Peter J. Fosco barred from LIUNA-IHO decision 99-10-14

OFFICE OF THE INDEPENDENT HEARING OFFICER

LABORERS’ INTERNATIONAL UNION OF NORTH AMERICA

IN THE MATTER OF

DOCKET NO

PETER J FOSCO

98–65D

LOCAL 692

BATON ROUGE, LOUISIANA

ORDER AND MEMORANDUM

PROCEDURAL HISTORY

This matter comes before the Laborers” International Union of North America (“LIUNA”) Independent Hearing Officer (“IHO”) pursuant to the LIUNA Constitution and the Ethics and Disciplinary Procedure (“EDP”).

On November 24,1998, Disciplinary Charges were filed by The LIUNA General Executive Board Attorney (“GEB Attorney”) against Peter J. Fosco (“Fosco”) alleging Respondent committed conduct proscribed by federal law and the EDP

The IHO held a hearing in New Orleans, Louisiana, on April 6–9,1999, and on May 3–6, 1999, Simultaneous briefs were filed by the GEB Attorney and Respondent’s attorney on June 7,1999. Reply briefs were filed on June 14,1999,

SUMMARY OF ALLEGATIONS

The conduct underlying the allegations in this matter began in or about 1989 and continued through February 1999. The GEB Attorney has alleged that Fosco, while Regional Manager of the South Central Region, caused the Kentucky District Council, the Louisiana District Council, and Local Union 692 in Baton Rouge, Louisiana (“ Local 692”), to pay him consulting fees in the amounts of $26,000 (Kentucky District Council), $14,000 (Louisiana District Council). and $10,000 (Local 692) over a period of approximately six years, for which he did no work [1] Based upon his consultant positions Fosco also received payments made on his behalf to two pension plans. The two pension plans were in addition to Fosco’s coverage as an International Union staff member.

The GEB Attorney further alleged that upon being ordered to cease his role as a consultant by General President Arthur A. Coia (“Coia”), Fosco devised a plan to have the three organizations continue to pay him outside compensation by using other methods to substitute for the consulting fees. The GEB Attorney presented evidence that the substituted methods included giving Fosco a $6,000 a year job and pension plan payments on his behalf as Sergeant– at Arms of the Kentucky District Council for which be received $27,945; causing the Louisiana District Council to pay his cellular telephone bills for a total of $10,022, and causing Local 692 to appoint film to four paid delegate positions for a total salary of $2,500.[2]The GEB Attorney also presented evidence that the total consulting fees and other outside compensation paid to Fosco by the three organizations from approximately 1990 to 1999, totaled $93,829 [3]

The GEB Attorney further alleged that Fosco solicited monthly payments from his staff, for a “staff fund,” originally at $25 a month per person, then at $50 a month per person, which the staff members felt they were obligated to pay. The payments were required to be in cash and Fosco pursued those who fell in arrears. There was no accounting for the fund. The stated purpose of the fund was to purchase gifts for staff members and gifts to be distributed at the International Convention. The funds collected by Fosco from his staff over approximately ten years, exceeded $34,000.

The GEB Attorney further alleged that, from approximately 1989 to 1997, Fosco received substantial personal gifts, pursuant to a practice which Fosco fostered with the Kentucky District Council, the Louisiana District Council, and Local 692, The practice consisted of the organizations requesting that Fosco select the gift of his choice, and then purchasing whatever he chose. The gifts were substantial.

The GEB Attorney further alleged that Fosco obstructed an investigation of the LIUNA Inspector General (“IG”) by attempting to mislead an Inspector regarding what work he had performed in exchange for his consulting fees.

FINDINGS OF FACT

1. Fosco is the son of Angelo Fosco and grandson of Peter Fosco, both of whom served as LIUNA General Presidents.

2. Fosco joined LIUNA in 1966 as a member of Local Union 2 in Chicago, Illinois GEB Attorney Exhibit (“GEB.Ex.”) 71.In 1972 Fosco became an International Representative and in 1975, he became Assistant Regional Manager of the Chicago Region. Id. From 1976 to 1984, Fosco was Regional Manager of –the Chicago Region Id. In 1984, Fosco resigned his position as the Regional Manager and did not officially participate in LIUNA activities for three years, other than to maintain his membership in Local 2. Id.

3. Although previously its own region, the New Orleans Region had been merged into the Dallas–Fort Worth Region prior to 1986, Id. In1986, Angelo Fosco was re–elected as General President and Fosco decided to return to active LIUNA participation, Id. Fosco felt the New Orleans and surrounding areas were languishing and, after his father’s re–election, suggested to his father that he reopen a regional office in New Orleans Id. InApril 1987, Angelo Fosco re–instituted the New Orleans Region and appointed Fosco as Regional ‘Manager Id. See also IHO Hearing Transcript (Tr.”’) 1101, 1104.The reinstituted New Orleans Region, at the time of Fosco’s appointment, incompassed Louisiana, Mississippi– and Arkansas. GEB Ex– 71

4. After recombining Regional Manager, Fosco transferred his membership to Local 692, in Baton Rouge, Louisiana– Id.

5. The New Orleans Region is currently known as the South Central Region and includes Kentucky and Ohio as of 1988, and Texas, Oklahoma, New Mexico, and Arizona as of 1995. Id.

6. In 1996, Fosco was elected as one of the International Vice Presidents of LIUNA– Tr. 110 7.

7. At all times covered by the charges. Fosco received a full time salary from the International Union as a regional manager. Fosco’s current International Union salary as both Regional Manager and Vice President is $165,000[4] Tr. 1108–1 GEB Ex. 61.

8. Robert W. Butler (“Butler”) is an independent contractor working for the IG’s Office. Tr. 458. Butler was the lead investigator in the investigation that resulted in the charges in this matter, Tr. 461, 464. Butler interviewed Fosco regarding the allegations. Tr. 465.

Consulting Agreements

9. As a regional manager, Fosco received a full time salary and his duties included consulting with the district councils and local unions of the South Central Region and advising them about issues that might arise. Tr.1089, 1090. The regional manager’s duties include being a liaison between the local unions, the district councils, and The International Union. Tr– 1089 –90.

10. There is no written job description for the job of regional manager, instead the duties depend on the particular needs of the locals and district councils within each region. Tr. 1091–93. As indicated by both Fosco and General President Coia, there is no dispute that part of a regional manager’s duties is to consult with the local unions in his area and to assist them in their operation– Tr– 2717–13, 1093. The regional manager is an executive position, regarded as the professional employee of the International Union, who answers directly to the General. President

11. A full–time International Union employee, such as Fosco, is covered by the LIUNA Staff Pension Plan. Tr– 318.

12. Employees of a local union or district council are covered by the Laborers’ National Pension Fund, also known as the Dallas Fund [5]. Tr. 297. The Laborers’ National Pension Fund is an hourly contribution rate pension fund in which a thousand hours worked in a year equals a. full year of participation credit. Tr. 319. The Laborers’ National Pension Fund is an entirely different pension plan from the LIUNA Staff Pension Plan.

13. Beginning in approximately 1990, Fosco entered into outside compensation or consulting– agreements with three separate LIUNA entities within his region. These compensation agreements form the basis of counts one through eight as discussed below.

Kentucky– District Council Consultant Agreement

14 Counts One and Two allege that by accepting consulting income from the Kentucky District Council, for which he did no substantial work, Fosco converted union funds to his own personal use and breached his fiduciary duty to the union membership and his duty of loyalty to his office.

15, Count One states as follows

Count One Conversion of Union Funds

From on or about January, 1, 1988 through on or about August 31. 1994, Peter J. Fosco did engage in barred conduct. as defined by the EDP and EPC, by converting to his own use at least $26,000 in monies from the Kentucky District Council of Laborers’ in the form of consulting” income, for which Fosco did no substantial work, in violation of 29 U. S.C.§ 5 0 1 ©

16. Count Two states as follows:

Count Two Breach of Fiduciary, Duty and Duty of Loyalty

From on or about January 1, 1988 though on or about. August 31, 1994, Peter J, Fosco did breach his fiduciary duty to the union’s membership and his duty of loyalty to his office by accepting substantial outside “consulting” income from the Kentucky District Council of Laborers, for which Fosco did no substantial work, and by failing to account for services he purportedly rendered to the organization for the money he received, all in violation of

LIUNA’s Ethical Practices Code and 29 U.S.C. § 501(a).

17, Paul Barrick, Jr. (“BarrIck”) is a retired LIUNA member. Tr.281–82. Prior to his retirement, Barrick had been the Business Manager/Secretly–Treasurer of the Kentucky District Council from approximately 1987 to 1997. Tr– 282–26.

18. Kentucky was formerly in the Akron Region (Kentucky–Ohio) until its Regional Manager– Charles Sutton, retired on December 3 1, 1987, and consequently the Akron Region was merged into the New Orleans Region in early 1988–Tr. 288, As a result of the merger, Kentucky became part of Fosco’s Jurisdiction as Regional Manager. Id.

19. Barrick testified that after the Akron Region came under Fosco’s Jurisdiction, he and the Kentucky District Council had much more interaction with Fosco than they had had with previous regional managers Tr. 289–90. Randall Lynn Gilbert (“Gilbert”), formerly the Vice President of the Kentucky District Council, has been the President and a field representative of the Kentucky District Council since March 1997. Tr. 1987–88. Gilbert testified that when Fosco took over Kentucky as Regional Manager, Gilbert received much more help from Fosco as a regional manager than he had received from with Fosco’s predecessors Tr 1994–98

20, Fosco is a member of Local 692 in Louisiana, whose membership is employed by companies who lay and maintain large, long–distance pipelines. Tr. 292,294. In LIUNA these local unions are referred to as pipeline locals, Even though Local 692 was located in Louisiana, Fosco recommended that Local 692 become a member of the Kentucky District Council– Tr293. Fosco then became a delegate from Local 692 To The Kentucky District Council[6] Tr. 292.

21. In approximately 1990, Barrick, Richard Beck, [7] and Fosco had a discussion in which Barrick stated that he was covered by three distinct pension plans and Fosco stated that he was solely covered by the LIUNA Staff Pension Plan. Tr–297, 1116–17.

22. Barrick testified that after the conversations regarding the pension plans, Fosco approached him and stated that he would like to be covered under The Laborers’ National Pension Fund– Tr. 297. Barrick testified that Fosco suggested that he [Fosco] be hired as a consultant to the Kentucky District Council so that he [Fosco] could be covered by the Laborers’ National Pension Fund. Id. Fosco denied initiating the consultant idea and stated on the contrary that he had been approached with the idea by Barrick– Tr, 1116–17. The IHO credits Barrick’s testimony that Fosco suggested the consultant arrangement.

23. Barrick testified it had been Fosco’ idea to term the arrangement a “consultation agreement” Tr 303. Fosco testified that he [Fosco] suggested that they use the word “consultant.” Tr. 1113. In later testimony, Fosco stated the title “consultant” had been suggested by his father, Angelo Fosco. Tr. 2715.

24. Beck testified that, after the conversation where Fosco commented that he was covered by one pension fund while other individuals were covered by several, Beck and Barrick–discussed a plan to enable Fosco to receive coverage by a pension plan in addition to the LIUNA Staff Pension Plan Fosco already had– Tr– 1763, 1877–80.

25. After Barrick and Beck’s discussion, Barrick made a recommendation on .April 24, 1990, to the Kentucky District Council that Fosco become a consultant to the District Council at a $115 weekly salary and that the District Council pay the. corresponding hourly contribution to the Laborers–National Pension Fund– Tr.299–99,

26. The Kentucky District Council Executive Board Meeting minutes state that.

Paul Barrick reported that Regional Manager Peter J Fosco had been unable to participate in the Laborers’ National Pension Fund. He recommended that the Council place Peter J. Fosco on salary as a consultant to the Council at the rate of $115; a week with pension contributions of twenty hours per week, retroactive to January 1990.

GEB Ex, 3,

27. Twenty hours a week equals one thousand forty hours a year, thus making Fosco eligible to receive a full year’s credit for the Laborers’ National Pension Fund. Tr. 319. Barrick testified that he could not recall whose. idea it was to make the contribution retroactive to January, 1990. Tr. 313.

28 Prior to this arrangement, the Kentucky District Council never had a consultant and the Regional Manager had never received a salary from the Kentucky District Council. Tr. 302, Barrick testified there was no need for a consultant– Tr– 302–06, Barrick stated, *there was no arrangement for anything special,” and “there wasn’t any agreement that he [Fosco) would offer any particular thing, to my knowledge other than the normal things that you expect the regional manager to do.” Tr. 300, 302.

29. Barrick testified that the purpose of hiring Fosco as a consultant was to provide Fosco with the extra pension and to “provide a little extra income” for him. Tr. 298–99. Fosco agreed –that the purpose of the arrangement was to give him $115 a week, and allow him to earn credit towards a second pension, Tr. 1162.

30. Beck testified that the Fosco agreement was not intended to be an actual consultant position. Tr. 1891– No “actual work” would be done, no hours monitored, and no activity reports made, the pay was simply an honorarium– Id. Beck testified the term “honorarium “was meant to give him a sum of money every yeax to allow him [ Fosco] to get another pension– and –that nothing was expected from Fosco in return. Tr– 1883 –84–

31 Danny R– Powell (“Powell”) is a former Delegate and Executive Board Member of the Kentucky –District Council– Tr– 639–40. Powell testified that he had a conversation with

Beck regarding Fosco’s consulting fees, and that Beck told him it was “a way for Pete [Fosco] to get a. [sic] get extra pay and be eligible for a pension from the Council.” Tr. 640–41.

32. Gilbert testified that when he voted to approve the agreement, he was not aware of any description of the type of consulting services Fosco would provide or how long the consultant position would last. Tr.2045. Gilbert voted to pay him as a consultant solely to allow Fosco to participate in another pension and have “a little extra money.” Tr.2048–50, The term “consultant–was just a label. Id.

33 Barrick accepted the consulting arrangement because “Pete (Fosco] was my friend, I did it because he was my friend and he wanted the pension, and in that respect, I was comfortable with that, but, personally, it’s not something that I would have done–“ Tr. 305,

34. Burick thought that “Pete Fosco worked hard”’ and was available when Barrick called him for help and provided help to a mucb geater extent than had been provided by the previous regional manager. Tr, 305. Barrick clearly reiterated that –[t]he reason Pete [Fosco] became the consultant was like the minutes state, becaue he was unable to participate in the local– or The Laborers’ National Pcnsion Fund, that the arrangement came for him to be a consultant,” Tr. 441–42.

35. Barrick said he “didn’t feel in a position to fight it [the consulting agreement– because Fosco was the Regional Manager, Fosco’s father was the General President at the time, and Barrick was a friend of Fosco’s. Tr. 309–

36 Barrick testified that he did not see any visible increase in the amount of energy or work Fosco put into his relationship with Kentucky as a result of –the consultant agreement. Tr. 312.

37. When the compensation of an employeee of a local union or district council reaches $6,000 in any given yeax, the local union or district council forwhom the employee works must make a controbution into The Local Union/District Council Pension Fund– Tir– 319. The Local Union /District Council Pension Fund is based upon money earned rather the hours worked, and is a. separate pension plan from the Laborers’ Naticnal Perision Fund and the LIUNA Staff Pension Fund.

38. At the December 20, 1991 Kentucky District Council regular meeting, Barrick recalled that Fosco’s consultant’s fee be raised to $6,000[8] per year so that Fosco could be covered under the Local Union~District Council Pension Fund.[9] Tr– 314, See also GEB Ex. 4. This contribution would give Fosco coverage by three pension funds: the LIUNA Staff Pension Fund, the Laborers’ National Pemion Fund and the Local Union/District Council Pension Fund.

39. In addition to enabling Fosco to become eligible for a third pension, Barrick also recommended that Fosco receive a bonus for 1991 GEB Ex. 4– The motions was made and passed. Id. Fosco recoived the $500 bonus given to Kentucky District Council full–time employees at Chrisrmas 1991. Tr.320–21. Barrick testified that none of the Kentucky Dlstrict Council’s attorneys or other professional consultants received the bonus. Tr– 321.

40. Barrick testified that the idea to make Fosco eligible for the third pension fund had been Fosco’s idea. Tr.320. Fosco testified that he did not recall whose idea it had been to give him a raise which enabled him to earn credits towards athird pension, Tr.1163–64. The

IHO credits Rarrick’s version of this event, that it waz Fosco’s idea to obtain a raise to become eligible for a third pension.

41. Barrick testified. that when Fosco began receiving over S6,000 a Year, the Kentucky Districi Council paid the Local Union/’District. Council Pension Fund contributions on Fosco’s behalf Tr. 319.

42, Earrick testified that none cf the increased expenses incurred by the Kentucky District Council (the increase in the consulting amount and the increased contributions for the third pension.) resulted in any additional benefits for the membership– Tr–306, 310–12,323. Barrick never requested any services from Fosco in his role as consultant and never received anydiing that he understood to be consulting work product from Fosco, Tr.304, 323–24.

43. Powell testified that he never saw any consultant work product generated by Fosco on behalf of the Kentucky District Council independent of his work as Rcgional Manager, nor did he see any articulation or proposals for consulting work from the District Council, Tr. 640–43.

44, From January 1990 to August 1994, Fosco received $28,040 in consultant’s fees from the Kentucky District Council,. not including pension contributions. GEB Ex. 3–7.

Louisiana District Council Consultant Agreement

45, Counts Three and Four allege that by accepting consulting income from the Louisiana District Council, for which he did no substantial work in return, Fosco converted union funds to his own personal use and breached his fiduciary duty to the union membership and his duty of loyalty to his office.

46. Count Three states as follows

Count Three Conversion of Union Funds
From on or about January 1, 1988 through on or about August 3 1, 1994, Peter J. Fosco did engage in barred conduct, as defined by the EDP and EPC, by converting to his own use at least $14,000 im monies from the Louisiana District Council of Laborers’ in the form of “consulting” income, for which Fosco did no substantial work, in violation of 29 U, S.C. § 501 ©.

47, Count Four States as follows:

Count Four Breach of Fiduciary Duty and Duty of Loyalty

From on or about January 1, 1988 though on or about August 3 1,1994, Peter J Fosco did breach his fiduciary duty to the union’s membership and his duty of loyalty to his office by accepting substantial outside “consulting” income from the Louisiana District Council of Laborers, for which Fosco did no substantial work, and by failing to account for services he purportedly rendered to the organization for the money received, all in violation of LIUNA’s Ethic’s Practices Code and 29 U.S.C.§ 501 (a.).

49 The minutes of the October 19, 1990 Louisiana District Council Executive Board and Regular Meeting reflect that a motion was made and seconded for the District Council to hire Fosco as a consultant and pay him $300 per month retroactlive to June 1990– GEB Ex. 8.

49 Gary Slaydon (“Slaydon”) was a delegate to the Louisiana District Council from 1986 to approximately late 1996 or 1997. Tr. 696–97. Slaydon was also a field representative for the Louisiana District Council for several years beginning in 1987 and again from Fall 1992 To Fall 1993. Tr–. 699–

50. Prior to the Louisiana District Council’s 1990 decision to hire Fosco as a consultant at annual salary of $3,600, the Louisiana District Council had never retained a consultant and Slaydon testified that there had been no discussion among the delegates regarding a need for consulting services, Tr. 7 0 7. S laydon testified that he did not recall any

discussion regarding the scope of Fosco’s consulting duties or the terms of Fosco’s employment nor any instance of the District Council givixig Fosco any consulting assignnients, Tr. 708.

51. The IHO notes that, during the fiscal year February 1990 to the end of January 1991, Fosco, in his capacity as consultant was being paid at a higher rate than the highest paid officer on the Louisiana District Council. Tr. 796–1 GEB Ex. 64, Tab H

52, Slaydon testified that at the time Fosco became a consultant, Slaydon was unaware that Fosco had a similar arrangement with the Kentucky District Council– Tr. 717.

53, In 1990, Dale Brasseaux was a delegate to and officer of The Louisiana. District Council, Tr– 949, Dale Brasseaux testified that while the Louisiana District Council as a whole felt that it needed consultant’s help, he and others also knew that it was Fosco’s job as a regional manager to assist all the locals ‘in his region as “consulting was a part of the job of the regional manager.” Tr.950–51. Dale Brasseaux further testified that Fosco did not receive any particular assignments as a consultant to the District Council and that afler he ceased being a paid consultant, no one else was hired to replace him. Tn 953–

54. Chris Paul Brasseaux is an intenal auditor for LIUNA and a mernber of Local Union 672 in Lafayette, Louisiana, Tr– 771. In 1992, during one of Chris Brasseaux’s audits of the Louisiana District Council, he discovered that Fosco was being paid as a consultant. Tr– 92023. Chris Brasseaux asked the secretary, Vickie Basco (“Basco”), for substantiation of the services, such as a bill or an invoice indicating work performed. Tr.822. The only documentation Basco was able to produce were two or three newsletters sent under Fosco’s name. Tr. 923–24– The newsletters are discussed infra–

55. From lime 1990 to August 1994, Fosco received $15,300 in consultant’s fees ftom The Louisiana District Council[10] GEB Ex. 8–9.

Local 692 Consultant Agreement

56. Counts Five and Six allege that by accepting consulting income from Local 692, forwhich he did no substantial work in return, Fosco converced union funds to his owm personal use and breached his fiduciary duty to the membership and his duty of loyalty to his office.

57. Count Five states as fol1ows

Count Five Conversion of Union Funds

From on or about January 1, 1990 though on or about August 3 1,1994, Peter J. Fosco did engage in barred conduct, as defined by the EDP and FPC, by converting to his own use at least $10,000 in monies from the Laborers’ Local 692 in the form of consulting income, for which Fosco did no substantial work in violation of 29 U.S.C. §501©.

58, Count Six states as follows:

Count Six Breach of Fiduciary Duty and Duty of Loyalty

From on or about January 1, 1988 through on or about August 31, 1994, Peter J. Fosco did breach his fiduciary duty to the union’s membership and his duty of loyalty to his office by accepting substantial “outside” income from Local 692, for which Fosco did no substantial work, and by failing to account for services he purportedly rendered to the organization for the money received,all in violation of

LIUNA’s Ethical Practices Code and 29 U.S.C–§501(a)

59. The October 10, 1990 Local 692 Executive Board Meetitg minutes reflect that a”[m]otion was made and seconded to pay Peter Fosco Two hundred dollars ($200) per month as a Consultant to Local #692, as long as we can afford it.” GEB Ex– 10. The motion carried Id.

60. From October 1990 to December 1994, Fosco received $10,000 in consultant’s feet, from Local 692, not including bonuses.[11] Id. The Local 692 Executive Board Meeting Minutes from. November 1992 and 1993 indicate that a Christmas bonus of $300 was authorized by Fosco as a consultant[12] GEB Ex– 52–54. A $300 bonus was again authorized for Fosco in October 1994, although at this time, the minutes read “as usual” and not “consultant– GEB Ex. 54.

61, Jerry Thomas (“Thomas–) was the Business Manager of Local 692 for twelve vears and the Business Manager of the Louisiana District Council for approximately eight to ten years. Tr, 2469–71, Thomas could not explain why Fosco’s services had been entitled consulting,” and did not know which of Fosco’s services were as a consultant and which were a part of his job as a regional manager. Tr– 2491–97. When specifically pressed for what services Fosco had provided as a consultant rather than as a regional manager, Thomas stated only –that Fosco “helped us... [with] anythirig we needed” and that Fosco had brought Local 692 into other states outside of Louisiana to perform pipeline work. Tr. 2496–97. The IHO finds that it was paxt of Fosco’s job as a regional manager to encourage the growth of the locals in his region, including Local 692,

62 Fosco testified that it was a coincidence that Local 692 and the Louisiana District Council consulting payments together totaled $500 a month, the same amount as that paid by the Kentucky District Council, Tr. 1159.

63 Fosco testified that Local 692,the Kentucky District Council, and the Louisiana District Council independently formulated the idea to compensate him.,without any solicitation by him, and the fact that all three entities cameup with the idea simultaneously was simply a coincidence. Tr 1111–14. 1125–26. The IH0 does riot credit this testimony.

The Obrdank Newsletters

64. Larry Oberdank (“Oberdank”) is an Ohio attorney, with a substantial practice in labor law, who was on retainerwith the 0hio District Council during the period covered by these charges, Tr.74,254–56. As a personal client development program Oberdank sent newsletters to clients and prospective clients in the Ohio region. Tr.74, 257. Oberdank prepared the newdetter by reviewing labor law advance sheets and preparing a synopsis of relevant labor law cases. Tr_ 237 See e.g..GEB Ex– 16– Obefdank testified that he created the newslerters both as a marketing tool for new clients and to keep his current clients informed of trends in the law. Tr. 258–59.The newsletters were provided free of charge. Tr.– 259.

65 Mark D. Llmsky (“Lynsky”) is a LIUNA International Representative– Tr, 43. In approximately 1991, Lynsky first became an International Representative and was affiliated with The New Orleans Region, now known as the South Central Region– Tr. 46 As International Representative, Lynsky reported to Fosco the Regional Manager. Tr. 46–47. In January 1996. Lynsky left the South Central Region and became an International Representative for the Mid–Atlantic Region, Tr. 48.

66. Lynsky testified rhat as Business Manager for Local 530 in Ohio, he had been on Oberdank’s newsletter mailing list– Tr. 75, Lynsky stated that he understood Oberdank’s letters to be a marketing tool to the affiliated local unions in the Ohio District Council in the event that a local union had a labor matter with which it needed legal representation Tr. 77.

ten months, and mail it to all three of his consultingJurisdictions– Tr– 1213–14. Fosco stated that he wanted to be able to show documentation or proof that he had submitted reports during the time of his consultancv. Tr. 1213. The Purolator Courier Corp. decision cited in Fosco’s backdated newsletter of May 1990, had not yet been decided on the date of Fosco’s newslettter. Tr. 1215,1227. Fosco stated that he changed the date of the newsletter to be able to document the early period of his consultancy and make it appear as if he had filed reports when in fact he had not submitted the report in May 1990, but had submitted it after Fcbruary 1991. Tr. 1217–18. In response to the IHO’s question, “Why did you put 1990 on it [The backdated newslertter]?” Fosco replied , because I was going to fill in the months from the beginning of the

consultancy.” Tr– 1221.

71. Fosco first claimed that he never intended for the readers of his newsletters to believe that he was the author, and that there was a difference between “authoring and submitting.” Tr– 1223–24. Fosco claimed that his copies of Oberdanks letters were simply his submissions, but not his actual work. Tr. 1239– Fosco also stated that none of his newsletters contained any of Fosco’s work or research; he had never read any of the National Laboir Relations Board decisions referenced in the newsletters. Tr– 1215, 1227, 1240–4 1.

72. Of the twenty–three sets of Oberdank–Fosco newsletters submitted by the GEB Attorney, twenty–two were verbatim and the twentv–thlrd set was verbatim except for one paragraph in which Oberdank makes reference to himself. GEB Ex. 17. When questioned, Fosco acknowledged that he may have omitted the paragraph to conceal the fact that he was not the author of the newsletters, Tr. 1237.

73. Oberdank denied any knowledge that Fosco was reproducing his newsletters verbatim and sending them out on Fosco’s letterhead as Fosco’s own work product. Tr– 266–157.

74. Fosco’s attempts to explain the discrepancy in the submission and backdating of the documents are not credible. The IHO finds that Fosco deliberately backdated his plagiarized newsletters as a ruse to formulate an appearance that he had not been “getting something for nothing” during his consulting period.

75. Fosco’s attempts at explaining which services he had performed as a consultant as opposed to his duties as regional manager were conflicting and are not persuasive.

· Fosco began by stating that he did no extra work by virtue of receiving a consultant fee– Tr. 1088–90, 1170.

· Fosco then stated that upon further thought he had performed “substantial work” for the consultant fee– Tr. 1168.

· Fosco repeatedly stated that, as part of his extra work he had served as a trustee for various fringe fund benefits yet when reminded by the GEB Attorney that it is illegal to receive compensation as a fringe benefit trustee, Fosco repeatedly backtracked and contradicted his prior statements by saying the extra work as a trustee was not part of why he had been compensated. Tr– 1168–1186.

· Fosco then testified that be had, in fact, been doing research in labor topics intending to create a newsletter when he came across Oberdank’s letters and decided to submit them instead. Tr– 1191–1293–

· Fosco testified that his father, Angelo Fosco, while LIUNA General President, had approved of the specific consulting arrangement with the three entities. Tr. 1285. Fosco said Angelo Fosco told him that Fosco “can’t get money for nothing” and that he needed to “do something” for the money. Tr. 1288. Fosco testified that he had told his father that he had planned on submitting, reports and that his father had given his consent– Tr. 1289. Angelo Fosco told Fosco that he needed to have something to show that some type of work was done and that a report had been filed. Tr. 1292–93.

· After originally testifying that he had, in fact, performed actual consultant work for the fees he received from the District Councils and Local 692, Fosco changed his testimony to state that the money he received monthly from the District Councils and Local 692 was honoraria, not salary– Tr, 2661–63.

· Fosco later stated that accepting honoraria was an established practice within LIUNA and that he had “checked with the general president to see if it could be done.” Tf – 2670. The IHO finds that such testimony by

Fosco was in direct contradiction to his prior testimony that he had asked the General President if he could accept a consultant position and was told that he needed to ensure he did not receive ‘something for nothing–“ Compare Tr. 1028–90, 1170 with 2670.

76. The IHO notes that the hearing in the present matter was the first instance that Fosco ever introduced the concept of honorarium as opposed io actually working for the extra pay arid pension benefits.

77. Fosco testified that he did not give the three entities frorn which he received consulting income any better attention than he gave to the other entities in his jurisdiction, and that he performed his required advising duties to all entities in his junsdiction before, during, and after he was a paid consultant, Tr. 1089–91.

78. Based upon the foregoing, the IHO makes the fbIlowing summary findings

· Fosco suggested to the three ofganizations the concept of paying him a consulting fee.

· Fosco suggested to the Kentucky District Council the
concept of hiring him as a consultant so that he could receive two additional pensions to which he was not entitled

· The groups agreed to provide Fosco with the extra money,
although there was no need to do so.

· Fosco performed no services for the consulting fees or thepension benefits.

· Fosco attempted to make it appear that he was providing some sort of service by copying Oberdank’s newslctters and distributing them to the organizations.

Post 1994 Payments as substitutes for the Consulting Fees

79. Angelo Fosco died in early 1993 and Coia becarne the LIUNIA General President.

80. On June 28, 1994. Coia sent a letter to all members of the General Executive Board enclosing a letter of the same date from General Secretary–Treasurex James T. Norwood addressed to all regional and subregional managers in tht United States and Canada– GEB Ex.

18. Norwood’s letter requested that the managers disclose the nature of my outside compensation with affiliates in their regions and required that they report all employees who held a position “whether as amployee, consultant or as a subcontractor of whatever description” including the title of the individual, compensation, and contribution to any fringe benefit funds. Id. Coia’s letter requested that the General Executive Board members also cornply with the directive. Id.

81. On July 21, 1994, in reply to Coia’s request, Fosco sent Coia a letter disclosing his three consulting positions, the amount he was being paid, and the period of time he had held the positions. GEB Ex. 19.

82. On August 2 1994, Coia, in response sent Fosco a letter requesting clarification of the term “consultant” GEB Ex. 20. Coia stated that he “was under the impression that Regional Managers consulted all Local Uriions and District Councils in their area as part of their job duties and responsibilities–“ Id.

83 On August 4, 1–994, Fosco replied to Coia by letter, stating in part;

My Local Union 692, The Louisiana Laborers’ District Council, and the Kentuckv Laborefs’ District Council wanted to be able to do something for me for the time and effort I put in to helping bring these affiliates around into a well–functioning body. Their feeling was that because of the extra effort that I put forth, they wished to do sornething for me.

At no time did I ever solicit any form of compensation. I do provide a bi–monthly newsletter to these affiliates as a tangible proof of work and all of the above was approved by the late General President–

GEB Ex.21

84. The IHO finds that Fosco’s letter to Coia was purposely misleading.

85. Shortly aftter this correspondence, at the August 15–18, 1994 General Executive Board meeting in Lake Tahoe, Nevada, Coia and Fosco had a private conversation about Fosco’s consulting agreements. Tr. 324–23, 532, See also Joint Exhibit 1. Fosco testified that he told Coia that the consulting arrangernems had been approved by his father, Angelo Fosco.– Coia told Fosco that with all due respect to Angelo Fosco, Coia was the General President and he wanted the consulting agreements to ceas e Tr. 1359.

86. Fosco testified thai he complied with Coia’s directlive to cease the consulting agreements. Id. As described below, however, Fosco soon thereafter found a way to circumvent Coia’s directive by replacing the consulting income with other compensation The specifics of the consulting income substitutes are as follows.

Kentucky District Council Paid Sergeant–at Arms Position

87. Counts Seven and Eight allege that, by seeking and accepting a paid position as Sergeant–at–Arms without the approval of the General President and despite the General President’s directive to cease receiving outside income from LIUNA entities in his region, Fosco violated the Constitulion and his duty of loyalty to the union and to his office,

88. Count Seven states as as follows:

Count Seven Violation of LIUNA’s International Constitution rsicl

By seeking and accepting a second paid position within a local union, namely the Sargent–at–Arms [sic] position without the approval of the General President. Peter I Fosco violated Article IV, Section 3 of the Uniform Local Union Constitution.

89. Count Eight states as follows:

Count Eight Violation of Dutv of Loyalty

By seeking and accepting a second paid position within LIUNA, namely the Sargent–at–Arms [sic] position in the Kentucky District Council, without the approval of the General President, and after being directed to stop receipt of substantial ourtside income from LIUNA entities within his region, Peter J Fosco breached bis duty