1
1 OFFICE OF THE INDEPENDENT HEARING OFFICER
2 LABORERS' INTERNATIONAL UNION OF NORTH AMERICA
3
4 IN RE: )
5 TRUSTEESHIP PROCEEDINGS ) No. 97-30T
6 CHICAGO DISTRICT COUNCIL )
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8
9
10 TRANSCRIPT OF PROCEEDINGS had in the
11 above-entitled cause at the Midland Hotel, 172
12 West Adams Street, Chicago, Illinois, on the 16th
13 day of July, A.D. 1997, at 9:22 a.m.
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15
16 BEFORE: MR. PETER F. VAIRA, Hearing Officer
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1 PRESENT:
2
3 COMEY, BOYD & LUSKIN,
4 (1025 Thomas Jefferson Street, N.W.,
5 Washington, D.C. 20007-5243), by:
6 MR. ROBERT M. THOMAS, JR.,
7 MR. DWIGHT P. BOSTWICK,
8 appeared on behalf of the GEB Attorney;
9
10 CARMELL, CHARONE, WIDMER, MATHEWS & MOSS,
11 LTD.,
12 (225 West Washington Street, Suite 1000,
13 Chicago, Illinois 60606), by:
14 MR. SHERMAN CARMELL,
15 MR. MARTIN P. BARR,
16 MS. SUZANNE M. LAW,
17 appeared on behalf of the Chicago
18 District Council of Laborers;
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1 PRESENT: (Cont'd)
2 EARL L. NEAL & ASSOCIATES,
3 (111 West Washington, Suite 1700,
4 Chicago, Illinois 60602), by:
5 MR. GEORGE N. LEIGHTON,
6 appeared on behalf of
7 John A. Matassa, Jr.
8
9 ALSO PRESENT:
10 MS. CHERYL MARQUARDT
11
12 REPORTED BY: MARY KAY BELCOLORE, CSR, RPR.
13 CORINNE T. MARUT, CSR, RPR.
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1 THE HEARING OFFICER: Ladies and gentlemen,
2 let's bring this meeting to order. My name is
3 Peter Vaira. I'm the independent hearing officer
4 from the Laborers' International Union.
5 Sitting beside me is a paralegal from
6 one of the local law firms. I sometimes use,
7 often use a lawyer from my office. But for at
8 least the next couple days, Miss Marquardt will do
9 the, just taking personal notes for me.
10 This is a hearing in the matter of the
11 Chicago District Council. It's a complaint filed
12 by the Laborers' International Union against the
13 District Council under trusteeship pursuant to the
14 Laborers' International Union of North American
15 Constitution. And the law that applies in these
16 areas is well settled in the reported cases in all
17 the labor reporters. We will follow that.
18 Let me just go over some working rules
19 here. We will generally follow the rules of
20 arbitration and the rules of evidence. However,
21 as you know, in those situations, the rules of
22 hearsay are greatly relaxed.
23 What I will generally do is, if
24 evidence is offered, it is permitted to be,
5
1 permitted to be made part of the record, unless
2 it's so far out that it's ridiculous.
3 But if it has some possible probative
4 value, we will let it come in as part of the
5 record.
6 At the end of the proceeding, I would
7 expect the Council will tell me why or why not
8 some of the evidence does or does not apply or
9 should not be probative.
10 But so we won't go into long arguments
11 over the evidentiary value of some of the items,
12 unless there's a very serious question.
13 I have some persons here -- let me just
14 say this. The rules of our union is that the, are
15 that in trusteeship matters, and other matters
16 that we hear, only the persons who are involved
17 are entitled to come.
18 This is an in-house battle between its
19 members, and no outsiders should be allowed to
20 participate. That doesn't mean you are not
21 free -- I can't stop anyone from talking about it
22 after they leave here. But the doors are closed;
23 only the persons, relevant persons, and the
24 relevant persons here would be the members of
6
1 this, the delegates to this particular union,
2 District Council.
3 And there are maybe, I think there is a
4 member from the International Union just to
5 observe, and some members of the GEB Attorney's
6 staff. But the reason for that is, this is an
7 in-house affair, and this is the union's problem
8 to settle. And they are going to settle it inside
9 these doors.
10 All right. I have some appearances
11 here; who? The GEB Attorney is represented by
12 whom, sir?
13 MR. BOSTWICK: Dwight Bostwick and Robert
14 Thomas.
15 MR. THOMAS: Robert Thomas.
16 THE HEARING OFFICER: Representing District
17 Council?
18 MR. CARMELL: Sherman Carmell, Martin P.
19 Barr, Suzanne M. Law.
20 THE HEARING OFFICER: Okay, thank you.
21 MR. LEIGHTON: George N. Leighton,
22 representing John Matassa.
23 THE HEARING OFFICER: I know that I received
24 a call from some other attorneys who may appear
7
1 for some individuals. And I'm not going to
2 mention their name now. I'll mention them to the
3 other attorneys. They are the attorneys that I
4 know, and have known for a long time, and I
5 believe will sometime during the proceedings
6 appear here.
7 Gentlemen, prior to beginning, we had a
8 lawyers' conference, and we talked about some
9 issues that have come up. Do you want to put
10 that, the gist of our conversation on the record?
11 MR. BOSTWICK: Certainly, your Honor. This
12 is Dwight Bostwick from the GEB Attorney's
13 office.
14 Our position would be on this issue
15 that they, the individuals who are officers, or
16 delegates, for that matter, of the District
17 Council are not specifically named parties in this
18 action; just the District Council is.
19 If there were individuals or officers
20 who wanted to cross-examine or participate in this
21 hearing, that they should be collaterally estopped
22 on those issues and any future disciplinary
23 matters that are brought against those
24 individuals.
8
1 If they don't choose to exercise that
2 ability, then they would simply, if charged in a
3 disciplinary hearing, have whatever full rights
4 and protections they have normally, and would be
5 able to cross-examine those people at that time.
6 THE HEARING OFFICER: Mr. Carmell?
7 MR. CARMELL: Well, obviously the District
8 Council doesn't take any position on it, except to
9 be pleased that we cleared the issue, as regarding
10 appearance of attorneys, that as Mr. Bostwick has
11 said, so that that can be relayed, I can relay
12 that to the officers, delegates who may be
13 considering having counsel, and to any counsel
14 that may call me.
15 With that being said, that is the only
16 decision the District Council has.
17 THE HEARING OFFICER: I gave you a
18 preliminary ruling from me.
19 Because the issues in this case,
20 trusteeship issues, are so fluid, this is almost,
21 almost an investigatory type of a proceeding.
22 It's -- it is not in danger of a disciplinary
23 matter and the issues are going to be fluid and
24 maybe not well-defined.
9
1 So, to say that someone would be
2 collaterally estopped if they examined, I gave a
3 ruling. If an individual wants to examine a
4 witness on behalf of a person they represent
5 outside of just one or two questions, if they
6 proceed and want to make an examination, there is
7 a presumption, a rebuttable presumption, they may
8 be collaterally estopped at a secondary hearing.
9 But I say a rebuttable presumption
10 because the issues, I don't think they are the
11 same and this is such an informal proceeding and I
12 will treat it that way that I don't want to make a
13 hard-and-fast rule.
14 I do reserve the right, though, to cut
15 that off. If someone proceeds and begins a long,
16 long, long examination, I am just going to cut it
17 off. We will worry about the presumption later.
18 For those persons who don't want to
19 examine or decide that that is not -- they are not
20 estopped. So I am not going to make that
21 hard-and-fast rule.
22 MR. CARMELL: I thank the hearing officer for
23 it because, as you well recognize, being an
24 experienced trial attorney, that the interest of
10
1 the District Council may at any given time not be
2 in line with a particular officer or delegate.
3 Therefore, the trial decision that the
4 District Council makes to examine or not examine a
5 particular witness should not inure to the
6 detriment of any of the individual officers or
7 delegates.
8 I think with that on the record and
9 your rulings and the GEB attorney's statements,
10 that the officers and delegates are now fully
11 advised of their opportunity to have an
12 independent hearing if and when some other
13 proceeding is filed that involves them.
14 THE HEARING OFFICER: I think that's fine.
15 Gentlemen, we will proceed. I look
16 back and sometimes the union in these proceedings
17 sets out coffee or something else for people --
18 for persons to participate. It is a rare occasion
19 when there isn't some coffee. There doesn't seem
20 to be any here today, but maybe sometime in the
21 next few hours we could think about that.
22 I was a hearing officer connected with
23 hearings in Beaumont, Texas. For some reason the
24 union there seemed to think ice water was all we
11
1 should have, nothing stronger than that. The
2 lawyers's table had ice water as much as you could
3 drink. That was about it.
4 So, sometime along the way we may see
5 if there is some coffee available so the
6 participants can pick up and go back including the
7 Hearing Officer can go back and get some coffee.
8 Gentlemen, let's go.
9 MR. CARMELL: Preliminary matter, Mr. Hearing
10 Officer.
11 THE HEARING OFFICER: Yes, sir. You can call
12 me Mr. Vaira. That's fine. This is among
13 lawyers. Go ahead.
14 MR. CARMELL: All right, Mr. Vaira. The
15 District Council wishes to at this time renew its
16 motion that you recuse yourself and place into the
17 record, in addition to the matters which you have
18 ruled on, which I am not going to repeat that have
19 been ruled on, matters that appeared in the
20 Chicago Sun-Times on Sunday, July 13, 1997, a
21 rather long and involved article which begins
22 with -- about the laborers hearings today.
23 And I'd like to read into the record
24 and go from there this following which appears in
12
1 the article, quote: "The outcome many labor
2 observers say is a foregone conclusion. The
3 International Union must and will place the
4 Chicago Council under trusteeship to
5 demonstrate its commitment to reform."
6 And there is the following which is
7 even more directly --
8 THE HEARING OFFICER: Mr. Carmell, who said
9 that? Who is the person being quoted?
10 MR. CARMELL: It doesn't say.
11 THE HEARING OFFICER: Oh, okay.
12 MR. CARMELL: It says, as papers do, many
13 labor observers say. The writer of the article is
14 Tom McNamee.
15 Within this article is the following,
16 and these are quotes:
17 "In another twist, the Hearing Officer
18 will be Philadelphia attorney Peter F. Vaira
19 who is already on record as saying the
20 laborers union, including the Chicago
21 Council is a, quote, 'captive,' unquote, of
22 organized crime.
23 "As head of the Justice Department's
24 Chicago Strike Force in 1982, Vaira co-wrote
13
1 the internal memo that spelled out the
2 union's mob ties.
3 "But Vaira said Friday that it is
4 common practice for unions attempting to
5 clean house to choose former judges and
6 prosecutors as hearing officers to give the
7 proceedings credibility," end of quote.
8 Mr. Vaira, taken in context of these
9 statements that it's a foregone conclusion and
10 that the only person -- the initial person at
11 least who would reach a conclusion is the Hearing
12 Officer subject to appeal to the Appellate level,
13 sir, together with the statement and the fact that
14 we have not seen the 1980 -- whatever this 1982
15 Chicago Strike Force memorandum, we would like to
16 have an opportunity to see that so that it could
17 be part of the record if we believe it appropriate
18 because it seems to confirm the testimony that you
19 gave and which is part of the motion to recuse
20 yourself.
21 I want to make it clear that the
22 District Council doesn't quarrel with former
23 prosecutors or even, by God, former defense
24 lawyers from having employment as hearing officers
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1 in internal matters. We have former prosecutors
2 who are judges in the District Court, et cetera.
3 It is, Mr. Vaira, the combination of
4 the fact that the Department of Justice at any
5 time, as the hearings show, can rescind the
6 agreement and file a consent decree, in which case
7 the independent hearing officer status is gone.
8 It's replaced by an independent monitor.
9 Together with not just your having been
10 an attorney, but the testimony you gave before the
11 Senate select committee and apparently, and I say
12 that underlined apparently because I haven't seen
13 this memo which says that, according to
14 Mr. McNamee, that the Chicago District Council of
15 laborers is a captive of organized crime, since
16 this is the main thrust of this hearing, as I read
17 it plain, permeates the whole hearing, in our
18 previous hearing conference, telephone conference,
19 I think that became clear.
20 We have a lot more here than your
21 former status and if, nothing else, Mr. Vaira, and
22 I'd like you to consider this, we have some 20 odd
23 locals and thousands and thousands of members who,
24 if the outcome of this is as the Sun-Times writer
15
1 says will never believe that it was done because
2 the evidence showed it but will believe that it's
3 because it had to be done and that you had already
4 made up your mind.
5 If nothing else, from the appearance of
6 conflict, appearance of bias that goes into the
7 reasonable members' minds, I would suggest to you
8 and request that you reconsider and determine that
9 you will recuse yourself from this hearing.
10 THE HEARING OFFICER: Thank you.
11 Mr. Bostwick, any comments?
12 MR. BOSTWICK: Well, I will make them brief.
13 THE HEARING OFFICER: Let me just add one.
14 That internal memo that you speak of written in
15 19 -- maybe '75, I have no copy of. I have not
16 seen it, haven't thought about it for years. It
17 was some sort of white paper. I think management
18 paper that said the Department of Justice, a
19 management tool for manpower, something like
20 that. And whatever it said, I have no idea. I
21 can't recall that.
22 Mr. Bostwick.
23 MR. BOSTWICK: Well, I will keep my comments
24 brief.
16
1 The appearance and the reality of the
2 integrity of the reform process have already been
3 litigated in other forums. Mr. Carmell knows that
4 well. He was the one that litigated them.
5 We have the stamp of approval of the
6 7th Circuit Court of Appeals, the District --
7 Federal District Court here in Chicago as well as
8 Congressional committees in Washington, D.C. after
9 days of hearing.
10 So, I don't take seriously the notion
11 that you are unable to preside over the hearing.
12 I also would have worked a lot less
13 hard on this matter if I had thought it was a
14 foregone conclusion, which I do not.
15 And obviously recusal matters are
16 matters for your determination and I will simply
17 leave it at that. From our side, I have no reason
18 to believe that you are unable to rule on these
19 issues fairly.
20 THE HEARING OFFICER: As the GEB attorney
21 knows, the GEB attorney has lost a number of
22 decisions before me. As you well know, sir.
23 MR. BOSTWICK: I myself have lost one.
24 THE HEARING OFFICER: Gentlemen, I will deny
17
1 the motion. Let's proceed.
2 MR. BOSTWICK: Brief opening statement.
3 THE HEARING OFFICER: Yes. Okay.
4 Feel free to make it wherever you want
5 to make it. If you want to do it there, it's
6 fine.
7 MR. BOSTWICK: I will feel free to walk
8 around a little bit.
9 THE HEARING OFFICER: Wherever you are most
10 comfortable. This is a hearing that is meant to
11 get evidence. I want you all to feel comfortable
12 in doing it. Keep it simple decorum.
13 MR. CARMELL: If we could move that podium,
14 because it does block your exhibits, or replace
15 those, one of the two. I can't see the bottom of
16 that exhibit.
17 MR. BOSTWICK: This exhibit here.
18 MR. CARMELL: I'm just saying, I don't mind
19 if the podium is pushed back or whatever, or we
20 don't use the podium, or however.
21 That's fine. Thanks.
22 OPENING STATEMENT ON BEHALF OF GEB ATTORNEY
23 MR. BOSTWICK: Good morning to the Hearing
24 Officer, to the officers and delegates of the
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1 District Council, the attorneys for District
2 Council.
3 My name is Dwight Bostwick. As we
4 mentioned, I'm from the GEB Attorney's office.
5 Here to assist me in presentation of this matter
6 for our office is Bob, Robert Thomas. And we have
7 a number of investigators working for the
8 Inspector General's office who will be present at
9 the hearing, and also part of some testimony.
10 And I will, without any further ado,
11 address my comments to you.
12 The leadership of the Chicago District
13 Council is corrupt. Currently, and for the past
14 25 years, this entity has been filled with mob
15 members, mob associates, and relatives of top mob
16 bosses. We are going to prove this, and I'll tell
17 you how.
18 First we are going to prove the general
19 existence and structure of organized crime in
20 Chicago, which is commonly referred to as the
21 Chicago outfit.
22 We will demonstrate that the leaders of
23 the Chicago District Council have had strong
24 discernible ties to the Chicago outfit for a
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1 period of at least 25 years.
2 This first chart, Exhibit 145, is a
3 chart that details in graphics a time line of the
4 general leadership of the Chicago District Council
5 over the past 25 years. It also includes select
6 officials, field representatives and delegates of
7 the Chicago District Council. That's Exhibit 145,
8 for the record.
9 This chart over here is Exhibit 163.
10 This chart is a general depiction of select
11 leaders, crew members, and other individuals in
12 the Chicago outfit, which we will prove through
13 the witness of, through the testimony of a number
14 of witnesses, and through exhibits.
15 This is not all of the Chicago outfit.
16 This is a select portion of the individuals that
17 will be mentioned most at the hearing. These are
18 individuals who have the closest ties to the
19 leadership of the Chicago Laborers' District
20 Council, as set forth in Exhibit 145.
21 The short way of saying this is that
22 this hearing is all about the connections between
23 these two charts. That's our case.
24 You are going to hear from a parade of
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1 witnesses who have extensive law enforcement
2 backgrounds. These individuals have worked
3 organized crime activity here in the city for
4 decades.
5 They have surveilled meetings of
6 organized crime figures, listened to tapes and
7 discussions of these crime figures, worked on
8 undercover operations, reviewed police and FBI
9 reports.
10 They have spoken personally to sources
11 and witnesses who are associates of organized
12 crime. Over and over again, these individuals are
13 going to identify the people on these charts as
14 being associated with organized crime.
15 You will also hear from witnesses who
16 are associates in the mob in live testimony. And
17 in prior sworn testimony, you are going to hear
18 these mob associates tell you about their
19 experiences in the mob, and how the mob operates.
20 You are also going to hear them testify
21 about their personal experiences with the
22 individuals on these charts. They are going to
23 provide consistent and compelling testimony about
24 the ties between the leadership of the Chicago
21
1 District Council and the Chicago outfit over the
2 past 25 years.
3 We are going to prove that the Chicago
4 District Council leaders identified on this chart
5 and in the trusteeship complaint, who owe their
6 allegiance on the one hand to the working members
7 of the union, who bargain collectively for Chicago
8 area locals, and who sit as trustees over pension,
9 health and welfare funds, that have literally
10 hundreds of millions of dollars as assets,
11 actually owe their primary allegiance to the
12 Chicago outfit.
13 Our position and the reason we are
14 bringing this case is because that's
15 unacceptable.
16 Toward the end of the case, we are
17 going to show that the outfit's control and
18 influence over the leadership positions in the
19 Chicago District Council has resulted in numerous
20 specific instances of undemocratic procedures and
21 financial malpractice.
22 Some of the manifestations of this
23 corruption are as follows: The transfers of power
24 without contested election for a period of 25
22
1 years in select locals and District Council,
2 uncontested transfers of outfit individuals from
3 official positions in different locals,
4 uncontested selection of leaders who are not
5 qualified to serve as officials, transfer of power
6 from one individual with associations with the
7 outfit to another, the practice of accepting
8 unauthorized dual salaries, aggregating to
9 millions of dollars, and the irresponsible
10 appointment of trustees who preside over the
11 affairs of affiliated funds.
12 But perhaps the most damning evidence
13 that you will hear is the deafening silence of the
14 leaders and delegates of the District Council, as
15 organized crime related arrests, indictments and
16 convictions pile up over the years, as a series of
17 Congressional committees, the President's
18 Commission on Organized Crime, hold hearings and
19 submit reports on organized crime specifically in
20 Chicago, and how this is connected with the
21 District Council and the individuals in the
22 District Council and various affiliated locals,
23 and as the press and the Chicago Crime Commission
24 continue to expose organized crime ties to the
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1 Chicago District Council's leadership.
2 The evidence we will present is
3 extraordinary, and will compare favorably to that
4 presented in federal criminal trials.
5 At the close of the hearing, we are
6 going to ask the Independent Hearing Officer to
7 impose a trusteeship on the Laborers' District
8 Council to correct corruption and LCN influence,
9 to correct financial malpractice and to restore
10 Democratic procedures to this institution.
11 But we have a message for the delegates
12 of the Chicago District Council as well through
13 the presentation of this evidence.
14 Let's be frank. You all have a
15 fiduciary duty to your union members to protect
16 and safeguard their jobs and their money. You
17 have a duty to listen to this evidence, and take
18 positive steps and affirmative steps to help
19 eradicate the influence of organized crime in this
20 union.
21 We expect that based upon the hearing
22 of this evidence, you will find it necessary to
23 take action yourselves, and in fact, that is the
24 only way this forum, process is ultimately going
24
1 to work.
2 That's all I have at this time. We are
3 ready to present our case.
4 THE HEARING OFFICER: Mr. Carmell, you may if
5 you wish.
6 MR. CARMELL: I don't wish at this time.
7 THE HEARING OFFICER: All right, sir. Would
8 you proceed?
9 MR. BOSTWICK: We will call Mr. Douglas Gow.
10 By way of explanation for the Hearing
11 Officer and the District Council attorneys, we
12 have done the following with respect to the
13 exhibits.
14 We have boxes of exhibits marked with
15 tabs, indicating the numbers of the exhibits. I'm
16 going to ask the witnesses simply to pull those
17 documents as we referred to them, and replace
18 them. But if the GEB Attorney -- I'm sorry, if
19 the Independent Hearing Officer or the District
20 Council attorneys want to review that evidence at
21 the same time, they have the boxes right next to
22 them.
23 THE HEARING OFFICER: He has a box also?
24 MR. BOSTWICK: That's correct. They have a
25
1 box as well.
2 So with that, I'll proceed, if that's,
3 if we're ready.
4 THE HEARING OFFICER: I think somebody here
5 is able to administer an oath.
6 (WHEREUPON, the witness was duly
7 sworn.)
8 W. DOUGLAS GOW,
9 called as a witness herein, having been first duly
10 sworn, was examined and testified as follows:
11 DIRECT EXAMINATION
12 BY MR. BOSTWICK:
13 Q. Sir, could I have your name?
14 A. W. Douglas Gow.
15 Q. What is your current occupation?
16 A. Currently, I'm the Inspector General
17 for the Laborers' International Union.
18 Q. What is the scope of your duties?
19 A. In essence, my duties extend to
20 enforcement of the disciplinary and ethics code,
21 and certain violations of the Constitution of the
22 union. The emphasis here is upon eradicating
23 organized crime influence within the union.
24 Q. Have you had any prior experience in
26
1 law enforcement?
2 A. Yes, I have.
3 Q. What agencies?
4 A. FBI.
5 Q. What period of time were you with the
6 FBI?
7 A. I was with the FBI approximately 30
8 years.
9 Q. Could you describe the position you
10 held with the FBI?
11 A. I held a variety of positions there,
12 beginning with the investigative position, and
13 rose up through the administrative ranks, holding
14 virtually every supervisory job in the FBI. I
15 retired as the associate deputy director.
16 Q. Did you at one time hold the position
17 of section chief for the criminal section?
18 A. Yes, I did.
19 Q. Could you tell me what the duties
20 entail of that job?
21 A. Well, at the time that I had that
22 position, the criminal section of the criminal
23 investigative division was the largest section
24 within that division. We had responsibility for
27
1 all undercover operations, a number of criminal
2 violations; not all that the division handled.
3 For instance, I did not have organized
4 crime. I had all violent crimes, property crimes,
5 threats against individuals and so forth.
6 Q. Are you familiar with the investigative
7 techniques of the FBI through your experience in
8 these various positions?
9 A. Yes, sir.
10 THE HEARING OFFICER: Folks in the back, are
11 you able to hear Mr. Gow?
12 Get a little closer to your
13 microphone.
14 BY MR. BOSTWICK:
15 Q. What investigative techniques, Mr. Gow,
16 are you applying in your investigative effort to
17 identify LCN corruption within LIUNA?
18 A. Basically utilizing the investigative
19 techniques that I applied in the FBI. There are
20 limitations in this job. For instance, there are
21 certain things I don't have access to. They are
22 prohibited by law. But our investigations are
23 founded on the rule of law, and with due concern
24 for due process.
28
1 Q. Have you uncovered evidence of LCN
2 corruption within LIUNA during your tenure as
3 Inspector General?
4 A. Yes, sir.
5 MR. CARMELL: I object. That is conclusion.
6 Let him tell the facts.
7 THE HEARING OFFICER: I'll note the
8 objection. You may answer that question. Go
9 ahead.
10 BY THE WITNESS:
11 A. I said yes.
12 BY MR. BOSTWICK:
13 Q. Okay. Have you made an effort to
14 determine reasons that the La Cosa Nostra
15 infiltrates the unions like LIUNA?
16 A. Yes.
17 Q. Where do you look for answers to those
18 questions?
19 A. In a variety of places. My contacts
20 extend to former law enforcement, current law
21 enforcement, a variety of commissions that have
22 been held with regard to organized crime, public
23 source information such as newspaper articles,
24 books that have been written on the subject,
29
1 Congressional commissions and Presidential
2 commissions and their reports.
3 Q. What are some of the reasons the
4 La Cosa Nostra infiltrates unions such as LIUNA?
5 A. Basically for financial --
6 MR. CARMELL: In order not to burden the
7 record, you are going to give the same ruling
8 concerning his testimony to these conclusions,
9 which is exactly what you are supposed to find.
10 How they got in supposedly, whether
11 they got in, I don't want to keep making
12 objections. I don't know.
13 THE HEARING OFFICER: I will note your
14 objections. The ultimate decision is through me
15 to figure out whether there is -- is organized
16 crime at all and is anywhere in this union, and
17 his conclusions are more of -- I think right now
18 he is going through some sort of historical
19 explanation.
20 I still haven't heard any proof.
21 Whatever he says and if we walked out of here
22 right now, I have heard nothing. I assume that
23 the question about have you found any evidence of
24 it, we'll hear that. If we don't hear it, we
30
1 don't hear it.
2 BY MR. BOSTWICK:
3 Q. Let me show you Exhibit No. 1. Can you
4 get that exhibit from your box there.
5 A. My eyesight is not quite what it used
6 to be.
7 I have it here.
8 Q. Prior to taking a look at that, what
9 are some of the reasons that you have uncovered
10 for La Cosa Nostra infiltrating unions such as
11 LIUNA?
12 A. Again, there is a number of reasons,
13 but I'd say in essence that it's for financial
14 gain. It's both for legitimate and illegitimate
15 purposes, to place people on payrolls, to
16 establish no-show jobs, people, so to speak, on
17 ghost payrolls, but also to have legitimate jobs
18 to exercise discretion and control of contractors
19 in the collective bargaining process and so forth.
20 Q. What is Exhibit 1 that's before you
21 now?
22 A. Exhibit 1 is a declaration of Alphonse
23 D'Arco that was given in conjunction with United
24 States vs. the Mason Tenders District Council of
31
1 New York.
2 MR. CARMELL: I am going to object to this.
3 He has testified that this is an affidavit. He
4 has not laid any foundation that he knows that
5 this is Alphonse D'Arco's signature, when it was
6 given or anything. This is hearsay upon hearsay.
7 THE HEARING OFFICER: I understand that.
8 This is an affidavit from a District Court case
9 involving the Mason Tenders. Mason Tenders are
10 technically part of this union, am I correct?
11 It's a large portion of this union up
12 in New York, and I presume this is a civil case
13 that the United States brought against the Mason
14 Tenders to put them in receivership. Am I
15 correct?
16 MR. BOSTWICK: That's correct. Actually that
17 was going to be the next foundational question
18 addressed to Mr. Gow.
19 THE HEARING OFFICER: I am glancing over
20 this. As I said earlier, gentlemen, I will
21 generally place all documents that you have before
22 me provisionally into the record. I will wait
23 until the end of the day for someone to tell me
24 why it does or does not apply.
32
1 I can see this is law division based
2 upon a group of people up in New York. I will
3 admit it, but I am looking for someone to explain
4 to me how it ties into Chicago.
5 MR. CARMELL: Mr. Vaira, maybe I wasn't
6 articulate.
7 THE HEARING OFFICER: I understand that.
8 MR. CARMELL: You have made an assumption
9 that because it says it's a declaration of
10 Alphonse D'Arco with a caption on it that in fact
11 it was a document filed, A, in court and,
12 secondly, that this is Alphonse D'Arco's
13 affidavit.
14 This is not an affidavit that Mr. Gow
15 has identified as being that he knows that is
16 Alphonse D'Arco's signature and his affidavit.
17 That's my objection.
18 You've gotten well beyond just an
19 affidavit of someone who this person can
20 identify. That is a different area that we can
21 get into later.
22 THE HEARING OFFICER: I understand that. The
23 rules of evidence being as they are in an
24 arbitration, I will expect Mr. Bostwick to give me
33
1 some assurances or some proof that this is what
2 it's supposed to be.
3 In the meantime you may proceed.
4 BY MR. BOSTWICK:
5 Q. Mr. Gow, where did you receive this
6 document?
7 A. Basically this document and others like
8 it that we received through contacts with the
9 Department of Justice or through access to court
10 records ourselves.
11 Q. Is this part of the LIUNA Inspector
12 General's working file?
13 A. Yes.
14 Q. Are you confident that it is a true and
15 correct copy of declaration prepared for purposes
16 of United States vs. Mason Tenders District
17 Council?
18 A. I am.
19 THE HEARING OFFICER: If I went to the
20 District Court in the Eastern -- Southern District
21 of New York and looked up this civil number, could
22 I find this document? I am asking either one of
23 you gentlemen.
24 THE WITNESS: I can't answer that, Judge,
34
1 right at this time. A number of these documents
2 with regard to specific individuals I have
3 obtained through contacts with the Department of
4 Justice.
5 THE HEARING OFFICER: I will look for someone
6 to tell me where this -- the authenticity of
7 this. You may proceed.
8 MR. BOSTWICK: May you -- your Honor, I had
9 provided to Mr. Carmell a number of these exhibits
10 in advance of the hearing asking for stipulations
11 to authenticity. I take it that some of them have
12 been stipulated to and some of them have not.
13 In an effort not to slow down the
14 hearing too much, what I propose to Mr. Carmell is
15 that if he is going to raise certain objections as
16 to the authenticity of these documents, we could
17 be subject to recall of various witnesses if
18 necessary for just authentication purposes.
19 THE HEARING OFFICER: Let me put it this
20 way. I will assume that the documents that you
21 are bringing up to here are good faith and you
22 haven't faked them or taken them out of
23 somewhere. I assume both lawyers for both sides
24 will be doing that.
35
1 What I would look for as I say at the
2 end is proof that, number one, that it is
3 authentic but then how does it tie into this
4 particular proceeding.
5 So, rather than spend a great deal of
6 time talking about authenticity or so forth, I
7 presume it has some basis in fact someplace.
8 Let's proceed and if you come up later
9 and indicate to me that this is made out of hole
10 cloth, since I am not a jury, I am not going to be
11 overwhelmed by -- overprejudiced by seeing or
12 hearing some information that I can't exclude.
13 Remember at the end of this case it's
14 up to me to decide what is probative and what is
15 not and I have to live or die on what I write.
16 Obviously other persons will look that over.
17 What I am saying is we will proceed,
18 give me the information about this, and I presume
19 it's -- it has some basis. If it does not, I will
20 throw it out.
21 MR. BOSTWICK: I can give a proffer as to
22 what it's offered to show.
23 THE HEARING OFFICER: No, go right ahead.
24 That's why I mentioned earlier that
36
1 trusteeship is a much more fluid evidentiary
2 proceeding. That's why our earlier discussions
3 about the stipulations and the estoppel are
4 important because this is a rather free-flowing
5 type of an evidentiary proceeding.
6 MR. CARMELL: But, with all due respect, it
7 doesn't flow beyond the bounds of any evidence and
8 there still is a need to authenticate a document
9 and I would agree with -- I have agreed with
10 counsel that one of two things will happen.
11 He will either at a break or whatever
12 establish for me that this is an authentic
13 document that was filed and something that
14 establishes that Mr. D'Arco signed it or he
15 will -- I have no problem with him bringing in a
16 witness out of turn or later to authenticate.
17 THE HEARING OFFICER: Or someone.
18 Gentlemen, I sat last fall for my 31
19 total -- 31 days in Buffalo, not in trusteeship,
20 but disciplinary proceeding. We had piles of
21 documents like this and, in fact, after it was
22 over I held some additional telephone hearings to
23 see if we could clear up the validity of some of
24 the documents and I think I eventually threw them
37
1 out. So there is no guarantee that since we are
2 putting them in doesn't mean that they will stay
3 in.
4 For the sake of moving this along,
5 getting evidence into the record, you may
6 proceed. I will note Mr. Carmell's objections and
7 we will deal with that as we go.
8 MR. CARMELL: Well, he hasn't offered to
9 admit it at this time. Do I understand that?
10 THE HEARING OFFICER: I think it's
11 preliminary.
12 MR. CARMELL: That's what I thought. We
13 haven't come to that.
14 THE HEARING OFFICER: Put it this way: I
15 will preliminarily admit documents that he
16 presents to me and at the end decide whether or
17 not I should discard them or not, in other words,
18 if there is some question, I will admit them
19 preliminarily.
20 MR. CARMELL: I do understand that,
21 Mr. Vaira. My point is that I have a right to
22 know what it's being offered for, what purpose is
23 this document being offered for or any other. Is
24 it to prove what? Before it comes in.
38
1 THE HEARING OFFICER: Let him have a chance.
2 MR. CARMELL: That's all I am saying.
3 THE HEARING OFFICER: Let's give him a
4 chance. You don't have to make an offer of
5 proof. Just proceed and I will decide whether or
6 not it stays in.
7 BY MR. BOSTWICK:
8 Q. Mr. Gow, who is Alphonse D'Arco?
9 A. Alphonse D'Arco is a made member of the
10 Luchese organized crime family out of the New York
11 area. He rose from a mere member to the acting
12 boss of the family. He is now in the witness
13 protection program.
14 Q. Paragraphs 3 through 5 on page 3, does
15 Mr. D'Arco testify in his declaration relating to
16 a general structure and existence of organized
17 crime in the United States?
18 A. Yes. In there he states that
19 throughout his entire life he was associated with
20 people who were members or either associates of
21 the criminal organization known to him as La Cosa
22 Nostra.
23 Q. Is this information that he provides in
24 this declaration consistent with interviews your
39
1 office has conducted with other witnesses?
2 A. It's -- yes, it's consistent not only
3 with that, but historical information that's been
4 compiled by us and what is known to myself and my
5 investigators.
6 Q. Could you give a brief overview of the
7 structure of organized crime in the United States?
8 A. Basically the LCN, La Cosa Nostra, is a
9 nationwide criminal organization that's divided
10 into units, generally called families. Families
11 are in many respects named after the area or the
12 individual that heads that particular family.
13 Each family is headed by a boss who has
14 an underboss and an individual known as a
15 counselor or a consigliere as an adviser. From
16 there, they are divided up into crews, each crew
17 headed by a captain or a capo.
18 Q. I'm going to refer you to paragraph 10,
19 which I am looking for a page number here.
20 A. Page 7.
21 Q. Page 7. What does -- to what does
22 Mr. D'Arco refer in paragraph 10 on page 7?
23 A. In 10, in paragraph 10 he states, "The
24 LCN tries to control labor unions for a variety of
40
1 reasons," and then he goes on to state what those
2 reasons are.
3 Q. Is that information than consistent
4 with the information you have obtained from
5 witness interviews and public reports and the
6 like?
7 A. Yes, it is.
8 Q. I ask you to read paragraph 10 for us.
9 A. Paragraph 10 states that "The LCN tries
10 to control" --
11 MR. CARMELL: I object. If it's going to be
12 in the record, it's there.
13 THE HEARING OFFICER: I don't think he needs
14 to read it. I have glanced through paragraph 10.
15 We will certainly note that paragraph 10 is what
16 you --
17 MR. BOSTWICK: What I have described it as.
18 THE HEARING OFFICER: And we will look at
19 paragraph 10.
20 MR. BOSTWICK: That's the purpose of that
21 document. I move for its admission.
22 THE HEARING OFFICER: Has this fellow,
23 Mr. D'Arco, testified -- I see you mention he is
24 in the witness protection. Has he testified in
41
1 any of the cases in New York, criminal cases in
2 New York, Mr. Gow?
3 THE WITNESS: I'd have to check on that. As
4 best I can recall, I believe he did testify in
5 conjunction with the Mason Tenders, but I may be
6 wrong in that.
7 THE HEARING OFFICER: I am talking about
8 other criminal cases.
9 THE WITNESS: I am not aware of any others
10 sitting here.
11 THE HEARING OFFICER: I will be interested in
12 knowing that if you can.
13 I will admit this document, Exhibit 1.
14 (WHEREUPON, said document,
15 previously marked GEB Attorney
16 Exhibit No. 1, for
17 identification, was offered
18 and received in evidence.)
19 BY MR. BOSTWICK:
20 Q. I'd like you to refer to Exhibit 2. Do
21 you recognize that document, Mr. Gow?
22 A. Yes.
23 Q. What is it?
24 A. It is a declaration of Salvatore
42
1 Gravano, better known as Sammy Gravano.
2 Q. And where was that document obtained?
3 A. Again, this document is -- was obtained
4 through contact with the Department of Justice
5 sources. It concerns United States bringing a
6 case against the Mason Tenders District Council.
7 Q. Is this part of the records of the
8 Inspector General's office?
9 A. Yes, it is.
10 Q. As of the time you collected this
11 document did you assure yourself that this was a
12 true and correct copy of the declaration prepared
13 for purposes of United States vs. the Mason
14 Tenders District Counsel?
15 A. I had no reason to question that based
16 on the sources that I obtained it from.
17 Q. Could you tell me the date on the back
18 of the last page?
19 A. The date on the back is, he executed it
20 on October 17th, 1994.
21 Q. Who was or is Salvatore Gravano?
22 A. He again was a member of organized
23 crime and a member of the Gambino family. He rose
24 from a member to the underboss of the family,
43
1 until he entered into the witness protection
2 program.
3 Q. Let me refer you to section C of this
4 declaration, Page 5, paragraphs 11 and 12. What
5 do those items refer to?
6 A. Well, paragraph C is entitled Organized
7 Control Over Labor Unions. In paragraph 11,
8 through 12, he details the Gambinos' actions, or
9 likes to control unions. Well, he states, the
10 Gambino family likes to control the unions of
11 unskilled workers such as Mason Tenders, because
12 there is no apprenticeship or special training
13 requirements to become a member in such unions.
14 As a result, members and associates of the Gambino
15 family could be placed easily into the Mason
16 Tenders' jobs, even though they generally lacked
17 training or experience in the more skilled forms
18 of construction work.
19 He goes on to state, the LCN likes to
20 have control and influence over labor unions,
21 because such control provides organized crime with
22 a power base. He says, through control over labor
23 unions, the LCN --
24 MR. CARMELL: Mr. Vaira --
44
1 THE HEARING OFFICER: Go ahead.
2 MR. CARMELL: He is reading. Let's stop the
3 reading. If he wants to tell us what he knows,
4 not what this document says --
5 THE HEARING OFFICER: He may read it. It's
6 only a couple paragraphs. And let him put his
7 case in.
8 You may continue to read, sir, or
9 paraphrase as you are going.
10 BY THE WITNESS:
11 A. What he is doing is detailing of why
12 organized crime likes to control labor unions.
13 Again, it gets into the fact that they can exert
14 power and influence over a contractor by
15 controlling certain aspects of it. They can
16 infiltrate legitimate businesses by influencing
17 bids for contracts, etcetera, and this is what he
18 lays out.
19 BY MR. BOSTWICK:
20 Q. Let's back up and make this clear. The
21 Mason Tenders District Council is a part of LIUNA,
22 is that correct?
23 A. That's correct.
24 Q. And it is a District Council in New
45
1 York, correct?
2 A. Yes.
3 Q. And these two declarations, Exhibit 1
4 and Exhibit 2, relates to Chicago, to -- I'm
5 sorry, to an individual in the La Cosa Nostra,
6 describing why it is that the La Cosa Nostra has
7 an interest in controlling labor unions?
8 A. Yes.
9 MR. CARMELL: That's not quite a fair
10 statement. It is, the Genovese family or Gambino
11 family, as the case may be, has an interest in
12 it. And so the document says what it says. But I
13 don't believe that's a fair characterization.
14 THE HEARING OFFICER: The document, you're
15 right, Mr. Carmell, says what it says. I think
16 the gist of it is they are talking about unskilled
17 labor unions, where there is no apprenticeships,
18 giving the reason why --
19 MR. CARMELL: But within the framework of the
20 families, to which these affiants have affirmed.
21 That is what I'm saying.
22 THE HEARING OFFICER: That's correct.
23 Remember, I asked earlier, this is two New Yorkers
24 talking about a Brooklyn, a Brooklyn local or
46
1 Brooklyn District Council.
2 Am I correct, Mr. Bostwick? The Mason
3 Tenders District Council has been placed in court
4 receivership, am I right, sir?
5 MR. BOSTWICK: That's correct.
6 THE HEARING OFFICER: And that's, that
7 number, the case is 94 CIV 6487. That's out of
8 New York. That has to do with this court case.
9 And in fact, they are right now under trusteeship,
10 right?
11 MR. BOSTWICK: That's correct.
12 THE HEARING OFFICER: When I say "they," I
13 mean "it" is under trusteeship, okay.
14 MR. BOSTWICK: That's correct. And I don't
15 want to engage in discussing every piece of
16 evidence and its meaning as we go along. But I do
17 think there was a misstatement there that these
18 relate totally to these families.
19 Paragraph 12 of the exhibit we are
20 looking at right now says the LCN likes to have
21 control and influence over the labor unions.
22 THE HEARING OFFICER: I assume that you are
23 offering that, as indicated, as sort of a generic
24 philosophy, why organized crime would like to or
47
1 it leads to influence certain locals or certain
2 industries.
3 MR. BOSTWICK: Precisely.
4 BY MR. BOSTWICK:
5 Q. Mr. Gow, is testimony provided by Mr.
6 Gravano in these paragraphs of the declaration
7 consistent with other testimony and information
8 you have obtained regarding the motivation behind
9 the LCN's infiltration of LIUNA?
10 A. Again, yes.
11 MR. BOSTWICK: I move for admission of
12 Exhibit 2.
13 THE HEARING OFFICER: Admitted.
14 (WHEREUPON, said document,
15 previously marked GEB Attorney
16 Exhibit No. 2 for identification
17 was offered and received in
18 evidence as GEB Attorney
19 Exhibit No. 2.)
20 MR. CARMELL: Same objection as --
21 THE HEARING OFFICER: Gentlemen, I give you
22 some advice. There is a fair sized body of law on
23 this subject matter, associations and organized
24 crime, in the Southern District of New York, and
48
1 also in the Seventh Circuit, in the Teamsters,
2 United States versus International Brotherhood of
3 Teamsters.
4 And there have been a number of cases,
5 many, maybe 100 cases involving these issues,
6 organized crime relationship, the type of evidence
7 that is admissible.
8 And I direct your attention to that.
9 That is, it is not controlling here, but it is
10 persuasive because it has gone through the court
11 system. And you have both Judge Elstner and the
12 Seventh Circuit writing on the subject.
13 BY MR. BOSTWICK:
14 Q. Mr. Gow, as part of your efforts as the
15 Inspector General of LIUNA, have you undertaken an
16 investigation of the Chicago District Council?
17 A. Yes, I have.
18 Q. Certain officers of the Chicago
19 District Council?
20 A. That's correct.
21 Q. Select affiliated locals of the Chicago
22 District Council?
23 A. That's correct.
24 Q. How many locals are affiliated under
49
1 the umbrella of the Chicago District Council?
2 A. 21.
3 Q. How many of these affiliated locals
4 have been targeted for investigation by the
5 Inspector General's office?
6 A. Approximately seven, and the District
7 Council, including.
8 Q. Which affiliated locals have been
9 targeted?
10 A. Local 1, 2, 5, 225, 1001, 1006, 1002.
11 And I have to explain, 1002 is no longer
12 chartered.
13 But at the period of time we were
14 looking at it, and at the officers, and there is
15 many, so to speak, carryover, local 8 was involved
16 in that, while it's not part of the District
17 Council, it was part of our investigation.
18 Q. What role does the Chicago District
19 Council play with respect to the affiliated
20 locals?
21 A. Well, Chicago District Council plays
22 same role as any District Council plays, in regard
23 to its affiliates. It is a central coordinating
24 body for the affiliated locals. As such, it is
50
1 affiliate of the International Union.
2 District Councils come into being
3 basically in two ways. A group of locals get
4 together and decide that it's in their best
5 interests to harness their political power and
6 strength and make application to the International
7 to form the District Council.
8 Or the international on its own
9 initiative can decide it would be best to have a