Court Order appointin Unitel NY Carpenters DC Independent Investigator

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA,

Plaintiff,

-against-

DISTRICT COUNCIL OF NEW YORK CITY AND VICINITY OF THE UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, et al,,

Defendants.

90 Civ. 5722 (CSH)

ORDER

WHEREAS, on or about December 18, 2002, the Court entered a Stipulation and Order (the "December 18, 2002 Stipulation and Order") between the parties that provided, inter alia, for the appointment of an Independent Investigator with respect to the proper implementation of the job referral rules affecting carpenters and shop stewards; and

WHEREAS, by Summary Memorandum and Order entered on April 22, 2005, the Court held that the District Council exercised its right under the December 18, 2002 Stipulation and Order to terminate the services of Walter Mack, Esq., as Independent Investigator after having served as Independent Investigator for 24 months; and

WHEREAS, the Court further ordered that the position of the Independent Investigator as constituted pursuant to the December 18, 2002 Stipulation and Order be continued with a "successor [Independent Investigator] having all the responsibilities previously wielded by Mr. Mack ";

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows:

Appointment of Unitel Intelligence Groups Inc. as Successor Independent Investigator. The District Council shall appoint Unitel Intelligence Group, Inc., d/b/a Unitel, as successor Independent Investigator effective as of the date of entry of this Order, upon the following terms and conditions,
Role of Independent Investigator, The Independent Investigator shall have the following authority, rights and responsibilities:

a. General Authority. The Independent Investigator shall have the authority to investigate allegations of wrongdoing concerning the operation of the job referral system, and/or corruption or violations of federal, state, or local law by District Council representatives, including without limitation officers, employees, delegates, business managers, business representatives and shop stewards (hereinafter, "District Council Representatives"), or District Council signatory contractors; to recommend disciplinary charges against District Council Representatives as well as against officers, employees and members of the constituent local unions for such wrongdoing or for the failure of any officer or member to cooperate with the Independent Investigator; to make referrals to the District Council and/or law enforcement agencies for further investigation when appropriate; and to report to the Court and/or the Government as appropriate. "Wrongdoing" as used in the foregoing sentence shall include, without limitation, (i) manipulation of the job referral rules for political or personal gain; (ii) falsified reports, including without limitation shop steward reports; (iii) kickbacks and bribes; and (iv) permitting contractors to pay workers in cash or violate the "50/50 rule. " The Independent Investigator shall operate the toll-free "hotline" telephone service (formerly

operated by Walter Mack, Esq.) in order to solicit and receive allegations of wrongdoing or corruption by any person in connection with the operations of the District Council, whether or not such allegations relate to the job referral system. The Independent Investigator shall conduct an assessment of the District Council's anti-corruption efforts as set forth in paragraph 2(f) infra.

When the Independent Investigator receives complaints or grievances that, in his judgment, are garden-variety collective bargaining agreement issues that do not implicate corruption, organized crime influence, or the fair administration of the job referral rules, the Independent Investigator is encouraged to refer those matters to the District Council's Director of Operations for resolution. The Independent Investigator shall maintain a record of all such referred matters.

In 2001, a member of the Union filed a complaint with the District Council and a subsequent motion in federal court challenging certain shop steward job referrals from the out-of-work list (hereinafter the "Clarke Complaint" or "Clarke Motion"). The Independent Investigator shall not have authority to investigate any of the specific factual allegations contained in the Clarke Complaint and/or the Clarke Motion; provided however that when investigating any person or allegation, the Independent Investigator in his discretion may investigate any facts or circumstances he deems relevant to the pending investigation, regardless of whether those facts or circumstances were the subject of an allegation raised in the Clarke Complaint and/or Clarke Motion,

b. Investigative Powers. The Independent Investigator shall have the authority to take such reasonable steps as are lawful and necessary to be informed fully about the operation of the job referral system, District Council activities related to the job referral system, and

jobsites. Without limitation, the Independent Investigator shall have the authority, (i) to interview and to take and require the sworn statement or sworn oral deposition consistent with

the Federal Rules of Civil Procedure of any District Council Representative, or officer,

employee, or member of the constituent locals, concerning any matter within the Independent

Investigator's authority; and (ii) upon application to the Court, to issue subpoenas for testimony and/or documents from any person or entity. The parties shall be invited to attend all depositions, unless the Independent Investigator determines that a particular witness should be

deposed without either party being present. For each deposition that the parties are invited to attend, the parties shall be provided copies of the exhibits and the transcript, the costs of which are to be paid by each party.

Access to Books, Records and Personnel. In furtherance of the authority set forth in paragraph 2(a), above, the Independent Investigator shall have access to, and the right to make copies of, during normal business hours, all books and records of the District Council, its constituent locals, and the union-related books and records of their officers, representatives, investigators, and agents. Requests for all records shall be submitted by fax or other writing to the Director of Operations, or his designee, who shall respond to such request or supply such documentation as promptly as practicable, consistent with the smooth operation of the District Council and job referral department. District Council Representatives, as well as officers, employees, or members of the constituent locals, are required to cooperate in any investigation in which their cooperation is sought.
Referral of Matters To the Independent Investigator. District Council Representatives, including without limitation the Out of Work List ("OWL") Supervisor, employees of the OWL office, and Business Managers and Business Representatives, shall

promptly report to the Independent Investigator (i) any actual or suspected violations of the job referral rules; (ii) any actual or suspected violations of local, state or federal law, and/or acts of wrongdoing or corruption, in connection with the job referral system, District Council activities

related to the job referral system, or jobsites; and (iii) any actual or suspected improper

circumvention of the job referral rules. "Wrongdoing" as used in the foregoing sentence shall include, without limitation, (i) manipulation of the job referral rules for political or personal gain;

(ii) falsified reports, including without limitation shop steward reports; (iii) kickbacks and bribes; and (iv) permitting contractors to pay workers in cash or violate the "50/50 rule." Furthermore, the District Council, at its discretion, may refer other matters to the Independent Investigator for investigation.

The Independent Investigator, in his discretion, may accept a matter for investigation or may decline to investigate. In the event the Independent Investigator informs the District Council that he will investigate a matter, neither the District Council nor any District Council Representative will take any action with respect to the matter unless authorized to do so by the Independent Investigator. If the Independent Investigator declines the matter for investigation, then the District Council can investigate, decline to investigate, or appoint someone else to investigate, at the District Council's discretion.

e. Operation of the Anti-Corruption-Hotline Service. The Independent Investigator shall be responsible for operating the toll-free hotline service (formerly operated by Walter Mack, Esq.) in order to solicit and receive allegations of wrongdoing or corruption by any person(s) in connection with the operations of the District Council. The hotline shall be staffed by a live operator for no less than ten hours each business day. The Independent Investigator shall be responsible for logging, and keeping written records of, all calls made to the hotline and

the nature of the allegations called in, Calls to the hotline may be received on an anonymous basis. The Independent Investigator, in his discretion, may make reasonable revisions to the current intake procedures for receipt of calls to the hotline. The Independent Investigator shall promptly notify the District Council of such revisions, Furthermore, the Independent Investigator shall follow the following procedures with respect to handling calls received by the hotline.

Hotline Calls Concerning Matters Within the Independent Investigator's Authority to Investigate. When calls made to the hotline concern, in whole or part, allegations within the scope of the Independent Investigator's investigative authority as set forth in paragraph 2(a) above, the Independent Investigator may, in his discretion, accept the matter for investigation. If the matter is accepted, the Independent Investigator shall promptly open an investigation of the allegations. The Independent Investigator need not disclose the subject of the allegations being investigated to any person while the investigation is pending; however, the Independent Investigator, at his discretion, may disclose the matter to any District Council Representative, governmental or law enforcement authority, or other person. The outcome of any investigation opened by the Independent Investigator in response to a hotline call shall be reported to the District Council and the Government in accordance with paragraph 2(i) infra. If the Independent Investigator declines to accept for investigation allegations called into the hotline that are within his authority to investigate, then he shall refer the allegations to the District Council to pursue as it sees fit,
Consideration of Collection Interests of the Union and Benefit Funds. In the course of conducting his investigation(s), the Independent Investigator, consistent with his investigative responsibilities, should consider reasonable measures to avoid prejudicing the

interests of the Union and its affiliated Benefits Funds to recover monies due and owing to them on behalf of their members and participants as a result of plans or schemes to avoid the payment of proper wages or benefit fund contributions; provided, however, that the Independent Investigator is not required to adopt any such measures if, in his judgment, such measures would compromise or jeopardize an ongoing investigation.

Hotline Calls Concerning Matters Not Within the Independent Investigator's Authority to Investigate. If, after logging a call made to the hotline, the Independent Investigator determines that the nature of the call falls outside the scope of his investigative authority as set forth above, then the Independent Investigator shall refer those allegations to the District Council. Prior to making that referral, the Independent Investigator shall advise the caller (if the caller provided his/her name and contact information) that the allegations are outside the scope of the Independent Investigator's authority and will be referred to the District Council for follow-up. The caller will then be given the choice to have the allegations referred to the District Council on an anonymous basis, or with the name of the caller identified. Nothing herein shall prevent the Independent Investigator from reporting any call, regardless of the nature of the allegations, to any law enforcement or governmental authority, as the Independent Investigator deems appropriate.
Referral to Other Entities. The Independent Investigator shall have the discretion to refer matters to law enforcement, or other agencies or individuals charged with the obligation of investigating organized crime influence, corruption or other wrongdoing, where appropriate in his judgment to do so. The Independent Investigator should, at the earliest appropriate time in his judgment, inform the District Council of misfeasance or malfeasance by any District Council Representative or employee of its affiliated Benefit Funds; provided,

however, that the Independent Investigator is not required to do so if, in his judgment, it would compromise or jeopardize an ongoing investigation.

Retention of Records Relating to Hotline. The Independent Investigator shall maintain a central file reflecting all calls received by the hotline, and indicating which of those calls were (i) accepted for investigation by the Independent Investigator, (ii) declined for investigation by the Independent Investigator and referred to the District Council, or (iii) referred by the Independent Investigator to the District Council as matters outside of the Independent Investigator's scope of authority to investigate.
Reporting to the Parties, The Independent Investigator shall provide the District Council and the Government with a summary statement, no less frequently than monthly, setting forth (i) all matters the Investigator determines fall outside the scope of his investigative authority as provided in sub-paragraph 3 above, and (ii) a brief description of matters that the Independent Investigator has accepted for investigation pursuant to his authority under paragraph 2(a) above; provided however that the Independent Investigator shall not be required to disclose to the District Council and the Government information that the Independent Investigator believes would compromise the investigation, such as (without limitation) the names) of the complainant(s), the name(s) of the target(s), the job location(s) or worksite(s) at issue, the local union(s) involved, the contractor(s) involved, or the particular job referral(s) at issue. In addition, the Government shall be copied on all written communications between the District Council and the Independent Investigator concerning the Independent Investigator's job performance and/or billing disputes.

f. Assessment of the District Council's Anti-Corruption Program. The Independent Investigator shall conduct an assessment of the overall functioning and effectiveness of the

District Council's anti-corruption efforts. This will include evaluation of the operation and effectiveness of (1) the District Council's Anti-Corruption Committee, (2) the toll-free hotline, (3) the District Council's efforts to investigate allegations of wrongdoing or corruption by District Council Representatives, union members or other persons (i.e. outside contractors), (4) the District Council's efforts to detect and address violations of the job referral system, (5) the District Council's efforts to discipline acts of wrongdoing or corruption by District Council Representatives or union members, and (6) any other area or factor relevant for the Independent Investigator to fully assess the District Council's ongoing efforts at deterring, detecting, and addressing wrongdoing and corruption by District Council Representatives and Union members. The Independent Investigator's assessment will also evaluate whether members have confidence in the District Council's anti-corruption efforts, and whether members feel free to report allegations of corruption, or fear reprisal for such reports.

To facilitate this assessment, the Independent Investigator shall have access to all persons, books and records as set forth in paragraphs 2(b) and 2(c) above. The Independent Investigator shall be invited to attend all meetings of the District Council's Anti-Corruption Committee, and may, at his request or by invitation, attend any meetings of the District Council Executive Committee to address any matters under his jurisdiction.

Prior to the expiration of his first year of retention, the Independent Investigator shall issue a report to the District Council setting forth the findings of his assessment and his recommendations. A copy of the report shall be provided to the Government and the Court. The District Council and the Government are free to solicit, at any time, the Independent Investigator's interim advice or opinion regarding the District Council's anti-corruption efforts.

g. Engagement of Necessary Personnel. The Independent Investigator shall have the authority to employ or engage the services of any personnel necessary to assist in the proper discharge of the Independent Investigator's duties, within the limits of the budget set forth in

paragraph 3 infra, and provided that the Independent Investigator shall not employ or engage the services of former employees of the District Council, the Labor Management Cooperation Fund, or the New York City District Council of Carpenters Benefit Funds.

h, Disciplinary Authority, The Independent Investigator shall have the right to refer charges to the District Council to initiate and prosecute any member of the District Council and its constituent locals. The charges, trial procedures, and punishments shall be as set forth in Section 28 of the District Council By-Laws. In the event a streamlined shop steward review procedure is instituted, the Independent Investigator shall have the right to refer charges or complaints against shop stewards through that process and make recommendations for sanctions in that process.

i. Reporting by the Independent Investigator. The Independent Investigator shall issue a written report to the District Council, the Government and the Court at the close of each matter investigated regarding the Independent Investigator's finding. Furthermore, the Independent Investigator may report to the District Council, governmental agencies and/or the Court, orally or in writing, as the Independent Investigator deems appropriate. The Independent Investigator shall provide to the Court, the District Council and the Government summary status updates of his activities every two months.

In addition to the reports required in this paragraph, the Independent Investigator is directed to file with the Court in camera with respect to the activities of all individuals performing services pursuant to this Order copies of contemporaneous time records which satisfy

the requirements for attorneys' fees set forth in Nat'l Assoc. for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (1983), These records are to accompany the status report called for by the preceding paragraph. They will be released by the Court to the parties upon the application of a party upon a showing of good cause, or in the exercise of the Court's discretion.

j. Communication with Membership, An announcement regarding the retention of the Independent Investigator, in a form to be agreed upon in advance by the District Council, the Government, and the Independent Investigator, shall be mailed to each current Union member and District Council Representatives. The announcement shall also be published in The Carpenter and on the District Council website. The Anti-Corruption Hotline's toll-free number shall be advertised by the District Council in The Carpenter and on the District Council website. The Independent Investigator may recommend that the District Council issue its written reports to the membership via The Carpenter or the District Council website,

3. Compensation and Expenses. The compensation and expenses of the Independent Investigator, and of all persons hired under his authority, shall be paid by the District Council. The Independent Investigator shall be paid not less than the sum of $35,000 per month, which shall include operation of the toll-free hotline, attendance at meetings of the District Council Anti-Corruption Committee, attendance at anti-corruption interviews and routine investigations. After the initial six-month period, the parties will confer regarding the appropriate monthly compensation for services of the Independent Investigator. In the event the parties are unable to agree, the Independent Investigator may apply to the Court for a determination of the appropriate monthly compensation.

In the event special investigations or processes are deemed necessary (including, but not limited to, surveillance and extraordinary field investigations), the Independent Investigator may

request additional funds to accomplish same. In the event the Independent Investigator and the District Council are unable to agree with respect to the payment for such special investigations or processes, either party may apply to the Court for appropriate relief.

The Independent Investigator shall provide the District Council with an itemized statement of his expenses and compensation each month, which the District Council agrees to pay no later than thirty (30) days after receipt of each monthly bill, Usual and customary office expenses, such as photocopying, postage and transcript fees, of the Independent Investigator, will be reimbursed by the District Council at cost. Any amounts within the applicable monthly limit not expended in the month billed shall be available for reimbursement to the Independent Investigator in other months.

Indemnification. The District Council shall purchase a policy of insurance and/or bonds in an appropriate amount to protect the Independent Investigator and any persons hired by or acting on his behalf from personal liability. Alternatively, the District Council can agree to indemnify the Independent Investigator out of its own funds. The District Council shall hold harmless the Independent Investigator from any personal liability for events arising from the performance of the Independent Investigator's duties as set forth herein.
Term. The Independent Investigator shall serve for no less than 24 months from the date of entry of this Order. The District Council may terminate the Independent Investigator within this 24-month period only for just cause, provided that the District Council has (a) provided such notice as may be reasonable under the circumstances to the Independent Investigator and to the Government and (b) obtained the approval of the Government or the Court. In the event the Independent Investigator is terminated for just cause, the District Council will promptly name a suitable replacement to complete the Independent Investigator's term

subject to approval by the Government or an order approving such arrangement to be entered in the referenced matter by United States District Judge Charles S. Haight, Jr. Either party may seek Court review in the event they are unable to agree to the appointment of a replacement Independent Investigator. Not later than thirty (30) days prior to the completion of the 24-month term provided for by this paragraph, the parties are directed to file and serve applications for a further Order (1) continuing the Independent Investigator in office for an additional stated term; or (2) terminating the services of Unitel as Independent Investigator and appointing a successor; or (3) abolishing the office of the Independent Investigator; or (4) such other Order as the parties may be advised to request. These applications must be supported by evidentiary submissions and citations to authority if the circumstances require. Not later than fifteen (15) days after the service of such applications, the parties are directed to file and serve responsive papers. Thereafter, and if necessary, the Court will conduct a hearing. Nothing in this paragraph of this Order prevents the parties from entering into a stipulation concerning this issue, provided that such a stipulation is presented to the Court not later than thirty (30) days prior to the completion of the 24-month term.

6. Retention of Records, No later than one week after his retention, the District Council shall provide the Independent Investigator with (i) a comprehensive records retention schedule applicable to all District Council records and (ii) a report of such records relating to the job referral system, which has been destroyed within the previous twelve months. During the period of the Independent Investigator's term, destruction of any District Council records relating to the job referral system requires prior approval from the Independent Investigator.

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7. Certain Provisions of the December 18, 2002 Stipulation and Order Still In Force and Effect. Paragraphs 1-4 and 11-16 (including all sub-paragraphs thereunder) of the December 18, 2002 Stipulation and Order shall remain in force and effect.

SO ORDERED:

Dated: August_22, 2005

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AUG-24-2005 11:46

CONSENTED TO.

Dated: New York, New York AUGUST 22

AUGUST 2005 DAVID N. KELLY

United States Attorney for the Southern District of New York Attorney for Plaintiff

United States of America

EDWARD SCARVALONE 4880

LISA ZORNBERG (LZ-1299)

BENJAMIN H. TORRANCE (BT-1118) 86 Chambers Street

New York, New York 10007

(212) 637-2734, 2720, 2703

O'DWYER & BERNSTIEN, LLP Attorneys for Defendant

District Council of New York City and Vicinity of The United Brotherhood of Carpenters and Joiners of America

BRIAN O'DWYER (BCD 9922) 52 Duane Street, 5"' Floor

New York, New York 10007 (212) 571-7100

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By:

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