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2 OFFICE OF THE GENERAL EXECUTIVE BOARD ATTORNEY
3 LABORERS' INTERNATIONAL UNION OF NORTH AMERICA
- - - - - - - - - - - - - - - - - -x
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5 In the Matter of
6 TRUSTEESHIP PROCEEDINGS LOCAL 734
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- - - - - - - - - - - - - - - - - -x
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10 November 23, 2004
10:00 o'clock a.m.
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12 Hilton Gateway
Newark, New Jersey
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15 B E F O R E:
16 PETER F. VAIRA,
17 Independent Hearing Officer.
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2 A P P E A R A N C E S:
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Messrs. PATTON BOGGS, LLP
4 Attorneys for Office of the General
Board Attorney
5 2550 M Street, N.W.
Washington, D.C. 20037-1350
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BY: PATRICK J. SLEVIN, Esq., of Counsel
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8
Messrs. COHEN LEDER MONTALBANO & GROSSMAN
9 Attorneys for Michael Rosado
1700 Galloping Hill Road
10 Kenilworth, New Jersey 07033
11 BY: BRUCE LEDER, Esq., of Counsel
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18 Tina DeRosa,
Reporter
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2 P R O C E E D I N G S
3 THE HEARING OFFICER: Good
4 morning, ladies and gentlemen. As you
5 can see, there is a Spanish
6 translation available and the
7 translator in a few moments will go to
8 the back and translate from another
9 location. She will explain that there
10 is a little translating device and
11 earphones for the persons who need it.
12 If any individual needs some
13 instruction on how to use the machine,
14 Ms. Carmen will be sitting right back
15 there. Thank you.
16 I am Peter Vaira and I am the
17 Independent Hearing Officer for the
18 Laborers' International Union of
19 America.
20 This is a hearing on a
21 emergency trusteeship in the matter of
22 Local 734, Newark, New Jersey, and it
23 is Docket No. 0426T, as in Tom.
24 To my right is an associate
25 attorney from my office Ms. Sarah
4
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2 Thompson. It is being transcribed by
3 a professional transcription service.
4 Would you have the record
5 reflect that I just instructed the
6 Spanish members the availability of
7 the translator and the translation
8 service.
9 Representing the International
10 Union this morning is Mr. Slevin.
11 Am I correct, sir?
12 MR. SLEVIN: Yes, sir.
13 THE HEARING OFFICER: I
14 understand you are prepared to put on
15 the program.
16 MR. SLEVIN: We are, sir.
17 THE HEARING OFFICER: I
18 believe some of the former officers
19 have representation. Would you state
20 your names.
21 MR. LEDER: My name is Bruce
22 Leder. I am with the law firm of
23 Cohen Leder Montalbano & Grossman
24 representing Michael Rosado.
25 THE HEARING OFFICER: To your
5
1
2 left the former officers.
3 MR. LEDER: To my left is
4 Joseph Gambardella.
5 I don't believe they are
6 former -- they are current officers.
7 THE HEARING OFFICER: I
8 believe that the Welfare and Pension
9 Funds have an attorney who is not
10 participating, but observing, is that
11 correct. Mr. Bisceglie, is that
12 correct?
13 MR. BISCEGLIE: Correct.
14 MR. LEDER: I would like to
15 make a motion to adjourn this hearing.
16 I was retained by Mr. Rosado on Friday
17 and as you can see, we have been
18 presented with a volume totaling 74
19 exhibits that I have not had the
20 opportunity to review.
21 Since Friday I have been
22 reviewing documents, but as you can
23 imagine based on this presentation or
24 the observance of the number of
25 documents there is a lot to review in
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2 this matter.
3 You wrote on November 17th to
4 Gregg Patrick Martello denying his
5 request for an adjournment of the
6 hearing, but I think under the
7 circumstances and the volume of
8 material I was presented with I should
9 be given the opportunity to be able to
10 review this document and do my
11 investigation.
12 THE HEARING OFFICER: I
13 sympathize with you if you just got
14 into the trusteeship hearing,
15 especially one under an emergency
16 trusteeship where there are a lot of
17 time complaints but I am required to
18 hear this case within one month of the
19 time that the trusteeship has been
20 installed. That was October 28th,
21 Mr. Slevin?
22 MR. SLEVIN: It was 28th or
23 29th.
24 THE HEARING OFFICER: 29th.
25 The time is running on it. Due to the
7
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2 nature of this type of hearing in
3 which the real party in interest is
4 the union itself I will deny your
5 motion, but you may participate in the
6 hearing and if you have good cause ask
7 for an adjournment to make a
8 presentation you may make that in
9 writing or otherwise and I will
10 entertain that. I have done that in
11 the past.
12 MR. LEDER: Thank you, sir.
13 THE HEARING OFFICER: Okay,
14 Mr. Slevin, I am going to tell
15 everyone usually there is coffee at
16 these events. I don't want to say
17 that this is a low budget, but there
18 is only ice water and maybe sometime
19 this afternoon we can figure out how
20 to get some coffee.
21 Some time ago I was at a
22 hearing in Buffalo and I walked back,
23 not only was there coffee and donuts,
24 but one of the students thought it was
25 his job to do it and they charged it
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2 to me.
3 Mr. Slevin, you may arrange
4 with someplace to at least get us some
5 coffee.
6 MR. SLEVIN: I would like to
7 make a brief opening statement before
8 we present our witnesses.
9 Mr. Vaira, this is a matter of
10 procedure, and I don't know if you
11 know but it was made clear that this
12 is a hearing for members of Local 734
13 and counsel to any. We would simply
14 invoke that requirement. I think we
15 are following that ruling.
16 THE HEARING OFFICER: What are
17 you saying?
18 MR. SLEVIN: It is my
19 understanding there are people in the
20 room that are not members of Local 734
21 or counsel.
22 THE HEARING OFFICER: I think
23 there was only one person who had been
24 a witness and someone came up and
25 asked if that person could
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2 participate. Not participate, but
3 listen.
4 Is there anybody else in that
5 category?
6 MR. BISCEGLIE: We have Lou
7 Calastro who is the Chairman of the
8 Funds who will, I believe be a witness
9 in this particular matter.
10 THE HEARING OFFICER: He is a
11 witness?
12 MR. BISCEGLIE: I think for
13 Mr. Rosado.
14 THE HEARING OFFICER: In other
15 words, the Chairman of the welfare
16 Funds; is that correct?
17 MR. BISCEGLIE: Yes.
18 THE HEARING OFFICER: He can
19 stay. I believe he has an interest in
20 this.
21 MR. SLEVIN: I believe there
22 is a vendor as well, Mr. Percell.
23 THE HEARING OFFICER: What
24 type of vendor?
25 MR. SLEVIN: He provided
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2 accounting services.
3 THE HEARING OFFICER: Is it
4 his firm that there is an issue about
5 the charges and so forth; am I right?
6 MR. SLEVIN: That is right.
7 THE HEARING OFFICER: I think
8 he has an interest. I may call him as
9 a witness.
10 Let me give you an example.
11 Mr. Leder is here representing the
12 former officers, the officers are here
13 and participating. The amount of
14 examination may not amount to what you
15 would normally see in a criminal case
16 or even a civil case. I will let you
17 know how far you can go.
18 MR. SLEVIN: The Chairman of
19 the General Executive Board Attorney's
20 Office asks you to affirm the position
21 of local trusteeship over Local 734
22 and this case really begins sometime
23 around late 2003 when the supervisor,
24 the supervisor received information
25 that there could possibly be a problem
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2 with the affiliated benefit Funds.
3 So to their mind the simple
4 solution to that was to put the deputy
5 Trustee on as a Benefit Fund Trustee
6 and seek an operational review of the
7 Funds and to see whether it was true
8 that there were problems.
9 THE HEARING OFFICER: The
10 Deputy Trustee.
11 MR. SLEVIN: Deputy
12 Supervisor. At that point the local
13 was under supervision.
14 THE HEARING OFFICER: It was
15 under supervision. The officers
16 remained in place, but there was
17 supervision.
18 THE HEARING OFFICER: Who was
19 the supervisor?
20 MR. SLEVIN: The Supervisor
21 was Mr. Pocino. The Deputy Supervisor
22 was Mr. Pat Byrne.
23 Over the course of time what
24 appeared to be a simple procedure of
25 substituting Trustees and getting an
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2 operational review proved to be
3 increasingly difficult.
4 THE HEARING OFFICER: In other
5 words, what you are saying is usually
6 there is three union side Trustees and
7 you were going to substitute and make
8 Mr. --
9 MR. SLEVIN: Byrne.
10 THE HEARING OFFICER: Mr.
11 Byrne a Trustee.
12 MR. SLEVIN: In this case
13 there were two and two.
14 MR. LEDER: That is not
15 exactly correct.
16 MR. SLEVIN: It proved to be
17 complicated. As time went on
18 ultimately Mr. Byrne was installed as
19 a Trustee and the operational review
20 of the Funds went forward.
21 As things developed with the
22 operational review there were more
23 delays with an eye toward the
24 expiration of the supervision which
25 was set to expire at the end of last
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2 month.
3 As things proceeded and as
4 more information was gotten by the
5 accounting firm that was hired the
6 lawyer for the Funds was terminated.
7 The accountant that was hired was
8 terminated. The Employer Trustees
9 refused to recognize the one Union
10 Trustee that was just recently put on
11 the Board, Mr. Byrne, and there was a
12 subsequent attempt to enlist the
13 membership in the effort to prevent
14 the audit from going forward.
15 Those are just a number of
16 things that went on, but they all
17 added up to an emergency situation in
18 which the union was unable to do a
19 very basic thing which was to conduct
20 or to have their Trustees support a
21 review of the Funds to simply verify
22 whether or not there were problems
23 with the Funds, specifically no show
24 employees or employees getting
25 exorbitant salaries for very little
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2 work.
3 Eventually the review was
4 completed. The Office of Inspector
5 General also conducted interviews and
6 examined documents and what was the
7 result. Exactly what the initial
8 source information was. Exorbitant
9 salaries for employees that did little
10 or no work. Thousands and thousands
11 of dollars of Fund money going to a
12 number of employees and that is what
13 we intend to show through witnesses
14 and through documents.
15 Based on the witnesses and
16 documents we would respectfully
17 request that you affirm the imposition
18 of the emergency trusteeship.
19 THE HEARING OFFICER: The
20 procedure is after the hearing I have
21 roughly 30 days to make a final
22 decision. It has to be decided within
23 60 days of the time that the
24 trusteeship was imposed.
25 MR. SLEVIN: That is correct.
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2 THE HEARING OFFICER: The
3 requirement under the law, under the
4 constitution is there be a hearing
5 before a judicial officer which I am.
6 What form it takes depends on me.
7 I see I am sitting here
8 holding a large volume of documents
9 that Mr. Leder has in front of him and
10 you are about to delve into that; am I
11 correct?
12 MR. SLEVIN: There is a good
13 bit of correspondence involved in this
14 case. There are trust agreements.
15 There are a number of documents from
16 the Funds Funds that explain this
17 story and our office always errs on
18 the side of providing as much
19 information to you as possible so that
20 you have everything that you need to
21 make your decision.
22 THE HEARING OFFICER: I
23 understand that is your normal
24 procedure. I just call your attention
25 it is in front of me and you are about
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2 to proceed. Go ahead.
3 MR. SLEVIN: We would like to
4 call Mr. Pat Byrne.
5 P A T B Y R N E, called as a witness, having
6 been first duly sworn by Tina DeRosa, a
7 Notary Public within and for the State of
8 New Jersey, was examined and testified as
9 follows:
10 DIRECT EXAMINATION
11 BY MR. SLEVIN:
12 Q Sir, could you state your name for
13 the record?
14 A Pat Byrne, B-Y-R-N-E, Assistant
15 Regional Manager of the Laborers' International
16 Union. I now serve as Deputy Trustee of the
17 local.
18 Q Explain a little bit your duties and
19 responsibilities in your present employment.
20 A Well, my job is Assistant Regional
21 Manager. I handle problems at the local unions
22 and the international union, doing investigations
23 of member complaints and when we have supervision
24 of trusteeships I typically will serve as a Deputy
25 Supervisor of a local.
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1 Byrne
2 Q For the record what region are we
3 talking about?
4 A Laborers Eastern Region.
5 Q What geographical does that
6 encompass?
7 A New York City, New Jersey, and
8 Delaware.
9 Q I would like to discuss the
10 supervision of Local 734 for a minute.
11 What was the status of the local
12 before the imposition of the trusteeship?
13 A Well, the officers of the local,
14 particularly Mr. Rosado had a number of
15 conversations with myself and Vice President
16 Pocino about raiding of the local and declining
17 membership and their lack of resources to deal
18 with the challenge.
19 Q When did these conversations take
20 place?
21 THE HEARING OFFICER: What
22 period of time are you talking about.
23 It was imposed October 28th, let us
24 say. What period of time are you
25 referring to?
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2 THE WITNESS: Well, this is
3 prior to the supervision which began
4 in October 28, 2002.
5 And in the months before these
6 conversations had occurred and
7 eventually how Mr. Rosado and
8 Mr. Pocino might be able to assist the
9 local union.
10 THE HEARING OFFICER: You have
11 been under supervision since 2002.
12 THE WITNESS: Since
13 October 28, 2002, voluntary
14 supervision.
15 Q Was there discussion with the local
16 about the possibility of supervision?
17 A Yes, there was. Mr. Rosado brought
18 the proposition back to his Executive Board.
19 There was discussion there and they ended up
20 voting in favor of voluntary supervision.
21 Q Did you believe them to understand
22 the powers that the supervisor was given by virtue
23 of the voluntary supervision?
24 A They had counsel at this meeting.
25 He read it and there was thorough discussion.
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1 Byrne
2 Q Could you look at Exhibit 1 and
3 identify that for the record?
4 A Yes. This is a letter dated
5 October 29, 2002 addressed to Vice President
6 Pocino from Michael Rosado who is Business Manager
7 of Laborers' Local 734, discussing the Executive
8 Board meeting at which the voluntary supervision
9 was approved.
10 Q Could you simply read into the
11 record the second page just from the top of that
12 first paragraph?
13 A "As indicated in the Executive Board
14 minutes, we did discuss the powers of the
15 supervisor per the constitution of LIUNA.
16 Q If you could please turn to the
17 attached minutes and if you could go to the third
18 page of the minutes where it has report of new
19 business and the third paragraph there, if you
20 could simply read this into the record.
21 A Business Manager Michael Rosado
22 indicated that the Voluntary Supervision Agreement
23 was per the parameters that Vice President Pocino
24 had discussed with the Executive Board in
25 September. Business Manager Michael Rosado
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1 Byrne
2 indicated that the provisions of the Voluntary
3 Supervision Agreement conform with the powers, I
4 presume, of a supervisor as set forth in the
5 constitution of LIUNA.
6 Q If you could turn to the next page
7 and read into the record the second paragraph.
8 A Business Manager Michael Rosado
9 continued to read the Voluntary Supervision
10 Agreement. There was some discussion concerning
11 the supervisor's authorities. Business Manager
12 Michael Rosado commented that all the powers of
13 the supervisor as set forth in the Voluntary
14 Supervision Agreement were the powers of the
15 supervisor as set forth in the constitution of
16 LIUNA.
17 Q One more thing. The third paragraph
18 from the bottom, if you could read in the record
19 the first two sentences.
20 A Counsel for Local 734 was present
21 for the Executive Board meeting. Counsel for the
22 union advised that Voluntary Supervision Agreement
23 was in accordance with the supervisor's powers set
24 forth in the constitution of LIUNA.
25 Q Did there come a time when the local
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2 had reached an agreement with the international to
3 have a voluntary supervision?
4 A Yes, October 28th.
5 Q Could you please turn to Exhibit 2
6 and identify that for the record?
7 A Yes. This is a copy of the
8 Voluntary Supervision Agreement which was executed
9 by the Executive Board October 28, 2002.
10 Q Does this agreement discuss the
11 powers of the supervisor?
12 A Yes, it does.
13 Q If you go to Paragraph 1, could you
14 simply --
15 MR. SLEVIN: Mr. Vaira, I do
16 not know how useful this is for you,
17 but the reason why I do this is so the
18 members can understand.
19 THE HEARING OFFICER: I
20 understand. I believe I passed on
21 this.
22 MR. SLEVIN: Pardon?
23 THE HEARING OFFICER: I
24 believe I passed on this. I believe
25 this voluntary supervision came before
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2 me and I held a hearing.
3 MR. SLEVIN: Yes.
4 THE HEARING OFFICER: In my
5 position of doing so, I believe I
6 questioned Mr. Rosado who was in the
7 room and asked if the supervision was
8 voluntary and there was a cause for it
9 and I satisfied myself and he agreed
10 to that.
11 I think there were other
12 members of the Executive Board in the
13 room at the time and I asked for a
14 vote that it was their agreement and
15 they still agreed to it, and obviously
16 it was because it went into effect.
17 Go ahead. But you may explain
18 to the members. Go right ahead.
19 MR. SLEVIN: I can simply
20 describe the exhibit. The Voluntary
21 Supervision Agreement provides the
22 supervisor with all the powers as set
23 forth in the constitution.
24 Included in that and
25 specifically mentioned in the
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2 agreement is the unfettered discretion
3 to do what is necessary to protect the
4 interest of members.
5 The supervisor had the
6 authority to remove all of the
7 officers or employees if he so chose,
8 and that is contained in this
9 agreement.
10 And Paragraph 3 indicates that
11 deliberate violations of this
12 agreement by Local Union 734, its
13 officers, members, employees, will
14 constitute obstruction of the General
15 President and the GEB attorney and may
16 be charged as such under the ethics
17 and disciplinary procedure.
18 BY MR. SLEVIN:
19 Q I believe you said previously,
20 Mr. Byrne, that Mr. Pocino was supervisor?
21 A That is correct.
22 Q Your position was?
23 A I was appointed Deputy Supervisor.
24 Q Could you turn to Document 3 and
25 identify that for the record, please?
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1 Byrne
2 A Yes. This is a letter dated
3 November 8, 2002 from General President O'Sullivan
4 appointing Mr. Pocino supervisor and myself as
5 deputy supervisor.
6 Q How long was the supervision set to
7 run?
8 A Eighteen months with the possibility
9 of an extension for an additional six months.
10 Q Was it extended for an additional
11 six months?
12 A Yes, it was.
13 Q Could you turn to Exhibit 4, please,
14 and explain those two documents?
15 A The first document is a letter from
16 General President O'Sullivan directed to
17 Mr. Pocino, Vice President of the region inquiring
18 of two local unions, one of them being Local 734
19 that had reached the 18th month of supervision and
20 inquiring whether there would be an extension.
21 Q Is there a typo in this document?
22 A Yes. This letter says the
23 supervision on 734 was imposed on 2/24/1999. That
24 is incorrect. It was October 28, 2002.
25 Q If you could identify the other
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1 Byrne
2 pages of that exhibit.
3 A Yes. This is a letter from Vice
4 President Pocino directed to General President
5 O'Sullivan. It's responding to General President
6 O'Sullivan's letter and notes that Local 734 had
7 been under supervision since October, 2002 and the
8 situation had improved and we planned to bring it
9 out of supervision at the end of 2004.
10 Q Okay.
11 A It also says that Mr. Pocino
12 conferred with GEB Attorney Luskin and that
13 Mr. Luskin concurred in that judgment.
14 Q During the supervision were any
15 officer removed?
16 A No.
17 Q Could you describe the level of
18 cooperation at the beginning of supervision or for
19 the majority of the supervision by the officers?
20 A The majority of the supervision the
21 cooperation was quite good.
22 Q How so?
23 A One of difficult decisions was the
24 budget was a mess. If things had gone unchanged
25 the budget deficit would have ballooned up to
26
1 Byrne
2 about $300,000 a year. We had to put together a
3 financial plan to address that because under the
4 constitution budgets are supposed to be in
5 balance.
6 So we imposed rather severe pay cuts
7 on the business agents and also proposed to the
8 General President that per capita break be given,
9 a per capita be given tax to help the union
10 balance its budget.
11 THE HEARING OFFICER: How many
12 full-time officers were there.
13 Business Manager, who else?
14 THE WITNESS: The Business
15 Manager was full-time. Joe Campbell,
16 he is a full-time accountant.
17 Those are the only officer
18 that are full-time employees.
19 THE HEARING OFFICER: How many
20 business agents?
21 THE WITNESS: Four.
22 Q Are you familiar with the officers
23 of the local as of September of this year?
24 A I will recognize their names, yes.
25 Q Well, if you could turn to Exhibit 5
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2 and identify that document, please.
3 A Yes. This is a list of Executive
4 Board members as of September 20th provided to me
5 by the local union, and in reviewing it I am
6 familiar with the names as being Executive Board
7 members.
8 Q Okay. And that is as of September
9 20th of 2004?
10 A Yes, that's correct.
11 Q Now, Mr. Byrne, I would like to
12 focus more specifically on the individuals at
13 Local 734.
14 Are you familiar with a gentleman by
15 the name of Frank Pernice?
16 A I am.
17 Q Who is Mr. Pernice?
18 A Frank Pernice was a business agent
19 for Local 734 when we arrived. He was not officer
20 of the local, but he was a business agent.
21 Q Did you have occasion at the
22 beginning of the supervision to learn anything
23 about Mr. Pernice?
24 A Yes. Even prior to the supervision
25 we had had a series of telephone calls from
28
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2 members complaining about his performance.
3 Q What were some of the things that
4 they were saying?
5 A Some of the members felt he was in
6 the employer's pocket. Some felt he never got a
7 decision done. He always blamed it on the
8 employers and things just didn't get done. They
9 felt he wasn't aggressive.
10 Q Did that situation change after the
11 imposition of supervision?
12 A No, it did not.
13 Q Did you take any steps to verify any
14 information that you were getting from the
15 membership?
16 A In the spring of 2003, in May of
17 2003 we distributed a member survey and we asked,
18 you know, members what they thought of the local
19 and about their business reps and, you know,
20 things like that. It was about ten or 12
21 questions as I recall.
22 Q At this time what was Mr. Pernice's
23 position?
24 A He was business agent.
25 Q Who was he being paid by?
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2 A Well, at this time he was being paid
3 by Laborers' Local.
4 Q As distinct from?
5 A The Funds Funds.
6 Q Again, what were the results of the
7 questioning with respect to Mr. Pernice?
8 A We received a total of 337 replies
9 to the survey and the ones that mentioned him were
10 pretty much uniformly negative.
11 Q Did you do anything with that
12 information?
13 A Yes. I determined to make a
14 recommendation to Supervisor Pocino that he be
15 terminated.
16 Q Did Mr. Pocino make a decision based
17 on your recommendation?
18 A He approved the recommendation.
19 Q What happened next?
20 A I believe it was October 22nd
21 Mr. Pernice was terminated -- August 22nd.
22 Q August 22nd of what year?
23 A 2003.
24 Q After he is let go by the local what
25 happens next?
30
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2 A He pretty much immediately went to
3 work for the welfare Fund.
4 Q In what capacity?
5 A I am told his title was pension
6 investigator.
7 Q Were you told what the duty of a
8 pension investigator is?
9 A I did ask Mr. Rosado about that
10 because I have been associated with a number of
11 Funds over the years and never saw the position
12 anywhere else.
13 He told me the function was to go
14 out and interview pensioners from the local union
15 to see that they are actually alive and report
16 back to the Fund.
17 Q If you could explain why is that
18 important to the Fund to determine that someone is
19 alive?
20 A Well, in any Fund you always have an
21 issue that perhaps a member dies, it doesn't come
22 to the attention of the Fund and checks are
23 continuing to be sent to the home and perhaps
24 cashed.
25 Q Was the fact that he was immediately
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2 hired by the Fund, did you have any reaction to
3 that?
4 A I had no objection to it. If there
5 is work to be done I have no objection to
6 Mr. Pernice working for the Fund.
7 Q Did you come to have some concern
8 about the situation?
9 A Yes. Probably it was January, 2004,
10 maybe December Ana Taveras, who also served as
11 deputy supervisor showed Mr. Pernice was being
12 paid approximately $120,000 a year.
13 Q What was your reaction to that?
14 A That is a sum of money that exceeds
15 what most Fund administration earn and I thought
16 it was out of line and I mentioned to Mr. Rosado,
17 who was the Fund Trustee, I thought they need to
18 give it some attention because it seemed to be out
19 of line.
20 Q When you say Mr. Rosado was the Fund
21 Trustee, he was one of the Trustees to sit on the
22 Board of the welfare and pension Fund?
23 A That's correct.
24 Q Did Mr. Rosado do anything in
25 response to that?
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2 A He later reported to me
3 Mr. Pernice's salary had been cut I believe to
4 $65,000 a year.
5 Q Half, almost in half?
6 A Yes. That's correct.
7 Q Is Mr. Pernice still the Fund
8 investigator?
9 A No, he is not.
10 Q Why not?
11 A I believe in, I am not sure when,
12 but he worked probably five or six months at the
13 Fund and then he was laid off by Mr. Fritzsch who
14 is the Fund Administrator. I believe it was July
15 of '04.
16 Q Now, at some point during the
17 supervision did you receive any information
18 suggesting that there were any problems at the
19 Fund?
20 A Yes. In November of '03 I received
21 information from a confidential source that there
22 may be an investigation of the Funds going on and
23 that one of the issues might be no show employees.
24 Q When you say investigations being
25 conducted?
33
1 Byrne
2 A By a law enforcement agency.
3 Q Anything other than the fact there
4 might be no show employees?
5 A There might be issues with vendor
6 contracts.
7 Q What was your response when you
8 received that information?
9 A Within a day or two I saw Vice
10 President Pocino.
11 THE HEARING OFFICER: When you
12 say no show employees, persons getting
13 benefits from the Funds Funds who are
14 not employed?
15 THE WITNESS: No. What I mean
16 are people who are being paid to do a
17 service for the Fund who are not doing
18 the service.
19 THE HEARING OFFICER: Thank
20 you.
21 Q What did you tell Mr. Pocino?
22 A Well, I told him what my source had
23 indicated to me, and Mr. Pocino decided that the
24 best route would be proactive, to have me added to
25 the Board of Trustees to make a presentation to
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2 the Board and get some sort of audit done to make
3 sure that this is handled, whatever the problem
4 is.
5 Q What steps did you take to implement
6 that?
7 A I immediately with that direction, I
8 immediately went to Mr. Rosado and told him I was
9 to be put on the Board of Trustees as a union
10 representative and at that time we are proposing
11 that I be added as an additional Trustee of the
12 Board to make it three and three.
13 Q I am assuming by that an employee
14 would also be able to add a Trustee as well?
15 A That is correct.
16 Q What was Mr. Rosado's reaction to
17 that?
18 A He said that he would take care of
19 it.
20 Q When was the conversation?
21 A It would have been late November or
22 the very first part of December.
23 Q What happened as a result of that
24 conversation with Mr. Rosado?
25 A Mr. Rosado met with the Board of
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2 Trustees and presented the idea and also met with
3 his Executive Board and presented the idea.
4 Q How do you know that he did that?
5 A I have seen minutes.
6 Q So if you could just give the
7 Hearing Officer and members a sense of what
8 happened over the course of this time with respect
9 to your request to be put on as a Trustee.
10 A Well, I had made the request and
11 Mr. Rosado said that he would handle it.
12 He then reported back -- their Board
13 of Trustees at that time was meeting on a monthly
14 basis. He reported back that the Employer
15 Trustees had some reservations both about the
16 necessity of it on one hand and weren't really
17 comfortable expanding the Board to three and
18 three.
19 Q Did you offer any alternatives to
20 the three and three Board?
21 A Well, in April Mr. Rosado met with
22 Mr. Pocino and laid out the problem with him and
23 at that meeting Mr. Pocino agreed to go to the
24 Board with two and two with me replacing
25 Mr. Gambardella.
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2 And at that time Mr. Rosado also
3 said that the employer Chairman of the Board
4 Trustee Mr. Lou Calastro would have lunch with him
5 to discuss the whole situation.
6 Q You mentioned Mr. Gambardella.
7 A Mr. Gambardella was the second
8 employee Trustee on the Funds Funds.
9 Q And to your mind you made according
10 to your testimony this request was made in
11 December and now we are all of a sudden you are in
12 April. To your mind was it something that was
13 that difficult to do?
14 A No. I have been put on Boards of
15 Trustees of other Funds Funds and it happens
16 rather quickly typically.
17 Q When you say rather quickly, how
18 typically?
19 A By the next meeting I am on the
20 Board of Trustees.
21 Q Did you have any sense at that time
22 why this was so difficult to do?
23 A Mr. Rosado reported to us that the
24 employers said had issues about going three and
25 three and they were talking about it at their
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2 meetings and they hadn't decided which way to go.
3 It was really at the Trustee meeting. The
4 Executive Board had no problem with it at all.
5 Q Did there come a time when
6 Mr. Pocino did have the requested lunch?
7 A Yes. On May 26th Mr. Calastro and
8 Mr. Pocino had lunch.
9 Q If you could identify for the record
10 who Mr. Calastro is.
11 A Chairman of the Board of Trustees
12 and employee Trustee.
13 Q If you could just give us his full
14 name.
15 A Louis Calastro.
16 Q Who was the other just so we are
17 clear on who is on the Board at this time, who is
18 the other Board Trustee?
19 A Salvatore Salerno.
20 Q Did you subsequently learn what took
21 place at that lunch?
22 A Yes. Mr. Pocino came back from
23 lunch, reported that Mr. Calastro promised full
24 cooperation, that the Board would go two and two
25 and directed me to get myself on the Board
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2 immediately.
3 Q What was the next step that was
4 taken?
5 A I called Mr. Rosado or perhaps I saw
6 him at Monday staff meeting and I told him I would
7 go on at the June meeting.
8 Q What was Mr. Rosado's response to
9 that?
10 A Well, first I checked -- I had the
11 meeting down as being for June 8th and I confirmed
12 that with him. He told me that no, that is wrong.
13 It's a week later, June 15th. So I changed my
14 calendar.
15 Q When was the meeting?
16 A In fact, it did occur June 8th.
17 Q How did you learn that?
18 A A few days before the 15th I called
19 Fund counsel. At that time Gary Carlson was
20 serving as the actual attorney at the meetings, to
21 let him know I was coming on in a couple of days
22 at the next meeting. He then informed me the
23 meeting had occurred the week before.
24 Q As an aside, explain who was Funds
25 Funds counsel at that time.
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2 A At that time the firm was called
3 Lynch, Martin. It later changed its name to Kroll
4 Heineman & Giblin.
5 Q What was your reaction when you
6 found out that that meeting had taken place?
7 A Well, I was actually stunned because
8 Mr. Rosado had given me the 15th. The meeting had
9 occurred. He didn't give me a last minute call to
10 say I made a mistake and he didn't report the
11 meeting occurred after it occurred.
12 THE HEARING OFFICER: This
13 occurs generally once a month; am I
14 right?
15 THE WITNESS: At this point in
16 time the meetings were monthly.
17 THE HEARING OFFICER: Is it
18 possible they could have done this.
19 Mind you this is not a meeting of the
20 Security Council of the UN. So I
21 imagine if you wanted to, if anybody
22 wanted to they could have made an
23 emergency meeting and done it within a
24 couple of days; am I right?
25 THE WITNESS: That is correct.
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2 MR. SLEVIN: As the record
3 will ultimately show, for some things
4 it proved capable of having emergency
5 meeting and for other things they
6 proved incapable of having a meeting.
7 MR. LEDER: Is counsel
8 testifying or giving us a preview --
9 THE HEARING OFFICER: Give us
10 a question.
11 BY MR. SLEVIN:
12 Q What was the next thing that
13 happened?
14 A I called Mr. Rosado and asked him
15 what happened. He just said made a mistake.
16 Q Then what was your response?
17 A Well, I brought that information
18 back to Mr. Pocino and he directed -- he wanted to
19 meet with Mr. Rosado. So a meeting was set up
20 with Mr. Rosado, myself, and Mr. Pocino for
21 June 29th.
22 Q Where was that meeting?
23 A Forsgate Country Club, Jamesburg,
24 New Jersey.
25 Q Why were you there?
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2 A We were also having other meetings
3 that day that Mr. Rosado was involved in with the
4 political action committee, political cabinet
5 committee.
6 Q If you could just provide the
7 Hearing Officer with what occurred.
8 THE HEARING OFFICER: Give me
9 which organization is having the
10 meeting. The political action
11 committee usually involved the union
12 itself; am I right?
13 Q Does it usually involve the union?
14 A Yes.
15 THE HEARING OFFICER: What
16 entity is going to meet June 29th?
17 THE WITNESS: Well, it was
18 just an opportunity for the meeting.
19 Our meeting with Mr. Rosado had
20 nothing to do with either of those
21 meetings except we were all in the
22 same place the same day.
23 Between meetings Mr. Rosado,
24 Mr. Pocino and myself sat down in the
25 lobby and Mr. Pocino directed
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2 Mr. Rosado to remove -- Gambardella
3 was removed as a Trustee. I was
4 designated a new Trustee, and
5 Mr. Rosado was to arrange for an
6 emergency meeting for the Board of
7 Trustees so an operational audit could
8 be authorized.
9 Q What was Mr. Rosado's response to
10 that?
11 A He agreed to handle all those
12 things.
13 Q Was that the first time that
14 Mr. Rosado understood that you were going to be
15 put on the Board of Trustees?
16 A No, it was not.
17 Q Circling back to June, did you
18 inform Mr. Rosado that you intend at the June
19 meeting to be put on as a Trustee?
20 A Yes, I did. I told him I was to
21 replace Mr. Gambardella and that I would start
22 with the June meeting.
23 Q All right. Now, bringing it up to
24 the meeting in June, what was the next thing that
25 happened?
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2 A Well, Mr. Rosado got back to us and
3 said the meeting had been scheduled for June 27th
4 or July 27th.
5 Q Did you again tell him what the
6 purpose of that meeting was?
7 A Yes. I was going in as a Trustee
8 and I intended to make a presentation on the need
9 for an audit of the Funds Funds.
10 Q Did that meeting on July 27th take
11 place?
12 A Yes, it did.
13 Q Where was that meeting?
14 A That was the Union Hall at Local 734
15 in Rochelle Park.
16 Q Who was at that meeting?
17 A Chairman Calastro, Sal Salerno, the
18 other employee Trustee, Mr. Rosado, myself and.
19 Q If you can describe for the Hearing
20 Officer what took place at that meeting.
21 A The meeting was quite friendly. I
22 introduced myself. I told them that about the
23 information I had received.
24 Mr. Calastro was already somewhat
25 aware of it and recommended that we hire the
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2 accounting firm of Schultheis & Pannetierra to do
3 an operational audit.
4 I had a draft engagement letter
5 which Mr. Kroll reviewed and approved and I made a
6 motion, after some discussion I made a motion that
7 the hiring of the Pannetierra firm be approved.
8 We all voted. Everyone voted yes,
9 and I requested that to move things along I be
10 designated or authorized to sign the engagement
11 letter in final form on behalf of the Trustees.
12 Everyone approved that and I requested of
13 Mr. Fritzsch that I be added to the fiduciary
14 policy and he get information on what resource
15 coverage was available.
16 At some point Mr. Calastro asked
17 John Fritzsch if a letter had been received
18 documenting my appointment, and Mr. Fritzsch said
19 no and I directed Mr. Rosado to get the letter out
20 on local union letterhead immediately.
21 Q What was Mr. Rosado's response to
22 that?
23 A He nodded yes.
24 Q Was Mr. Gambardella at this meeting?
25 A No, he wasn't.
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2 Q Was there any discussion as to why
3 Mr. Gambardella was not there?
4 A No, there wasn't.
5 Q Did anyone object to your being at
6 that meeting. Did anyone object to your being a
7 Trustee at that meeting?
8 A No.
9 THE HEARING OFFICER: Well,
10 technically it is up to the union to
11 appoint you to do that at any time and
12 send your name over at the next
13 meeting and you show up.
14 THE WITNESS: That is correct.
15 THE HEARING OFFICER: So that
16 technically you were a Trustee.
17 Q Was there any discussion about
18 putting out to bid the accounting work?
19 A None.
20 Q Did anyone at that meeting give you
21 either an explicit statement or imply that this
22 was not a meeting of the Board of Trustees of the
23 pension welfare plan?
24 A No, sir.
25 Q So ultimately was the firm of
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2 Schultheis & Pannetierra retained?
3 A Yes, they were. The following day I
4 got a final version of the engagement letter which
5 I signed on behalf of the Board of Trustees and I
6 sent a copy, a signed copy to the Fund
7 Administrator in my capacity as Trustee.
8 Q Could you look at Exhibit 6, please,
9 and identify that document, please?
10 A This is a letter dated July 29, 2004
11 whereas I am forwarding a signed engagement letter
12 to Vincent Pannetierra of Schultheis & Pannetierra
13 and I signed it Patrick C. Byrne, Trustee.
14 Q Who is copied on this letter?
15 A Vice President Pocino and John
16 Fritzsch, administrator.
17 Q Could you please read into the
18 record the attached letter of engagement, the
19 second paragraph?
20 A We will obtain job descriptions of
21 the Funds' employees and interview them to insure
22 that job descriptions are accurate. We will then
23 perform walk-through tests of transactions
24 pertaining to their individual jobs. We will also
25 review timekeeping and payrool records. If we
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2 observe opportunities for streamlining your
3 operations we will point them out to you in the
4 report we will issue at the conclusion of our
5 engagement.
6 Q Does that accurately reflect what
7 the Board of Trustees at the July 27th meeting
8 approved?
9 A Yes.
10 Q Then again if you could identify the
11 next page. There appears to be a signature there.
12 I am sorry, a signature at the very bottom of the
13 page beneath the Schultheis & Pannetierra's
14 signature.
15 A Yes. It says authorized signature
16 and I indicate Patrick C. Byrne on behalf of Local
17 734 Benefit Funds Board or Trustees.
18 THE HEARING OFFICER: Was
19 there an administrator of the Fund?
20 THE WITNESS: Yes, John
21 Fritzsch.
22 Q Mr. Byrne, did there come a point at
23 which Schultheis & Pannetierra sought to commence
24 the operational review?
25 A Yes, sir. Once we signed the
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2 engagement letter I reached out to the partner of
3 the firm we deal with, Mr. Pannetierra, and he
4 indicated he is going to let me know who he was
5 going to assign to the project.
6 Two days later he let me know that
7 it was Michael Van Sertima and around August 10th
8 or so Mr. Van Sertima and I spoke.
9 Q Could you turn to Exhibit 7, please,
10 and take a look at that document and tell me what
11 that is?
12 A Yes. On the morning of August 11th
13 Mr. Van Sertima came to my office to discuss the
14 project. He went back to his office and then
15 e-mailed a list of document that he wanted to see
16 in advance of his going to the site.
17 Q Did you do anything -- so you
18 received the attached document?
19 A That is correct.
20 Q What did you do once you received
21 that?
22 A As soon as I received it I printed
23 it out and then faxed it to Mr. Rosado.
24 Q Could you identify the next exhibit,
25 Exhibit 8, and tell the Hearing Officer what that
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2 is?
3 A Yes. This is my cover sheet to the
4 fax to Mr. Rosado dated August 12, 2004.
5 Q If you could summarize that.
6 A Well, I was enclosing the list of
7 documents that Mr. Van Sertima had e-mailed to me
8 and was asking Mr. Rosado to take responsibility
9 for making sure the document request gets
10 satisfied as quickly as possible.
11 There were a few items that were
12 especially needed in advance. I identified which
13 ones those were and I gave him Mr. Van Sertima's
14 telephone in case he needed to reach out to him.
15 Q Did you indicate to Mr. Rosado when
16 Mr. Van Sertima intended to be on the site?
17 A In the cover I identified the week
18 of August 17th as Mr. Van Sertima's start date.
19 Q Did Mr. Van Sertima get the document
20 right away?
21 A No, he didn't.
22 Q What happened?
23 A Well, immediately thereafter the
24 Fund Administrator faxed a letter over to Mr. Van
25 Sertima saying it would be impossible for them to
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2 get started on the document request before Labor
3 Day.
4 Q Could you turn to Exhibit 9 and
5 identify that for the record?
6 A Yes. This is a letter dated
7 August 13th from John Fritzsch. He was
8 administrator of the Local 734 Welfare and Pension
9 Fund. He is indicating to Mr. Van Sertima that
10 they received the document request, that they had
11 someone on vacation, someone else on jury duty,
12 and that they were installing a new computer
13 program and that they wouldn't be able to comply
14 with the request before Labor Day.
15 Q Did you receive a copy of this
16 letter?
17 A A couple days later I received a
18 copy from Mr. Van Sertima.
19 Q Could you identify Exhibit 10 for
20 the record?
21 A Yes. This is -- Mr. Van Sertima had
22 e-mailed me a fax or he had faxed me and then sent
23 an e-mail explaining what it is on August 16th,
24 the request that the audit be put off until after
25 Labor Day.
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2 Q Did you have a reaction to this when
3 you saw it?
4 A Yes. At the July 27th meeting the
5 Trustees indicated they wanted to get this thing
6 moving along and I just didn't understand the foot
7 dragging. It was only a document request.
8 Q What else was occurring at this time
9 that -- was something else occurring at this time
10 that made it time sensitive as of August?
11 A As of August?
12 Q As of August was there any reason
13 why you felt this had to be done sooner rather
14 than later?
15 A Well, there was an upcoming
16 September Board of Trustees meeting and one of the
17 Trustees, Mr. Salerno was hoping we would have
18 some kind of report for that meeting.
19 Q What date was the supervision
20 scheduled to expire?
21 A The supervision was on extension and
22 would expire by its terms by October 28th.
23 Q Was that any concern of yours that
24 this supervision was set to expire in October?
25 A Well, it was. It wasn't yet an
52
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2 intense concern, but I was anxious to get the
3 audit done and any corrective measures taken
4 before the end of supervision.
5 Q If you could explain to the members
6 why the expiration of the supervision
7 was important. What happened -- what would happen
8 at the end of supervision that would create a
9 potential problem.
10 A Well, once the supervision was over
11 the regional office, the supervisor would lose
12 authority to designate Trustees to conduct the
13 investigation of the Fund issues and wouldn't
14 necessarily be privy to what an audit, if it was
15 completed, would show.
16 THE HEARING OFFICER: Can I
17 explain that for the members for the
18 record.
19 Under the Labor Management
20 Reporting Disclosure Act the
21 Trusteeship is presumed valid for one
22 year and may be extended for six
23 months. After that it is presumed
24 invalid.
25 MR. SLEVIN: Eighteen months.
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2 THE HEARING OFFICER: Eighteen
3 months and six more months after that.
4 So if it expires it expires and that
5 means these gentlemen, the supervisor
6 and deputy supervisor are gone. They
7 have no more authority.
8 That is why I guess the time
9 is crucial because after that they
10 completely lose office space if you
11 have nothing more to do. Okay.
12 BY MR. SLEVIN:
13 Q So did you act on the letter once --
14 I am sorry, the letter of August 13th when you saw
15 it. Did you do anything?
16 A Yes, I did. I called Mr. Rosado and
17 told him forcefully about the importance of
18 getting this document request fulfilled so the
19 audit could begin.
20 Q Did you give him some date that you
21 thought it had to be done?
22 A Not Mr. Rosado. Mr. Rosado was very
23 uncomfortable with me pushing him to get things
24 done and requested that I speak to Mr. Rizzo.
25 Q Who was Mr. Rizzo?
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2 A He was the assistant Fund
3 Administrator.
4 Q What is Mr. Rizzo's first name?
5 A Peter.
6 Q How long had he been the assistant?
7 A My understanding he has been with
8 the Funds a number of years, but become assistant
9 Fund Administrator in the early part of 2004.
10 Q Was there any involvement of Funds
11 the Funds counsel in this initial document search?
12 A Yes. It later came to my attention
13 and actually Mr. Rosado mentioned that he had done
14 so, that Mr. Rosado had written Fund counsel Gary
15 Carlson enclosing a copy of the document request
16 and asking Mr. Carlson to advise him as a Trustee
17 under fiduciary obligations whether it was an
18 appropriate request.
19 Q Could you turn to Exhibit 11 and
20 identify that for the record?
21 A Exhibit No. 11 is Mr. Carlson's
22 response dated August 20th to Mr. Rosado.
23 Q If you could summarize that letter
24 for the record, please.
25 A Well, basically he said, well, he
55
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2 does say all the information requested by
3 Schultheis & Pannetierra appears germane to the
4 audit. There is no reason why the Fund should not
5 comply with the request.
6 Q Did the Fund comply with the request
7 by September 1st?
8 A No, they did not.
9 Q At what point did you learn that
10 they had not complied with the request by
11 September 1st?
12 A Well, when I spoke to Mr. Rizzo,
13 he -- first of all, when I spoke to Mr. Rizzo he
14 told me all the problems that he was having
15 because of the computer, turnover and that kind of
16 thing, and I insisted that he produce the
17 documents to the Pannetierra firm by September 1st
18 and he agreed to do so.
19 Then I asked Mr. Van Sertima to let
20 me know if they were received because I asked they
21 go directly, that they go directly to the
22 Pannetierra firm to save time.
23 Some days after, probably the 10th I
24 learned the documents had not been received.
25 Q Who did you learn that from?
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2 A Mr. Van Sertima.
3 Q Could you turn to Exhibit 12 and
4 identify that for the record?
5 A Yes. This is an e-mail exchange
6 between myself and Mr. Van Sertima. The lower
7 portion is an e-mail sent by me dated
8 September 10th where I related my conversation
9 with Mr. Rizzo and the deadline that he agreed to
10 comply with of September 1st and requesting that
11 Mr. Van Sertima let me know if he receives it.
12 Q In that document there is a
13 statement that you make, quote, the foot dragging
14 is heightening my suspicions.
15 Could you explain what your thoughts
16 were at that time?
17 A Yes. This had been going back and
18 forth for several days, for actually a couple of
19 weeks and the document request was still not
20 fulfilled and I was beginning to wonder whether
21 the staff of the Fund wanted to cooperate on the
22 audit.
23 Q Again was there ongoing concern
24 about timing?
25 A Absolutely. You know, October 28th
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2 was the end of supervision and we both had to get
3 a report done and get Trustee action on it by that
4 date.
5 THE HEARING OFFICER: Who were
6 the individuals who physically were
7 responsible for going in and pulling
8 out those documents?
9 THE WITNESS: Fund staff. I
10 wouldn't know the names of people.
11 THE HEARING OFFICER: But the
12 Fund Administrator for one and people
13 working for him; right?
14 THE WITNESS: That is correct.
15 Q If you could go to the top of
16 Exhibit 12 and just summarize that.
17 A This is a reply to my e-mail of
18 September 10th where Mr. Van Sertima informs me he
19 just checked with the front office and nothing has
20 been received from Mr. Rizzo.
21 Q Now, at this time was there to be a
22 Board meeting?
23 A A meeting was scheduled for
24 September 14th.
25 Q I guess we should clarify that, a
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2 Board of Trustees meeting?
3 A Board of Trustees meeting, yes.
4 THE HEARING OFFICER: Of the
5 welfare pension.
6 THE WITNESS: Of the pension
7 welfare Funds Funds, that is correct.
8 Q When did you learn that there would
9 be a meeting. Would this have been a quarterly
10 meeting?
11 A At this time they had just shifted
12 to quarterly meetings, yes.
13 Q Did you attend that meeting?
14 A No, I did not. I was scheduled to
15 go on vacation September 14th. So a week or ten
16 days or maybe two weeks before I asked Mr. Rosado
17 to try to get the meeting moved up a little bit so
18 I could attend.
19 Q What was Mr. Rosado's response to
20 you?
21 A He said he would try to do that and
22 a week or so later he got back to me and said one
23 of Employer Trustees was dropping his son or
24 daughter off from college and wouldn't be back in
25 time from college for a meeting the day before.
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2 Q How long was your vacation scheduled
3 to be?
4 A About two weeks.
5 Q Did you let Mr. Rosado know that?
6 A Yes.
7 Q At this point did you come to learn
8 what was to be discussed at that meeting?
9 A Yes. Shortly before the meeting,
10 about three or four, five days before the meeting
11 Mr. Rosado mentioned to me that the administrator
12 John Fritzsch had indicated he intended to resign
13 at the meeting his position as administrator for
14 health reasons.
15 Q When Mr. Rosado told you that, where
16 does that fall in the timeline with when you told
17 Mr. Rosado that you wouldn't be able to attend the
18 September meeting?
19 A It was right around the same time.
20 Probably shortly after.
21 Q Did you respond when Mr. Rosado told
22 you that?
23 A Yes. I told him and as part of that
24 same report I said that it looked like Mr. Rizzo
25 would attend, Peter Rizzo, the assistant Fund
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2 manager would be promoted to Fund manager or Fund
3 Administrator and I indicated to him because the
4 audit was just starting that it would be wiser not
5 to make that appointment, to wait until the audit
6 results are in and have the Board of Trustees make
7 a decision and I indicated that is what I wanted
8 to have done.
9 Q What was Mr. Rosado's response to
10 that?
11 A He agreed.
12 Q Was that communicated to any of the
13 other Trustees?
14 A Yes. After that conversation I
15 called Mr. Lou Calastro and Mr. Salerno and had
16 conversations along the same lines.
17 First I called, I called
18 Mr. Calastro. I explained my reasons why --
19 Q Can you be more specific about what
20 happened in the conversation, what did you say to
21 Mr. Calastro?
22 A I indicate to him because of the
23 pending audit I thought it would be inappropriate
24 to promote anyone to be the new Fund
25 Administrator. Anything should be done on an
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2 acting or interim basis and I did not want to see
3 Mr. Rizzo make Fund Administrator at this point in
4 time.
5 Mr. Calastro indicated to me that he
6 fully agreed with that and said that he believes
7 that Mr. Rizzo was controlled by the guy down
8 south.
9 Q Now, when he said controlled by the
10 guy down south, did you understand what he meant
11 by that, who he meant by the guy down south?
12 A I thought I did, but I wanted to be
13 clear on that. So I asked who do you mean.
14 Q Did he respond to that?
15 A Yes, he did. He told me Augie
16 Vergallito.
17 Q When he originally said the guy down
18 south, who did you think he meant?
19 A I thought he meant Augie Vergallito.
20 Q Who is Augie Vergallito?
21 A He used to work with a number of
22 locals starting with Local 31 to my knowledge, but
23 was a Fund employee for Local 734 and also
24 assistant business manager at one point in time.
25 Q Did you discuss with Mr. Salerno
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2 your opposition to having Peter Rizzo appointed as
3 a Fund Administrator?
4 A Yes, I did.
5 Q Did he respond to that?
6 A Yes. He told me he would support my
7 position and not make Mr. Rizzo Fund Administrator
8 at this time.
9 Q Was that conversation in person or
10 over the phone?
11 A It was over the phone on
12 September 10th. All conversations were on Friday,
13 September 10th.
14 Q Were both over the phone?
15 A Both were over the phone.
16 Q Did you offer an opinion as to how
17 to replace the administrator?
18 A I don't understand the question.
19 Q Did you propose any alternative to
20 the hiring of Mr. Rizzo?
21 A Well, I said I would have no problem
22 with anything on an acting or interim basis, just
23 that I didn't want a permanent appointment made.
24 Q Did Mr. Fritzsch actually resign?
25 A Yes, he did.
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2 Q Could you turn your attention to
3 Exhibit 13?
4 A Yes. This is a letter dated
5 September 13th, from counsel David Grossman to Mr.
6 Fritzsch, and the subject line is contemplated
7 resignation of John Fritzsch as Fund
8 Administrator.
9 Q Could you essentially summarize that
10 document?
11 A It just reports to the Board of
12 Trustees and this letter is addressed to the Board
13 of Trustees that Mr. Fritzsch had indicated due to
14 health problems he was contemplating resignation
15 and was attempting to work out termination,
16 severance pay and that kind of thing.
17 THE HEARING OFFICER: I have a
18 question here. Isn't the question
19 before you, the Supervisor of the
20 Trustees where you are going to get
21 these documents, right, when all this
22 is going on?
23 THE WITNESS: Right. We had
24 still not received the documents. The
25 accountant still had not received the
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2 documents.
3 THE HEARING OFFICER: Well,
4 forgetting about Mr. Fritzsch, what
5 could you have done. Could you have
6 Rosado get the document?
7 THE WITNESS: Initially I had
8 charged Mr. Rosado with the
9 responsibility to get the documents.
10 He declared that he was too busy to do
11 so, that there were problems and
12 basically tried to -- basically told
13 me to deal with Mr. Rizzo on the
14 issue.
15 THE HEARING OFFICER: It
16 sounds like he is working for somebody
17 and I was just wondering why somebody
18 hasn't given an order and sat on their
19 doorstep until these documents appear.
20 That just occurs to me as just an
21 unanswered question. Go ahead.
22 BY MR. SLEVIN:
23 Q Can you turn to Exhibit 14?
24 A Yes. This is a letter dated
25 September 14th from John Fritzsch resigning as
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2 Fund Administrator.
3 Q Again what was the date of that?
4 A September 14th.
5 Q Now, did you ultimately leave on
6 your trip to China?
7 A Yes, I left on September 14th.
8 Q When did you return?
9 A I was back in the office
10 September 30th.
11 Q When you got back into the office
12 did you subsequently learn about anything that --
13 did you learn whether or not the September meeting
14 took place?
15 A Yes. I came in. Mr. Pocino was
16 standing in the reception area next to his
17 secretary's desk and he indicated to me that the
18 September 14th meeting had occurred.
19 Q Okay. Did he inform you whether or
20 not, anything else happened with regard to
21 Mr. Rizzo?
22 A Yes. He indicated that Mr. Rizzo
23 had been made Fund Administrator, not acting or
24 interim Fund Administrator against our wishes.
25 Q Okay. And did he inform you of
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2 anything with respect to Mr. Gambardella?
3 A Yes. He said that Mr. Gambardella
4 had appeared and presented himself as a Trustee at
5 that meeting and there had been a discussion about
6 my appointment as Trustee and the Board had
7 decided to essentially excise me from counsel. He
8 indicated it was his understanding I was a
9 Trustee.
10 Q Did you learn whether or not
11 Mr. Rosado voted on Mr. Rizzo's appointment?
12 A Yes.
13 Q Okay.
14 A It was reported to me that
15 Mr. Rosado and Mr. Gambardella both voted in the
16 affirmative, but at later in the meeting
17 Mr. Rosado had the record show his vote changed to
18 abstained.
19 Q When?
20 THE HEARING OFFICER: Did you
21 say that Mr. Gambardella voted?
22 THE WITNESS: Yes, I did.
23 THE HEARING OFFICER: As a
24 Trustee?
25 THE WITNESS: As a Trustee.
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2 That was what was reported to me.
3 THE HEARING OFFICER: Are
4 there any records that indicate that.
5 There have got to be some records.
6 MR. SLEVIN: Of the September
7 meeting.
8 THE HEARING OFFICER: I am
9 asking you.
10 MR. SLEVIN: I don't know that
11 we have them in here because there are
12 so many documents, but we will look.
13 THE WITNESS: I have never
14 seen the minutes of the meeting
15 myself.
16 THE HEARING OFFICER: All you
17 know is that Rizzo got appointed?
18 THE WITNESS: I was told he
19 was appointed and functioned as Fund
20 Administrator thereafter.
21 THE HEARING OFFICER: Did he
22 draw a salary thereafter?
23 THE WITNESS: Yes, he did.
24 Q When you learned, when we talk
25 about, who was Funds Funds counsel at that time?
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2 A The law firm of, by that time it was
3 Kroll, Heineman & Giblin and Al Kroll was counsel
4 attending at that meeting.
5 Q Again, it is your testimony that
6 Mr. Kroll advised -- what was the advice that he
7 provided to Trustees at that meeting with respect
8 to your status?
9 A That I was a Trustee.
10 Q When you learned what had occurred
11 at the September meeting what did you do?
12 A I immediately called Mr. Rosado.
13 Q If you could just tell the Hearing
14 Officer what transpired in that call.
15 A Well, I asked Mr. Rosado what
16 happened.
17 THE HEARING OFFICER: What
18 date was that?
19 THE WITNESS: September 30th.
20 THE HEARING OFFICER: Okay.
21 Was that by telephone or in person?
22 THE WITNESS: Telephone.
23 THE HEARING OFFICER: Tell us
24 what you said and what he said.
25 THE WITNESS: I asked
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2 Mr. Rosado what happened. He told me
3 that, first of all -- well, I asked
4 him what happened. He told me the
5 Trustees, Employer Trustees had
6 recognized Mr. Gambardella as the
7 proper union Trustee along with
8 himself and that the Trustees felt
9 that the position of Fund
10 Administrator shouldn't be an acting
11 or vacant basis.
12 He said Mr. Gambardella and
13 the two employers voted to appoint
14 Mr. Rizzo Fund Administrator and he
15 told me that he, himself, had
16 abstained.
17 Q Did you discuss with him your status
18 as Trustee?
19 A Yes. I told him, I asked him
20 whether he understood I was a Trustee. He said
21 yes, he did.
22 Q Did you ask him whether he had
23 voiced that opinion in the meeting?
24 A Yes, I did. I asked him, well,
25 didn't you tell the Employer Trustees that. He
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2 told me he did not in so many words.
3 Q Was there any doubt in your mind
4 that Mr. Rosado in that conversation with you
5 recognized you as the union Trustee on the Funds
6 Funds?
7 A None in my mind. I was very
8 explicit with him and he confirmed it.
9 Q So did you do anything after that to
10 try to confirm that?
11 A Yes. I asked him to write a letter
12 immediately confirming the fact that I was the
13 Trustee as of the July 27th meeting.
14 Q Had you asked him to do that before?
15 A That is the first time I asked him
16 to do that.
17 Q How was that different than at the
18 July 27th meeting with regard to the paperwork?
19 A Well, on July 27th I asked him to
20 confirm my appointment with a letter from the
21 local union. This time I asked him to confirm my
22 appointment as of July 27th.
23 Q Why did you ask him to write a
24 letter?
25 A Because I thought the hiring of
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2 Rizzo was improper because Mr. Gambardella was not
3 a Trustee and Mr. Rosado had changed his vote to
4 abstain and therefore there wasn't a majority vote
5 to seek Mr. Rizzo as Fund Administrator.
6 Q Did Mr. Rosado eventually write a
7 letter?
8 A Yes, he did.
9 Q Could you turn your attention to
10 Exhibit 15 and identify that for the record?
11 A Yes. This is a cover page to a fax
12 that he sent to me followed by a formal letter
13 that he prepared which sort of ducks the whole
14 issue.
15 Q Do you recall receiving this letter?
16 A Yes, I do.
17 Q When do you recall receiving it?
18 A It would have been the same day as
19 the fax, October 1st.
20 Q What was your reaction when you --
21 did you have any reaction when you read the
22 letter?
23 A Yes. I called and told him that is
24 not in accord with what you told me.
25 Q Did Mr. Rosado respond to that at
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2 all?
3 A Mr. Rosado repeated he understood me
4 to be a Trustee as of July 27th.
5 Q Did you do anything as a result?
6 A Yes. I told him I will prepare a
7 letter for his signature laying out, more
8 particularly laying out those facts.
9 Q Did you do that?
10 A Yes, I did.
11 Q Okay. I turn your attention to
12 Exhibit 16 and could you identify that for the
13 record?
14 A Yes. The first page is a cover page
15 from me to Mr. Rosado and sort of to Barbara Brown
16 the office secretary's attention because
17 Mr. Rosado was not in the office at that time,
18 asking her to type my draft of the letter onto the
19 union letterhead.
20 Q Do you know whether or not
21 Mr. Rosado received this letter?
22 A Yes. He referred to it later to me.
23 Q Did Mr. Rosado ultimately sign this
24 letter?
25 A No, he didn't. He told me the
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2 letter was fine, but he wanted to put it in his
3 own words.
4 Q At this point in your mind did you
5 see this as complicated as it appeared?
6 A No. This was a very simple thing.
7 It told how I was a Trustee as of July 27th.
8 Mr. Gambardella was removed as of then. It would
9 seem a rather simple matter to confirm it in
10 writing.
11 Q How would you characterize the tone
12 of your conversation with Mr. Gambardella?
13 A Mr. Gambardella.
14 Q I am sorry, Mr. Rosado.
15 A Well, I was frankly a little upset
16 about what had happened because I was a Trustee
17 and I was unseated and Mr. Rosado and
18 Mr. Gambardella had cooperated in unseating me.
19 So I was agitated with him.
20 Q Going back to the question of
21 whether or not Mr. Rosado ultimately sent this
22 letter.
23 A No, he did not.
24 Q Did there come a point where you
25 tried to determine the reason for that?
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2 A No, a couple of days passed and I
3 didn't receive it. And so I decided I probably
4 wasn't going to get it.
5 Q Did you call him up with respect to
6 that letter?
7 A This letter?
8 Q Yes.
9 A The one I prepared, yes, that is
10 when he told me it was fine with him except he
11 wanted to say it in his own words.
12 THE HEARING OFFICER: Did he
13 eventually ever say it in his own
14 words?
15 THE WITNESS: Not that I saw.
16 THE HEARING OFFICER: Okay,
17 Mr. Slevin, we have been going an hour
18 and a half. Let us give the reporter
19 a couple minues break. So shall we
20 take a ten-minute break?
21 MR. SLEVIN: Yes.
22