The Consent Decree instituted a number of measures to weed out corruption in the union’s operation. (A copy of the Consent Decree is attached to the Declaration of Benjamin H. Torrance dated August 10, 2005, as Ex. 1).¹ Formal written job referral rules, incorporated into the Consent Decree itself (see Consent Decree (Ex. 1) ¶ 5, Exhibit A), were implemented specifically to ensure that carpenters are assigned work in a fair and impartial matter and to protect against jobs being doled out as a means of solidifying political power or extracting private economic gain. See United States v. District Council, 2002 WL 31873460, at *1-3

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requested by the employer.” (Consent Decree, Exhibit A at Rule 5(A)).

Indeed, the Consent Decree recognizes only one narrow exception to referral based on length of unemployment—namely, an employer may request a specific carpenter off the out-ofwork list, regardless of that carpenter’s priority ranking on the list, if the carpenter had been employed by the employer within the previous six months: “Requests by an employer for specific members employed by the employer within the previous six months shall be fulfilled, as required by applicable collective bargaining agreements.” (Id., Job Referral Rule 5(B)). As the plain language of this provision suggests, the six-month limitation was contained in agreements in effect at the time of the Decree. (See, e.g., Independent Building Construction Agreement, July 1, 1993–June 30, 1996 (Ex. 23), at 18; Building Contractors Association Agreement, July 1, 1993–June 30, 1996 (Ex. 24) at 19).

In his first decision implementing the Consent Decree, IRO Conboy recognized a few other “limited,” permissible exceptions to the first-in/first out system, such as referrals made out of order “in response to a lawful request for a minority or women employee,” but in doing so IRO Conboy reaffirmed “the Consent Decree’s strong preference for list priority.” (IRO Decision No. 1, § F, at pages 5-6; see also IRO First Interim Report at 14). To allow such exceptions from the list-priority system to be “carefully administer[ed] and monitor[ed],” the IRO required the administrator of the out-of-work list to maintain certain supporting documentation. (IRO First Interim Report at 14). Thus, IRO Decision No. 1 required the submission of “a listing of out-of-order referrals made, including the name of person referred, the date of the referral, the reason for the out-of-order referral, and the name and description of the job to which the person was referred,” id. at 6, which listing was to be certified by the appropriate union officer, id. at 7.

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Soon thereafter, IRO Conboy singled out requests for specific carpenters pursuant to Job Referral Rule 5(B) as deserving of additional scrutiny. The IRO determined that when an employer makes a request for a specific carpenter, the employer must submit documentation establishing that the request falls within Rule 5(B), that is, that the carpenter has, in fact, been employed by the employer within the previous six months:

Whenever an employer requests a specific individual pursuant to Section 5(B) of the Job Referral Rules, the request must be in writing and must be received by the local before the requested individual begins the work assignment. The employer must provide either (1) a pay stub reflecting the last date the individual worked for the employer or (2) provide the date in the letter requesting the individual.

(IRO Decision No. 3 (Ex. 3), subsection E, at page 5). The IRO further provided that the employer’s letter be retained for three years and be available for inspection by the IRO upon demand. Id. Such a documentation requirement facilitates the effective monitoring and policing of requests to ensure that they were not abused. (See IRO Decision No. 1, at 6 (“Referrals made pursuant to these exceptions [to the Consent Decree’s list priority system] must be carefully monitored in order to ensure they are not abused”)).

Underlying the job referral rules was the “50/50 rule,” found in all of the District Council’s collective bargaining agreements at the time of the Consent Decree, authorizing the union to assign fifty percent of the carpenter workforce at a job site (with the company designating the other fifty percent). (IRO Second Interim Report (Ex. 5) at 3; see, e.g., Building Contractors Association Agreement, July 1, 1993–June 30, 1996, at 17; see also April 12, 2005 tr. (Ex. 31) at 282). The 50/50 rule (at least when properly enforced, see infra at 12-14) makes the District Council a major source of job opportunities for its members, allowing them to obtain job assignments directly from the union without having to win the favor of a contractor. (See IRO Second Interim Report at 3). Had there been no 50/50 rule in effect at the time of the

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Decree—that is, had the union not been a major source of job opportunities for its members—the parties to the Decree and the IRO would most certainly not have devoted so much of their focus to implementing a fair and corruption-free job referral system.

 The District Council has conceded that it unilaterally amended Job Referral Rule 5(B) in 2001 to eliminate the limitation restricting requests to those carpenters who had worked for the employer within the six-month period immediately prior to the request. The District Council’s concession was made in open court by the union’s president, Peter Thomassen, in testimony received by the Court on April 12, 2005.

As Mr. Thomassen testified, during the 2001 collective bargaining negotiations the union “bargained away” Job Referral Rule 5(B) to make the request system more contractor-friendly. (April 12, 2005 tr. at 281-91). Specifically, the District Council replaced the former rule with a new rule (contained in numerous collective bargaining agreements entered into by the District Council) giving members of certain contractor associations the unfettered right to request any carpenter off the out-of-work list, irrespective of whether that carpenter had worked for the contractor within the prior six months or, indeed, whether he had ever worked for the contractor.

As Mr. Thomassen conceded:

With the associations, it used to be that if an employee was going to be requested, he had to show that he worked for the contractor in the past six months. We took that away and said you could request a carpenter. He didn’t have to work for you in the last six months.

(Id. at 288).

According to Mr. Thomassen, by agreeing to eliminate the six-month provision the union “enhanced the request system for the contractors of the association[s]” (id. at 287), by allowing them “the latitude” to hire whichever carpenters they want, regardless of the 50/50 rule that

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 nominally ensures that the union designate fifty percent of the workforce on the job site (id. at 282, 285-86). By contrast, contractors who are not part of one of the associations—that is, the so-called “independent contractors”—are not permitted to request carpenters under their agreement with the union. (Id. at 288 (“[w]e took the requesting procedure away from the independent contractors, and they have strict 50-50 rules right now today”)). As Thomassen explained, “[t]he only ones who are allowed to request are the associations.” (Id.).²

In eliminating the requirement of Job Referral Rule 5(B) that a requested carpenter have worked for the employer within the past six months, the District Council ignored the Consent Decree’s requirement that the union provide advance notice to the Government. As Thomassen testified:

(April 14, 2005 tr. (Ex. 32) at 339). Nor did the District Council provide the Government any such notice after the fact.

Significantly, at the same time that the District Council was engaged in the collective bargaining negotiations that eliminated Job Referral Rule 5(B)’s restrictions, the union was defending itself against a Government motion alleging that the union had violated the Consent Decree’s requirement of prior notice by implementing a by-law amendment without having obtained the approval of the Government or the Court. (See Order of June 4, 2001 (Ex. 25); see also Docket Sheet, entries 653-659 (reflecting court submissions filed April 4, 2001; April 18, 2001; April 25, 2001; and May 11, 2001)). Indeed, the Court’s Order of June 4, 2001, deciding that motion expressly found that “[i]t was a clear violation of ¶ 12 of the Consent Decree to fail to get the government’s approval before implementing the proposed revision to the By-Laws at ¶ 21(G).” (June 4, 2001 Order, at 14). The Court’s June 4, 2001 Order came just weeks before the District Council finalized its negotiations with the Association of Dry Wall & Ceiling Contractors (see Memorandum, Joseph Olivieri to Association Members, July 2, 2001 (Ex. 26)) culminating in the elimination of the restrictions imposed by Job Referral Rule 5(B).

 The District Council’s decision to negotiate away the requirement that a requested carpenter have worked for the contractor within the prior six months contravened the wishes of the rank-and-file membership. Not only were the carpenters deposed by Mr. Mack universally

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opposed to the request system as currently implemented (see Report on the “50/50” Rule and “Request System” (“Request System Report”) (Ex. 10) at 10-12), but the expansion of the request practice effected by the 2001 bargaining negotiations was expressly opposed by the membership of Local 608, the District Council’s largest local union. As John Greaney, Local 608’s president and also the District Council’s business manager for the local, testified at deposition, prior to the 2002 bargaining negotiations he mailed questionnaires to the Local’s membership to ascertain its views on issues relevant to the bargaining. (Greaney Dep. (Ex. 19) at 11-12, 81). Greaney learned through compiling data from completed questionnaires that the members wanted to “[e]liminate requests.” (Id. at 81-82). Greaney then presented what he termed his membership’s “collective sentiment” to the District Council negotiating committee (id. at 83), but the change was not made (id. at 83-84).

 On November 5, 2004, Independent Investigator Walter Mack issued his Request System Report, revealing the extent to which the request system has not only undermined the job referral rules, but also encouraged evasions of those rules and facilitated job-site corruption. The Report’s findings, which have gone unrebutted by the District Council, have been amply supported by depositions taken by Mr. Mack.³

____________________

³          The District Council wrote two letters taking issue with various aspects of Mr. Mack’s report, but without challenging Mr. Mack’s central findings concerning the extent to which the request system undermines the job referral rules and encourages corruption. (See Letter of Gary Rothman to Walter Mack, Oct. 29, 2004; Letter of Gary Rothman to the Honorable Charles S. Haight, Jr., Nov. 9, 2004). Mr. Thomassen attempted to rebut Mr. Mack’s findings during the recent evidentiary hearing, but by his own admission Mr. Thomassen has no competence or experience as corruption investigator (April 12, 2005 tr. at 307-09).

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1.	The special request system effectively renders the “50/50 rule” a nullity, and permits contractors to hand-pick virtually every carpenter who works on a job.

As Mr. Mack explained in his Report, he had always understood “that the purpose of the OWL is to insure that out of work Carpenters are dispatched to jobs on a non-discriminatory basis.” (Request System Report at 1). Specifically, he had understood “that the ‘50/50’ rule, incorporated in most Carpenter collective bargaining agreements . . . was designed to work with the OWL system so that for half of the Carpenters on any job site, the members who have been out of work the longest are the first to be dispatched.” (Id. at 1-2). Mr. Mack’s understanding proved “wrong.” (Id.).

Notwithstanding that the union’s collective bargaining agreements purport to effectuate a 50/50 rule, whereby the contractor and union each pick fifty percent of the workers on a given job site, the special request system permits an association contractor to select not merely all of the contractor’s fifty-percent share of the workforce, but all of the union’s fifty-percent share as well (with the exception of the shop steward). (Request System Report at 3; see also id. at 1013). This is so because carpenters who are requested off the out-of-work list are designated as “union” for purposes of the 50/50 rule (and therefore included within the union’s fifty-percent share) even though they are hand-picked by the contractor. Thus, as Mr. Mack explains, “it is possible and, indeed, common for a contractor to hand-select the entire crew of Carpenter journeymen.” (Id. at 3; see also id. at 2 (association contractors “routinely choose more than ninety per cent of the Carpenters employed at their sites”)).

As a result, Mr. Mack found, the 50/50 rule, although still reflected in the District Council’s collective bargaining agreements, is “meaningless.” (Id. at 10-13). According to the deposition testimony, the 50/50 rule exists “only on paper.” (Michael Nee Dep. (Ex. 21) at 162).

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“50/50 is 50 percent company, 50 percent union, but with the requests, it is called 50/50 but it is really not 50/50 . . . .” (Robert DeFeo Dep. (Ex. 15) at 154). Because the 50/50 rule is so easily and commonly circumvented by contractors’ hand-picking the union’s fifty percent, one shop steward characterized the rule as “ridiculous.” (Michael Mitchell Dep. (Ex. 20) at 151, 152-54). As Mr. Mack found, requesting has converted the 50/50 rule into “an absurd paperwork dance” in which contractors and union officials alike adhere to a nominal 50/50 requirement that is devoid of any real meaning. (Request System Report at 12; see also id. at 4-5 (describing how contractors switch carpenters from designated “company” workers to “union” workers simply by having the carpenter put his name on the out-of-work list and then requesting him from the list, so that the worker counts as a “union” worker for purposes of the 50/50 rule)).

That the 50/50 rule has been rendered meaningless has led to the undermining of the job referral rules adopted by the Consent Decree, as Mr. Mack has found. The referral rules have as their premise that the District Council’s out-of-work list will be a source of meaningful job opportunities for carpenters. (See supra at 6-7). By effectively eliminating the requirement that fifty percent of the carpenter workforce be referred off the out-of-work list, however, the union has undercut this premise.

As Mr. Mack found, “[t]he Carpenters chosen by association contractors frequently never miss a day of work and, through the operation of the request system, jump over carpenters who often have been on the OWL for months.” (Request System Report at 2; see also Dennis Gimblett Dep. (Ex. 18) at 45 (describing “revolving door” of the same individuals getting referred to jobs, while non-requested carpenters “are sitting on the out-of-work list”)).

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The unfairness created by the request system is obvious. As Mr. Mack found, “permitting contractors to hire only the people they know from the OWL rather than those who have been on the list the longest results in Carpenters who are either new, or have not developed contacts in the industry, or have alienated a contractor . . . being unemployed for lengthy periods of time.” (Request System Report at 21-22). In the words of one carpenter, “you’re not giving the guy who doesn’t know anybody or the guy who just came to the business a fair opportunity, compared to the guys who know people. I don’t think it’s a fair system.” (John Corrigan Dep. (Ex. 14) at 145; see also Anthony Arguelles Dep. (Ex. 12) at 266-67 (“[g]ood carpenters can’t get a job because they don’t have an in with a company”); see also id. at 268 (“as far as everybody getting a fair amount of work, it’s not happening”)).

It is not just new union members, or those without contacts, or those who have alienated a contractor, who are less likely to be requested; older members, too, are less likely to be requested (Gimblett Dep. at 45-46 (“our members over fifty . . . are experiencing age discrimination, because these contractors will also hire a young guy before an old guy”)). By contrast, the 50/50 and “requesting” rules in effect prior to the 2001 bargaining agreements had ensured that older members would get job assignments, as Mr. Thomassen conceded at the recent evidentiary hearing:

[T]he 50/50 ruling was good for us because as our carpenters got older, maybe

they weren’t as much in demand . . . .There is nothing wrong with their brain.

They just didn’t work fast. That was our way of letting those members make a

living also.

(Apr. 12, 2005 tr. at 282) (emphasis supplied).

The widespread use of the request system is not only unfair to the carpenters who sit for

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 months on the out-of-work list without work, but it also leads to corruption of the job site. (Request System Report at 21-22; Report on Unreported Cash Payments to Carpenters by Boom Construction (“Boom Report”) (Ex. 11) at 39-40). As Mr. Mack found:

Permitting contractors to hire only the people they know from the OWL rather

than those who have been on the list the longest . . . deprives the union of having

at the job site Carpenters whose primary loyalty is to the union and its principles

rather than to the contractor, whose principles and objectives may be quite different.

 (Request System Report at 21-22; see also id. at 12). This observation not only comports with common sense, but it is amply supported by deposition testimony of carpenters with first-hand knowledge of how construction sites operate. As carpenter Dennis Gimblett explained, under the request system “[y]ou end up with an inordinate number of individuals who have displaced loyalty to the company; . . . [I]t fosters an environment where the remainder of the agreement can suffer; certain rules may not be enforced . . . [I]t undermines the position of the steward, it separates the legitimate union men from the company men.” (Gimblett Dep. at 126-27; see also Corrigan Dep. at 145 (“[I]f a guy [is] working for a company for years, I don’t think he’s as loyal to the union as he should be”)).

Moreover, as Mack has found and deponents have corroborated, “the request system as it currently operates nurtures abuse” and corruption of the job site. (Boom Report at 39). This is so because “lengthy waits for jobs that are often short-term (as contrasted with the choice jobs offered to contractors’ selectees), make it extremely difficult if not impossible . . . to fend off violations of the CBA.” (Id.). As Mr. Mack explained, “Carpenters cannot afford to take lightly the threat of losing a job—particularly a large, long-term job such as Boom’s jobs at Jacobi [Hospital], Columbia Medical Center and Brooklyn Tabernacle. Because contractors are permitted to select the journeyman they want from the OWL, the waits on the OWL are many

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months long.” (Id. at 18). Given the lengthy wait carpenters face on the out-of-work list, they “often do not have a realistic choice to refuse contractors’ demands that they be paid off the books . . . .” (Id. at 40).

Indeed, the corruption potential presented by the request system is vividly illustrated by Mr. Mack’s recent investigative report concerning Boom Construction. As Mr. Mack reported, Boom routinely paid its carpenter work force in cash, off the books, in order to disguise the fact that the wages they were paying were significantly below the rate mandated by the collective bargaining agreement and to avoid paying fringe benefits. (Id. at 1-2). This practice was only “made possible,” Mack found, “because the union has allowed the out-of-work list to be rendered meaningless” by the special request system. (Id. at 40).

That carpenters beholden to contractors for employment are more likely to engage in or tolerate corrupt job-site practices is demonstrated by the evidentiary record. Carpenter Jeremiah Casey of Local 608 agreed to work off the books for Boom Construction because “you’re not going to get hired or you won’t be kept if you didn’t go ‘off the books’ when you were asked . . . .” (Casey Dep. (Ex. 13) at 200). “If you demanded to stay on the books, they would walk you in and give you a layoff check” so that the contractor could replace him with a carpenter willing to work off the books (id. at 200, 203-06). Casey’s perception was shared by other carpenters who worked off the books for Boom. (See, e.g., Alex Frederick Dep. (Ex.17) at 185 (“I was concerned about being out of work. . . . Not only losing my job there. Where’s the next job?”); Chester Simon Dep. (Ex. 22) at 40 (worked off the books out of concern that “[i]f I call up the District Council and put my name on the out-of-work list, you’re talking three to four months”); see also Boom Report at 18-19 (summarizing additional testimony)).

This fear of being laid off and facing a long wait on the out-of-work list led several Boom

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 carpenters to perjure themselves at deposition by falsely denying they had worked for cash at various Boom jobs. (Casey Dep. at 190-91; Greg Duhig Dep. (Ex. 16) at 224; Simon Dep. at 3536). They feared that contractors would not hire them or “specially request” them off the OWL if word got out that they had informed on Boom. (Casey Dep. at 199-200; see also id. at 190-91 (“[i]f it got out in this industry that you were the guy who gave up evidence, you would never again work in this town”)). Indeed, Boom’s owner threatened Chester Simon that if he disclosed to Mr. Mack the cash jobs that were being operated by the contractor, then other contractors would not specially request him in the future:

And he also said to me . . . that, remember, as contractors, we talk to other contractors, so you’re—if you say you get cash, it’s going to make it harder for you to get a job if something happened.

(Simon Dep. at 35-36; id. at 36 (“if you try to get a job with the next contractor, they are going to know that you ratted out a different contractor”).

In light of this evidentiary record, Mr. Mack found the job referral provisions of the Consent Decree to have been “eviscerate[d].” (Boom Report at 39). As Mr. Mack understood it, “the purpose of the job referral provisions was not only to eliminate simple unfairness, but also minimize the potential for abuse and corruption.” (Id.). Yet thanks to the request system, the job referral rules—as they now operate—not only fail to minimize the potential for corruption, but the rules actually encourage job-site corruption, Mr. Mack found. (Id.).