REPORT   OF THE GEB ATTORNEY

TRUSTEESHIP

Local Union 1001, Chicago, Illinois

On September 25. 2003. the GEB Attorney filed a complaint for trustee-ship against Local 1001 in Chicago. Illinois. An investigation of Local 1001 by the Inspector General's Office revealed that a trusteeship was necessary to eradicate corruption, restore financial integrity, restore democratic practices and carry out the legitimate objectives of the union.

Local 1001. which represents employees of the City of Chicago. has long been dominated by La Cosa Nostra (the LCN). Bruno Caruso served in various offices within Local 1001 from 1984 until he was removed from his positions as Business Manager and President of the Local following a disciplinary hearing in 2001 that found that Bruno Caruso was an associate of organized crime. Local 1001 has not held a single contested election since at least 1972. During this period, the Local has also taken no effective steps to rid itself of organized crime corruption. In addition to a failure of democratic practices. Local 1001 has maintained a long-time practice of making improper pension. health and welfare contributions on behalf of certain unpaid officers. The GEB Attorney sought a trusteeship over Local 1001 to rid the Local of LCN influence: to restore democratic practices: to correct financial misconduct: to correct corruption and to protect Local 1001 as an institution so that it may conduct its affairs in a manner that will enhance, conserve and protect the welfare and interest of the International Union. its affiliates and its members.

The Independent Hearing Officer held a hearing in the matter in Chicago. Illinois over several dates in November and December 2003 and issued a decision on March 2. 2004. According to the IHO. "[t]here is a preponderance of the evidence that Local 1001 continues to be infiltrated by organized crime. This is based upon the fact that the two Business Managers/Presidents. Ernest Kumerow and Bruno Caruso, who have held those offices from 1984 to 2001, have been recognized organized crime associates. The combination of the administration of these individuals and the Local's history of 30 years without

one contested election presents a situation that the IHO has recognized can not be ignored in the LIUNA reform process." Therefore, the IHO ruled that the trusteeship over Local 1001 should continue.

As a result of the trusteeship over Local 1001. the GEB Attorney has acquired evidence of possible disciplinary violations pertaining to breaches of fiduciary duties by the Executive Board and other unpaid officers of Local 1001. Although the investigation is continuing, to date, the GEB Attorney has entered into Settlement Agreements with the following former officers of Local 1001. all of whom have agreed permanently to resign their membership in Local 1001:

James Capasso, Jr.

On June 10. 2004, the GEB Attorney and James Capasso, Jr.. formerly an Auditor and member of the Executive Board, entered into a Settlement Agreement to resolve the investigation regarding his involvement in possible disciplinary violations at Local 1001. Under the terms of the Agreement. Capasso. Jr. agreed to resign permanently from LIUNA membership and from any positions or employment with LIUNA and any LIUNA-affiliated entity effective immediately.

Sam DeChristopher

On June 14. 200-1. the GEB Attorney and Sam DeChristopher, formerly Secretary Treasurer of Local 1001. entered into a Settlement Agreement to resolve the investigation regarding his involvement in this matter. Under die terms of the Agreement. which was effective immediately. DeChristopher has agreed to resign permanently from LIUNA membership and from any positions or employment with LIUNA and any LIUNA-affiliated entity:

Nicholas Gironda

On June 17. 2004. the GEB Attorney and Nicholas Gironda. formerly Business Manager of Local 1001. entered into a Settlement Agreement to resolve the investigation regarding his involvement in this matter. Under the terms of the Agreement. Gironda agreed to resign permanently all

LIUNA membership effective immedi-

ately and to refrain from seeking office or employ ment with LIUNA or any entity affiliated with LIUNA.

Floyd Grogan

On June 19. 2004, the GEB Attorney and Floyd Grogan. a member of the Executive Board, entered into a Settlement Agreement to resolve the investigation regarding his involvement in this matter. As a result of this Agreement. Grogan agreed to resign permanently from LIUNA membership and from any positions or employment with LIUNA and any LIUNA-affiliated entity.

Michael Palermo

On June 23. 2004. the GEB Attorney and Michael Palermo, formerly Vice President of Local 1001, entered into a Settlement Agreement to resolve the investigation regarding his involvement in this matter. Under the terms of the Agreement. Palermo agreed to resign permanently from LIUNA membership and from any positions or employment with LIUNA and any LIUNA-affiliated entity effective immediately..

MATTERS CHARGED

Fred Clemenza, Jr.

Local 1175, Howard Beach, New York

On April 8. 2003 an emergency trusteeship was imposed upon Local 1175 based on evidence of financial and other misconduct at Local 1175. primarily in the form of alleged financial conduct by Fred Clemenza. At the time of this trusteeship. Clemenza served as the Business Manager of the LocaL as well as a trustee on the Local 1175 Welfare. Pension, and Annuity Funds and the Administrator of the Local 1175 Welfare. Fund. As a result of the trusteeship. Clemenza was removed from his position as Business Manager of Local 1175. as well as a trustee on the Local 1175 Welfare. Pension. and Annuity Funds.

After holding an emergency trustee-ship hearing. the Independent Hearing Officer issued a decision in the matter on June 11. 2003 and found that "[t]here was extensive financial malpractice at Local 1175. This was evidenced by the improper use of credit cards, improper transfer of union funds

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The LABORER • FALL/WINTER 2004 25

to the personal account of Clemenza, the President/Business Manager, excessive charges, and charges with inadequate backup.

On November 25, 2003. the GEB Attorney filed disciplinary charges against Fred Clemenza, Jr. The charges against Clemenza included breach of fiduciary duty with respect to union and trust fund assets. Clemenza was also charged with embezzlement of funds belonging to Local 1175 and the Local 1175 Welfare fund, as veil as with multiple barred conduct charges for obstruction of the Inspector General, the Independent Hearing Officer and the GEB Attorney.

After holding a hearing in the muter in New York, New York on February 24-25, 2004 and May 24, 2004, the IHO issued a ruling on June 23, 2004, and found that the GEB had proven 12 of the 13 charges against Clemenza by a preponderance of he evidence. According to the IHO, "[t]his record presents a disturbing pattern of conduct that is reminiscent of the abuses that lead to the passage of the Labor Management Reporting and Disclosure Act in 1969..It is clear that Clemenza and the Executive Board sought to use the Welfare Funds for Clemenza's expenses, hoping that Clemenza's conduct would fall outside the jurisdiction of the EDP. Let it be clear that such course of conduct will not succeed."

In light of these findings, the IHO has permanently revoked Clemenza's LIUNA membership and ordered him to pay $12,952.41 in restitution to the Welfare Fund plus interest on all funds he improperly converted from this fund, as well as $1,928.33 in restitution to the Pension Fund Holding Corporation and interest on all funds he improperly converted from the Pension Fund.

Local Union 177, Des Moines, Iowa Fred T. Risius

As previously reported, on July 25, 2002, Fred Risius pled guilty to embezzlement from a labor union in violation of 29 U.S.C. § 501 (c) . As part of his plea, Risius admitted to embezzling $100,060.60 in Local 177 funds. Subsequently, Risius was sentenced to 15 months of incarceration and ordered to pay restitution in the amount of $100,060.60. On January 14, 2004, the GEB Attorney filed disciplinary charges against Risius including "barred conduct" for embezzling funds and converting to his own use the money or assets of LIUNA Local 177 and with criminal violation of federal labor law. Risius was also charged with breach of fiduciary duty, and with receiving "kickbacks" from businesses with which the union did business.

   In order to resolve the pending charges, on April 27, 2004, Risius entered into a Settlement Agreement with the GEB Attorney and agreed to permanently resign his LIUNA membership effective immediately.

Henry Jannenga

On July 25, 2002, Henry Jannenga pled guilty to embezzlement from a labor union in violation of 29 U.S.C. § 501 (c). As part of his plea, Jannenga admitted m embezzling $20,460.54 in Local Union 177 hinds, Jannenga was later sentenced to 3 months of incarceration and to pay restitution in the amount of $22.500.54. Based on this conviction, the GEB Attorney filed disciplinary charges against Jannenga on January 14, 2004, The charges against Jannenga include "barred conduct" for embezzling local union 177 funds and criminal violation of federal labor law. Jannenga is also charged with breach of fiduciary duty and with receiving a "kickback" from a business with which the union did business.

After holding a hearing in the matter, the IHO issued his opinion on May 17, 2004 and found that the charges against Jannenga had been proven by a preponderance of the evidence. According to the IHO, "[t]he stipulated facts underlying Jannenga's guilty plea reveal that Respondent developed and implemented a scheme to convert Local 177 and Statewide Training Fund assets to his own personal use. This is precisely the type of conduct the IHO and Appellate Officer have consistently found warrant severe sanctions." As a result of these findings, Jannenga's LIUNA membership was permanently revoked and Jannenga has been permanently barred from holding office or being employed by Local Union 177 or any other LIUNA-related entity or fund.

Norval Craig Michael

On November 13, 2002, Norval Craig Michael pled guilty to conspiracy to embezzle from a labor union in violation of 18 U.S.C. § 371 and 29 U.S.C. § 501 (c). Michael was sentenced to 2 month home confinement and ordered to pay restitution in the amount of $16,900. Subsequently,

the GEB Attorney filed disciplinary charges against Michael on January 15, 2004. The charges include "barred conduct" for embezzling union funds by converting $16,900.00 of Local Union 177 funds to his own use Michael was also charged with criminal violation of federal labor law and with breach of constitutional duty as a LIUNA member.

The IHO held a hearing in this matter on April 14. 2004. Despite receiving proper notification of the hearing, Michael did not appear and was not represented by counsel. On May 5, 2004, the IHO issued his decision in the matter and found that the GEB Attorney had proven the charges against Michael by a preponderance of th evidence. As a result, Michaels LIUNA membership was permanently revoked.

Clyde Starkey

On January 16, 2003, Clyde Starkey pled guilty to conspiracy to embezzle from a labor union in violation of 18 U.S.C. 371 and 29 U.S.C. $ 501 (c). As a result of this conviction, Starkey was sentenced to months of incarceration and to pay restitution in the amount of $28,905.00. Subsequently, the GEB Attorney filed discplinary charges against Starkey based on this conviction. The charges included "barred conduct" for converting $28,905.00 in money or assets of LIUNA Local 177 to his own use, criminal violation of federal labor law for conspiring to embezzle from a labor union, and with breach of constitutional duties as a LIUNA member.

Rather than contest the pending charges, Starkey and the GEB Attorney entered into a Settlement Agreement on May 17, 2004. Under the terms of this Agreement, Starkey has agreed to resign h LIUNA membership effective immediately

Joleen Coughlon

As previously reported, Joleen Coughlon pled guilty to two counts of labor union embezzlement in violation of 29 U.S.C. § 501 (c) and one count of making a false envy in labor union records in violation of 29 U.S.C. § 439 (c). On January 16, 2004, the GEB Attorney filed disciplinary charges against Coughlon based on this conviction. The charges against Coughlon include "barred con-duct" for embezzling union funds by converting at least $1,484.70 in money or assets of LIUNA Local 177 to her own use. Coughlon was also charged with violation

of federal labor law for making a false entry in the Local 177 records and for embezzlement, as well as with breach of constitutional duties as a LIUNA member.

On May 4, 2004, Coughlon and the GEB Attorney entered into a Settlement Agreement to resolve this matter Under the terms of this Agreement, Coughlon agreed to resign permanently her member-ship with LIUNA Local Union 177 and all other LIUNA-related entities or funds, effective immediately.

Local Union 652, Santa Ana, California Rudy Rios

On October 10, 2003, the GEB Attorney filed disciplinary charges against Rudy Rios, who served as Secretary-Treasurer of Local 652 in Santa Ana, California from June 1999 until the imposition of the trusteeship over local 652 on April 30, 2002. Rios was charged with breach of fiduciary duty and breach of his constitutional duty as Secretary-Treasurer for failing to ensure that union funds disbursed for travel expenses and via the Local 652 credit cards were adequately documented and/or spent properly. Rios was also charged with breach of fiduciary duty and constitutional duties as a LIUNA member for failing to document properly his personal expenses on the union credit card.

A hearing before the Independent Hearing Officer took place on December 17, 2003 in Santa Ana, California. Despite receiving proper notification of this hearing, Rios did not attend and was not represented by counsel. On March 9, 2004, the IHO issued his decision and found that the GEB Attorney had proven the charges against Rios by a preponderance of the evidence. Among other findings, the IHO concluded that "Rios violated his fiduciary duty as a Union officer by failing to ensure that Union funds disbursed for travel expenses and charged to Local 652 credit cards were adequately documented and/or spent properly"

As a result of these findings, Rios was barred from holding any LIUNA office or employment for five years from the date of the IHO decision. Rios may work at the calling. Rios was also ordered to make restitution to Local 652 for the funds he spent on personal items but did not properly document and to make this restitution within two years of the IHO's order. If Rios Fails to make the restitution payments as

ordered, his LIUNA membership will be revoked until this restitution is complete.

Jesse Hernandez

On October 7, 2003, the GEB Attorney filed disciplinary charges against Jesse Hernandez, a member of Local 652 in Santa Ana, California. Hernandez was charged with breach of his fiduciary duty for attempting to substantiate his expenditure of union funds for union-related travel through the knowing submission of false documentation, for spending union funds on unauthorized and/or improper items, and for failing to document properly his expenditure of union funds. Fernandez was also charged with embezzlement, and with breach of his constitutional duties as a LIUNA member

The Hearing in this matter before the Independent Hearing Officer took place on December 16, 2003 in Santa Ana, California. On March 9, 2004, the 11 10 issued his decision and found that the GEB Attorney had proven the charges against Hernandez by a preponderance of the evidence. As a result, Hernandez is barred from holding any LIUNA office or employ-ment for five years from the date of the IHO decision. Hernandez may continue to work at the calling. Hernandez was also ordered to make restitution to Local 652 for the funds he improperly charged and to make this restitution within two years from the date of the IHO's order. If Hernandez fails to make the required restitution payments as ordered, his LIUNA membership will be revoked until all restitution payments have been made.

Victor Maldonado

On October 7, 2003, the GEB Attorney filed disciplinary charges against Victor Maldonado, a member of Local 652 in Santa Ana, California. Maldonado was charged with breaching his fiduciary duty for attempting to substantiate his expenditure of union funds for union-related travel through the submission of false documentation; for spending union funds on unauthorized and/or improper items; and for failing to document properly his expenditure of union funds. In addition, Maldonado was charged with "barred conduct" for obstructing the LIUNA Inspector General by giving knowingly false answer to questions posed by the Inspector General's representative.

On February 18, 2004, Maldonado entered into a Settlement Agreement w the GEB Attorney in order to resolve th matter. Under the terms of this Agreem Maldonado has agreed to a permanent on seeking or holding any position as at officer, trustee, board or committee me, ber or employee in or with any LIUNA-affiliated entity and to make restitution' Local 652 in the amount of $1,500. Maldonado will be permitted to remain member in good standing.

OTHER MATTERS RESOLVED

Carmelo Profeta

Local Union 6A, Queens, New York

Local Union 6A member Carmelo Profeta pleaded guilty to a federal indict ment in the Southern District of New Yo which listed Carmelo Profeta as an associate of organzed crime and which charged Profeta with conspiracy to engage in act, extortion. Carmelo Profeta has previous] been convicted of loansharking and extottion. In order to resolve an investigation possible disciplinary violations relating t evidence associated with those cases, the GEB Attorney and Carmelo Profeta entered into a Settlement Agreement on March 18, 2004. Under the terms of the Agreement, Profeta has resigned his membership in Local 6A and has agreed never to seek reinstatement as an employee or member of LIUNA or any of its affiliated entities, regardless of whether such positions are paid or unpaid.

Andrew Cefalo

Local Union 79, New York, New York

Andrew Cefalo is a member of Local in New York, New York and served as a member of the Local 79 Executive Boar, and as a Special Assistant to the Local 79 Executive Board. On June 8, 2004, Cefalo and the GEB Attorney entered into a Settlement Agreement in order to resolv an investigation of allegations that Cefalt committed conduct that violated LIUNA Constitution, Ethics and Disciplinary Procedure and Ethical Practices Code. A result of this Agreement, Cefalo has agreed to permanently resign from any position an officer, tustee, board or committee member or employee, in or with LIUNA any affiliated entity.

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Frank Noviello

Local Union 79, New York, New York

Frank Noviello is a member of Local 79 in New York, New York and served as a member of the Executive Board and as President of the Local until he resigned in May 2004. On June 8, 2004, Noviello and the GEB Attorney entered into a Settlement Agreement in order to resolve an investigation of allegations that Noviello committed conduct that violated LIUNA's Constitution, Ethics and Disciplinary Procedure and Ethical Practices Code. Under the terms of the Agreement, Noviello has agreed to permanently resign from any position as an officer, trustee, board or committee member or employee, in or with LIUNA or any affiliated entity.

Linda Chargois

Local Union 80, Houston, Texas

Linda Chargois, the former Office Secretary of Local 80, was indicted by the United States District Court in the Eastern District of Texas on January 9, 2002 and charged with 29 separate

counts of embezzlement of labor union funds in violation of 29 U.S.C. § 501 (c) (Embezzlement) totaling $35,171.10. On August 22, 2002, Chargois pled guilty to Count 1 of the Indictment and was sentenced to pay $35,171.10 in restitution to LIUNA. In order to resolve potential disciplinary charges arising out of this matter, the GEB Attorney entered into a Settlement Agreement with Chargois on July 15, 2004. Under the terms of this Agreement, Chargois has agreed to a permanent ban on membership and employment with any LIUNA-affiliated entity effective immediately.

David McAlister

Local Union 388, Norfolk Virginia

On July 1, 2004, David McAlister and the GEB Attorney entered into a Settlement Agreement in order to resolve an investigation of allegations that McAlister committed conduct that violated LIUNA's Constitution, Ethics and Disciplinary Procedure and Ethical Practices Code while he served as the Director of Training for the Virginia/North Carolina Laborers' District Council. Under the terms of this Agreement, McAlister has agreed to a permanent ban on holding any post

tion as an officer, trustee, board or committee member, and to a permanent ban on holding any employment that requires him to posses, to be reimbursed from, to spend, or to direct the expenditure of LIUNA funds. Also, under the terms of this Agreement, McAlister will be subject to a one-year ban on holding any other employment with LIUNA or a LIUNA-affiliated entity which will begin on August 1, 2004.

David Valenzuela

Local Union 585, Ventura, California

On May 4, 2004, the GEB Attorney and David Valenzuela entered into a Settlement Agreement to resolve an investigation into allegations that one or more individuals at Local 585 may have committed conduct that violated LIUNA's Constitution, Ethics and Disciplinary Procedure and Ethical Practices Code. Under the terms of this Agreement, Valenzuela has agreed to a three-year ban on seeking or holding any position as an officer, trustee, board or committee member in or with any LIUNA-affiliated entity. This three-year ban will begin at the date of the next scheduled election of officers at Local 585. Valenzuela will he permitted to remain a member in good standing.

Joseph Rocha

Local Union 1082, El Monte, California

On February 10, 2004, the GEB Attorney and Joseph Rocha entered

into a Settlement Agreement in order to resolve an investigation of allegations of financial malfeasance that occurred while Joseph Rocha served as the Business Manager/Secretary-Treasurer of Local 1082. Under the terms of this Agreement, Rocha agreed to resign permanently his membership with LIUNA Local Union 1082 and all other LIUNA-related entities or funds, effective immediately.

Michael Urgola

Local Union 1153, Newark, New Jersey

In December 2001, Michael Urgola, the Business Manager of Local 1153, sent Vincent Urgola to a job at a union contractor, although Vincent Urgola was not on the out-of-work list and was not a member of the local. In order to

resolve potential disciplinary charges arising from this matter, the GEB

Attorney and Michael Urgola entered into a Settlement Agreement on May 5, 2004. As a result of this Agreement, Urgola agreed to serve a two-week suspension without pay from his position as Business Manager of Local 1153 beginning May 10, 2004.

Leslie Bell

Local Union 1184, Riverside, California

An investigation by the Inspector General's Office revealed that Leslie Bell embezzled $179,074.33 in Local 1184 funds while she served as the

Bookkeeper of Local 1184 in violation of the LIUNA Constitution, Ethical Practices Code and federal law. On May 28, 2004, the GEB Attorney and Leslie Bell entered into a Settlement Agreement to resolve the investigation into this matter. Under the terms of the Agreement, Bell agreed to resign permanently from any positions or employment with LIUNA and any LIUNA-affiliated entity.

Antonio Chaidez—Local Union 1655, North Riverside, Illinois

Antonio Chaidez served as Secretary-Treasurer of Local 1655 in North Riverside, Illinois from February 2002 through October 2003. An audit of Local 1655 that concluded in October 2003 revealed that Chaidez misappropriated $1,000 in Local 1655 funds by writing a Local 1655 check to himself for his personal use in violation of LIUNA's Constitution, Ethics and Disciplinary Procedure and Ethical Practices Code. In order to resolve the investigation into this matter, Chaidez and the GEB Attorney entered into a Settlement Agreement on April 28, 2004. Under the terms of this Agreement, Chaidez has agreed to a three-year suspension from any elected or appointed position as an officer, trustee, board member, employee or committee member, with any LIUNA-affiliated entity, regardless of whether such position is paid or unpaid. Chaidez will be permitted to retain his LIUNA membership during this suspension period, as long as he fulfills the terms and conditions of the Settlement Agreement and the duties and obligations of membership as outlined in the LIUNA Uniform Local Union Constitution.