whose identity Stier refused to reveal to us, had never sought confidentiality from the Stier Anderson investigators in the first place and did not consider themselves to be confidential informants.

We describe below what we learned from the interview reports and from the sources themselves, as well as what we learned elsewhere about the sources.

B.        RELIABILITY PROBLEMS WITH THE SOURCES AND THEIR INFORMATION - IN GENERAL

The information attributed to each of the sources is described on pages 19-21 in the April Report. We discuss below each of the six sources and the information that each one provided. However, we first note that with respect to all six sources, there are fundamental problems that go to the very heart of the quality of the information attributed to them.

The first critical problem is one of reliability.  Nowhere in the Report is there any description of any reasons for relying on the sources or their information.  The Report is silent on why the sources themselves were credible.  Moreover, even if it were shown that the sources were honest, there is no evidence even to suggest that the information that they reported was credible.  In fact, there is virtually no explanation at all of where and how the sources had obtained the information that they reported.

The Report creates a misleading impression concerning the reliability of the sources and their information. The six sources are presented as six independent individuals who corroborate each other. However, it is clear -- and it had to have been clear to the Stier Anderson team -- that much of the information that the six sources reported had been recycled among themselves.  This is a process that we call “circular sourcing,” for which we provide the following examples.

Sources A and B could not have been less independent of one another.  Source A told the Stier Anderson investigators that he initially obtained the information that he reported from Source B; Source B told them that he got the same information from Source A.  The principal Stier Anderson investigator in Chicago remarked to us that Sources A and B substantiated one another; but a witness cannot substantiate another by simply repeating what the other had previously told him.

Sources C and E were also not independent of each other.  They agreed to meet with us but refused to do so unless they were interviewed together, explaining that we “are in this together” and that “our information is the same.”  The two sources refused to identify their sources of information, but the principal Chicago investigator for Stier Anderson told us that he “assumed” that most of Source E’s information had come from Source C.

We also learned that Source B was closely associated with Source F.  In fact, when Source F lost his position with the IBT, Source B, the principal officer of an IBT local, hired him.  There is good reason to believe that Sources B and F were also recycling information.  In fact, another Stier Anderson investigator familiar with Sources A, B and F, told us that he believed that the information attributed to Source A in the Report was the “blending” of information from three sources.

The second problem is one of accuracy.  The Report, in its summary of what the six sources reported, essentially has them saying that the Chicago Outfit had Chicago Teamsters and Carlow Scalf use their official positions to “shut down” Stier Anderson investigations in Chicago. But it is clear from the Report itself that that is not what all six of the informants said.

For example, on the critical allegation that the Chicago underworld was behind the effort to “shut down” the investigations, sources C, D and F made no mention at all of organized crime trying to interfere with any investigations.  Source B mentioned the Outfit but said that he was simply repeating what he said Source A had told him. Thus, only Sources A and E implicated the Outfit in the alleged sabotage.

In addition, it is unclear what the informants claimed was to be “shut down.”  All six sources are reported to have given information about attempts to “shut down” or impede “Project RISE.”  But what did the sources mean by “Project RISE?”  In fact, “Project RISE” is only that part of the Stier Anderson retention that was devoted to the development of a code of conduct and the survey and report on the current state of the Union -- not the “special investigations” authorized by the General Counsel for certain IBT locals, such as those in Chicago that the April Report addresses.

Thus, when the six sources are reported to describe efforts to impede “Project RISE,” there is, at the very least, ambiguity about what they meant.  For example, Source F certainly was not referring to investigations that the Stier Anderson team was conducting or proposed to conduct in Chicago when he spoke about Project RISE.  On its face, the information that he reported concerns efforts within the IBT to defeat certain provisions in the proposed RISE Code of Conduct. Those efforts took place in 2000, long before the IBT authorized any Stier Anderson investigations in Chicago.  In addition, Source B was clearly misinformed and told us that he thought that “Project RISE” investigations referred to those that would be conducted after the IRB was replaced.

The third problem with the “confidential” source information is that it does not make sense.  Implicit in the allegation that the Chicago underworld wanted to “shut down” the Stier Anderson investigations is the premise that only the Stier Anderson team is capable of conducting effective investigations of corruption in IBT locals.  The fallacy in this premise is that even if the Stier Anderson team were removed from Chicago, the Outfit and any corrupt associates in Chicago IBT locals would still have to cope with the IRB, which, of course, has had enormous success in rooting out organized crime and corruption from IBT locals throughout the Union.

We now turn to our evaluation of the six sources and the information that they provided.

C. “CONFIDENTIAL” SOURCE A

We devote considerable attention to Source A because he was most important in the development of the intelligence information that is at the heart of the April Report.  Stier Anderson’s principal investigator in Chicago, who spent a substantial amount of time with Source A, told us, “As full of shit as [Source A] is, he was the first one to tell of Carlow Scalf and the Outfit’s attempts to kill the investigations,” and therefore, he was “the most important source.” According to the investigator, it was only after Source A’s first report, on September 15, 2003, about the Outfit’s efforts to sabotage the investigations that the investigators were assigned to talk to others to see if they could confirm what Source A had said.

The Report says the following about “Confidential” Source A:

One Confidential Source (“Source A”), who investigators have independent reason to believe has Outfit connections, stated that the Outfit is extremely upset with “Project RISE” and at General President Hoffa for starting it, and has ordered it stopped.  Source A reported that there was too much money involved in control of Teamster pension and health and welfare funds in Chicago for the Outfit to tolerate Project RISE.  The Executive Assistant [Carlow Scalf], current JC 25 President [John Coli], and a former barred JC 25 President [Bill Hogan] were sabotaging Project RISE pursuant to Outfit instructions, according to Source A.

First of all, Stier has corrected an extremely disturbing accusation attributed to Source A in the passage quoted above. The unambiguous meaning of the last sentence is that Scalf was sabotaging Stier Anderson investigations pursuant to direct instructions from the Chicago underworld. However, in a letter to IBT General Counsel Szymanski dated April 21, 2004, after the Report had been issued, Stier conceded that their information was not that Scalf was acting directly at the behest of the Outfit, but instead that he was receiving “pressure from Chicago-area Teamsters who in turn were acting at the instigation of racketeers.” Stier Anderson’s principal investigator in Chicago, who interviewed Source A and the other sources, also told us that despite the careless wording in the Report, none of the sources ever claimed that Scalf was aware that the Outfit was seeking to undermine the Stier Anderson investigations or that Scalf was taking directions from the Outfit.

In any case, Source A is Anthony D’Amico, a former business agent and trustee at IBT Local Union 786 who has repeatedly made allegations about corruption in Chicago IBT locals. Despite Stier Anderson’s description of D’Amico as a “confidential” source, the chief Chicago investigator informed us that D’Amico did not provide information attributed to him with any expectation of confidentiality.  Indeed, D’Amico has made many of his allegations publicly and has been questioned in depositions about several of his claims.

We were able to interview D’Amico by telephone.  We attempted to interview him in person on three occasions when we were in Chicago, but we were unable to do so.  On one occasion, D’Amico failed to appear for a meeting that had been scheduled the evening before. We reviewed reports of several interviews of D’Amico that the investigators had conducted, and we interviewed others and gathered background information about D’Amico to determine whether he was reliable and whether the information that he reported was credible.  We have concluded that there were numerous reasons - many known to the Stier Anderson lawyers - for disbelieving D’Amico and what he said.

(1)        The Investigators’ Disparaging Descriptions of D’Amico - and What They Told Stier Anderson

We interviewed the chief Chicago investigator at length about his experience with D’Amico and his perceptions concerning D’Amico’s credibility and the value of his information.  He told us that D’Amico had provided differing accounts of a bribe that at one point he had claimed to have paid to Hoffa in 1997, two years before Hoffa was elected General President.  We will describe the details of D’Amico’s shifting accounts of this assertion below.  For present purposes, the investigator told us that upon hearing from D’Amico about his claim to have paid the bribe, he was “very hesitant about” him. He said that because of the importance of the allegation, he introduced D’Amico to the Stier Anderson lawyer who was supervising the Chicago investigations and who ultimately was primarily responsible for preparing the April Report. The lawyer wanted to hear first hand what D’Amico had to say about the bribe.  When D’Amico met the Stier Anderson lawyer, he contradicted his previous statements and denied that he had ever paid the bribe. The Stier Anderson lawyer then took a sworn statement from D’Amico, and D’Amico again denied paying the bribe.  The investigator said, “I told [the Stier Anderson lawyer] when D’Amico denied the bribe, his credibility was out the window.”

We also interviewed Bill Moore, the IBT International Representative who was appointed by General President Hoffa as his personal representative in connection with the Stier Anderson investigations at two Chicago locals, and learned his views of D’Amico.  Moore met three times with D’Amico to hear his allegations about one of the locals that Stier Anderson had been authorized to investigate.  Moore said that he told the Stier Anderson lawyers handling the Chicago investigations that what D’Amico said was “not believable” and in fact, that D’Amico was “almost laughable.”  Moore believed that D’Amico was “using the investigators” in order to get even with Chicago Teamster leaders with whom he had had a falling out.  Moore said that D’Amico had never provided “anything solid” and that the investigators had problems trying to prove what D’Amico said was true.

(2)        What Stier Anderson Knew About D’Amico’s Background and His Motive to Fabricate

D’Amico was well known to the Stier Anderson lawyers.  Not only did one of the lawyers depose D’Amico in January 2004 concerning his bribery allegations, he also deposed D’Amico in December 2002 in connection with the investigation of a Chicago area local.  In view of the Stier Anderson lawyers’ first hand experience with D’Amico and other critical facts that the Stier Anderson lawyers knew about him, they must have recognized that D’Amico had a motive to fabricate. In fact, they did.  Even though they do not describe in the April Report any reasons to be skeptical about D’Amico, they did refer to his credibility problems in a report that they issued on June 25, 2003, in connection with one of the locals that they were investigating.  In that report, Stier Anderson stated that a lawsuit that D’Amico had brought against Local 786 “raise[s] questions about his credibility.”

D’Amico had been a member of Local 786 for more than 30 years.  In 1996, he was elected to a Trustee’s position on a slate headed by the Local’s current principal officer, Lou Mazzei. Shortly after the election, Mazzei sought D’Amico’s removal from the Local, claming that D’Amico had associated with an organized crime member who had been permanently barred from membership in the IBT.  In January 1997, a Local 786 Trial Board concluded that the charges had been established and expelled D’Amico from the Local.  The decision of the Trial Board was affirmed later in 1997 by the Chicago area’s Joint Council 25 and the IBT’s General Executive Board, which removed D’Amico from membership in the Union.

The decisions removing D’Amico from membership in Local 786 and the IBT itself were reversed four years later by a vote of the delegates at the 2001 IBT International Convention. D’Amico was then reinstated to IBT and Local 786 membership.  D’Amico, however, has been unable to find permanent work with any IBT employers and has not been able to take advantage of his IBT membership.

D’Amico blames Mazzei and his associates at Local 786 for his problems.  He described for a Stier Anderson lawyer at his December 3, 2002, deposition his account of how Mazzei had harassed him and pressured prospective IBT employers not to hire him. D’Amico has sued Local 786, Mazzei, and others involved in the leadership of Local 786, alleging, among other things, that he was wrongfully removed from his Union membership on false charges and deprived of work. D’Amico has also been critical of IBT Joint Council 25, and he has repeatedly complained to the Stier Anderson investigators -- and to us -- that the Hoffa leadership team was not responsive to his complaints.

(3) D’Amico’s Contradictory Stories About Paying (and not Paying) a Bribe

As we noted above, when D’Amico contradicted his previous claims about paying a bribe, one of the investigators told Stier Anderson that D’Amico’s credibility was “out the window.” The bribery allegation that D’Amico made arose when he was asked about a rumor that had circulated in Chicago IBT circles for some time to the effect that D’Amico was able to get reinstated to IBT membership at the 2001 IBT Convention because he had paid a bribe to Hoffa in 1997 to support his reinstatement.  The implausible details of D’Amico’s various contradictory accounts -- which were provided to the Stier Anderson team -- alone should have entirely discredited D’Amico.  We review his contradictory statements about the bribe at length, because they so clearly demonstrate D’Amico’s lack of trustworthiness.

(a) According to his interview reports, D’Amico first spoke to Stier Anderson

investigators about the bribery allegation on September 15, 2003, the same day he initially

volunteered his allegations about the Outfit’s efforts to sabotage the Chicago investigations. 

D’Amico’s first account of the bribe was cryptic and hypothetical:

D’Amico stated it is rumored he paid $25,000.00 to get back in the IBT. D’Amico stated it also rumored the meeting with Hoffa was set up by John Coli. D’Amico stated if this were true then that might be why he refers to Carlo Scalf as Hoffa’s bag man as he probably passed the envelope to a guy he thought was named Carl, who was with Hoffa. D’Amico stated if this did take place the meeting was held at a restaurant in a hotel Hoffa stays in when he comes to Chicago, and that he, D’Amico, probably has witnesses, who saw the envelope being passed.  D’Amico stated he thought the hotel was a Ramada on the North side of Chicago, and he could show the investigators where it was and the restaurant they had dinner at, which by the way was lousy. D’Amico stated if he did pay the money, he sure did not get much for it, that it would make one think Carl did not give Hoffa his share of the money.  D’Amico stated the investigators should tell Hoffa this may come up in his (D’Amico’s) case in US District Court in Chicago next year, and he will have to testify truthfully as to what probably occurred.

That D’Amico would play games with the investigators and treat a matter as

important as the alleged bribery of the IBT’s General President in such a cavalier manner should

immediately have raised red flags about D’Amico and the weight to be accorded to anything he

said. Further undermining his credibility was the last sentence of the statement in which

D’Amico, who was seeking to have the IBT leadership intercede in his dispute with Local 786,

could be viewed as attempting to blackmail the General President.  Nonetheless, Stier Anderson

instructed the investigators to pursue the bribery allegation, if it can be called that, with

D’Amico.

(b) On November 6, 2003, when Stier Anderson investigators interviewed

him again, D’Amico purported to be serious:

D’Amico stated he was approached during either February or March, 1997 by the Hoffa camp and was told for $25,000.00 Hoffa would arrange to have him reinstated, when they got Carey out as General President, because Hoffa was a sure winner in another election. D’Amico stated Hoffa and his people were holding a campaign slate meeting at the Ramada Inn, Rosemont, IL, which he attended. D’Amico stated the time frame was February or March, 1997. D’Amico stated he then gave Carlo Scalf an envelope containing $25,000.00 in cash at the meeting.  D’Amico stated he has a witness who saw him give the money to Scalf and is willing to testify.

* * *

D’Amico stated this bribe will come out in his lawsuit against Local 786, which is currently pending in US District Court, Northern District of Illinois.

(c) On November 21, 2003, D’Amico was questioned once again about his

claim.  He provided important details significantly inconsistent with his previous account:

[D’Amico] stated he paid the bribe to Carlo Scalf on the day the General Executive Board of the IBT in Washington, DC upheld his being banned from the IBT and it could have been October 20, 1997, if that is what the records showed.  D’Amico stated he did make a $500.00 contribution to Hoffa via a money order, which he gave to Dane Passo sometime during the summer of 1997 at the Hoffa campaign headquarters in Berwyn, IL.  D’Amico stated the $20,000.00 was passed to Carlo Scalf at a dinner meeting with Hoffa at a restaurant close to the hotel in Rosemont, IL where Hoffa was staying. D’Amico stated Hoffa had Scalf and 2 other people at the table, when he gave the $20,000.00 to Scalf in a sealed Federal Express envelope.

* * *

D’Amico stated he did not wish to harm Hoffa, but that this is going to come out in his lawsuit, and will make Hoffa look bad.  D’Amico stated that the IBT hierarchy in Chicago is planning on using this to run against Hoffa.  D’Amico stated he had a witness to the bribe paid to Scalf, and intimated it was Robert Walston, President and Principal Officer of IBT, Local 743.

(d) As we mentioned above, after one of the investigators had heard

D’Amico’s allegation about the bribe, he informed the Stier Anderson attorney with whom he

was working. According to the investigator, he arranged a meeting with D’Amico and the

attorney. When the attorney asked D’Amico about his claim of having paid a bribe to Hoffa

and/or Scalf, D’Amico contradicted his previous statements and denied it.  The attorney followed

up his interview with a formal deposition on January 20, 2004.  Once again, this time under oath,

D’Amico denied paying the bribe:

Q. Did you ever give the Hoffa campaign or anyone close to Hoffa 20,000 or any significant amount of money like that in order to be reinstated [into Local 786]?

A. No.

* * *

Q. So as far as you’re concerned, there is no truth to you ever giving money to Hoffa or someone around Hoffa in order to be reinstated back in the Teamsters?

A. There’s no truth to that. I believe that this was put out because of my pending lawsuit to make me and Mr. Hoffa look bad.

                        (e) By the time Stier Anderson was preparing the April Report, D’Amico had once again denied paying a bribe to Hoffa; and once again he had been under oath.  When deposed on February 4, 2003, in connection with the lawsuit that D’Amico had filed against Local 786 concerning his removal from membership in the Local and other claims, D’Amico said, “It’s not true,” when asked if he had paid Hoffa $20,000.

                        (f) We spoke with D’Amico ourselves in a telephone interview on August 20, 2004. D’Amico, who displayed a bitterness towards the IBT and Local 786, rambled on at length, at times incoherently.  He refused to answer most of our questions but did raise the subject of the bribe. He repeatedly insisted that he had never paid a bribe to General President Hoffa. He claimed that the allegation “came from someone in 786.”  D’Amico also made the incredible assertion that he had never made such an allegation to anyone.

 

Certainly the record of D’Amico’s shifting and contradictory claims about paying and not paying a bribe to General President Hoffa should have established for Stier Anderson that D’Amico was not worthy of belief.  His stories about the bribe also made no sense.  Why would D’Amico pay a bribe to Hoffa in 1997 to get reinstated in the Union at a convention not scheduled until four years later?  In 1997, Hoffa had recently lost an election to former General President Carey and there was certainly no guarantee that Carey’s election would be overturned¹

¹ It is unclear when D’Amico claimed that the bribe had been paid.  In one interview, he said it had been paid in February or March 1997, before Carey’s election was set aside.  In another, he places the payment after the election had been overturned.

and that Hoffa would ever be in a position to help D’Amico at the 2001 convention.  In addition, D’Amico’s accounts are replete with contradictions, especially about matters as critical as the amount of the bribe and when it was supposed to have been paid. Robert Walston, the President and Principal Officer of Local 743, who D’Amico intimated in his statement of November 21, 2003, was a witness to the payment, denied both to the Stier Anderson investigators and to us ever witnessing the bribe payment.  He also said that it was a “ridiculous” allegation, because, among other things, when the bribe was allegedly paid, Hoffa was not the president of the Union.  Finally, it was clear that the decision of the IBT leadership in 2001 to support D’Amico’s reinstatement at the 2001 convention was made on the merits and supported by overwhelming evidence. Indeed, a simple review of the Report of the Appeals and Grievances Committee supporting D’Amico’s appeal would have established this.

(4) D’Amico’s Allegations about the Outfit and Related Events

Finally, there were other reasons for discounting D’Amico’s claims about the Chicago Outfit’s attempts to use Coli, Hogan and Scalf to “shut down” the Chicago investigations. This becomes especially clear when the two interview reports that contain accounts of what D’Amico said about the Chicago Outfit are reviewed.  One report, dated September 15, 2003, contains the following:

Unsolicited D’Amico advised he had met with his close friend Robert Walston, President and Principal Officer, IBT, Local 743, Chicago, IL during the evening of 9/11/03.

* * *

D’Amico stated Walston told him that the Chicago “Outfit” does not want Lou Mazzei removed as President and Principal Officer of Local 786 and is utilizing William Hogan, Jr. former President, IBT Joint Council 25, Chicago, IL and John Coli, current President, IBT Joint Council 25, Chicago, IL. They had enlisted Carlo Scalf, IBTHQ, Washington, DC to do everything in his power to impede or stop “Project Rise” investigation[s].  D’Amico then asked if the Field Representatives knew who Carlo Scalf was, stating that the name sounded Mexican to him.

D’Amico provided a second account, but it is unclear when that account was

given, because the investigators prepared two reports of his account that are identical in all

respects except for their dates, September 15, 2003, and October 1, 2003.  Whatever the date of

the interview might be, the second report contains the following:

D’Amico stated all of the IBT officials in Chicago are puppets for the “Outfit” and do as they are told, and that includes John Coli and Bill Hogan.  D’Amico stated Coli and Carlo Scalf are extremely close and their sabotaging of “Project Rise” is just following orders given by the “Outfit.” D’Amico stated the IRB investigations in Chicago were a joke, basically throwing out anyone that appeared on a list. D’Amico stated the “Outfit” is extremely upset by “Project Rise” and has ordered it stopped.  D’Amico stated the “Outfit” is upset with James Hoffa the General President of the IBT, because he started “Project Rise,”, and if Hoffa doesn’t back off he will disappear like his father.  D’Amico stated there is too much money involved in the control of the Chicago IBT Pension and Health and Welfare Funds for the “Outfit” to tolerate “Project Rise.”

The substance of the two accounts provided ample basis for questioning what

D’Amico had said.  We note the following:

(a) We discussed above the problem with circular sourcing.  In the first

D’Amico interview report, D’Amico identifies Robert Walston, the principal officer of Local

743, as his source. Walston is Source B.  As we describe below, Walston says that he received

his information from D’Amico.  Not only is this an example of unreliable circular sourcing, it is

also a fundamental contradiction between D’Amico and Walston that undermines the reliability

of both of them.

(b) D’Amico’s question of the investigators in the first interview on

September 15, 2003, about whether they knew who “Carlo Scalf” was and his remark that “the name sounded Mexican to him” are also significant.  Certainly, he meant to convey that he did not know who Scalf was. However, in the same interview report concerning information reported about the alleged bribe, on the same day, September 15, 2003, D’Amico conveyed that he knew who Scalf was, calling him “Carl” and referring to him as a “bagman.”

* * * Even before Stier Anderson deposed D’Amico on January 20, 2004, in light of what their investigators had reported about D’Amico’s credibility (“out the window,” “laughable”) -- and in light of what Stier Anderson themselves had said of the “questions about his credibility” in their June 25, 2003, report -- it is difficult to understand how Stier Anderson lawyers could have given any credit to D’Amico’s allegations.  Indeed, Stier Anderson had

already had direct experience with D’Amico at his December 2002 deposition and clearly knew of his motives for fabrication and his history of lying.  As the Stier Anderson team learned more about D’Amico -- the details of his contradictory accounts of paying (and not paying) a bribe, his

claim that Walston was his source (while Walston said that D’Amico was his source), and his bizarre questions about Carlow Scalf, “the Mexican” -- it is baffling that the Stier Anderson lawyers could have seriously considered D’Amico to be worthy of belief.  It is also baffling why Stier Anderson did not include in the April Report any qualifying information about “confidential” Source A and words of caution about what he had said.

Putting aside D’Amico, Stier Anderson still had five additional “confidential” sources. For reasons that we explain, not one of the five provided information that should have been credited.

D. “CONFIDENTIAL” SOURCE B

Source B, who is identified as “a local union officer,” is reported to have said that “JC 25 President [John Coli] was attempting to block the ‘Project RISE’ investigation into [a Chicago area Local] and was using his close relationship with the Executive Assistant [Carlow Scalf] to accomplish this.”  

As mentioned above, Source B is Robert Walston, the President and Principal Officer of IBT Local 743. When we interviewed Walston, he informed us that he had readily met with Stier Anderson investigators in his capacity as a Union officer and that he had never sought to keep the information that he provided confidential.  The investigators interviewed Walston on September 20, 2003, five days after they had received the initial allegations from D’Amico.  They made it clear that Walston was not a separate, independent source.  Indeed, despite the way his information is presented in the Report, according to the investigators, Walston said that he was repeating information that he had received from D’Amico at a card game.  Walston himself confirmed this when we spoke with him in Chicago on October 15, 2004. He told us that the only time he had ever heard the allegation that John Coli was trying to interfere with any investigation was when D’Amico made such a claim at one of their regular poker games.

Stier Anderson’s inclusion in the Report of Walston’s statement as if it were independent corroboration for D’Amico obviously creates a misleading impression.  Moreover, as we noted with D’Amico, Walston’s credibility, as well as D’Amico’s, is undermined by the fact that the two contradict each other, D’Amico saying that he received his information from Walston, Walston saying that he learned the information from D’Amico.

Finally, we note that the clear implication of Stier Anderson’s summary of the source information in the Report is that all six informants supported the proposition that the Outfit had ordered that Chicago investigations be “shut down” and that they were using Scalf and Coli to achieve that goal. The report of Walston’s September 20, 2003, interview does have him saying that D’Amico told him that the Outfit was behind efforts to “block the Project RISE investigation [of a Chicago area Local.].”  However, when we interviewed Walston, he told us that he had never heard D’Amico or anyone else say that the Chicago Outfit was attempting to use Coli or anyone else to intercede with Scalf or anyone else in order to stop any investigation into any Chicago local. Walston also said that he had no personal knowledge of any attempts by Scalf or anyone else to stop any investigation.

E. “CONFIDENTIAL” SOURCE C

The Report ascribes to Source C two pieces of information:  (1) “that the Executive Assistant [Carlow Scalf] was fronting a move by Chicago Teamsters to derail ‘Project RISE,’” and (2) that Scalf “had been promised by Chicago Teamsters that if he were fired as a result of his efforts in their behalf, they would hire him back as a union consultant.”  

This information does nothing to support the allegation that the Chicago Outfit had “ordered” IBT investigations “shut down.”  Indeed, Source C’s information does not even contain any mention of the Outfit.  It is essentially useless for other reasons.

With respect to the second claim, that the Chicago Teamsters would hire Scalf as a “union consultant” if he were fired for his efforts to impede Chicago investigations, we met with Source C (and agreed not to reveal his identity) and asked him about the assertion.  Source C told us that he had not been accurately quoted.  He said that he had learned of a commitment by Chicago Teamster leaders to Scalf to help him get a job, but that commitment had nothing to do with the Stier Anderson’s investigations in Chicago and any efforts by Scalf to sabotage them.  Source C said that he had heard sometime in 2002 that if Scalf lost his job as Executive Assistant as a result of an IRB investigation of two former IBT officials, Chicago Teamster officials would arrange for Scalf to find work in Chicago. Source C refused to identify who provided him the information about Scalf in 2002.

The information in the Report about a consultant’s job for Scalf also makes little sense. If Scalf were fired for improperly seeking to “derail” investigations authorized by the IBT in Chicago, it would be likely that he would be barred from IBT membership either by the Union or by the IRB.  Even if he were not barred, it is unlikely that any IBT officials in Chicago would take the political risk of assisting Scalf once he had been fired by the leadership.

With respect to the first piece of information, it does little more than place an exaggerated spin on what was already well known to the Stier Anderson team and to many others in Teamster circles.  By mid-2003, Scalf had serious misgivings about what Stier Anderson was doing in the Chicago area, believing, among other things, that the investigations were too costly, that they were duplicative of work being done by the IRB and federal law enforcement agencies, and that it made little sense for Stier Anderson to continue when it appeared that negotiations with the Department of Justice had reached a point where the IRB might soon be ended and the need for Stier Anderson eliminated.

We also asked Source C about the basis for his report that Scalf was trying to “derail” the Chicago investigative efforts.  He said that he “did not know that” but that he had heard “second hand” that a particular Chicago Teamster leader had said that.  Source C declined to identify who had provided this “second hand” information to him.  Source C also said that he had no information, first-hand or otherwise, about Scalf acting at the direction of the Outfit.

The circumstances in which Source C reported his information also provided little reason for crediting anything that he said. According to the investigators, Source C was an extremely angry retired IBT member who had repeatedly told them that he could provide important intelligence information but he would not do so unless he received certain concessions from the IBT.  The investigators refused to “trade for information,” and according to one of them, Source C never provided anything meaningful except what was included in the Report.  When we met with Source C (who insisted on being interviewed in the company of Source E), he made the same offer to us; and while he bitterly made conclusory accusations of corruption and incompetence within the IBT leadership, he failed to provide any meaningful or specific information.

Finally, we note that despite what the Stier Anderson team knew about him, the Report does not contain any mention of reasons to be cautious about what Source C said.

F. “CONFIDENTIAL” SOURCE D

Source D is described as “a local union officer.”  The Report states,

[T]he current principal officer of Local 330 had interceded with the JC25 President [John Coli] to keep “Project RISE” from becoming involved in an investigation of the current principal officer’s alleged organized crime connections, after which someone influential had called the Executive Assistant [Carlow Scalf] to get the investigation stopped.

It is difficult to see the relevance of this statement to the Report’s summary

assertion that six informants supplied information that the Outfit was influencing high level IBT officials to sabotage Stier Anderson investigations in Chicago.  Source D’s report makes no mention of the Outfit at all.  Moreover, there is no probative value in the vague claim that “someone influential” had called Carlow Scalf to have an investigation at Local 330 stopped.

In any case, we learned that Source D is Joseph Degande, the former principal officer of Local 330. We met with Degande, and he informed us that he never considered himself to be a confidential source and that he had made his complaints about the current principal officer, Dominick Romanazzi, to many other parties.

The circumstances in which Degande made his complaints about Romanazzi are particularly relevant to the significance and reliability of the information attributed to him, even though the Report contains no reference to those circumstances.  In 2003, Degande was involved in an acrimonious election campaign against Romanazzi.  During the campaign, Degande repeatedly charged that Romanazzi should be barred from IBT membership because he had embezzled Union funds and was an associate of organized crime figures.  He told us that he made these charges not only to the Stier Anderson investigators, but also to the IRB and various IBT officials, including General President Hoffa, General Secretary Treasurer Keegel, General Counsel Szymanski, and Bill Moore.  According to Degande, the IRB opened an investigation in the summer of 2003 on his charges and deposed Degande, Romanazzi and others.

Concerning the allegation that Romanazzi had interceded with Joint Council 25 President Coli to impede an investigation into his background, Degande told us that he did not have any personal knowledge that Romanazzi had actually asked Coli to interfere with any investigation (“That I can’t say”).  Degande said that he knew that Coli and Romanazzi had met, but he conceded that that was not unusual in view of their positions in the IBT.  While he has no knowledge of what Coli and Romanazzi discussed, he believes that Romanazzi asked Coli to prevent an IBT investigation at Local 330 because none was ever begun.  Degande said, “It can only be speculation on my part. I only know meetings took place.  I wasn’t in on them, but all I know is that everything on the allegations stopped.  Now you tell me.”  He also said, “You can only speculate.”

Concerning “someone influential” calling Scalf, Degande was again speculating.  He said that he had no personal knowledge that anyone had called Scalf, but he knew from personal experience that Coli was “close to Scalf” and he believed that Coli or some other important IBT official in Illinois must have called Scalf because “nothing was ever done on the charges” at the IBT. (Of course, Degande also said that the IRB was already investigating his allegations).

We interviewed Romanazzi.  He told us that upon learning of Degande’s allegations that he was associating with organized crime figures, he contacted the IRB himself and volunteered to be interviewed, as he was adamant that he had done nothing wrong and wanted to clear his name.  He told us that he welcomed an investigation by Stier Anderson or anyone else and would never have requested anyone to impede such an investigation.

Finally, when we read to Degande the full account of what was attributed to him in the Report, he effectively conceded that he had been speculating: “Everything just added up.  You know what I’m saying.  I just connected the dots.”

G. “CONFIDENTIAL” SOURCE E

The Report says that Source E, “who investigators have independent reason to believe has Outfit connections, confirmed the information from other sources that the Outfit has ordered Project RISE shut down.” A report of an interview with Source E on March 15, 2004, prepared by Stier Anderson investigators provide some additional details, including Source E’s claim that “sources” have said that “the Chicago ‘Outfit’ is upset with the Project RISE investigations and have ordered John Coli to stop the investigators, and that Coli is using Carlo Scalf to get this accomplished.”  

We have no way to evaluate the reliability of Source E’s information.  He refused to identify the source or sources of his information for the investigators, although one of the investigators assumed that Source E was repeating what he had been told by Source C.

We met with Source E, who, as we noted above, refused to be interviewed separately from Source C, contending that they were “in this together” and that their information was “the same.”  Source E repeatedly stated, without supplying any basis, that everyone knows that the Outfit ordered the Chicago investigations shut down and that they used Coli to influence Scalf to achieve their objective. When we asked from whom Source E had heard this, he refused to say, claiming that he was concerned for his safety.  We then asked if he had heard that the investigation at a particular Chicago area local was to be “shut down.”  Source E said that he had heard that. When we referred to the report of an interview that Source E had given in July 2003 during which he reportedly had said that the Outfit “wants the current leadership at the Local replaced, and that the current investigation by the IBT meets there [sic] needs,” he was unable to explain the discrepancy.

At the conclusion of the interview, we noted that our trip to Chicago to interview Sources C and E could be described as unproductive since they would not describe their sources of information and we had no way to evaluate the reliability of their assertions.  Source E said that there was nothing that he could do about that.  He also said that if we could arrange for Source C to obtain the concessions that he sought from the IBT, he might be more forthcoming.

H. “CONFIDENTIAL” SOURCE F

According to the Report, Source F “reported being present at a meeting of Teamster officials in the Chicago area during the period when the rules for Project RISE were being drafted and at which the former joint council president and the current JC25 President were present. According to Source F, the current JC25 President [John Coli] explained that Project RISE investigations would be superficial and for show only.”  

It makes no sense that this information was included in the Report as supporting the claim that the Outfit was influencing various officials to get the Stier Anderson investigations “shut down.” The information has nothing at all to do with the Outfit or the Stier Anderson investigations. It also has nothing to do with Carlow Scalf.  Indeed, the information concerns a statement made by Coli about what was obviously the drafting of rules for the RISE Code of Conduct. Those drafting sessions took place in 2000, long before Stier Anderson ever even proposed investigations in Chicago area locals.

We were able to interview Source F, who is Danny Moussette, a retired Teamster.  Moussette said that he had not provided his information to the Stier Anderson investigators with any expectation of confidentiality. He also told us that the information that the Report attributes to him did indeed relate to a public statement by Coli to more than 30 representatives to Joint Council 25 when the Code of Conduct was being drafted.  Coli’s statement was to the effect that he believed that investigations that would be conducted as part of the proposed Code’s enforcement mechanism, not the Stier Anderson investigations, would be “window dressing.”

Even if Moussette’s report were somehow relevant to the claims about the Outfit wanting to end the Stier Anderson investigations, it is significant that Moussette had a reason to malign Coli.  As Moussette told us, when Coli became the president of Joint Council 25, he fired Moussette from his position at the Council.

We also asked Moussette about any knowledge that he might have about the allegations by other sources contained in the Report.  Moussette said that he did not have any knowledge of whether the Outfit was trying to block investigations authorized by the IBT in Chicago. He also said that he had no knowledge that Coli or anyone else ever attempted to thwart any investigations in Chicago.

I.          CONCLUSIONS ABOUT THE SIX “CONFIDENTIAL” SOURCES AND THEIR INFORMATION

In sum, there were numerous compelling reasons to discredit all six sources and disbelieve their allegations.  Moreover, in light of the first-hand experiences that the Stier Anderson attorneys had had with certain of the informants and what they had learned from their experienced investigators about all six, it should have been apparent when they prepared their Report that virtually all of what the sources had said that was included in the Report was the unreliable product of bitterness, vindictiveness, rumor, speculation, or wishful thinking.  For Stier Anderson to have repeated what their six supposedly “confidential” sources had said, especially without ever mentioning any of the reasons for disbelieving them or being skeptical about their information, is, to say the least, disappointing.

PART THREE: EVALUATIONS OF THE IBT’S DECISIONS IN RESPONSE TO

STIER ANDERSON’S RECOMMENDATIONS CONCERNING

INVESTIGATIONS IN CHICAGO

A. INTRODUCTION

We recognize that even though the sources themselves and their information, as Stier Anderson reported it, were unreliable, it is still possible that some of what they said might have been true. After the Report describes the source information, it goes on for 15 pages presenting what it describes as evidence from “covert inquiries and analysis of intelligence information and other evidence” that has produced “independent corroboration of the intelligence sources.”  Indeed, the Report states that the evidence that it presents concerning attempts to sabotage the investigations “constitute[s] the strongest corroboration of the information received from confidential sources.”

In fact, what the Report presents is a review of a series of events and interactions between Stier Anderson and the IBT leadership concerning Stier Anderson’s proposals for investigations in Chicago. Notably, all the “independent corroboration” that Stier Anderson describes is circumstantial in nature.  Nowhere in the Report do they cite any direct evidence, such as a statement by an identified witness or a relevant document, that shows (1) that the Chicago Outfit sought to interfere with any Stier Anderson investigations, (2) that John Coli, Bill Hogan or someone else took steps improperly to shut down or impede the Chicago investigations, (3) that Carlow Scalf -- whether acting at the behest of organized crime, under pressure from Coli, Hogan or someone else, or for some other reason -- tried to interfere improperly with the investigations, or (4) that the Hoffa leadership team had abandoned or even wavered in its commitment to reform.

We sought to determine whether any such direct evidence exists.  We interviewed virtually everyone who might provide relevant evidence; we also reviewed countless documents.  We did not discover any direct evidence to corroborate in any way what the informants reported and what Stier Anderson concluded.

Therefore, we reviewed every item of circumstantial evidence that the Report cites as “independent corroboration” of their confidential informants.  Certain of those items are addressed in detail in Section F below.  We also reviewed  the facts and circumstances that led to the decisions and actions of the IBT leadership with which the Report takes issue.  As we described in our Introduction to this report, the IBT leadership explained to us why they decided not to accept certain of Stier Anderson’s proposals.  We interviewed those primarily responsible for those decisions, General President Hoffa and General Counsel Szymanski, the IBT’s principal legal advisor and the Union’s point person in the dealing with Stier Anderson.  We interviewed other members of the Hoffa administration who expressed to Hoffa and Szymanski their views about Stier Anderson’s performance and the proposals that they made for Chicago, General Secretary Treasurer Keegel, Executive Assistant Scalf,² and Gary Witlen, the Director of the Legal Department.  We also conducted lengthy interviews of Bill Moore, the General President’s personal representative for the Chicago investigations that had been authorized, and several other IBT officials and employees.

² We note that to resolve an IRB investigation into whether he improperly received a housing allowance from the IBT (an issue unrelated to the allegations that Stier Anderson makes about Scalf), effective January 12, 2005, Scalf agreed to serve a 60-day suspension from his position as Hoffa’s Executive Assistant. Scalf did not admit or deny any wrongdoing.  Effective March 12, 2005, Scalf was terminated from his position as Executive Assistant and is no longer employed by the IBT.

We describe below the findings and conclusions that we have reached.  However, in order to provide a better understanding of our analyses, we first describe certain aspects of the relationship between the IBT and Stier Anderson that shed light on the IBT leadership’s dissatisfaction with Stier Anderson and how that dissatisfaction influenced the leadership’s response to Stier Anderson’s proposals in 2003 and 2004.  

B.        STIER’S ROLE IN THE IBT’S NEGOATIONS WITH THE U.S. ATTORNEY AND STIER ANDERSON’S FUTURE WITH THE IBT

In addition to participating in Stier Anderson’s efforts at developing a code of conduct and conducting field studies of local unions, Stier assumed a role in the IBT’s ongoing effort to convince the United States Attorney’s Office for the Southern District of New York to agree to phase out the IRB.  Soon after his firm’s retention, Stier was included in IBT strategy sessions and in negotiations with the Southern District.  He boldly predicted that in view of his contacts within the Department of Justice and the United States Attorney’s Office, the results of his work with Project RISE would in short order persuade the attorneys in the Southern District that the IRB was no longer necessary.  Early on, however, it became clear to the IBT leadership that despite Stier’s assertions, the goal of removing IRB supervision would not be achieved quickly.

While the substance of the Union’s negotiations with the United States Attorney’s Office that we described in our report to the General Executive Board is confidential, we can report that by May 2001, the IBT leadership had determined that Stier’s participation in negotiations with the government was no longer productive and he was removed from the negotiating team.  Indeed, he was replaced by another lawyer who thereafter participated in the negotiations. In addition, by May 2002, Stier had also been removed from participating in discussions within the IBT about dealing with the Consent Decree and phasing out of the IRB.  In fact, Stier was particularly chagrined when Robert Luskin, a Washington, D.C., lawyer who had been advising the Laborers International Union of North America on matters relating to reform, began to advise the IBT leadership.  By the end of 2002, it was abundantly clear to most of the IBT leadership that in view of Stier’s performance in dealing with the Southern District and for various other reasons that we describe, if the IBT’s efforts to negotiate an end to the IRB were successful, the new enforcement process that would replace the IRB would not include a role for Stier Anderson. In addition, by the summer of 2003, the leadership felt that progress was being achieved in negotiations with the prosecutors in the Southern District and they were optimistic that it would not be long before the government agreed to a new enforcement process replacing the IRB.

Thus, we have found that in late 2003 and early 2004, when the IBT leadership addressed Stier’s recommendations and allegations concerning Chicago locals, they believed that Stier Anderson’s future with the IBT was short-lived.  For that reason, the idea of allowing the firm to conduct expensive, complicated, long-term investigations, going forward, made little sense.

C.        PROJECT RISE: STIER ANDERSON’S FAILURE TO MEET THE IBT’S  EXPECTATIONS

It is clear to us from our interviews with members of the IBT leadership team that their disappointment with Stier Anderson’s overall performance in connection with Project RISE also played an important part in their decisions on the firm’s recommendations concerning investigations in Chicago. In what follows, we review some of the reasons for that disappointment.

(1)        Failure to Meet Scheduling Commitments

By mid-2003, the IBT leadership had grown increasingly frustrated with the lack of progress achieved by the Stier Anderson team, not just with the Southern District but on several additional fronts. They were particularly irked because of what had turned out to be wildly optimistic projections repeatedly made by Stier about when the code of conduct would be completed and implemented, when the field study and the report on the state of organized crime and internal corruption would be finished, and when the Union could expect the IRB to be phased out.

In Stier’s initial meetings with the leadership in the spring and summer of 1999, he spoke of his reputation and contacts within the federal law enforcement community.  Hoffa, Keegel, Szymanski and Scalf told us that they were extremely impressed with Stier’s descriptions of his long-term relationships with the then FBI Director and with important figures within the Department of Justice, both in headquarters in Washington, D.C., and in the Southern District of New York. Stier represented that he and his team could get to work promptly and that the IBT could expect that the code of conduct would be completed, the nationwide field study conducted and the organized crime report issued by the end of 2000.  The phasing out of the IRB would soon follow.

While it might be expected that some puffery would be included in Stier’s pitch, Stier’s on-the-record commitments, even after it had been agreed that he would be hired, had the ring of sincerity. In a memo to General President Hoffa in September of 1999, Stier said,

Within one year, the code of conduct should be adopted, the education process should be completed, and enforcement of the system should be in place and operating, and the organized crime study should be completed and released to the public.

Even more encouraging was testimony that Stier gave on March 28, 2000, to the House of Representatives Sub-Committee on Oversight and Investigations.  In his prepared remarks, Stier said that “By the middle of the summer of this year, we are scheduled to prepare a detailed report on” the national field study that would “account for every local union that has in any way been associated with organized crime during the last thirty years” and for which “[e]very scrap of information relating to the problems in those locals [will be] catalogued and used by our staff to compare with current conditions.”  Stier also described the steps that were being taken to create and implement the membership’s code of conduct and enforcement system and said, “The entire process is scheduled for full implementation by January 2001.”  

Stier’s projections were wildly off the mark.  As explained below, the code of conduct was never completed.  And the report on the current state of organized crime’s involvement in the Union, while it was included in a far more comprehensive report on the IBT, was not published until October 2002.

The IBT leadership recognized that certain factors beyond Stier Anderson’s control had contributed to delays in meeting Stier’s scheduling commitments.  They had been extremely patient with Stier, deferring to his experience and giving him broad discretion in order to demonstrate the leadership’s commitment to reform.  Nonetheless, by 2003, they were disappointed with Stier Anderson.  Not only had Stier given unreasonably optimistic projections at the outset of his retention, he had also continued over and over again to mismanage expectations about when promised goals would be achieved.  The IBT leadership had believed that Stier Anderson would provide results, but by mid-2003, after the expenditure of millions of dollars, it was becoming apparent those results were not forthcoming.

(2) Unrealistic Promises About Obtaining Information From The FBI

The leadership was especially frustrated by something else that Stier did.  Stier recognized that in proposing an enforcement process for the RISE Code, it was important that the IBT have the capacity to gather intelligence information about possible corruption and organized crime influence within local unions.  Szymanski recalled that as early as July 22, 1999, Stier said in a meeting with Szymanski that he recognized the issue but was confident that through his contacts in law enforcement circles, he would be able to obtain intelligence information critical to effective IBT self-policing. Thereafter, time and time again, Stier would assure the IBT leadership that it was just a matter of time before the FBI would start providing them with essential information.

For example, in February 2003, in connection with a request by Stier Anderson to conduct an investigation of a local in Chicago, Stier’s partner, Howard Anderson, wrote a memo to Szymanski stating that the firm was “on the verge” of finalizing an information-sharing agreement with the FBI.  Szymanski also said that as late as June 13, 2003, at a meeting that Stier had with Hoffa and Szymanski, Stier continued to remain positive.  He said that the FBI was circulating a letter to its field offices that recommended that Stier Anderson should get the same information as the IRB.

The fact of the matter, in our experience as former federal prosecutors, is that it was extremely unlikely that the FBI would ever agree to share information with the Stier Anderson team.  The FBI has traditionally been extremely reluctant to share their information, even with other law enforcement agencies.  Stier Anderson was a private law firm working for the IBT not pursuant to a court appointment, but rather under the terms of a private retainer agreement.  The Stier Anderson investigators, while several of them might have been retired from the FBI, were likewise in the private sector.  Stier should have recognized that Rule 6(e) of the Federal Rules of Criminal Procedure strictly forbids the disclosure of grand jury information to non-government personnel.  He also must have known that in the course of federal investigations, it is often difficult to distinguish between information obtained pursuant to the grand jury process and that received from other sources, especially once such evidence has been commingled.  It naturally followed that the Department of Justice and the FBI would have been especially reluctant to share investigative information with Stier Anderson, thereby possibly jeopardizing important criminal investigations and even possibly implicating sanctions under Federal Rule of Criminal Procedure 6(e).  Not surprisingly, despite Stier Anderson’s repeated assurances that they were “on the verge” of finalizing an information-sharing arrangement, it had not happened by the fall of 2003.

(3) Disappointment with the Development of the RISE Code of Conduct

In the fall of 2003, as the leadership grew more dissatisfied with Stier Anderson and their failure to produce meaningful results, certain members of the Hoffa team looked back with disfavor at the impractical and wasteful manner in which Stier Anderson had gone about preparing the code of conduct. The following are a few examples.

(1) In his initial presentations to the IBT, Stier had touted Stier Anderson’s capacity for quickly drafting a code of conduct that would be acceptable to the federal prosecutors. The leadership had been led to believe that the Stier Anderson lawyers would be responsible for the drafting. Stier mentioned hiring expert investigators, but their responsibility would be for the field study, not the code.

Once Stier Anderson had been retained, however, the size of the group devoted to preparing the code grew significantly.  Several Teamsters were first assigned to a formation committee to help set an agenda for the Stier Anderson team.  After a few months, the RISE Task Force, consisting of 22 Teamsters from a cross-section of the Union, was created to work with Stier Anderson in developing the code and facilitating its anticipated implementation.

Even though Teamster members and officials were required to miss work when assisting in formulating the code, thereby increasing costs for the IBT, participation of the rank and file was certainly something that made sense.  Nonetheless, Stier Anderson also recruited individuals from outside the IBT to work on the code.  In a memo to Hoffa dated September 13, 1999, Stier proposed that a Washington “think tank” be hired to advise them concerning the code’s preparation. He said that he was “impressed with that organization’s insights and experience in assisting organizations in creating and implementing codes of conduct” and that “their participation will bring significant credibility to the project.” Stier also suggested to Hoffa that a committee of three to five advisors with experience in “union matters and labor racketeering investigations be recruited to provide their perspectives.”  Stier said that they would “provide additional credibility.” 

As it turned out, the board of advisors grew to well beyond the three to five members suggested in the Stier memo and eventually included 11 advisors, many former colleagues and friends of Stier’s. According to Szymanski, the “think tank,” which had no experience with labor unions, appeared to contribute nothing other than bills; and after a few months and the expenditure of over two hundred thousand dollars, they were removed from the project.

                        (2) Stier repeatedly emphasized that it was essential that there be a change in the Teamsters’ culture and that the code therefore had to be the product of the membership itself.  While this was an admirable concept, what resulted was a seemingly endless series of expensive “dog and pony shows,” as Stier called them.  Members of the Stier Anderson team and Project RISE traveled throughout the United States and Canada between August 1999 and the Spring of 2001. Again and again they made presentations, conducted focus groups, organized workshops, and ran educational programs.  While seemingly well-intentioned, in hindsight, it seemed to be an entirely wasteful exercise, especially since the code was never presented to the General Executive Board.

                         

                        (3) Szymanski and Gary Witlen, the IBT’s Legal Director, also had substantive concerns about the code.  They both felt that drafts of the code were in large part incomprehensible, certainly not designed for the rank and file for whom the code was being prepared. Keegel and Scalf told us that they had the same concerns.  Szymanski expressed the opinion to Stier and his team that the code should be kept “relatively short and simple.”  He envisioned a document similar to the Lawyers Code of Ethics with black letter rules followed by simple examples for guidance.  His suggestions for simplicity fell on deaf ears.

 

Witlen recalled that the code’s draftsmen went “off the tracks early on,” creating a document that no member would ever understand.  He felt that the Stier Anderson lawyers had “no clue” how to deal with Union members and that with each draft, the code became more complex and more incomprehensible.

Szymanski and Witlen were familiar with codes of conduct in use at the United Auto Workers and the Laborers International Union of North America.  LIUNA’s Code, in fact, had found favor with the Department of Justice.  Those other codes were straight forward and understandable. If used as models, they certainly would have been better suited for the membership.  Moreover, the drafting process could have been streamlined, with the RISE draftsmen not having to start from scratch.

Szymanski’s and Witlen’s suggestions were derided by the Stier Anderson team, who continued to maintain that it was necessary that the code be the product of the membership.  In hindsight, Szymanski saw this as naïve.  After all, even with all the “dog and pony shows” that Stier Anderson put on, how many of the hundreds of thousands of IBT members could actually have any input into the development of the code?

(4) Questions About “Perception and Reality”

“Perception and Reality” was published in October 2002.  It consists of three volumes: a 25 page summary, a 242 page appendix, and the report itself, which consists of 526 pages of text and 112 pages of end notes. Almost all of the first 314 pages of text concerns organized crime’s domination of the Union from its founding in the early 20th century up until the early 1990’s. The bulk of the next 200 pages consists mostly of case studies of local unions in which organized crime control was most pervasive.

It is an extremely impressive document, well researched, well written, and with 112 pages of end notes, painstakingly documented. Stier Anderson had done an exceptional job. Nonetheless, by the time the dust had settled and the reactions to the book had been received, serious questions remained, including what had been accomplished and at what cost.

By mid 2003, several within the IBT leadership, including Keegel, Szymanski and Scalf, had come to believe that the issuance of the book was another example of Stier Anderson’s extravagance and wastefulness.  Indeed, Stier had even proposed that thousands of copies be printed and that the report be sent for free to the libraries of every high school and college in the United States.  The critical issue that the IBT had expected to be addressed was not what happened for the entirety of the 20th century, but what the current state of organized crime and corruption was within the Union.

 

(5) Escalating Costs

We considered presenting an analysis of the cost to the Union of the various  aspects of the Stier Anderson retention.  Unfortunately, we have been unable to obtain from Stier Anderson’s Chief Investigator, James Kossler, the investigators’ unredacted, detailed billing  statements.  In addition, many of the Stier Anderson law firm bills do not distinguish among the  various tasks for which they billed the IBT.³

In any case, the number speaks for itself.  As Stier says in his April 28, 2004, letter of resignation, “In total the Union has spent $15 million on Project RISE.”  By the summer of 2003, the Hoffa leadership group was becoming more and more concerned with the amount of IBT money being paid to Stier Anderson and their investigative team.  They were also growing more and more disinclined to agree with additional proposals for additional investigative work by Stier Anderson that would require the expenditure of even more IBT money, especially when so few of Stier’s promised results were being achieved.

³ It was not possible for us to determine the cost of any particular Stier Anderson investigation.  The bills that the investigators submitted did not explain how the tasks that they performed pertained to any particular investigation.  The investigators submitted redacted bills to the IBT with information such as the names of witnesses they interviewed (that would have permitted us to determine, at least for some entries, the investigation to which a particular billing pertained) removed.  The unredacted versions of the investigators’ bills were submitted to Kossler. Kossler has refused to provide the unredacted bills to the IBT, despite a formal demand by Szymanski.  Kossler claims that providing the IBT with these materials would reveal the identities of confidential sources and contravene the investigators’ promises to these individuals.  Obviously, the IBT disagrees with Kossler’s position. With regard to the work performed by the Stier Anderson law firm in each investigation, only starting in October 2002 did Stier Anderson present bills for investigations that were broken down by local.  For the investigation of one of the Chicago locals for which an investigation was authorized, for example, from October 2002 through March 2004, Stier Anderson billed the IBT $461,178.  However without the ability to determine exactly how much time the investigators, who did much of the “leg work,” devoted to the investigation of a particular local, the cost figures are incomplete.

* * *

We found that the IBT leadership’s disappointment with Stier Anderson’s performance in Project RISE, particularly their concern about the wasted use of Teamsters resources, formed an important part of the backdrop when the leadership considered Stier Anderson’s proposals for costly, long term investigations in late 2003, making the leadership, for reasons having nothing to do with “sabotage,” reluctant to accept their proposals. 

D.        THE IBT’S DISSATISFACTION WITH STIER ANDERSON’S INVESTIGATIVE WORK APART FROM CHICAGO

Our investigation identified aspects of Stier Anderson’s work for the IBT in connection with special investigations involving locals outside of Chicago that justifiably caused the IBT leadership to question their judgment and to perceive of them as investigators prone to overreaching, acting without proper sensitivity to costs, and ignoring directives from General Counsel Syzmanski.  These perceptions also caused the IBT leadership, by the fall of 2003, to view with skepticism Stier Anderson’s assertions and influenced their response to the proposals that Stier was making in the fall of 2003 and early 2004.  In what follows, we present descriptions of certain investigations that the leadership felt were handled in ways that were inconsistent with the interests of the IBT and counter-productive to the reform process.  Our descriptions here have been significantly revised and abbreviated from those that are in our confidential report to the General Executive Board so as to remove confidential and sensitive information.

(1)        Stier Anderson’s Problematic Use of Surveillance

The IBT leadership’s experience with Stier Anderson’s investigation of a former high-level IBT official was a matter that had perhaps the most profound impact on the IBT leadership’s attitude towards Stier Anderson and their work.  In that investigation, Stier proposed that investigators working under his direction conduct around-the-clock surveillance to determine if source information about a meeting scheduled to take place including the Teamster official and a known member of organized crime was correct.  Given the gravity of the allegation and Stier’s representation that the source information was reliable, the leadership took Stier’s proposal seriously. However, members of the leadership had strong reservations about authorizing such extensive surveillance for several reasons.  Among their concerns was that the IBT is not, and should not be viewed as, a “police state.”  The leadership also considered the financial implications of having investigators working around-the-clock.  Despite these reservations, the leadership authorized Stier to conduct the surveillance because of the serious nature of the allegation and Stier’s assertions about the reliability of the sources.  

Szymanski recalled that after Stier’s investigators had completed approximately two to three weeks of 24-hour surveillance, the expected meeting had not occurred.  When Szymanski questioned the wisdom of continuing, Stier reiterated that his sources were reliable and insisted that the meeting would occur.  Szymanski acquiesced in continuing the surveillance, and the surveillance continued.  When the meeting still did not take place, Szymanski ordered the surveillance stopped. Stier agreed that the surveillance would be “tapered off.”  Szymanski later discovered that the surveillance continued for several additional weeks without any apparent reduction in intensity. Szymanski also later learned that Stier Anderson had continued the surveillance even after it had become obvious that the targets of the surveillance had recognized that they were being followed. The actual cost of the surveillance was not apparent until all the bills had been submitted, and only then did it become clear that the cost of the surveillance far exceeded anything that the Union had been led to expect. 

In May 2002, one of the targets of the surveillance filed a lawsuit in state court against the surveillance investigators alleging, among other things, intentional infliction of emotional distress, stalking, and harassment.  In related correspondence, lawyers for this former Teamster official described “the bizarre and alarming behavior” of the investigators.  They claimed that the “laughingly inept” surveillance had continued for the six months on a regular basis. The lawyers also sent to Szymanski a letter stating that a search of official records had failed to reveal that one of the investigators was a licensed private detective or a registered employee of a private detective agency. 

As they learned about the extent of the surveillance, about Stier Anderson’s decision to continue despite Szymanski’s order to the contrary and despite the targets’ knowledge of the surveillance, and about the embarrassing details of the lawsuit, the reaction of the IBT leadership was one of outrage. They became even more upset when they learned that Stier Anderson had independent evidence that appeared to be sufficient to lead to the official’s removal from the IBT long before authorization for the surveillance was requested.  General President Hoffa stated that he was “irate.”  He said that he had reluctantly agreed to the surveillance but had not given Stier Anderson “carte blanche” to go off on an expensive “espionage mission.”  Szymanski confirmed that Hoffa was “appalled” and “beside himself.”  

(2)        Other Stier Anderson Investigations That The IBT Leadership Found Troubling

(a)        The Rejection of Stier Anderson’s Recommendation That Charges Be Brought Against A Principal Officer Of A Local Union

On February 15, 2001, Stier sent Szymanski a memorandum in which he requested for the first time permission to commence an investigation into various matters concerning the principal officer of a local union and his possible associations with organized crime figures.  Szymanski recalls that Stier insisted that there was a solid case to be made and his team was as capable as the IRB and the FBI in making a case of organized crime associations.  Szymanski gave Stier the requested authorization, and in July 2002, Stier Anderson issued a 91 page report that contained 190 footnotes and made reference to 67 exhibits.  It was clear to Szymanski that the report was the result of a considerable effort and reflected substantial expense. The most significant charge among the several recommended was that the Teamster official had knowingly and purposefully associated with an individual who was an organized crime figure.

Szymanski reviewed the report and told Stier that he had serious doubts about whether a case against the official had been made out.  Szymanski felt that the proof was deficient on two critical issues, whether the individual with whom the Teamster had associated was an associate of organized crime and whether the Teamster had knowledge that the individual had ties to organized crime.  Szymanski was also concerned that if the charges were not sustained, the individual could be immunized under the IBT’s Constitution if sufficient proof was later developed.

According to Szymanski, Stier agreed to his suggestion to have the IRB, which had traditionally dealt with charges involving prohibited associations, review the Stier Anderson proposal. A short while later, Szymanski and Stier were informed that the IRB had reviewed the proposed charges and found them to be deficient.  When Szymanski discussed the IRB’s response with Stier, Stier insisted that both the IRB and Szymanski were wrong.  He questioned the IRB’s motives, charging that they did not want to admit that Stier Anderson had been able to develop sufficient proof while they had not. He also said that his team would continue to gather evidence, but Szymanski does not recall Stier ever revisiting the subject.

In short, Stier Anderson’s first attempt to carry out an independent organized crime investigation had been a costly failure.  Both Szymanski and the IRB had found that despite the substantial effort devoted to developing a case, the charges that Stier Anderson had proposed could not be sustained. What affected Szymanski even more was Stier’s reaction, attacking the IRB’s bona fides and suggesting that only he and his team were capable to do what the IRB had been unable to do.

(b) Investigations Concerning Local 25

Local 25 was one of the 80 locals that the Stier Anderson team reviewed as part of their field study. While the field study of Local 25 was being conducted, the Boston-area press reported that the President of the Local, George Cashman, and other Local 25 officers were being investigated by a federal grand jury. Among other things, the investigation reportedly was focused on efforts by Cashman and the other local leaders to extort money from movie and television producers filming in the area

According to Szymanski, Stier told him that in September and October 2000, while working on the field study, Stier Anderson had received information from confidential sources about corruption at the Local.  Stier wanted to arrange a meeting with the United States Attorney in Boston to report the information and to determine if there was any way in which they could work with the prosecutors on the investigation.  Stier emphasized that the press reports about the government’s investigation were making the IBT look bad and that it would be helpful to the Union’s image if Stier Anderson could arrange to assist in the investigation.

In December 2000, Szymanski, Stier and others met with the United States Attorney in Boston. According to Szymanski, the United States Attorney was polite but firm in his directive to Stier and the IBT: the union and its investigators could assist in the investigation only by giving the government any information that they developed.  Moreover, the United States Attorney requested that Stier Anderson refrain from taking any investigative steps in connection with the Local without first seeking approval from the prosecutors.  

In January 2002, the indictment of Cashman and the Local’s vice president on charges of defrauding the union health insurance fund was announced.  In April 2003, Cashman and his codefendant entered guilty pleas. At that point, according to Szymanski, Stier began to press once again to continue his investigation into misconduct at the Local that was, in Stier’s view, unrelated to the conduct that was the subject of the guilty pleas.

In August 2003, Stier’s partner Howard Anderson wrote to the IRB’s Chief Investigator Charles Carberry. In the first paragraph of the letter, Anderson noted that during a June conference call, he and Stier had proposed “a joint meeting with the United States Attorney’s Office in Boston to obtain a briefing on current issues and to determine what actions the IBT and IRB can take that are not inconsistent with ongoing federal investigations.”  In the balance of the letter, Anderson went on to complain, in what can only be described as an extremely obnoxious way, that the Chief Investigator had not returned his telephone calls promptly, going so far as to suggest that if he was unable to deal with Stier, Anderson’s proposals regarding Local 25 personally, someone else on his staff should be assigned.

In October 2003, the IRB served a lengthy document request on Local 25’s new president.  According to Szymanski, Stier “went ballistic” when he learned what the IRB had done. Stier complained repeatedly to Szymanski that his firm, not the IRB, should be conducting the investigation at Local 25. At Stier’s insistent prodding, Szymanski raised the issue with the IRB. He was rebuffed, and the IRB proceeded without coordinating or even informing Stier Anderson of their plans.

Szymanski told us that Local 25 was another situation that gave the leadership a reasonable basis to question the value of the Stier Anderson team and Stier’s judgment.  It was clear from the time of the field study that the Local was under investigation by federal authorities. The idea that federal prosecutors would allow Stier Anderson to become partners in the investigation was, to say the least, far-fetched, as the government is almost always extremely protective of its investigative process.  Stier, as a former federal prosecutor, should have realized this. Ultimately, Stier Anderson’s attention to Local 25 was an unproductive use of time, energy and money.  Stier’s insistence, after the guilty pleas had been entered, that his firm be afforded a role in ongoing investigations was also counterproductive, as it was likely to engender unnecessary ill will with the IRB and it did not further the interests of the Union.  The IBT leadership’s experience with Stier Anderson on the Local 25 matter also highlighted that certain investigations could just as easily, if not preferably, be handled by the FBI, the IRB or, in cases involving benefit funds, the Department of Labor.  The Local 25 experience demonstrated that the IBT leadership could reasonably conclude that in many cases having law enforcement agencies or the IRB, as opposed to Stier Anderson, investigate allegations of corruption within locals was perfectly legitimate and appropriate.  

(c) Stier’s Persistence Concerning Benefit Fund Investigations

By late 2003, Szymanski had also grown tired of Stier’s persistence in proposing to investigate alleged wrongdoing not in IBT local unions but in their affiliated benefit funds.  Szymanski recognized that there could be problems with potential wrongdoing in the funds, but he strongly believed that Stier Anderson was not the means by which investigations should be conducted at the funds.

Under the Consent Decree, the IRB only had jurisdiction over the IBT and its locals. Similarly, under the IBT Constitution, the IBT could take disciplinary action against local unions and IBT members, but it had no direct jurisdiction over the funds, which are technically entities independent of the IBT and its locals.  Therefore, neither the IRB nor the IBT could compel the production of documents from the funds or third party providers.  They also could not compel non-members of the IBT to testify.  It is true that evidence of a member’s wrongdoing in connection with a benefit fund could be grounds for removal from the IBT.  However, because of the significant restrictions on investigations relating to the funds by both the IBT and the IRB, it was clear that any investigations by the Union concerning the funds would be costly, time-consuming and unlikely to result in the production of necessary evidence.  In short, Szymanski believed that it made little sense for the Union to pursue investigations in this area, especially since federal agencies had the statutory authority to do so.

In the face of repeated proposals from Stier to investigate benefit funds, Szymanski consulted with Hoffa and Keegel.  They shared Szymanski’s misgivings, believing that the IBT and Stier Anderson, which was only empowered through the IBT, were “essentially powerless” when it came to the funds.  Stier Anderson could commence investigations of members who were employed at the funds, but such investigations would probably result in protracted costly litigation that would be unlikely to yield results.  On a cost-benefit analysis, the IBT was better served by referring investigations concerning benefit funds to the Department of Labor and the Department of Justice, which of course, have the power of compulsory process.  

Despite Szymanski’s admonitions, Stier was persistent; and he continued, even in late 2003 and early 2004, to propose that his team investigate allegations of wrongdoing at benefit funds. Indeed, certain of his proposals for investigations in Chicago concerned benefit funds. Szymanski saw these proposals as additional examples of Stier’s stubborn failure to listen when his client, the IBT, had reasonably concluded that what Stier wanted to do was ill-conceived, extremely expensive, and almost certain to be unproductive.

E. THE CHICAGO INVESTIGATIONS

(1) Introduction

In early 2002, Stier Anderson was authorized by the IBT to conduct investigations of two Chicago-area locals.  Thereafter, they proposed investigations of additional locals in Chicago. It is the leadership’s response to Stier Anderson’s recommendations concerning the two authorized investigations and other proposed investigations in Chicago that Stier Anderson cites as corroboration for what the sources reported.  The Report asserts that there is “little doubt” that “there have in fact been attempts to shut down or severely restrict IBT investigations in Chicago” and that “these attempts constitute the strongest corroboration of the information received from confidential sources.” In addition, the Report charges that Teamster forces in Chicago and “their ally” Scalf actually succeeded in sabotaging Stier Anderson’s investigations and that in February 2004, the IBT leadership ordered that all of the investigations be “shut down.” The Report then devotes several pages to describing what it calls “Independent Corroboration of Confidential Source Information.”

As explained above, the Stier Anderson investigations were, quite simply, never “shut down.” Furthermore, the events Stier Anderson cite as “independent corroboration” do not provide any confirmation for what the sources are reported as saying.  Since much of the purported “independent corroboration” involves the IBT leadership’s decisions with regard to the two investigations that Stier Anderson had been authorized to conduct in Chicago, we review here in an abbreviated fashion issues related to those investigations.  We then address various items cited as corroboration.

(2) The Two Authorized Investigations in Chicago

The idea that Stier Anderson would conduct full-scale investigations for the IBT was not encompassed in the firm’s initial retention.  The concept of “special investigations” was something that evolved, with Stier Anderson proposing investigations as they gathered information during their field study and from other sources.  Due to the sensitive nature of these issues, we will not identify the two locals at which Stier Anderson conducted investigations and will refer to them as Local A and Local B below.

The issues at Local A included the then principal officer’s possible association with organized crime figures and the possibility that members of the local had to pay bribes for preferable jobs and overtime.  At Local B,  there were allegations of possible embezzlement of local funds by its principal officer and the possible failure to collect fund contributions from certain employers affiliated with organized crime.

In February 2001, Hoffa signed a letter appointing Bill Moore, the Principal Officer of Local 696 in Kansas and an IBT International Representative, to serve as his personal representative at Local A to assist Stier Anderson in investigating “various issues concerning the activities of [an alleged organized crime figure with whom the Principal Officer of Local A had allegedly associated] and concerning the selection of routes and the assignment of overtime for certain members.”  

In March 2002, Hoffa issued letters appointing Moore to serve as his personal representative to Local B in an investigation of:  (1) various issues concerning claims for reimbursement of personal expenses; (2) “matters involving benefit contributions paid by employers subject to collective bargaining agreements with the Local union;” and (3) “other matters.”  The reference to personal expenses related principally to the accusations that the principal officer of the Local had used local funds for personal trips and telephone calls.  The second allegation, regarding “benefit contributions,” was a reference to source information that the principal officer had arranged “sweetheart” deals with certain employers.  

The Stier Anderson investigation of Local B, from the outset, focused on issues relating to benefit funds associated with the Local.  Not surprisingly, the funds objected to producing documents to the Union.  Thus, the investigation of Local B quickly became sidetracked with Stier Anderson engaging in an ultimately unsuccessful attempt to obtain fund documents.  Apparently frustrated, Stier Anderson switched gears, turned their attention away from the principal officer and instead focused on three individual employees of the benefit funds who they said were IBT members.  Stier Anderson did recommend certain charges against the three individuals. However, the IBT leadership found those charges lacking in many respects, especially since the evidence to support some of the charges might be difficult to obtain because it was in the possession of the funds.⁴  While Stier Anderson did depose the principal officer of Local B, they did not question him about the personal expense issues that were the focus of the

⁴ In our report to the General Executive Board, we recognized the legitimacy of the leadership’s misgivings about the strength of the charges but disagreed with their overall assessment of the charges proposed against two of the three individuals; and we recommended that charges be brought against them.

decision to authorize the investigation in the first place.  The IBT leadership was clearly dissatisfied with Stier Anderson’s lack of focus on this critical issue.

With regard to Local A, Stier Anderson conducted a wide-ranging investigation, requested and obtained numerous documents and completed many depositions.  In August 2002, Stier Anderson lawyers deposed the principal officer; and he denied any wrongdoing.  In April 2003, the principal officer resigned to take a position with the state government.  At that point, the IBT leadership, which, on the basis of Moore’s report, was satisfied that the new principal officer was competent and honest, determined that continuing to pursue the investigation made little sense. Stier strongly disagreed.

The investigations at both locals continued through the summer of 2003 and, indeed, with respect to Local B, until Stier Anderson resigned in April 2004.  In September 2003, on Moore’s recommendation, his assignment as personal representative at Local A was terminated and, during the same month, Moore raised substantial questions about whether it was appropriate that he continue his assignment at Local B.  His appointment to Local B was never terminated.

F. THE REPORT’S “INDEPENDENT CORROBORATION”

After the description of the information from “confidential” sources, the Report presents a section entitled “Independent Corroboration of Confidential Source Information.”  It states:

[C]overt inquiries and analysis of intelligence information and other evidence produced independent corroboration of the intelligence sources and left little doubt that, whether emanating from the Outfit or not, there have in fact been attempts to shut down or severely restrict IBT investigations in Chicago.  Indeed, these attempts constitute the strongest corroboration of the

information received from confidential sources.  

Traditional investigative techniques used to corroborate source information would have included, in this case, locating direct evidence that what the sources said was true, for example, a witness who participated in a conversation with Scalf, Coli, or Hogan about improperly “shutting down” the investigations or a document that reflects that such efforts were made.  The Report does not present any such direct evidence – and we did not discover such evidence. Other forms of corroboration might be found in documentary evidence that there were meetings or telephone conversations involving Scalf, Coli and Hogan at or about the time the alleged “sabotage” plot was afoot.  The Report does not include this type of evidence – and again, we did not find any such evidence. Instead, the Report first mentions “covert inquiries” and “analysis of intelligence information.”  However, nowhere does the Report describe any results of any such “covert inquiries” and “analysis.”  The Report does mention and does describe “other evidence.”  That evidence consists of a series of events, mostly in September 2003 and early 2004, that is supposed to constitute “independent corroboration” that Stier Anderson’s investigations in Chicago were improperly “shut down” and that the IBT leadership had abandoned its commitment to reform.

Our investigation included a detailed review of every item that the Report claims to be evidence providing “the strongest corroboration” for the “confidential” sources.  We found that when viewed in their proper contexts, not one of the items mentioned in the Report corroborates Stier Anderson’s sources or their information.  Indeed, it is clear from our review that Stier Anderson started with the premise that what their “confidential” sources said was true.  They then engaged in a tortured exercise to describe every encounter with the IBT as some sort of “corroboration” for the conclusion that they had already reached.  In fact, their presentation of “corroborative evidence” amounts to nothing more than a series of attempts to squeeze square pegs into round holes to confirm the unreliable information that they had received from their supposedly “confidential” informants.

We note two contentions for which the Report does not even purport to present corroborative evidence. One of the most significant assertions in the Report is that:  “There was also corroboration of the informant information to the effect that [John Coli] was heavily involved in opposing IBT anti-racketeering investigations in Chicago and was closely coordinating his opposition with [Carlow Scalf.]” Scalf is certainly an important IBT official, and Stier Anderson does take a stab, albeit unsuccessfully, at providing corroboration for the allegations about him.  However, Coli is also an important IBT official, the president of one of the largest IBT joint councils. Surely, if Stier Anderson asserts that there is corroboration for allegations that Coli was engaged in wrongdoing, they should have made at least some effort to explain what it was. But nowhere in the entire Report is there any description of any evidence at all that tends to corroborate or even suggest that Coli was “coordinating” anything at all with Scalf, let alone acts of “sabotage.”  As we describe below, the only reference to Coli in the Report’s account of the events of late 2003 and early 2004 is a telephone call that he placed, not to Scalf, but to Szymanski, in February 2004 to complain about the conduct of Stier Anderson’s investigators.

Similarly, while the Report repeatedly makes reference to the barred former President of Joint Council 25, Bill Hogan, and contains conclusory assertions about his efforts at sabotaging the Chicago investigations, the Report fails to present any specific evidence at all that corroborates or even suggests in any way that Hogan had any role in the alleged “sabotage.”

In our Report to the IBT Board, we reviewed in detail every item included in the Report as corroborating the “confidential” sources.  Because many of these items refer to non-public investigations or other confidential matters, we have eliminated  the discussions of those items contained in our confidential report.  We do present below descriptions of certain items to serve as examples of the type of so-called “corroboration” upon which Stier Anderson relies.  In bold print, we set forth the Report’s description of the item cited as “independent corroboration,” and we then explain our conclusions.

ITEM 1: In July 2002, [Scalf] summoned [Moore] to Washington to explain why he and Stier Anderson were pursuing the investigation of Local A, when, according to [Scalf] there was no organized crime involvement in the local.  

From the context in which this sentence appears, it is clear that Stier Anderson is contending that by “summoning” Moore, Scalf was improperly pressuring Moore to end the investigation at Local A in its early stages.  In our interviews with Scalf and Moore, however, they both denied that Scalf had ever “summoned” Moore or demanded an explanation as described.  They were also adamant that Scalf never pressured Moore in any way concerning the Local A investigation. Scalf told us that he had no specific recollection of a meeting with Moore in or about July 2002 that would come close to fitting the Report’s description.  He noted that while he later had serious concerns about what Stier Anderson was doing, in the summer of 2002, he “got along very well” with Stier and was still one of his strongest supporters at the IBT.⁵  We were told the same thing about Scalf by Hoffa, Keegel, Szymanski and Moore.

In reviewing the boxes of materials that Stier Anderson sent to the IBT Legal Department after their resignation, we discovered an invitation to Scalf’s June 28, 2003, wedding that had been sent to Stier.

Moore told us that as the General President’s personal representative to local unions, he usually reported to Scalf, since he was the General President’s principal assistant.  However, he recalled that early in his assignments on the Local A and Local B matters, he viewed himself as reporting primarily to Szymanski, as he understood the investigations to be “General Counsel investigations.” Moore said that in or about June 2002, he had a conversation with Hoffa in which Hoffa told him to “keep Carlow in the loop” on the Local A investigation.  Moore later learned that Hoffa had previously asked Scalf to update him on developments at either Local A or Local B and that Scalf had been unable to do so.  Scalf thereafter told Moore to keep him “in the loop” on both matters, since it was obvious that Hoffa was looking to Scalf to stay abreast of developments.  Moore then began sending Scalf periodic e-mail updates regarding his work as the personal representative to the locals under investigation.  Since the first update is dated June 26, 2002, Moore surmised that Stier Anderson might be referring to a meeting -- or possibly a telephone conversation -- that took place at some point in June 2002 in which Scalf asked Moore for periodic updates.

What Scalf and Moore told us makes sense. As of July 2002, the investigation of Local A had been active for not even five months; and very little investigative work had been done. As Scalf was aware, the investigation had been authorized by Hoffa and specifically concerned whether the principal officer had associated with an organized crime figure.  It is implausible that Scalf, in July 2002, would have summarily summoned Moore and stated that there was “no organized crime” at Local A given that the General President had just recently authorized Moore to investigate that very issue.  Moreover, even if Scalf had made such a comment, it obviously had no impact on the investigation, since it proceeded without limitation for over a year after July 2002.

Thus, we believe that the first incident described by Stier Anderson does not provide any “independent corroboration” for the six “confidential” sources.

ITEM 2: During [July 2002], a rumor circulated that [Scalf] was going to fire [Moore] for failing to keep him apprised of what was going on in the investigations of [two] Locals [in Chicago]. [Moore] was not fired, however, and [Scalf] disavowed any intention of doing so.  

It is puzzling why Stier Anderson reported in their discussion of “independent corroboration” a “rumor” that Scalf was going to “fire” Moore.  Rumors do not constitute corroboration. Corroboration is needed to substantiate rumors.  It is also difficult to imagine how the “rumor” could possibly have been true, since it was Hoffa, not Scalf, who had the authority to “fire” Moore and, in reality, in the early stages of the investigations, it was Szymanski who was much more involved in supervising the work of Stier Anderson and Moore.  In any case, Moore was never fired.  We would like to think that this reference to a “rumor” was included inadvertently in the April Report.

ITEM 3: In late August 2002, while the general president was on vacation, [Scalf] arbitrarily refused to authorize the payment of an invoice for the lead investigator in Chicago who was assisting in the [two authorized investigations in Chicago]… investigations . . . the matter was resolved upon the return of the general president  . . .

It does not appear that the Report asserts that there was any conspiracy in existence in the summer of 2002 to “sabotage” Stier Anderson’s investigative work and it is, therefore, not entirely clear why this event is included as “corroboration.”  The implication appears to be that Scalf was exhibiting some level of hostility toward the investigations in August 2002, which was evidenced by his alleged “arbitrary” refusal to authorize the payment of two invoices.

As we understand the allegation, presumably Scalf’s hostility remained dormant for the next year and then manifested itself in a concerted effort to thwart the investigations.  As unlikely a scenario as this is, we nevertheless questioned Hoffa and Scalf about the processing of the bills submitted by the Stier Anderson investigators; and we reviewed the history of the IBT’s payment of those bills.

The process for paying investigators’ bills was as follows: (1) each investigator was retained directly by the IBT and had his own consulting agreement with the Union, although, for all intents and purposes, they worked at the direction of Stier Anderson; (2) the investigators prepared detailed bills describing their activities on a monthly basis and submitted those bills to Stier Anderson’s chief investigator, James Kossler; (3) Kossler then forwarded to the IBT “redacted” versions of the bills, removing certain detailed descriptions of the tasks performed so that no one in the IBT would be able to see, for example, which witnesses had been interviewed; (4) Kossler had to sign an IBT “Consulting Services Certification Form” for each investigator’s monthly invoice, representing that the invoice had been “reviewed and approved for payment,” and then had to forward the form and the redacted invoice to the IBT Legal Department; (5) Szymanski would review and sign the “Certification Form;” (6) Szymanski would then forward the form and the redacted invoice to the Office of the General President; and (7) Scalf was responsible for obtaining the final approval of Hoffa to have the bills paid.

 

Scalf told us that, as a general matter, Hoffa wants close attention paid to bills and that Hoffa keeps a sharp eye on how IBT funds are being spent.  Scalf recalled that when the bills for the work performed by two of the investigators in July 2002 arrived in the General President’s office in August, Hoffa was away on vacation.  Scalf was wary of approving the bills without reviewing them first with Hoffa, as they were for substantial amounts, $19,814.94 and $25,115.48, and, importantly, the bills were so heavily redacted that they provided literally no information about what the investigators had done.  For example, one investigator’s typical billing record entry – for the first five work days in July 2002 – is as follows:

Date	Time	Purpose
7/1/02	4.25 hours	[entries completely REDACTED]
7/2/02	6.0 hours	[entries completely REDACTED]
7/3/02	6.5 hours	[entries completely REDACTED]
7/6/02	7.5 hours	[entries completely REDACTED
7/7/02	5.75 hours	[entries completely REDACTED]

 

Scalf told Hoffa over the telephone that he had concerns about the bills, and Hoffa

told him that he would review them when he returned from his vacation.  When Hoffa returned

in September, reviewing the bills was not his first order of business.  The bills were approved for

payment on October 28, 2002, and were paid in full.

In these circumstances, it is not surprising that Scalf delayed processing the

payment of the bills.  His hesitation to do so in the summer of 2002 was completely

understandable and provides no corroboration at all for what the sources reported.

ITEM 5: On February 26, 2003, Stier Anderson recommended to the IBT that it launch a formal investigation, with the appointment of a personal representative, into issues concerning [another Chicago area local]. … For months, no action was taken in response to this request. … At a meeting with the general president in June [2003], Stier reiterated the need to act on the February 2003 recommendation to investigate issues related to [this local].  Instead, without explanation, the general president in July [2003] instructed that the issues be referred to the IRB.  

The assertion that the IBT’s referral of allegations of wrongdoing to the IRB somehow constitutes “independent corroboration” for what the informants reported about an improper effort to obstruct Stier Anderson’s investigation and a lack of commitment to reform is absurd. To suggest that by referring a matter to the IRB, the court-appointed entity charged with overseeing the union, the IBT had somehow acted improperly is, on its face, ridiculous.  It demonstrates that what the Report appears to be complaining about is not the IBT’s lack of commitment to reform but rather, an approach to reform that was not entirely dependent on Stier Anderson.⁶

ITEM 7: In August 2003, while the general president was on vacation, the Executive Assistant refused for the second year to approve payment of bills for Chicago-based investigators.

For the work that they performed in July 2003, two Chicago investigators submitted bills to the IBT in the first week of August that were paid on September 24, 2003.  A third investigator submitted a bill on August 4, 2003, that was paid three days later.  

Presumably, the bills referred to are those submitted by the two investigators in August. Scalf explained that in 2003, he was again reluctant to approve bills for payment while Hoffa was on vacation. When Hoffa returned, the bills were paid.  The delay of several weeks simply does not amount to an effort “to inhibit general investigative activity” in Chicago, as the Report asserts. The bills were paid within 60 days and, as described above, Scalf’s hesitation was completely understandable.  Furthermore, the payment of the third investigator’s July 2003

⁶At page 26 of the Report, it actually states that Stier Anderson’s “progress on IBT investigations in Chicago [was] retarded by… referral to the IRB …” (emphasis added).

bill within three days undermines any suggestion that Scalf was attempting to thwart or “shut

down” Stier Anderson’s investigations by delaying payments.

ITEM 15: On February 9, 2004, an IBT investigator met with the principal officer of a Chicago area local for the purpose of arranging an informal interview. . . [T]he officer agreed to meet the investigator three days later on February 12. . . The investigator’s contact with the officer provoked a strong and immediate reaction from certain Chicago Teamster leaders and their allies. Complaints were made to the IBT general president, not by the officer, but by others apparently threatened by the prospect of his speaking freely to the investigator. . . . The intense interest in this matter by individuals other than the officer who was to be interviewed and the apparent pressure on that officer to have a lawyer . . is consistent with confidential source information about the reasons behind the resistance to IBT investigations in Chicago.

ITEM 16: Indeed, at the same time, complaints from Chicago were also raised about IBT investigators interviewing two Teamster members regarding alleged organized crime issues at their local.

Hoffa, Keegel, Szymanski and Scalf all told us that by September 2003, they had lost confidence in Stier Anderson. They were disappointed with Project RISE, particularly their failure to produce a code of conduct acceptable to the Southern District.  They were also disappointed with the way in which Stier Anderson had conducted investigations both in Chicago and in other parts of the country. They saw Stier as someone who was convinced that he was always right and that anyone who disagreed with him did so for the wrong reasons.  They also saw Stier as overzealous and, whatever his motives were, eager to pursue investigations without sound bases and with little expectation of success.  Finally, they felt that Stier was totally unconcerned with the costs to the IBT of what he was proposing; indeed, he almost always exceeded his authorization from IBT and behaved as if he had a mandate that was unlimited in scope. In that regard, the leadership was especially concerned that the Stier Anderson project had already cost them almost $15 million.  

On September 23, 2003, a meeting was held at IBT Headquarters to discuss, among other things, the status of the two authorized investigations that Stier Anderson was conducting in the Chicago area. Hoffa, Keegel, Szymanski and Scalf, along with Stier, attended the meeting.  Szymanski called Stier the next day to inform him of the leadership’s decisions.  Szymanski told Stier that he was authorized to continue only one aspect of the investigation of Local B -- whether or not the principal officer of that Local had embezzled funds, an issue the leadership felt Stier should have resolved months earlier.  After that was done, Szymanski explained, the leadership would discuss the various other matters that Stier wanted to investigate.  Any other investigative activity, Szymanski explained to Stier, had to be cleared, in advance, with him.

With regard to the events described in the second item, “ITEM 16” (which our investigation determined preceded the events in ITEM 15 concerning the interviews of two members of a Chicago area local), we interviewed Szymanski and the attorney who represents the Local. They told us the following.

The Local’s attorney said that in early February 2004, he received a telephone call from a member of the Local who said that two individuals who had identified themselves as RISE investigators had come to her home the previous evening and had asked her questions about internal politics at the Local and whether two former principal officers of the Local who had been removed from office had attended the Local’s Christmas party in December 2003.  The Local’s attorney called Szymanski and left a voicemail message inquiring about why the investigators had visited the member.  The next day Szymanski returned the call.  The Local’s lawyer demanded to know why RISE representatives were approaching members and asking about internal politics at the Local.  He also said that he had attended the Local’s last Christmas party and that neither of the two former principal officers had been there.  Szymanski told the Local’s lawyer that investigators were not supposed to be approaching members in this manner.  He said that it would not happen again.

Szymanski was upset.  He did not understand why Stier Anderson had not first sought authorization from him to conduct the interviews.  Szymanski had given very specific directions to Stier that Szymanski would have to approve in advance all investigative activity.  In addition, Szymanski could not understand why the investigators had approached a member at home and why they had apparently asked questions about political issues at the Local without any apparent relationship to specific allegations of misconduct or corruption.

Szymanski spoke to Stier on February 9 or 10.  Stier said that his investigators had received allegations concerning the Local that they felt they were responsible for investigating. Szymanski said that Stier Anderson did not have authority to conduct any investigative activity at all without his approval.  Szymanski then asked Stier what the woman had said. Stier replied that she had said that the two former principal officers had not attended the Christmas party. Szymanski said, in that case, he assumed that the investigation was over.  Stier assured him that it was.  Stier also assured Szymanski that his investigators would not speak with anyone else in connection with any local who did not voluntarily approach them unless they had obtained specific authorization from Szymanski.

A day or so later, the Local’s lawyer received a telephone call from another Local member who said that two so-called RISE representatives had visited him at home and had asked questions about the Christmas party.  The Local’s lawyer again called Szymanski and reported what the member had said.  Needless to say, the lawyer was not happy.  Szymanski was shocked. 

Szymanski called Stier on February 11.  He was quite angry and asked, “What the hell is going on?”  Stier replied “How are we to investigate?”  Szymanski became even angrier and reiterated that Stier Anderson was not supposed to be investigating anything without his authorization. Stier did not offer any excuse or explanation, but he did say that there would be no further investigative activity without Szymanski’s approval.

This item includes a reference to the fact that “complaints from Chicago” were raised about the two interviews, suggesting that high-level Teamsters acting for the Outfit were trying to interfere with Stier Anderson.  Those complaints clearly were the two telephone calls that the Local’s attorney made to Szymanski inquiring why the Local’s members had been approached in such an intrusive manner.  How these events could corroborate a sabotage plot by Scalf, Hogan and Coli is certainly unclear.

With regard to Item 15’s reference to the February 9, 2004, interview of a Teamsters “officer,” we learned that on that date, one of the Chicago based investigators working with Stier Anderson appeared unannounced at the official’s office. As Stier Anderson describes it, the investigator wanted to schedule an informal interview and the official agreed to meet with him on February 12.  The Report asserts that this contact “provoked a strong and immediate reaction from certain Chicago Teamster leaders” and that the official was “pressur[ed]” to request that a lawyer be present at the informal interview.

In our interview with John Coli, the President of Joint Council 25, he said that the official had contacted him and said that the investigator had visited him, identified himself as a “RISE” investigator and, in addition to scheduling an interview, asked questions about Coli.  We also spoke with a Chicago attorney who represents various IBT locals who told us that at about the same time, the official contacted him and said that the investigator had asked questions about Coli. The attorney told the official that he did not recognize the name of the investigator, and he advised the official that if the investigator contacted him again, he should tell him that he would not agree to be interviewed without a lawyer present.  The attorney said that several days later, the official called him and said that he had told the investigator that he wanted a lawyer at the interview. The investigator responded that he would call back to schedule the interview, but the official never heard from him again.

Szymanski recalled that on February 10, he received a call from Coli asking why the investigator had contacted the official and asked questions about him.  Szymanski told Coli that he did not know but that he would contact Stier.  Szymanski spoke to Stier on February 11, 2004. By now Szymanski was exasperated, and he demanded to know what was going on.  Szymanski said that Stier told him that he had sources who had said that the official had significant information about Coli.  Szymanski reminded Stier once again that his team had acted without the necessary authorization.  Stier also complained that “someone had gotten to” the official because he was insisting that a lawyer be present for the interview.  When Szymanski directed that there be no further contact with the official, Stier said that they would comply.  He also said that someone was trying to “shut them down.”

It is entirely unclear what gave Stier Anderson the idea that they were authorized to approach the official, who was the principal officer of a local not the subject of any investigation. Stier Anderson had been directed not to take any action without first obtaining clearance from Szymanski; and they had not done so.

In addition, it is clear that the “subject” of the official interview was Coli.  Coli was obviously upset by the fact that the investigator had asked questions about him which prompted him to “complain,” as Stier Anderson describes it, to Szymanski.  What is omitted from the April Report is that Coli’s reaction to learning that a Stier Anderson investigator was asking questions about him was obviously influenced by the fact that Coli and Stier had just recently come to loggerheads over an unrelated matter, an experience that no doubt affected how Coli reacted.

Coli explained that he had been under consideration for an appointment by the Governor of Illinois to a position with the Illinois Toll Authority.  Coli said that he had learned that while his appointment was being considered, Stier Anderson investigators contacted the Governor’s office and said that Coli was under investigation.  Szymanski recalled that during a conference for Teamster lawyers in California in October 2003, Coli complained about what the Stier Anderson investigators had done and was visibly upset.  A meeting was later arranged at IBT Headquarters on December 15, 2003, where Coli confronted Stier directly about the issue.  Stier denied telling anyone that Coli was under investigation; he also denied that any of his investigators had done so. Coli also told us that he felt that Stier had “snapped” at the meeting and had gone on at length about how the IRB was incapable of dealing with corruption in Chicago locals and how only he was able to “clean up Chicago.”  It was obvious that Coli believed that Stier or the investigators had made disparaging remarks about him. Coli told us that he remained so angry with Stier that he told “everyone who would listen” that Stier “wasn’t dealing with reality.” He also probably expressed the view that Stier should be removed from his position with the IBT.

When Coli learned that Stier investigators had been asking questions about him, he was “intense[ly] interested.” Clearly Coli had reason to suspect that Stier was responding to his hostile remarks.  We have found no evidence that Coli’s interest -- and his telephone call to Szymanski -- was part of a plot orchestrated by the Outfit to bring Stier Anderson’s investigations to a halt.  Nor did the reactions of Coli and Szymanski evidence a lack of commitment to reform by the IBT leadership.

ITEM 17: [O]n February 24, 2004, Stier was formally instructed to stop all investigations in the Chicago area pending completion of this report.

We found that the Report’s description of the these events on February 24, 2003, is accurate.  We note, however, that despite Stier Anderson’s repeated description of a “shut down” of their investigative work, the “instruction” was to put investigative work in Chicago “on hold” pending completion of a report summarizing the status of all the issues that the Stier Anderson investigators had been examining in Chicago.  In addition, the Report does not refer to what Stier Anderson had to have understood concerning what led to the instruction to stop work.  When Stier defied Szymanski’s explicit directives and permitted investigators to continue to perform investigative work without Szymanski’s authorization, it was the final straw for Szymanski.  He and Hoffa both felt that all investigative activity by Stier Anderson should be placed “on hold” pending the completion of what became the April Report.

ITEM 19: As if to confirm [rumors that Project RISE is finished], on April 1, 2004, during the final preparation of this Report, the Executive Assistant -- without knowledge of the General Counsel -- directed the transfer of [Cindy Impala], the Project Manager of the “Anti-Corruption Committee’ (Project RISE) to the education department because of the conclusion of this Committee.” This precipitous action before [the April] Report was even completed is one of a series of recent indications that the forces against the Anti-Racketeering Program in the Union have succeeded in destroying the credibility of IBT self-policing in the Chicago area and within the Union itself. 

The transfer of Cindy Impala can not in any way be construed as reflecting the leadership’s inclination to turn its back on reform.

Impala began working as a secretary for the IBT in 1978 at headquarters in Washington, D.C. In 1999, she was working in the IBT’s Education Department as its Associate Director.  After Stier Anderson was hired, the IBT put together a “formation committee” to work with Stier Anderson to decide how the IBT and the firm could best work in the reform effort.  Representatives of various IBT departments, such as Communications, Government Affairs, Research, Legal and Education, had representatives on the formation committee.  Impala was the Education Department’s representative.  According to Impala, the formation committee developed the agenda for Project RISE and completed its work after about six months.  She very much enjoyed her work on the committee and was interested in continuing to work in connection with the anti-racketeering reform efforts at the Union.  When she learned that the IBT was creating a position as the Project Manager for Project RISE, she made her interest known and was selected for the position in late February 2000.

Impala explained that Project RISE encompassed (1) the development and implementation of a code of conduct and (2) a national study of corruption within the Union, the results of which would be included in a formal report.  The formation committee had decided that a Task Force made up of 22 Teamsters from different parts of the IBT would be responsible for working with the Stier Anderson team in creating the code.  The study of the various local unions would be conducted by Stier Anderson, working with teams of former law enforcement agents who would investigate the status of corruption in certain locals.

Impala said that her role as the RISE Project Manager included coordinating the activities of the Task Force, setting up meetings, developing a budget, preparing correspondence, making travel arrangements for those involved in the various functions, and making presentations about Project RISE to local unions.  She also coordinated drafts of the code as revisions and suggestions were received from various sources.

Impala said that the last work that was done in developing and revising the code of conduct took place sometime in early 2001.  At that point, it had become clear that the negotiations with the Southern District were not going to result in their accepting the code and the internal enforcement process as proposed by the RISE team.  She understood that the development and implementation of the code would be “on hold” until agreement was reached with the prosecutors.  Impala also said that the national survey on organized crime and corruption was completed sometime in 2002 and that the resulting report was issued in October 2002.

Impala said that following the final draft of the RISE Code in early 2001 and the publication of the organized crime report in October 2002, her job as the Project RISE Project Manager was “very quiet.” In fact, during this period, she said that she found various other projects unrelated to Project RISE on which to work.  She said that she went to other division heads and sought out assignments.  She worked on a project to gain approval for a members’ dues increase and assisted in making presentations at local unions regarding that proposal.  She also assisted in planning a convention in Las Vegas and worked for the Strategic Planning Committee and the Rail Conference.

Impala explained that she had no role at all in the investigations that were conducted by Stier Anderson and the investigators working with them.  She heard them referred to as “special investigations,” but she was never privy to anything that was the subject of the investigations.  She also said that while she sometimes heard Stier refer to the investigations as Project RISE investigations, they certainly were not part of Project RISE and she had no duties or responsibilities with respect to any of them.

Impala said that even though she did not have any work for Project RISE after October 2002, she was still pleased that she remained in the position as RISE Project Manager.  She was hopeful that agreement would be reached with the Southern District concerning enforcement procedures, and that once that happened, the code of conduct would be adopted and implemented.  She expected that once the implementation process began, she would be extremely busy developing educational and training programs and otherwise helping implement the code. She was very much looking forward to these assignments.

On April 1, 2004, Impala unexpectedly received a memo transferring her back to the Education Department.  She was upset for two reasons:  (1) she felt that her return to the Education Department might jeopardize her assignment in implementing the RISE Code once negotiations with the Southern District were concluded, and (2) she was unhappy with what she expected would be the travel requirements that would be imposed on her at the Education Department.

Impala told Stier that she had been transferred.  He responded, “I can’t believe they would transfer you out. You are the only person assigned to work on Project RISE.”  Impala stated, however, that she had not done any work on the Project since October 2002.  Indeed, her secretary had been reassigned to the Legal Department about a year earlier because there was no work for her to perform.

When asked if she believes that her transfer to the Education Department represented a lack of commitment to anti-corruption efforts within the Union, she said that she understood that it reflected the fact that she did not have anything to do in connection with Project RISE for sometime and that a determination had been made to use her elsewhere.

We are simply at a loss to see why Stier Anderson included reference to Impala’s transfer to the Education Department as “corroboration.”

* * *

As we explained in our unabridged report to the General Executive Board, the “independent corroboration” cited by Stier Anderson simply does not confirm what the “confidential” sources are reported as saying. What is surprising is that experienced former prosecutors would make such extremely serious allegations concerning decisions at the highest levels of the IBT based on what we have shown was patently unreliable informant information without any real corroboration at all.

G.        THE TIMING OF THE REPORTS FROM THE “CONFIDENTIAL” SOURCES AND THE RELEASE OF THE APRIL REPORT

During the period when Stier Anderson was working on Project RISE, preparing the RISE Code and supervising the field studies, they certainly contemplated that they would have a long term role working with the IBT.  This was clear in Stier’s numerous conversations with Hoffa and Szymanski about the IBT enforcement process that would be implemented when the IRB was ended. Indeed, the initial draft of the RISE Code that was designed to replace the IRB oversight process included an Appendix C that prescribed the “Procedures. . .  For the Investigation of Allegations of Organized Crime Activity Within the Union and Associated Benefit Funds.” These procedures specifically provided that for each investigation, investigators retained by the IBT “will be supported by the law firm of Stier Anderson and Malone in developing the investigative plan and in documenting the results of the investigation” and “The firm of Stier Anderson and Malone will provide legal oversight and assist [the investigators] in the drafting of the report [of the investigation] so that conclusions are fairly stated and the analyses are well balanced.”

It appears that Stier was slow in recognizing the IBT’s increasing misgivings about his firm’s performance and ability to produce the results that he had promised and the growing likelihood that the end of Stier Anderson’s role with the IBT was drawing near.  However, by September 2003, it had to have been clear to Stier that he was out of favor at the IBT and that his days with the Union, days in which his firm had been paid millions of dollars, were numbered.  In what follows, we review evidence that made clear that by September 2003, Stier Anderson did not have a future with the IBT.

·        In May 2001, Stier was removed from the team negotiating with prosecutors in the Southern District of New York over the Consent Decree.

·        By May 2002, Stier had been excluded from strategy sessions at the IBT concerning how best to deal with the Southern District in getting the IRB terminated.  To make matters worse for Stier, Robert Luskin, a Washington, D.C., lawyer, had joined the group providing advice concerning the replacement enforcement process.  Luskin had a long-term role at Laborers International Union of National America, the same type of role that Stier had envisioned for himself and his firm at the IBT, and Luskin’s presence at IBT headquarters was certainly a threat to Stier Anderson.

·        By September 2002, the debacle resulting from Stier’s use of surveillance in the investigation of a high-level IBT official, described above, was having a chilling effect on Stier Anderson’s relationship with the leadership.  It was made clear to Stier that General President Hoffa was extremely disturbed that extensive, intrusive surveillance, well beyond what Hoffa and Szymanski had ever imagined, had been conducted to no avail.

·        In late September 2002, Szymanski learned that the IRB had found Stier Anderson’s proposal to bring charges against the principal officer of a local to be deficient.  Szymanski discussed the matter with Stier, displaying obvious dissatisfaction with Stier Anderson’s failure to understand the fundamental legal standards that apply in cases involving organized crime associations and the firm’s expenditure of resources

·        without any results. Stier, of course, insisted that they would continue with the investigation; but he never revisited the subject with Szymanski.

·        On June 13, 2003, Hoffa told Stier that he declined to authorize an investigation by Stier Anderson at a local in the Chicago area.  Hoffa explained that the IRB was already conducting an investigation at the local and that it would be wasteful to duplicate that effort.

·        In July 2003, Stier was informed that the IBT leadership had rejected his recommendation that the IBT pursue charges against the former principal officer of another Chicago local, after he had resigned from the Union.  The leadership felt that it made no sense to proceed because his successor was competently running the Local.  Stier was clearly miffed.

·        In July 2003, the IBT leadership rejected Stier Anderson’s request for authorization to conduct a full-blown investigation of another Chicago area local. Stier was upset with the decision, especially since it had been made without the leadership first explaining their reasons to him. The matter was referred to the IRB, which had previously investigated the local and had extensive experience with its issues.

·        The April Report makes clear that Stier knew that on September 9, 2003, Hoffa’s personal representative, Bill Moore, sent a letter to Scalf stating that his assignment as personal representative to one of the locals in which Stier had an ongoing investigation should be terminated.  

·        The April Report also makes clear that Stier knew that on September 9, 2003, Moore sent another letter to Scalf saying that it was time to evaluate whether he should continue as the personal representative at the other Chicago area local to which he had been appointed, because the Department of Labor had completed a favorable audit of the local.  

·        The April Report makes clear that Stier knew that on September 15, 2003, Hoffa terminated Moore’s assignment at a Chicago area local.  The Report also makes clear that Stier was offended that he had not been personally notified by Hoffa.

·        After an important meeting with the IBT leadership on September 23, 2003, Stier was told that Stier Anderson was only authorized to pursue specific charges related to a principal officer of one of the Chicago locals and was not to conduct any other investigative activity without first obtaining approval from the IBT leadership.

·        The Report reveals - and Stier demonstrated in repeated conversations with Szymanski - that Stier knew that during the summer and into the fall of 2003, Scalf was a strong advocate of the position that Stier Anderson had overstepped their bounds, that they were proposing work that was either unwarranted or better performed by the IRB, and that despite the millions of dollars that the IBT had already spent, they were not accomplishing what they had been retained to do.  In fact, in meetings that Stier attended, Scalf openly expressed his opinion.  In his conversations with Szymanski, Stier could not accept that there were valid reasons for Scalf’s position and as the Report shows, he alleged that Scalf was acting in bad faith, holding up the payment of his investigators’ bills, and trying to sabotage his mission.

                         

·        In October 2003, Stier had a series of conversations with Szymanski in which he expressed displeasure over the IRB’s refusal to agree to joint investigations with his firm.  He also expressed concern that delays in negotiations with the Southern District were resulting in “slowing down” and “breaking down” his firm’s special investigations.

 

Perhaps it was a coincidence that on the very day that Hoffa terminated Moore’s assignment at one of the Chicago area locals that Stier Anderson was investigating and only six days after Moore had recommended to Scalf that his assignment at the other local be reevaluated, Stier Anderson’s investigators met with Anthony D’Amico and heard for the first time (1) about the Outfit pressuring Chicago Teamsters to influence Scalf to sabotage Project RISE and (2) that Scalf may have received a bribe to arrange for D’Amico’s reinstatement into the IBT at the 2001 Convention.

Whatever the case may be, Stier recognized in the late fall of 2003, that he and his firm almost certainly had no future with the IBT. He was aware, of course, that his stature with the IBT leadership had fallen so low that throughout the summer and into the fall, his recommendations were being  routinely rejected.  Unable to accept that on the basis of their four year experience with the Stier Anderson team, the IBT leadership might have legitimate reasons for rejecting his proposals, Stier saw Scalf as the principal nemesis seeking to undermine his goals. At the same time, Stier was plainly unsettled by the emergence of other attorneys as the principal advisors to the IBT on dealing with the Consent Decree and replacing the IRB.  In fact, he told Cindy Impala that he was disappointed that he was not going to have the role as “chief investigator” when the IRB was disbanded. Stier also began to reveal by his complaints to Szymanski that negotiations with the Southern District were “slowing down” his investigations that he had come to realize an important fact: one of the reasons why the leadership was resistant to his proposals was not because of mob influence or some other untoward factor, but because it was becoming apparent that someone else -- not Stier Anderson -- would soon be conducting the Union’s investigations.

It was in these circumstances that the Report was prepared and issued in April 2004. We do not know what Stier Anderson’s motives were when they presented their allegations and conclusions. Perhaps Stier Anderson honestly, but mistakenly, believed that the evidence that they presented in the April Report justified their explosive allegations.  Perhaps they were trying to slow down discussions with the Southern District with their charges and pressure the leadership into changing their minds and authorizing the investigations after all.  Perhaps they acted out of spite.⁷ Or perhaps there were other reasons. Certainly, as we have

⁷ On this point, we note that in the days after Stier Anderson presented the April Report to the IBT, Stier behaved in a manner that was inconsistent with the obligations to the IBT that he had as an attorney and under the terms of his law firm’s retainer agreement.  Although the Report was supposed to have been confidential, Stier repeatedly gave interviews to the press in which he discussed the contents of the Report and made disparaging comments about the Union’s leadership and General President Hoffa. He has also gone so far as to post on his firm’s web site the letter that he sent to the members of the IBT’s General Executive Board explaining the reasons for his resignation. In that letter, he also disparages his former client and discusses sensitive matters related to his retention.

43163.10.LITIGATION

demonstrated, there was no factual basis for concluding that the leadership had abandoned its

commitment to reform or that Teamsters had improperly sabotaged the Stier Anderson

investigations either at the direction of the Outfit or for some other reason.

Submitted By:

Edward A. McDonald
Michael Gilbert
Dechert LLP 30 Rockefeller Plaza
New York, NY 10112