The District Council’s centralized administration of the job referral system did not eliminate charges of corruption, however. In July 2001 (i.e., approximately eighteen months after the UBC’s trusteeship ended), Local 608 member Eugene Clarke filed a complaint with the

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³    Specifically, the IRO had charged that Forde, while business manager of Local 608 in 1997, had “referred members of Local 608 to work as shop stewards who were not eligible for such referrals, including by jumping certain favored members ahead of others on the out-of-work list.” (See IRO Eighth Interim Report (Ex. 9) at 21). Forde resolved the charge by signing a March 1998 settlement agreement in which he agreed not to violate the job referral rules for five years, and to pay a fine of $5000 if he failed to comply. (See IRO Ninth Interim Report (Ex. 10) at 30). Yet Forde, as EST, is now the person ultimately responsible for ensuring the job referral rules’ application. (See District Council By-Laws (Ex. 40) § 12(A)).

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District Council Executive Committee alleging that there continued to be persistent violations of the job referral system by Michael Forde, certain shop stewards, and others, whereby they rigged the system to favor those shop stewards who were political supporters of Forde. Specifically, Clarke contended that, through manipulation of the skills designations included in their profiles on the out-of-work list, favored shop stewards were able to jump ahead of others on the list to get preferred jobs—thereby evading the first-in/first-out job referral system mandated by the Consent Decree. See United States v. District Council, 2002 WL 31873460, at *3-4. In support of this complaint, Clarke pointed to District Council records showing that the stewards in question had changed their skills portfolio on the out-of-work list only hours before dispatch requests were submitted seeking stewards with precisely those newly added skills, with the result that the District Council’s computer matched that steward with the job.

The District Council, however, rejected Clarke’s complaint as unfounded, leading Clarke to file a motion before this Court in January 2002 (which is currently pending) to enforce the Consent Decree. See United States v. District Council, 2002 WL 31873460. In opposition to Clarke’s motion, the District Council filed a report defending the job referrals in question as technically correct under the District Council’s computerized referral system.⁴ (District Council’s Investigative Report (Ex. 13) at 20). In countering Clarke’s allegations of ongoing corruption, the District Council’s report also advised this Court that it had created an “anticorruption committee” which meets regularly to address allegations of corruption, and that the Council operated a toll-free “anti-corruption hotline” (the “hotline”), which at the time was

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⁴    The District Council’s investigation into Clarke’s allegation was conducted by Scott Danielson, who supervises the District Council’s OWL office, and Gary Rothman, a lawyer with O’Dwyer & Bernstien, LLP. (Scarvalone Decl. ¶ 5).

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supervised by the Barry Security firm, for receiving tips from carpenters. (Decl. of Scott C. Danielson in Opp. to Clarke Mot., Jan. 28, 2002, ¶ 17).

In view of the serious allegations raised by Clarke’s motion, the Government entered into discussions with the District Council early in 2002 to put in place a mechanism to address the issues raised by Clarke’s motion. (Scarvalone Decl. ¶ 8). In the Government’s view, there were two major areas of concern: first, the job referral rules required modification because, despite the passage of eight years since the Consent Decree’s entry in 1994, shop stewards and other carpenters were still able to “rig the system” in violation of the Consent Decree. (Id. ¶ 10). Second, the District Council lacked any truly independent investigator responsible for looking into allegations of corruption. (Id. ¶¶ 5-7).⁵

D. The Court’s Entry of the December 2002 Stipulation and Order Appointing Walter Mack as Independent Investigator

The Government’s discussions with the District Council culminated in the modifications to the Consent Decree memorialized in the Stipulation and Order entered by the Court on December 18, 2002 (the “Stipulation and Order”). The Stipulation and Order modified the job referral rules to make it harder for shop stewards to manipulate their skills set to get referrals.

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⁵   Barry Security was not, in the Government’s view, an independent investigator. (Scarvalone Decl. ¶ 7). In the course of the Government’s discussions with the District Council, Government counsel learned that Barry Security, in addition to operating the hotline, had a lucrative contract with the District Council to provide security guards at the District Council’s headquarters. (Id.). Moreover, Barry’s role in managing the hotline was ad hoc. Neither Barry nor the District Council could locate any retention agreement or any other document outlining Barry’s investigatory responsibilities or any protocols for running the hotline or investigating or memorializing allegations of corruption. (Id.). The need for an independent investigator was also underscored by the District Council’s response to Clarke’s motion: Clarke’s allegations were leveled directly at EST Michael Forde, yet, in the absence of any independent investigator, Clarke’s allegations were investigated by a District Council officer employed at Forde’s will, and an O’Dwyer & Bernstein lawyer retained by Forde. (Id. ¶ 6).

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(Stipulation and Order (Ex. 14) ¶ 1). The Stipulation and Order also appointed Mack to a minimum two-year term as Independent Investigator. (Stipulation and Order (Ex. 14) ¶ 9).⁶

Significantly, it was the District Council that proposed Mack to the Government to serve in the role of Independent Investigator. Indeed, Mack was the first and only person proposed to the Government for the position. (Scarvalone Decl. ¶ 9).

By its terms, the Stipulation and Order broadly authorized Independent Investigator Mack to, among other things, “investigate allegations of wrongdoing concerning the operation of the job referral system and/or corruption or violations of federal, state, or local law” (Stipulation and Order (Ex. 14) ¶ 6(a)); review the District Council’s books and records (id. ¶ 6(c)); interview and depose carpenters (id. ¶ 6(b)); subpoena testimony and documents from third parties (id.); operate the anti-corruption hotline (id. ¶ 6(e)); assess the competency of the District Council’s anti-corruption program (id. ¶ 6(f)); refer charges to the District Council to initiate discipline of any member (id. ¶ 6(h)); and issue reports to the Court and parties (id. ¶ 6(i)). The Stipulation and Order provided that, after Mack completed his “initial” 24-month term, the District Council “may issue a sixty-day notice of termination, or may continue to retain the Independent Investigator’s services.” (Id. ¶ 9).⁷

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E. The Substantial Evidence of Consent Decree Violations and Corruption Uncovered by the Independent Investigator

Mack’s tenure as Independent Investigator to date has been marked by intensive information-gathering. Mack has interviewed scores of carpenters, conducted job site visits, taken video surveillance, and attended the District Council’s weekly anti-corruption meetings. In the course of his investigations, Mack has also deposed dozens of individuals, including carpenters, shop stewards, business agents, and contractors. (Scarvalone Decl. ¶ 11). At those depositions, Mack has marked as exhibits hundreds of District Council records, including shop steward reports, job referral records, and Benefits Funds records. (Id.). Moreover, the Independent Investigator has published three reports containing multiple findings: a June 15, 2004 report on the functioning of the District Council’s anti-corruption program (“Anti-Corruption Report”); a June 29, 2004 report concerning the manipulations of the job referral system by shop steward John Corrigan (“Corrigan Report”); and a November 5, 2004 report addressing the extent to which the “special request” system has undermined the job referral rules (“Special Request Report”). Accordingly, there is a considerable body of evidence now available regarding the practical operation of the job referral system, the state of District Council’s anticorruption efforts, and evidence of corruption.

1. Evidence of Substantial Violations of the Job Referral Rules by District Council Business Agents, Shop Stewards, and Carpenters

Mack’s investigations have revealed that violations of the Consent Decree’s job referral rules have been widespread, particularly in the years immediately preceding his appointment. As described below, the evidence show that shop stewards and carpenters—often acting in concert with business agents and contractors—have rigged job referrals in many ways, including by manipulating their skills profiles on the out-of-work list, adding bogus skills to their profiles, “riding” the out-of-work list when they were not actually working, obtaining suspicious “immediate dispatches” to jobs, and arranging to be “specially requested” by contractors.⁸

One of the most flagrant examples of job referral violations uncovered by Mack involves shop steward John Corrigan, who was the subject of Mack’s Corrigan Report. As described in Mack’s evidentiary findings, John Corrigan routinely obtained lucrative, long-term steward assignments by adding a bogus “40-hour OSHA” skill to his skills portfolio, and by tailoring his profile to meet precisely the dispatch requests that contractors with whom he was colluding would then submit to the OWL office. (Corrigan Report (Ex. 16) at 5-19, 20-22). As recently as February 2003, Corrigan was dispatched by the OWL office to the Sorbara Construction job rebuilding 7 World Trade Center because of the 40-hour OSHA skill. (Id. at 7-10). Yet, as Mack discovered simply by making a few telephone calls, there is no such thing as a “40-hour OSHA” skill. (Id. at 3). Nevertheless, John Corrigan and one other steward, Joseph Connelly, were permitted over a period of years to list this bogus skill in the District Council’s job referral database, and use it to gain an “enormous advantage” over other shop stewards waiting on the out-of-work list. (Id. at 5).

As Mack found, the evidence further suggested that District Council business agents “were complicit in Corrigan’s and Connolly’s machinations.” (Id. at 20). Corrigan admitted that he was assigned to a Trump site for R&J Construction after “the powers that be” determined that he was “best suited” for the job. (Corrigan Dep. (Ex. 21) at 90-93; see Corrigan Report (Ex. 16)

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at 15-17 (describing explanations given by business agent Joseph Firth and business manager John Greaney); id. Exhibit B (Memorandum of Greaney interview)). Similarly, shop steward Ron Rawald conceded at his deposition that he obtained desirable, long-lasting job assignments by adding and deleting skills at the advice of a Local 608 business agent who was helping Rawald get assigned to particular jobs. (Rawald Dep. (Ex. 29) at 54-57, 61-63, 68-71, 113). As Rawald explained, “I was given a heads-up” by the business agent as to what skills to add or delete (id. at 57); “Jerry was my business agent, and he’s the one that kept me working, and when he would advise me to do something, I would do it” (id. at 113).

Meanwhile, shop steward Michael Dolphin colluded with a company called Prince Carpentry to ensure that he would repeatedly be assigned as shop steward to Prince jobs. Dolphin admitted at his deposition that he had discussed with Prince what skills he should list on his skills portfolio in order to have his skills match those that Prince was requesting from the OWL office, and he even discussed with Prince how a dispatch request should be timed in order to result in Dolphin being assigned by the OWL computer system. (Dolphin Dep. (Ex. 23) at 4041, 54). For example, Dolphin said that he once obtained a year-long job for Prince by adding a “refrigeration” skill to his portfolio, which then became one of the skills Prince requested in its steward request—notwithstanding that there was no need for any refrigeration work on that job. (Id. at 59-61, 65-67).

Mack’s depositions also revealed that stewards and carpenters have frequently put their names on the out-of-work list when they were, in fact, employed—otherwise known as “riding the list.” (Rawald Dep. (Ex. 29) at 60, 105-07, 112, 123-24; Anthony Arguelles Dep. (Ex. 18) at 83-86, 89-91, 312, 360; Michael Nee Dep. (Ex. 28) at 37-39, 93-94, 134-36; Patrick Lynch Dep.

(Ex. 27) at 44-46, 81-85, 105-08, 116-17, 126-28, 143-44, 222-24). Riding the list has been a common practice, according to shop steward Michael Nee. (Nee Dep. (Ex. 28) at 95 (“it was the thing to do”)). Ron Rawald, for example, “rode the list” from February 18, 2000, to May 2000, when he was employed by Component Contracting, and again from March 5, 2002, to April 8, 2002, when he was waiting for a dispatch to a desirable job for Donaldson Acoustics that eventually lasted nine months. (Rawald Dep. (Ex. 29) at 36-43, 51, 57-60, 105-07, 112, 122-24). By riding the list in this manner, Rawald was able, in his words, “to beat the system.” (Id. at 124). Similarly, shop steward Anthony Arguelles admitted to “riding the list” on several occasions 1998-2002, which practice enabled him to obtain referrals to desirable, long-lasting job assignments (Arguelles Dep. (Ex. 18) at 83-86, 89-90, 133-35, 155-57, 263-64, 312), including a two-year assignment for Prince Carpentry, which he labeled “a home run job” (id. at 360-62, 372).

Evidence gathered by Mack suggests that “immediate dispatch” requests are yet another tool for manipulating the job referral rules, resulting in stewards being able to engineer their assignment to desirable, long-lasting jobs. Michael Brennan, who has been referred consistently to the same contractor (OnPar) since October 2000, obtained what proved to be a three-year assignment at a major construction project (Times Square Tower) by means of a such an “immediate dispatch” request, which he himself termed “unusual.” (Brennan Dep. (Ex. 19) at 170-74; see also id. at 36). Likewise, Michael Nee obtained a desirable assignment to a major high-rise construction project by means of a “immediate dispatch” request that was telephoned in only minutes after Nee spoke with the contractor about his availability. (Nee Dep. (Ex. 28) at 151-60; see also Lynch Dep. (Ex. 27) at 178 (Lynch admittedly “knew that the dispatch was coming”)).

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None of these stewards could explain why their jobs—both major projects for which the need for a steward would have been anticipated days (if not weeks) earlier—would have been telephoned in to the District Council as an immediate dispatch. (Brennan Dep. (Ex. 19) at 174 (“no idea”); Lynch Dep. (Ex. 27) at 171-72 (“a mystery”); Nee Dep. (Ex. 28) at 160 (“no idea”)).⁹
 

2. Evidence of the District Council’s Failure to Investigate Job Referral Violations

The evidence further indicates that, prior to Mack’s appointment in 2002, the District Council often did little to investigate or punish even flagrant violations of the job referral rules. Particularly telling is the District Council’s failure to catch the bogus 40-hour OSHA skill at any point prior to Mack’s 2003 investigation. As Mack reported to this Court, “[e]ven the most superficial inquiry—talking to an OSHA representative and to the Carpenter’s own Director of its training arm—would have disclosed that there is no 40-hour OSHA skill and, one would hope, triggered some investigative scrutiny.” (Corrigan Report (Ex. 16) at 6). Indeed, the District Council has no explanation for how its out-of-work office adopted “40-hour OSHA” as an approved skill without any investigation into the legitimacy of that skill. (Id. at 2, n.2). Moreover, business agents repeatedly called in dispatch requests listing the bogus 40-hour OSHA skill; they did this even though “no one whom [Mack later] deposed or questioned could tell [Mack] what a 40-hour OSHA certificate was or what it signified.” (Id. at 3).

That the District Council failed to make such inquiries is even more striking because the

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⁹    Brennan repeatedly asserted his fifth amendment privilege against self-incrimination with regard to the accuracy of the shop steward reports he prepared during the course of that lengthy job assignment. (Brennan Dep. (Ex. 19) at 181-84). Brennan also asserted the fifth amendment with respect to his prior experiences working as a shop steward for OnPar. (Brennan Dep. (Ex. 19) at 110-11, 115-16 (18 Leonard Street job); id. at 136-38 (130 West 34th Street job)).

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40-hour OSHA requirement was squarely placed at issue by Eugene Clarke’s allegations, which called special attention to John Corrigan’s referral history. See United States v. District Council, 2002 WL 31873460, at *4. As Mack has pointed out, in response to Eugene Clarke’s allegations, the District Council blindly relied on the 40-hour OSHA certification to justify Corrigan’s dispatches, without any further investigation—notwithstanding the unusual nature of that skill, and its role in determining Corrigan’s repeated assignments to desirable jobs. (Corrigan Report (Ex. 16) at 17, 21 (quoting District Council’s Investigative Report (Ex. 13) at 7 (“Corrigan’s 40-hour OSHA certification alone can explain this dispatch as convincingly as any other reason.”))). Accordingly, Mack found the District Council guilty of “at the very least negligence” in permitting the bogus 40-hour OSHA schemes to occur, and he moreover questioned the District Council’s “commitment to oversee the OWL with meticulous care, particularly since the issue had been brought to the District Council’s attention.” (Id.. at 21).

Moreover, given that many shop stewards were repeatedly assigned to jobs for the same contractor, it must have been obvious to business agents or other District Council representatives that this was no coincidence. If the job referral system worked in the neutral way intended, it is exceedingly improbable that any shop steward would be assigned to consecutive jobs for the same contractor. (Declaration of Michael Billelo, dated February 20, 2005 (“Billello Decl.”) ¶ 9). Yet, prior to Mack’s appointment, the District Council apparently did nothing to investigate this phenomenon.

Similarly, despite rampant and easily ascertainable evidence that carpenters were “riding the list,” those carpenters deposed by Mack on this subject testified that no one from the District Council had ever questioned them about, let alone disciplined them for, such conduct. (See, e.g.,
 

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Rawald Dep. (Ex. 29) at 96; Arguelles Dep. (Ex. 18) at 39; Dolphin Dep. (Ex. 23) at 101-02). Indeed, not only was Rawald not disciplined for his out-of-work list violations, he was promoted by Forde to the position of District Council organizer in May 2003. (Rawald Dep. (Ex. 29) at 2528, 128-29; see also Dolphin Dep. (Ex. 23) at 51-52 (Dolphin testifying that he was willing to ride the list because he did not know anyone who had ever been caught by the District Council for doing so, and in any event the District Council’s fine for such conduct was only $100)).

Finally, additional findings by Mack have revealed that the District Council’s anticorruption efforts have had limited effectiveness. Thus, for example, Mack has found a real “need” for union leadership “to pay closer attention to the realities of the job site.” (Anti-Corruption Report (Ex. 15) at 3). Mack has also reported his “fundamental criticism” of the District Council’s anti-corruption program for being too “focused on computer systems and document retrieval without placing sufficient emphasis on whether those systems and documents accurately depict conditions at the job sites themselves.” (Id. at 3). As set forth in Mack’s reports, the District Council’s investigative responses to complaints have been “slow” and, at times, “not effective in ascertaining the truth.” (Id. at 7, 11 (noting “significant backlog” in anticorruption committee’s response to hotline calls referred from Mack’s office for follow-up)). Moreover, Mack found that the District Council still needs “a system for holding shop stewards accountable”—a system “still only in its inception.” (Id. at 4).

3. Mack’s Revelation of Long-Standing “Cash Jobs,” Indicating that District Council Business Agents Have Been Negligent in Failing to Uncover Corruption

Mack has also uncovered overwhelming evidence demonstrating the extent to which certain contractors (such as Boom Construction and Tri-Built Construction) have been able

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routinely to operate large “cash” jobs on major construction sites—where carpenters are paid off the books, without union benefits, in violation of collective bargaining agreements—without detection by the District Council. This information is the subject of pending investigative reports (see Letter of Walter Mack to Hon. Charles S. Haight, Jr., Jan. 18, 2005 (Ex. 39), at 3), the substance of which has been reflected in depositions conducted by Mack. (See Scarvalone Decl. ¶¶ 12, 16). The depositions taken by Mack reveal that these contractors have been able to run these large cash jobs through the complicity of the particular shop steward assigned to the job. (Id. ¶ 16).

Shop stewards are not solely to blame, however. As Local 157 member Michael Billelo explains in his declaration, “[w]hile the shop steward is the union’s first line of defense against corruption on the job site, the business agent is supposed to be the second line of defense.”

[T]he fact that Mack is uncovering big cash jobs tells you that the District Council’s business agents have not been doing their jobs. No business agent is so incompetent that, if a major cash job is going on in his district, he can’t find it.

(Billelo Decl. ¶ 5). Billelo speaks to this subject from experience, as he himself worked as a business agent in 1998 and 1999. (Id.). As Billelo describes, during that time, “I uncovered and shut down a number of cash jobs—simply by doing my job and being vigilant. I walked the job site regularly; I personally checked the employees on the site against the shop steward report and against the amount of benefits being paid; and I removed the shop steward when I detected a problem. While I thought of this as just doing my job, in reality I was one of very few business agents—then or now—who took this anti-corruption role seriously.” (Id.).

Billelo’s comments about business agents are echoed by other carpenters’ testimony. (See, e.g., Chester Simon Dep. (Ex. 30) 121-22; Hank Simon Dep. (Ex. 31) 100-03; Eamon

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Johnston Dep. (Ex. 26) at 86-92). According to Chester Simon, who admitted to working several “cash jobs” for Boom Construction, it should have been obvious to any business agent visiting the job site that there were far more carpenters working there than were listed on the shop steward report. (Chester Simon Dep. (Ex. 30) at 121 (stating that if business agents see “twenty, thirty guys” on the job, and then see a shop steward report listing fifteen carpenters, they “would have to know something is wrong”). Carpenter Hank Simon used the following analogy to make the same point:

A	Imagine we are building this table, right, all these six bottles are building the table. It takes thirty bottles to build that table, but there are only six. Say you’re the business agent, you come in, you see six bottles building the table, on the sheet [i.e., the shop steward report] or whatever; to build the table, you know yourself for the table to be finished in a week, it takes thirty bottles.10
Q	Why shouldn’t the business agent be alerted to that situation?
A.	Right . . . .

 (Hank Simon Dep. (Ex. 31) at 102).

In the case of the numerous cash jobs run by Tri-Built Construction, foreman Eamon Johnston testified that the business agent who visited Tri-Built’s job at Kings County Hospital failed to check workers’ union cards against the shop steward reports, to verify that all carpenters on the site were listed. (Johnston Dep. (Ex. 26) at 87-88). Had the agent done so, he would have discovered that some of the workers “carded” were actually being paid off the books. (Id. at 8692). Likewise, due to a lack of diligence, the business agents from Local 608 who visited another

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TriBuilt job, at Fordham University, never raised any questions about the accuracy of the shop steward reports, even though roughly half of TriBuilt’s carpenters were being paid off the books. (Id. at 78-80; see also id. 65-67; Hank Simon Dep. (Ex. 31) at 102-03 (Simon similarly testifying that business agents who visited Boom construction sites were not diligent in checking workers’ union cards)).