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

of loyalty to the union and to his office, in violation of the Financial Practices Section and the Business and Financial Activities of Union Officials Section of LIUNA’s ethical Practices Code.

90. From 1988 forward, Fosco attended Kentucky District Council meetings on a regular basis, originally ex officio as a regional manager, thcn as elected delegate from Local 692 as well as regional manager. Tr. 1323.

91. Bazrick stated that he was aware of a mandate against full time Internationational Representatives receiving other compensation from local unions and district councils– Tr. –334–35.

92. Barrick testified that he and Fosco had a discussion regarding the General President’s directive and the effect on Fosco’s consultant arrangement– Tr. 33 7. Foscn told Barrick that under the directive Fosco would not be able to serve as the consultant to the Kentucky District Council because the directive precluded taking “extra, over–and–above salaries frorn local iuiions and District Councils–“ Tr. 341–42. Barrick stated that he and Fosco discussed the idea of Fosco and Beck being given salaried officer positions.[14] Tr. 342, Barrick testified that Fosco proposed that he would like to be Sergeant–at–.Arms of the Kentucky District Council and that Richard Beck would be President of Tte District Council, and that he and Beck be paid for their positionz. Tr– 341–42, 359,

93. Prior to August 1994, the Sergeant–at–.Arms and President positions of The Kentucky District Council had been unpaid; the only salaried officer was the Secretary– Treasurer/’Business Manager. Tr 338–39, 342, 1325. Donnie Jones, the field representalive of Local 576, had been the unpaid District Council Sergeant–at–Arms for several years, Tr– 344–45.

354. In LIUNA organizations, Sergeant–at–Arms is generally an unpaid position for which a small expense stipend is paid for attending the meetings,

94, Barrick agreed to the arrangement but stated that out of faimess, the other officers should also be paid, not just Fosco and Beck. Tr.411–11. Barrick testified that while Fosco initially only suggested that he and Beck be compensated as officers, Fosco did not oppose Barrick’s recommendation that all the positions be compensated, Tr. 414–1 G. Fosco denied Barrick’s statement, and testificd that it had bcen his, not Barrick’s, idea to compensate all Kentucky District Council officers. Tr. l3j7_ The IHO credits Barrick’s Testimony.

95. Barrick testified that Fosco told him that the: salary needed to be under $6,000 because at $6,000 a report to the Local Union/District Council Pension Fund at the LIUNA headquarters building in Washington, D.C.was required– Tr_ 343. In addition, Fosco told Barrick that a provision to include them in the Laborers’ National Pension Fund should be attached to the new officer salaries hecause as Fosco’s and Beck’s salaries were– now under $6,000, They would no longer qualify for coverage under the Local Union/District Council Pension Fund. Tr.343–44_

96. The August 18, 1994 Kemucky District Council Executive Board meeting took place the day before the scheduled nornination and election of District Council officers for the next four–year term. Tr– 338– At the xneeting, the executive Board recommended that all officer salaries be set at $5,988 per year and that a contribution be made to the Laborers’ National Pension Fund at twenty hours per week for all officers not serving on a local union or district council on a full time basis– GEB Ex. 22.

97, At the time of the August 19 meeting, there –was no dUcussioa of the plan to nominate Fosco for one of the ne–w1v salazied p”itions mad rhe record is silmt as to the plan– Tr_

345, 651–52, Powell testified that he had assumed Jones would be nominated for the Sergent–at–Arms position because Jones had held that position for several years– Tr. 653.

98– The next day, on August 19, 1994, at the regular District Council meeting, Fosco was nominated bv his brother–in–law, Paul Raymond (“Raymond’), and elected Sergeant–at–Arms thereby becoming the beneficiary of the $5,988 salary and pension contributions to The Laborers’ National Pension Fund voted the previous day–to all part–time officers. Tr.340, 652–53. Fosco was the only candidate nominated for Sergeant–at–.Arms, Tr.660–61.

99. Donnie Jones’s candidacy was erased in the following manner. As Business Manager of Local 576, Raymond was Donnie Jones’s boss. Tr– 652–53– Powell testified that just prior to Fosco’s nomination for what had previously been Jones’s job, Jones was taken aside to a corner by Beck, Raymond, and Fosco for a private discussion. Tr. 654–55. Jones then appeared to Powell as if “somebody just hit him in the gut,” Tr.635, Immediately aftenwards,the, nomination was called. Id– Powell testifled that he later had a conversation with Jones in which Jones told him that he did not know of Fosco’s intended nomination until after Raymond called him aside. Tr. 662.

100. The IHO finds that Jones expected to be nominated and receive a salary as Sergeant–at–Arms.

101. Beck denied that he was present when Raymond spoke to Jones, but stated that Raymond later acknowledged “he told Donnie (Jones] that he was going to nominate Peter [Fosco] for sergeant of arms [sic].” Tr. 1915–16.

102. Powell testified that affer the nornination he questioned Beck about Fosco’s having been nominaied instead of Jones. Tr. 653. Beck told Powell that due to Coia’s directive, the paid Sergcant–at–Arrns position was the ordy way for Fosco to keep his second pension. Id

103. Beck testified that the $5,988 salary did not trigger the collateral benefit of pension contributions to anyone other than Beck and Fosco because all the other executive board members were alreadv receiving pension coverage as a result of their full–time salaries elsewhere. Tr. 1943–49,

104. Barrick testified that Beck, Fosco’s assistant regional manager, told him that the paid officer arrangement would not be in conflict with Coia’s directive to Fosco. Tr. 346–49.

105. The economic difference between Fosco’s prior consulting agreernent with the Kentucky District Council and the newly salaried Sergeant–at–Arms agreement was $12 a year and the loss of payments to the third pension fund, Tr. 350–51. Fosco’s second pension rcmained intact. Id. In addition, Fosco and Barrick specifically discussed that by setting the compensationai: $5,988, no report to the Intemational Union Was required. Tr.351, Barrick testificd that they would have kept the compensation for the Sergeant–at–ARms position at $6,000, the same as the prior consultation compensation “but the issue was that it would require a report going to headquarters.” Id.

106. The IHO finds unpersuasive Fosco’s argument that the pension funds are maintained in a separate location at LIUNA headquarters, and thus not accessible to General President Coia, indicating that he did not need to keep the salary under $6,000 per year for concealment reasons. This assertion is contradicted by the witnesses who frankly stated Fosco did not want the salary reported to LIUNA.

107 Fosco continued as Sergeant–at–Arrns receiving $499 monthly, one dollar below the $6000 threshold required for paying into the Local Union/District Council Pension Fund. Tr_ –352,354, 912–14. The IHO finds that the salary was deliberately set at $499 to attempt to conceal the paid position from the International Union.

108. Beck denitd that the decision to keep the salaary under $6,000 was made to conceal anything, but simply to save the Kcntucky District Council the 12% contribution which is required at the $6,000 threshold. Tr. 1793, Peck’s explanation is unpersuasive.

109. The duty of a Sergeant–at–Arms is to examine the credentials of meeting participants, keep order and if necessary, dispel rowdy members. The Uniform District Council Constitution, article VII, Section 5, Sergeant–At–Arms, states as follows:

The Sergeant–al–Arms shall determine the right of those who shall be permitted to enter the meeting hall; he shall execute such orders given to him by the President for the maintenance of order and decorum at conventions and meetings

Although this position might havesome responsibility at a local union level where the general membership attends, there is little, if any, responsibility at a district council level. The district council rneeting is attended by only official delegates designated in advance by the local unions. The need to dispel rowdy persons is slight, and there is little need to determine who has a right to attend
.

110, Prior to his election as Sergeant–at–Arms, Fosco regularly anended Kentucky District Council meetings– Tr– 355– After being e1ected Sergeant–at–Arms, Fosco did nothing in addition to whati he had previously done as a delegate to the Kentucky District Council. Id.

111. Barrick– testified that the membership of the Kentucky District Council did not receive any additional services in exchange for placing Fosco on the payroll as Sergeant–at–Arms at $5,998a year and pension benefits, and the duties of the
of’fice did not change once the position became paid, Tr. 358

112. On April 12, 1996, the Kentucky District Council Executive Board discussed paying health insurance benefts for Beck and Fosco under the Kentucky Laborer’ Health and

Welfare Fund effective July 1, 1956. GEB Ex. 24. Barrick made a motion at the subsequent District Council meeting, and the motion carried. Id

113. The officer salary information for part–time officers was not consistently listed on the Kentucky District Council LM–2 reports[15] Tr. 915.For example, the Kentucky District Council LM–2 for 1995 does not list Fosco as either an officer under Schedule 9 or an ernployee under Schedule 10, and does not disclose Fosco’s name, position, and salary anywhere on the form, GEB Ex. 74.The Kentucky Distzict Council LM–2 for 1997 lists all the officers and their salaries, including Fosco, under Schedule 9. GEB Ex 73– It is possible that the disclosure of all officer salaries on the 199 LM–2 was due, to Milenkoff, a LIUNA field auditor, instructmig a new accountant on the proper method of filling out the form. Tr. 913–15, 920–24. The IHO makes no finding regarding the omissions on the LM–2 form other than to note that the International Union could not have kown about Fosco’s paid Sergeant–At–Arms position from an examination of the LM–2 reports,

114. From his election as S ergeant–at–Arms on August 19, 1994, through and including February 1999, the Kennicky District Council has paid Fosco a total of $26,946, in salary alone, not including pension contributions and health benefits– GEB Ex. 22–24.

115. Fosco claimed that his election to the Kentucky Sergeant–at–Arms position was unrelated to Coia’s directive to stop the consulting income– Tr. 1328–3 1. The IHO notes that Fosco’s election to the Sergeant–at–Arms position took place onlly days after he had been told by Coia to cease receiving consulting income, and the difference in salary from his consulting

arrangement is only one dollar a month– Id.. Fosco’s testimony that there was no relationship between Coia’s order and his candidacy and election is not persuasive.

116. Article IV, Sectlon 3, of the Constitution states as follows:

Subject to the approval of the General President, an officer or employee of a Local Union may also hold office in or be employed by another body of the Union and receive the salary and other compensation provided for such positon.

117. Fosco testified that wliile he knew the Constitution requires the General President’s approval to hold a dual position, he did not consider the Sergeant–aa–Ams position to be a second position but an honarafium. Tr. 1363. Fosco stated that he believed that a part–time salary was not a salary because he could not not a “living off of’ it and he interpreted the Constitution to only bar dual full–time salaries. Tr.1363, 1366,

118. The GSB Attorney and counsel for Fosco stipulated that if called to testify Coia would have offered the following testimony: that Fosco did not have Coia’s approval for the paid Sergeant–at–Arm position, that at no time did Fosco mention the possibiliry of the paid position to Coia or seek Coia’s approval for the positlion, and that Coia learned about the paid Sergeantat–Arms position only upon the filing of the instant charges. Joint Exhibit 1 at 2.

Louisiana District Council Celluar Telephone payments Substitution

119. The following evidence of payments to Fosco for his cellular phone is accepted by the IHO pursuant –to Federal Rules of Evidence, Rule 404(b), as evidence of motive and intent to accept money in lieu of consulting fees.

120 Jamie Peers, the Secretary–Treasurer of the Louisiana District Council, testified that at the October 7, 1994 Louisiana District Council meeting, Fosco had raised the issue of the

International Union questioning his consultant fee, and that the consulting fees had to cease, Tr. 2536–37,2598–99.

121. Jerry Thomas testified that the Louisiana District Council stopped paying Fosco a consulting fee because the District Council had received a letter from the International Union informing the mernbers that if they were paying the regional rnanager any type of fee, the payments should cease. Tr.2515–16.

122. The October 7, 1994 Louisiana Distrim Council meeting minutes reflect that Jerry Thomas made a motion that the District Council pay Fosco’s monthly cellular phone bills in lieu of the consultant fee,” GEB Ex. 27. Jamie Peers seconded the motion– GE8 Ex– 27. Fosco recused himself from the vote and the vote was unanimous. Id.

123. Fosco stated that the remuneration in the form of cellular telephone payments was unrelated to Coia’s directive to cease the consulting arrangement and that Fosco had not been responsible for the Louisiana District Council using the term “in lieu of’ the consulting payments. Tr. 1343 – However, several witnesses,[16] including some called by the Respondent himself, clearly indicated –that the cellular photic payments were meant to replace Fosco’s consulting fees. Tr. 955–57, 989, 2196, 2584, 2603–04–

124, The telephone bills the Louisiana District Council received were not itemized, but were based on a package plan in which the Council paid per minute of use. Tr– 1414–15, 2 599–2600,

125. In September 1994, the International Union’s practice of paying for cellular telephone bills on behalf of the regional manager and other members of LIUNA staff ceased.

Tr– 2623– see also Respoadent Exhibit (“R. Ex.”) 4. Thereafter, a $100 monthly cap was established for all International Union staff and regional managers. Id. Fosco claimed that the Louisiana District Council took note of the cutback and offered to pay his cellular telephune bills to ensure council Members could telephone Fosco if they required his assistance. Tr. 2623–63. Fosco further claimed that the time frame of the telephone bill payments beginning at roughly the same time the consultant payments stopped was merely coincidence, Id. The IHO finds this explanation unpersuasive.

126. The IHO finds that the payment of the cellular telephone bills was not merely a coincidence but planned to substitute for Fosco’s consulting fees. The cellular telephone bills was not simply a payment for Fosco’s calls on behalf of the Louisiana District Council, but were payment of Fosco’s overall cellular telephone usage without regard to what apportionment belonged to The Louisiana District Council,

127. From 1994 to Februazy 1999, the Louisiana District Council paid $10,024.05 for telephone bills on Fosco’s behalf. GEB Ex.27–30,62–63. There is no indication if the International Union reimbursed the Louisiana District Council $1,200 per year during this tirne peiiod according to its payment cap, or if the entire $10,024,05 sum was paid by the Louisiana District Council.

Logal 692 Paid Delegate Position Substitution

128. The following evidence of payrnents to Fosco as a delegate from Local 692 to several district councils is accepted by the IHO pursuant to Federal Rules of Evidence, Rule 404(b), as evidence of motive and intent to accept money in lieu of consulting fees.

129. According to Local 692 records, despite Coia’s directive, Fosco continued receiving consultant compensation at $200 a month through and including December 1994. GEB Ex, 11

130. At the April 26, 1995 Local 692 Executive Board meeting, Jerry Thomas made a motion that elected delegates frorn Local 692 to district councils who were not full time employees of the local receive twelve hundred dollars ($ 1,200) per year for each district council to which they serve as a delegate. GEB Ex– 31. The motion carried. GEB Ex 31. Prior to that time, the delegate to district council position had been unpaid. Tr. 1333,1335.

131. At the April 26, 1995 Local 692 Nomination meeting, three individuals, including Fosco, were norninated for three uncontested positions as delegates to the Louisiana District Council. The positions were uncontested. GEB Ex, 31. Fosco was also nominated for delegate to the Arkansas Distict Council, for delegate to Kentucky District Council, and for delegate to Mississippi District Council and was unopposed for all three positions[17]. Id As a result, Fosco became a paid delegate to four district councils at $1,200 per year per position.

132. The paid delegate income frorn Local 692 cornmenced eight rnonths after Coia directed Fosco to cease receiving consulting income ancl four months after the consulting income ceased. Tr. 1340– When Fosco ceased receiving the $2,400 a year consultant fee as a consultant to Local 692, he was re–elected as a newly–paid delegate to four district councils at a rate of $4,800 a year. Tr 1333– GEB Ex 11.

133 Fosco later resigned as delegate to the Mississippi District Council, having received compensation in May but not June 1995. Tr. 1336.As a result, Fosco received $400 a

mouth for his first month as a paid delegate and $300 a month for the subsequent months of 1995. GEB Ex. 31: Tr. 1336, 1341.

134. From May 1995 through and including December 1995, Fosco received a total of $2,500 for the delegate positions he held. GEB Ex–31. This sum includes $100 a month for cach of the Louisiana, Arkansas, and Kentucky District Councils and $100 for the Mississippi District Council for May. Id.

135. As discussed in Finding 60 above, Fosco was authorized a $300 bonus by Local 692 in 1992 and 1993 specifically as a consultant. GEB Ex. 52–53. In 1994, a motion was made “to give Christmas bonuses as usual,” including a $300 bonus for Fosco– GEB Ex. 54 (emphasis added). The 1994 minutes however do not label Fosco a consultant. Id, The IHO finds that despite the directive from the General President, Fosco was given a bonus for his position as a consultant.

136. At the December 13, 1995 Executive Board Meeting, Jerry Thomas made a motion to stop paying all delegates until the work picked up. GEB Ex, 31. The delegates have not been paid since that tirne. Fosco only received pay as a delegate during 1995.

137. In paragraph 17 of Fosco’s answer filed with the IHO prior to the hearing, he adverred the following: “My election as Kentucky District Council Sergeant at Arms has been reported annually to LIUNA directly and rny receipt of compensation from all three has been annually reported on the LM’s submitted to the DOL and LIUNA". However with the exception of two documents, one from Local 692 and one, from the Kentucky District Council, none of the LM–2s or LM–3s filed by local 692, the Kentucky District Council, or the Louisiana Dustrict Council specifically disclose the arrangements between Fosco and Local 692, the Kentucky District Council, or thc Louisiana District Council, Tr. 1412. Fosco testified at the

hearing that despite the averments made in his answer to the IHO, he had not examined the LM–2s or LM–3s. Tr. 1404.

138. Fosco has continuously denied any correlation between ceasing the consulting agreements and his subsequent compensation for the paid Sergeant–at–Arms and delegate positions, and receipt of cellulur telephone expenses– Tr.528–30.

South Central Regional Office “Staff Fund" Dues

139. Count –Nine states as follows–

Count Nine Breach of Fiduciary Duty:, Breach of Duty of Loyalty
By soliciting monies frorn subordinates in LIUNA, by demanding that all payments be in cash, by failing to keep adequate records of how the money was spent or if it was spent for proper purposes, and by failing to account for the ultimate disposition of the monies receivcd, Peter J Fosco breached his fiduciary duty to the rnembexs of the union who contributed to the “club dues” for the South Central Regional Office, and breached his duty of loyalty to his office, in iolation of 29 U. S. C. §501 (a) and the Financial Practices Section of LIUNA’s Ethical Practices Code–

140. All parties agree that Fosco maintained a “staff fund"[18] for which he collected a fixed monthly rate from the individuals on his staff, always in cash. Any attempts to pay by check were refused and all payments were made in person. Tr– 386, 390~ 745–46, 831,895, 1052–54, 1549.

141. Fosco told Butler that he required the “staff fund" dues to be paid in cash because he did not want the burden of Internal Revenue Service procedures. Tr. 535

142. The staff fund dues were not voluntary; individuals were actively reminded of arrearages by Fosco, and there was no accounting of how much was collected and spent.

to Fosco’s explosive personality. The incident only served to make Ybarra reluctant to refuse Fosco’s requests for “staff fund” dues when Fosco made the request later in the conference–

153. At the same conference, Fosco asked Ybarra for dues for the first time, telling him that he owed $150, dues for three months. Tr. 1052. Fosco made his request in private. Tr.1052–53. Ybarra told Fosco that he did nor have that amount of cash with him but that he could pay hirn with a check. Tr. 1052–54. Fosco told Ybura that he did riot accept checks. Tr, 1053. Ybarra testified that while he felt the arrangement was “a bit shady, “ but he wouldn't have questioned the man after what just occurred [the beer coolcr incident].” Tr.1034. Ybarra withdrew the money from an automatic telIer machine, and paid Fosco. Tr. 1055. Fosco did not tell Ybarra for what purpose the money would be used, and Ybarra did not feel comfortable challenging Fosco– Tr. 1056–57– Ybarra continucd paying Fosco monthly until June 1998. Tr– 1057,1060,1065.

134. Although The General President has the ultimate hiring and firing power over the International Representatives on Fosco’s staff Fosco has the ability to make reconimendations which absent an.unu.sual circumstance, will be given considerable deference by the General President. Tr. 1099.

155. Despite Fosco’s assertions that payments were strictly voluntary, several staff members testified that when they fell behind on their dues, Fosco would actively remind them of their arrearage. Lynsky, Chris Bfasseaux, and Ybarra testified that on the occasions when they fell behind on their dues, Fosco would remind them individually that their monthly payment was due, Tr.61,831–32,1058. Ybarra also stated that he never made the first approach to Fosco to pay him; he paid only after being approached by Fosco. Tr. 1065–66.

156. When Dale Brasseaux fell behind in his paymnents he was reminded of the arrearage by either Fosco or Jerry Thomas. Tr. 975~77.

157. Barrick and Slaydon testified that when they were behind on their dues, Fosco telephoned them to tell them the amount of the arrearage and remind them to bring the money to the next meeting. Tr–390–91, 744.

158. When Millenkoff:fell behind on his payments, Fosco telephoned him to remind him that he owed dues and arranged to meet him. Tr. 901–02. On one occasion in 1995, Fosco told Milenkoff that he would be in Columbus, Ohio for the District Council meeting and that Milenkoff should meet hm there. Tr. 902. Milenkoff specifically drove from Cincinnati to Columbus to make his payments of $600. Id,

159. Ohio was removed from the South Central Region briefly beginning in March 1995. Tr. 64, As a result, Lynsky no longer reported to Fosco. Despite the fact Lynsky was no longer in Fosco’s region, Fosco phoned Lynsky and demanded two months’ dues, for January and February 1995. Id, Lynsky did not pay and Fosco took no action as a result of Lynsky’s nonpayment. Tr. 65,

160. Fosco testified that he did not rnakc a public accounting of the ‘staff funds’ because he did not want to pressure the staff to participate. Tr. 2648–49, The IHO finds this explanation unpersuasive.

161 In 1996 and 1997, events occurred which led several staff members to cease paving staff dues.

162. Chris Brasseaux iendled that at the 1996 convention in Las Vegas, he had a discussion with an associate Auditor, Theodore Milenkoff about the posoible illegality of the

staff dues"[21] Tr. 833 –34. Both individuals were concemed that with the restructuring of the Intemational Union and their offices coming under the supervision of the Inspector General, the paying of staff dues might be improper– Id. When Chris Brasseaux officially became under the supervision of the Inspector General's office in January 1997, he stopped paying dues. Tr– 834–35

1631. Dale Brazzeaux testified that, at the September 1996 International Convention a regional staff rneeting was held. Tr.979–80. The staff ineeting included a discussion regarding the "staff fund” dues and that a standardized collection and receipt issuing process would be instituted, Id. Thereafter, some individuals ceased paying dues.

164. Dale Brasseaux stopped paying dues after December 1996, Tr. 982.

165. In 1996 or 1997, Slaydon was present at a meeting in Mississippi where Fosco stated that the"staff fund” dues was a voluntary system. Tr– 749, Slaydon then ceased making "staff fund” dues payments– Id–

166. Ybarra testifled that in 1998, at a staff meeting in Arlington, Texas, Fosco stated that the "staff fund’ dues were voluntry and that anyone whe did not want to pay need not participate. Tr. 1067. This was the first time Ybarra had heard the "staff fund" dues were voluntary. Tr– 1068, Ybarra ceased paving “staff fund” dues in June 1998– Tr– 1065–

167– The exact amount of money collected as “staff fund’ dues can not be determined Tr. 540. When Fosco became the regional rnanager in 1987, he had no staff members– Tr. 1101. Since that time the regional staff has varied between eight to twelve persons, Tr, 1102. For example, Fosco originally hired two Special International representatives and one person on assignment while at the time of the hearing, Fosco had seven full time international

representatives, tvo organizers, and two secretaries, Tr. 1102–03 . In 1999, the regional staff consisted of approximately twelve individuals; frorn 1994 to 1999, the regional staff consisted of approximately ten to twelve persons, Tr, 539–40, Prior to 1994, the regional staff was smaller Id, Lynsky approximated that when he joined the South Central RegIon in 1991, there were approximately five to eight persons on the staff and that when he left the region in 1995, there were approximately eight people on the staff Tr.150–51. The IHO finds that most of the persons on Fosco’s staff contributcd to the fund,

168, In his deposition taken by The GEB Attorney Fosco testified that the “staff fund" dues revenue totaled approximately $6,000 a year. Tr. 1501–02. However at the hearing, in the present matter, Fosco testified that in 1995, the highest point of the "staff fund" dues revenue, the arnount was approximately $6,600 yearly while the lowest point was approximately $4,000 yearly, and approximate figures were $6,000 for 1996 and $4,500 for 1997 and less in 1998– Tr. 1500–03–

169. Inspector Butler stated that Fosco told him that the "staff fund” dues were initially $25 a month, and increased to $50 a month after the 1994 pay raise, wbile special International Representatives paid a lower $30 rate. Tr. 534.

170. Barrick,[22] Lynsky,[23] Chris Brasseaux, Milenkolf, Beck, Calvin, and Ybarra testified that they paid Fosco at a rate of $30 a month ($600 a year), with Chris Brasseaux having started at $25 and Lynsky at $30 or $35 a month– Tr.60, 66, 150–51, 828,830,855,896,1057, 1060, 1681, 1964. Dale Brasseaux testified that while other individuals eventually had their dues

increased, his dues did not increase and remaincd at $25 a month because he was not a regular International Representative. Tr. 921

171 Slaydon paid $25 a Month until Fall 1995, when Fosco approached Slaydon at the Laborers’ Agency Conference in Albuquerque, New Mexico and told him that due to the substantial pay raise issued by the Intemational Union, the “staff fund”’dues amount had increased. Tr. 747. Slaydon told Fosco that the increased rate would be a hardship since he had not received the same pay raise as the rest of the International Union staff, he had a daughter beginning college, and other family considerations. Tr, 748, As a result, Fosco and Slaydon negotiated Slaydon’s rate to $40 a month, Tr, 744–49.

172 The IHO finds that Fosco doubled the “staff fund” rate after the 1995 pay raise given to all International Union employees.

173. Fosco testified he did not participate in the monthly contributions himself Tr. 1546–47

174. Fosco’s manner of maintaining the money collected is graphic evidence that the "staff fund" was totally improper and operated solely for Fosco’s benefit.

175. Fosco testified that while he received dues payments from the staff members he wrote their names on the side of one of the bills given to him and put the money in his back pocket, keeping the money separate fxom his own personal money which he kept in his front pocket. Tr. 1520–21. Fosco testified that he generally carried “a few hundred dollars” on his person in his front pocket. Tr. 1521 Fosco testified that he did not have an exact accounting of the staff funds but at best could only provide “a close approximation. Tr. 1523.

176. The first time Ybarra paid his dues, he gave Fosco a lump sum of $150. Tr– 1056. Fosco took folded money out of his pocket, wrote something down on a piece of paper, added

the money Ybarra had given him replaced a rubber band around the whole wad of bills, and placed everything back into his pocket. Id. Ybarra testified that Fosco told him he kept “staff funds” in one pocket, his own money ‘in the other pocket, and used a little piece of paper upon which he kept a tally. Tr. 1059, Other witnesses also confirmed this practice, Tr. 61, 390, 899.

177. Fosco showed Butler some photocopies of dues cards on which Fosco kept track of who had paid his "staff fund” dues. Tr. 5326, Fosco told Butler that he onIy kept the cards for certain years because once everyone paid Fosco threw the cards away, Id,

178. Fosco told Butler he kept the “staff funds” in cash and showed Butler a canvas bank bag containing slightly over four thousand dollars in cash– Tr– 535. In addition, Fosco stated that he kept some cash in a safe deposit box. Tr. 536– None of the money was ever deposited in any bank account. Id.

179. It is unclear exactly what items, if any, were purchased from the "staff fund.” It is clear, however, that it was Fosco who made the decision regarding how the money would be spent.

180 There was evidence that Fosco bought a number of small Christmas gifts for secretaries and children of staff members, and made three cash gifts to individuals.[24] Tr.423, 755, 837, 900–01, 930, 1069–71, 1666, 1696–98, 2557–58. The IHO finds that there is no way to verify the amount spent. At the hearing, Fosco also presented photographs of gifts he purchased, but there is no evidence of the cost of the items or whether “staff funds" were used to purchase the gifts. Tr. 89–109.

181. Dale Brasseaux testified that his son had received small Christmas gifts such as a coloring book, Tr– 980. The gifts were sent to Dale Brasseaux at his house from “Mr.Fosco" Tr– 981–92, Barrick testified that his daughter had received a gift each Christmas from Fosco, but Barrick could not state whether the gift had come from the gift fund or as a personal gift frorn Fosco. Tr 424,454. Also the gifts were always labeled “from” Fosco not from the Regional Staff– Id

182 The South Central Region sponsored a hospitality suite at the 1996 Intemational Convention in Las Vegas, however, the source of the funds is unclear, such funds typically are paid from the convention fund. Tr. 107–11 The IHO finds that no accounting was ever made to substantiate whether the South Central Region made any expenditures at the 1996 International Convention frorn the staff fund as opposed to from a convention fund.

183– At the hearing. Fosco presented serveral promotional iterns, such as pens, decals, and coffee mugs, which he claimed had been purchased with "staff funds" R. Ex. 1a. While Slaydon was able to identify having received or seen some of the items Fosco claimed were purchased through "staff funds", Slaydon was unable to indicate whether such items had been paid for by "staff funds” or from another source, Tr. 757. The IHO finds that there was no evidence presented to demonstrate that the promotional items and other gifts had, in fact" been purchased with "staff funds". Furthermore, several of the gifts only credited Fosco, and not the staff, as the source of the gift. Tr– 2627, 2699–2700–

184– Fosco did not maintain a checking account for the “staff fund”, disbursement. Tr–1537. Instead, Fosco wrote personal checks for the iterns, reimbursing himself for money spent or purchased money orders frorn the bank– Tr. 1537–38. It was Fosco’s practice to write the check, take the corresponding cash from the "staff fund" and place it in his pocket. Tr– 1538–

190. During his testimony, Fosco gavc conflicting accounts regarding the amount of money in the “staff fund” at particular times, Tr. 1517–19

191. Fosco testified that he maintains the cash from the "staff fund” –in a. small safe in a file cabinet in his office where he keeps the money clipped in $1,000 bundles. He stated that he knows how much money is available by the quantity of clips in the drawer Tr. 1519.

Fosco’s Accounting Representations to the IHO

192. After he was interviewed by Inpector Butler on November 11, 1997, Fosco retained Ted A. Soileau, an accountant, to aid him in reconstructing the staff funds. Soiloau specifically stated that he did not conduct an audit and did not verify the accuracy of the information.Tr.2355, 2442, Soileau’s calculautions were based solely upon the face value of paper receipts and verbal information given to him by Fosco. Id.

193– Soileau testified he was givm two folders of paper receipts by Fosco, Tr. 2323,R. Ex. 17–B– One of the folders contained the same receipts that Fosco had given to Butler (Folder 1), the other contained paper receipts not previously given to the GEB Attorney or the IG which Fosco claimed he had later found in his desk drawer (Folder 2). Soileau was also permitted to count cash in a box in Fosco’s office and shown pictures of the silver dollar coins Fosco had collected. Tr. 2326–27; see also R. Ex– 17–B– Based upon the information he gathered from Fosco and ageed upon procedures by Fosco and his attorney, Soileau developed a history of the accounting transactions of ‘the staff fund" for the period September 1, 1989 through April 30, 1999– R. Ex– 17 and 17B.

194. While the rellability of several receipts submitted by Fosco was highly questionable, the IHO gives Fosco the benefit of the doubt on all the paper receipts he submitted

and accepts them at face value, as receipts for money expended in the amount shown Tr.2782–84.

195. Fosco represented to the IHO that he fully accounted for all the "staff fund"monies. The information provided by Fosco seerns to indicate that the total cash collected from the "staff fund",was $37,303.80 (including "staff fund” contributions of $34,204.31, and silver dollars coins valued at $3,099.49), The total expenditures were $31,537.31 (Folders 1 and 2 of paper receipts totaling $17,077.13 and $14,460.18), with the rernaining balance accounted for by the cash in Fosco’s drawer $2,667, and the silver dollars in the safety deposit box valued at $3,099.49 R. Ex– 17.

IHO Fig 1 Fosco’s Representation of Complete Accountability to the IHO

Staff contributions	$34,204.31
+ silver dollar coins[25]	$3,099.49
TOTAL CASH COLLECTED	$37,303.80

Folder 1	($17,077.13)
+ Folder 2	($14,460.18)
TOTAL DISBURSEMENTS	($31,537.31)

CASH COLLECTED	$37,303.80
– DISBURSEMENTS	($31,537.31)
FUND BALANCE	($5,766.49)
BALANCE IN FOSCO’S POSSESSION
cash in drawer	$2,667
+ silver dollars	$3,099.49
TOTAL IN FOSCO’S POSSESSION	$5,766.49

Thus, Fosco contends that the accounting demonstrates the figures balance completaly.

196. Fosco testified that that "staff funds" were not an exact science but that he would occasionally round off figures in favor of the fund when he was making transactions. However, even if the rounding were in favor of the fund, it is incredible that the fmal sum would tally to the last penny.

197. It should be noted, however, the silver dollar coins, valued by Fosco at $3,099.49 were incorrectly calculated as Cash collected. Because the coins were purchased by the “staff funds,” the coins are not additional cash collected but merely a part of the total assets, changing only in denomination from bills to silver dollar coins. When properly calculated to not include the silver dollars as cash collecred, the cash collected total includes only the amount collected by Fosco from the staff, which by Fosco’s own calculations totaled $34,20431. Therefore,the correct amount of cash collected was $34,204.31, the disbursements totaled $31,537.31 (receipts from Folders 1 and 2, $17,077.13 plus $14,460.18), and The balance totaled $5,766.49 (including the cash in Fosco’s drawer $2,667, and the value of the silver dollar coins $3,099.49). As a result, instead of matching exactly as presented by Fosco, the balance and disbursements exceed the cash collected.

IHO Fig.2 Fosco’s Representation to IHO Adjusted for Silver Dollars As Cash Collected Error

staff contribution	$34,204.31
TOTAL CASH COLLECTED	$34,204.31

Folder 1	($17,077.13)
+ Folder 2	($14,460.l8
TOTAL DISBURSEMENTS=	($31,537.31)

CASH COLLECTED	$34,204.31
–DISBURSEMENTS	($31.537,31)
FUND BALANCE	($2,667)

BALANCE IN FOSCO'S POSSESSION
cash in drawer	$2,667
+silver dollars	$3099.49
TOTAL IN FOSCO’S POSSESSION	$5,766.49

After making the adjustment, Fosco should have $2,667 left in his possession, yet by his own account, Fosco retains$5,766.49. Thus, Fosco’s account of the monies in his possesion exceeeds his accounting the total furid balance.

198. When contronted with this error, Fosco testified that sorne staff rnernbers had paid him in silver dollars– Tr. 2734–35– He named only Nancy George as having done so. Id,

199– The IHO finds this explanation to be incredible and notes that no mention was previously made by either Fosco or any of the witnesses regarding payment in 1903 silver dollar coin. To the contrary, several witnesses emphasized that Fosco preferred payment in large bills, and furthermore, Fosco testified that the silver dollars he was keeping were to be a ‘special surprise.” Tr. 2764–65. Moreover, 1903 silver dollars have a limited availability.

200– Even if the IHO were to credit Fosco’s explanation, Fosco testified that only one person, Nancy George, paid $300 in 1903 silver dollar coins. Tr. 2734–35– Therecfore, the cash collected is still overcalculated and would not have balanced exactly as represented. Id, When confronted again that the cash collected would still have been overcalculated and should not have balanced perfectly, Fosco testified that Soileau had also included the money Fosco had put into the “staff fund” out of his own personal funds– Tr~2747–48– The IHO finds Fosco’s explanation to be incredible. Not only does such a fact not appear anywhere until Fosco’s cross–examination, but the numerical odds that the amount Fosco contributed equaled exactly the difference between Nancy George’s contribtition and the total balance held in silver coins is astronomical.

201. Fosco further testified that not only did he round off totals, but he occasionally would place receipts in the staff dues folder for items that he had personally paid without reimbursing himself Tr. 2721–23. The IHO finds such transactiom, if true, and even if accepted as cash collected, would further illustrate that the cash collected, disbursements, and balance as accounted for by Fosco could have never matched exactly withhout having been fabfricated after the fact.

202. The following illustrates the absurdity of Fosco’s explanations. Fosco double counted an expense for Andrews Decal listing in the amount of $675 under “staff club in brown folder" in Folder 1 and again in the total expenditures under “the staff club” in Folder 2. R– Ex 4 at 13, and 17. See also 2768–73– While the IHO finds that the double counting of the receipt was accidental, the IHO also finds the fact that Fosco’s numbers balanced perfectly, despite the double counting, is further evidence that Fosco fabricated the figures supplied to the IHO.

203. The IHO finds that Fosco intended to mislead the GEB Attorney, the IG, and the IHO by his varied efforts at attempting to account for the “staff fund" on the witness stand and through his submissions.

204. The IHO further finds finds that there was no proper accounting kept either of the collection or of the disposition of the funds, and the amounts can not be accurately recreated to demonstrate how much Fosco collected in "staff fund" dues or what happened to the money.

Improper Receipt of Exhorbitant Gifts

205. Fosco was charged with pressuring the Kentucky District Council, the Louisiana District Council, and Local 692 to give him exorbitant gifts.

Gifts from the Kentucky District Council

206. Counts Ten and Eleven allege that by suggesting and accepting gifis from the Kentucky Dlstrict Council, Fosco converted union asstets to his own use and breached his fiduciary duty to the membership and his duty of loyalty to his office.

207. Count Ten states as follows;

Count Ten Conversion of Union Asssets

From on or about December 15, 1989 through on or about

December 31, 1997, Peter J Fosco did engage in barred conduct,

as defined by the EDP aiid EPC, by converting to his owm use the

assets of the Kentucky District Council of Laborers, in the form of

substantial gifts to himself, in violation of 29 U.S.C. §50 1 ( c ).

208. Count Eleven states at follows:

Count Eleven Breach of Fiduciary Duty and Duty of Lovaltv

From on or about December 15, 1989 though on or about December 31, 1997, Peter J. Fosco did breach his fiduciary duty to the union’s membership and his duty of loyalty to his office by suggesting and receiving substantial gifts from the Kentucky District Council of Laborers, in violation of LEUNA’s Ethical Practices Code and 29 U.S.C. § 50l (a)–

209. In the late 1980s, –the Kentucky District Council developed the custom of giving gifts to the regional manager dluring the annual Christmas dinners. Tr. 360–61. In 1994, when the position of assistant regional manager was added, that individual also received an annual gift. Tr_ 685.

210. Barrick testified that the gift–giving process to the regional manager was suggested by Richard Beck, who at the time was an International Representative and President of the Kentucky District Council. Tr. 361–62–

211. Fosco testified that beginning in approximately 1990, the practice of the Kentucky District Council was to approach Fosco and ask what he wanted as a gift, and then purchase it for him, Tr, 1454–55.

212. Powell testified that the practice of giving a gift to Fosco followed a certain course. Beck, the President of The District Council, would announce it was time for a gift for Fosco– Tr.667. A motion was made and passed to assign the gift buying responsibility to the Business Manager, and the gift would be selected without further input from the Kentucky District Council Executive Board. Tr–666–67– The delegates would not know until after the fact what gifts had been purchased for Fosco. Tr. 667–68, 673,

213. Barrick also testified that the practice eventually evolved where Barrick and Fosco had an annual conversation in which Fosco would tell Barrick what he wanted for Christmas. Tr. 376. Fosco always received what he requcsted. Tr. 376,

214– The gifts Fosco received from the Kentucky District Council were as follows:

· In 1990, Fosco suggested a $1,400 stereo as a Christmas gift. Fosco selected and purchased the stereo and the Kentucky District Council paid for the gift. GED Ex– 33, Tr. 366–67, 1455–56. Barrick testified that he felt, “a little concerned’ at the $1,400 price spent on the stereo, but he did not mention his concern until the next year when the subject of Christmas presents arose. Tr 367. Barrick testified that he had received complaints from delegates that the $1,400 cost for a gift to the regional manager was excessive. Tr– 368.

· In 1991, the Kentucky District Council, in conjunction with other District Councils purchased a Joint gift of a painting to give Fosco at the 1991 Convention, GEB.Ex. 34. Tr. 369–70. The record does not reflect the cost of this gift.

· In 1992, the Kentucky District Council joined the Mississippi, Louisiana, and Arkansas District Councils in purchasing a large–screen television for Fosco as a Christmas gift. GEB Ex, 35; Tr, 371–73. The total price of the television set was $2,184.99 with Mississippi and Arkansas each contriburing $400, Kentucky contributing $784.99 and Louisiana contributmig $600. GEB Ex–35: Tr. 373.

· In 1993, at Fosco’s request, the Kentucky District Council gave Fosco a Cadillac tire package for his car which cost $872– GEB Ex. 36,

· In 1994, as a Christmas gift, the Kentucky District Council paid $725 for a custom –tailored suit selected by Fosco, Tr.–380. See also GEB Ex.37.

· In 1995, the Kentucky District Council again paid for a $725 custom tallored suit as a gift for Fosco.Tr, 381. See also GEB Ex. 38. Fosco paid taxes on the suits in 1994, but not in 1995. Tr. 1462–67.

· In 1996, the Kentucky District Council gave Barrick the authority to purchase a gift for Fosco and Beck– GEB Ex.39. Fosco selecred a $1,000 cellular telephone, which he received. Tr.382–84–,GEB Ex.39.

· At the November 20, 1997 Kentucky Districk Council Executive Board Meeting, a motion was made “to continue council policy of giving regional Manager Fosco a Christrnas gift with the cost riot to exceed $1,000.00 GEB Ex. 40.

215. Both Fosco and the delegates received Cluistmas gifts. Tr. 666– None of the gifts to the delegates were of a comparable monetary value to those received annually by Fosco and Beck the Assistant Regional Manager. Tr– 378–79, 666. The full time employees of the Kentucky District Council, Barrick, Barrick’s secretary, and a full time representative each received $500. Tr. 379,

216– Fosco agreed that within reasonable bounds, whatever gift he received, the Kentucky District Council would feel bound to purchase far him– Tr. 1459,

Gifts from the Louisiana District District Council

217 Counts Twelve and Thirteen allege that, by suggesting and accepting gifts from The Louisiana District Council, Fosco conveted union assets to his own use and breached his fiduciary duty to the membership and his duty of loyalty to his office.

218. Count Twelve states as follows:

Count Twelve Conversion of Union Assets
From on or aboout December 15, 1989 though on of about December 31, 1997, Peter J.. Fosco did engage in barred conduct as defined by the EDP and EPC, by converting to his own use the

assets of the Louisiana District Council of Laborers, in the form of substantial gifts to himself in violation of 29 U. S.C, § 501 ( c )

219, Count Tbirteeri states as follows:

Count Thirteen Breach of Fiduciary Dutv and Duty of Loyalty

From on or about December 15, 1989 though on or about December 31, 1997, Peter J Fosco did breach his fiduciary duty to the union’s membership and his duty of loyalty to his office by suggisting and receiving substantial gifts from the Louisiana District Council of Laborers in violation of LIUNA's Ethical Practices Code and 29 U.S.C. §501 (a).

220, Dale Brasseaux testified that the Louisiana District Council originally gave gifts to Fosco bv authorizing an amount and having Jamie Peers, the Secretary–Treasurer of the District Council, select the gift. Tr. 965, Dale Brasseaux testified that on orie occasion, after the District Council had set an arnount, Jamie Peers later conducted a telephone poll to vote for an increased amount because the gift Fogco wanted exceeded the amount which had been authorized– Tr– 965–66.

221. Jamie Peers served as the Smetary–Treasurer for the Louisiana District Council, Peers testified that frorn 1994 forward, "[u]sually the guys in the November or December meeting would tell me we’d like to get Peter [Fosco] a gift for Christmas. Find out what he wants.” Tr. 2579–80, Peers further testified that she, not Fosco, initiated asking for particular presents. Tr. 2580–81.

222. Barry Kaufman, the Business Manager of Local 689 in Louisiana, testified that it was his recollection that Jamie Peers had asked Fosco his choice of a Christmas gift– Tr. 213 When the decisions to approve a gift were presented for vote, the gift to be selcted forFosno had already been selected. Tr. 214.

223 Dale Brasseaux stated that, in the early 1990s, the Louisiana. District Council discussed setting a cap on gifts because there had previously been informal complaints arnong the members who felt the need to limit gift expenditure. Tr. 969, No action was ever taken on these complaints.

224. Fosco received the following gifts from The Louisiana District Council:

· In 1989, the Louisiana District Council presented Fosco with a lithograph painting, GEB Ex– 42. The record does not indicate the cost of the lithograph.

· In 1990, the Louisiana District Council gave Fosco a camcorder for Christmas. GEB Ex. 43,

· In 1991, all delegates were given a $ 100 cash gift– GEB Ex. 44.

· In 1992, the Louisiana District Council Executive Board voted to contribute six hundred dollars ($600) towards Fosco’s Christmas gift of a large–screen television, and to set a three hundred and Fifty dollar ($350) limit on all gifts in the future. GEB Ex 45, See Finding 214 Supra,

· In November 1994, the Louisiana District Council Executive Board approved the purchase of a Bose Wave radio in the amount of $349 (plus shipping and taxes)[26] as a Christmas gift for Fosco by telephone poll[27] GEB Ex– 47. Of six executive board members, five voted to approve and one vote was not recorded. Id– Therewere no negative votes– Id–

· In –November 1995, the District Council voted by telephone poll to purchase Fosco a Valentine One Radar Laser Locator with Display Module in the amount of $468 (plus shipping and taxes) as a Christrnas gift[28] GEB Ex. 43. All six executive board members voted to approve. GEB Ex– 48

· In November 1996, the Louisiana District Council by telephone poll authorized the purchase of a WEBTV setup at a cost of $400 (plus taxes) for Fosco as a Christmas gift[29] GEB Ex, 49. All seven members of the executive Board voted in favor of the gift Id.

· At the December 10, 1997 Louisiana/Mississippi District Council Meeting. Felton Parquet made a motion to purchase a 25" TV/VCR Combination unit, not to exceed $600 as a Christmas gift for Fosco– GEB

Ex. 50– Dale Brasseaux asked whether the motion required General Executive Board approval and Jamie Peers replied that she believed the threshold for gifts needing approval was $5,000. Id. DaleBrasseaux Voted against the motion while all others present voted for it– id.

225. Fosco testified that for each gift from the Louisiana District Council, except for the 1989 lithograph and the $100 gift to all delegates in 1991, he was asked for what he wanted and received what he had requested, Tr. 1447–48.

Gifts from Local 692

226. Although not specificaIly charged in any of the charges, the GEB Attorney presented evidence that Fosco received gifts from Locad 692 in the same manner as he had received from the Kentucky District Council and the Louisiana District Council. GEB Ex. 51–54.

227. The IHO finds that, unlike the gifts frorn the Kentucky District Council and Louisiana District Council, there is insufficent evidence to indicate that Fosco caused Loca.1 692 to provide him with Cluistmas gifts.

Obstruction of the IG

228– Fosco is charged with obstruction of the Inpector General limited to the specific allegation that he deliberately and falsely represented to the IG and GEB Attorney that the newsletters were his own work product while he knew that they were not.

229. Count Fourteen states as follows;

Count Fourteen Obstruction of the Inspector General

On or about November 11, 1997, Peter J. Fosco did engage in barred conduct as defined in the EDP and EPC by obstructing and attempting to obstruct an investigation of the Inpector General by falsely representing to Inspector Robert Butler that the work product he produced to Butler was the results of his own research and that he performed the research to ensure that he was not receiving money for nothing,” then knowing full well that the consulting reports were not his own work product but the work

product of another, retyped in order to lend the false appearance that the work was Fosco’s.

230– Butler’s initial interview with Fosco lasted approximately five to six hours. Tr. 514. Butler testified that during their initial interview:

· Fosco told him that the consulting agreements started as the idea of the Three entities wanting to do something for him because he was doing a good job, and that the idea had specifically been of the entities, and not Fosco’s idea, Tr 512, 519.

· Fosco did not mention his interest in receiving an extra pension. Tr.519.

· Fosco told Butler that he had discussed the consulting agreements with his father, then General President Angelo Fosco, and That his father had approved the agreements provided that he “did something” in exchange for the payment. Tr. 512, 516.

· Fosco also told Butler that he "put out a consulting document” periodically. Tr. 512.

· Fosco presentcd Butler with several of the consulting decurnents/newsletters. Tr. 513. Fosco told Butler that he had produced the newsletters himself, through his own research, by culling the information from various sources such as magazines. Tr. 515. Fosco did not mention Oberdank’s name to Butler during the interview, nor did he state that he had copied anyone else’s documents. Tr. 5 14

· Fosco gave Butler the same version of events that he had givcn Coia in his August 4, 1994 letter, that the initiative for the consultation agreements had corne frorn the three entities, that he had never solicited compensation, that he issued a bi–monthly newsletter as tangible proof of work performed, and that the arrangement had been approved by his father the General President Tr–527–29. See Findings 75, 85,supra

231 The IHO fnlds That Fosco intentionally led the IG Inspector to believe he had been issuing consultant documents for which he had done actual work. The IHO also finds that.Fosco intentionally did not inform the IG Inspector of the true source of the newsletters for fear that it would be discovered that he had not performed any work in exchange for the consulting fees.

232. Fosco was deposed by the GEB Attorney on April 9,1998. At the deposition

· Fosco was questioned about his consulting relationships, and at no point in his deposition did Fosco mention that he had told his secretary to copy

Oberdank’s newsletters twenty three times or mention Oberdank’s name in any manner, Tr. 1252,

· Fosco stated that while the newsletters he had given Butler were fairly clear excerpts from labor law digests, he could not remember from where he had obtained the information– Tr, 1263

233. At the hearing, Fosco testified that, at the time of his deposition, April 9, 1998, he had not remembered that he had copied Oberdank's newsletter twenty–three times Tr. 1259. The IHO does not credit Fosco's testimony that he did not recall coping the letters twenty–three times, especially since he was specifically being questioned on the subject.

234. The IHO finds that at his deposjtion Fosco intentionally mislead the GEB Attorney by deliberately failing to mention that he had copied Oberdank’s letters and had instead issued them as his own work

235. On May 12, 1998, approximately four and a half weeks after his deposition by the GEB Attorney, Fosco amended his deposition to state that the newsletters were based on information frorn Oberdank, however he still did not indicate that he had actually copied the information verbatim– Tr.561. The letter from Fosco to the GEB Attorney states in relevant part as follows:

Wfth regard to the consulting report we discussed. At the onset I would first decide on the message I wanted to deliver. Then I used materials wMch addressed the point I had focused upon. I found this in various periodicals and cornpiled a formal report frorn them. The purpose of the report was to provide timely and useful information about operational issues that would be of interest to people in the field, such as pitfalls to be avoided and targets/tactics of opportunity which otherwise might be overlooked in the press of everyday business.

After some Time in 1991 or 1992 I began to received a newsletter frorn Larry Oberdank, Esq., an attorney who did some work for the Laborers’ District of Ohio. His newsletter seemed to me to be sirnilar in editoral policy and format to what I thought was appropriate. I asked for and received LAM’s okay for me to use his newsletter in whole or in part for my own reasons.

Those reports I gave Bob Butler were inspired in large part by what I gleaned from Mr. Oberdank’s newsletters GEB Ex, 69– (Emphasis added.)

236. The IHO finds that the Fosco newsletters are exact copiez of Oberdank's. The only differences include the headings, the signature, and the omission from one newsletter of a paragaph containing personal information about Oberdank’s practice. GEB Ex–17.

237. Fosco never offered any evidence to substantiate his clairn that he had been doing his own research and had gone so far as to compile his own reports. The IHO finds that despite his vague claims to the contrary, Fosco did no independent research outside of Oberdank's newsletters.

FOSCO'S DEFENSES

The IHO has discussed several of Fosco’z defenses in the Findings of Fact above. Fosco’s additional defenses are discussed as follows.

Fosco contends that the funding of the Sergeant–at–Arms position and his election to the position were accomplished in accordance with the Constitution. Fosco relies on Beck’s testirnony that prior to the nominations for Kentucky District Council, the compensation and benefit package were properly set according to the norrnal rotation and in conformance with the Constitution Tr. 1776– 77. The IHO finds that the propriety of the procedure is not at issue and the setting of salary and the vote on its face were not improper as a district council may vote to compensate its officers. The impropriety arises from the fact that Fosco was seeking to replace compensation previously titled as consultant income, a practice he had clearly been told to cease by the General President. He accomplished this with an exorbitant Sargeant–At–Arms salary, which required no work. The IHO Finds that Fosco caused the post to be funded, and then

caused himself to be nominated. His defense that the post was properly funded by a regular vote, and that the election was regularly scheduled has no merit.

Fosco further argued that all locals must be represented at the district council with one officer before other locals ran have two, therefore, it was proper for hirn to be selected as Sergeant–at–Arms See generally, Tr. 1779–90. The LIUNA Uniform District Council Constitution (‘District Council Constitution”), .Article V, Section 4 states as follows:

No two officers or member of the Executive Board shall be from the same Local Union if there are at the time of election seven or more Local Unions in good–standing with the District Council, and if there are fewer than seven, each Local Union shall have one of its delegates on the Executive Board, and the remaining may be elected from the delegates of any Local Union or Local Unions.

The IHO finds this defense to have no factual merit. The purppose of electing Fosco, an International Vice President and a regional manager, to a Sergeant–at–Arms position was to give hirn a salary of $5,988 a year–

The IHO finds that to ensure proper representation and comply with the District Council Constitution, giving Fosco the Sergeant–at–Arms position was not the only option. At the time of the Sergeant–at–Arms election, the Kentucky District Council had delegates from eleven local unions. Tr. 1923. Another delegate from Local 692 could have been selected, a delegate frorn Local 692 could have held a position other than Sergeant–at–Arrns, or Local 692 could have bcen one of the four unrepresented locals as ther were more locals than offices. See gencrally 1944–45

Fosco also argues that he had a good faith belief that he could hold the positions as a consultant. The facts refute such an assertion. Fosco used his position as the regional Manager to obtain, not one but three consulting positions. he attempted to create the impression that he was performing some dury by sending out Oberdank‘s letters– When president Coia forced him to

give up the consultant's positions, he caused the organizations to pay him funds as substitute for the consulting fees. These facts fly in the face of a good faith claim.

CONCLUSIONS

1. This case is a classic example of the abusive and corrupt practices in union administration, which lead to the passage of the Labor Management Reporting and Disclosure Act. It is disturbing that such practices still exist and more disturbing that the perpetrator is a high ranking International officer and a member of the General Executive Board. Fosco”s action's are blatant examples of misuse of power, manipulation of subordinates, and greed. This case is also an argument for the necessity of the LIUNA reform machinery. No one can seriously doubt, after reviewing the facts set forth above, that these abuses would not have been exposed and prosecuteded without the passage of the EDP and the EPC.

2. Fosco devised a scheme by which the Kentucky District Council, Louisiana District CounciL and Local 692 paid hirn consulting fees and pension contributions for which he performed no services.

3. Fosco accepted cousulting incorne from the Kentucky District Council the Louisiana District Council, and Local 692, and provided no services in return.

4. Fosco delibrately copied newsletters he had received in a legitimate mailing from Oberdank, an Ohio attorney, to give the appearance that he had been issuing a document during his entire consultancy. Fosco sent these newsletters, many purposely backdated,to the Kentucky District Council, Louisana District Council and Local 692 to make it appear that he was perforrming some work for consulting,

5. The total amount of funds coverted through Fosco's scheme of outside compensation through the consulting agreements and their subsequent substitutes is set forth in IHO Figure 3 in the attached Appendix.

6. In Counts Two,.Four and Six, the GEB Attorney charged .Fosco with violating Title 29 USC. § 501 (a) and the EPC.

7. Title 29 U.S. C– § 5 01 (1) provides in pertinent part

The Officers and other representatives of a labor union occupy positions of trust in relation to such organization and its members as a group. It is, therefore, the duty, of each such person..to hold its money and property solely for the benefit of the organization and its members....

8. Fosco's activity clearly breached his fiduciary duty to maintain union funds solely for the benefit of the organization in violation of 29 U.S.C. § 501 (a) and § 501 (c) as alleged by Counts Two, Four, and Six.

9. In Counts One, three, and Five, the GEB Attorney charged Fosco with violations of Title 29 U.S.C.§ 501 ( c).

10– Title 29 U.S.C. §.50l ( c) provides in pertinent part:

Any person who embezzles, steals, or unlawfully and willfully

Abstracts or converts to his own use, or the use of another, any of

the moneys, funds,securities, property, or other assets of a labor

organization of which he is an officer, or by which he is employed,

directly or indirectly, shall be fined not more than $10, 000 or imprisoned for not more than five years, or both.

11– To prove a violation of 29 U. S– C.§ 5 0 1 ( c) The GEB Attorney, must demonstrate that Fosco Fosco acted with fraudulent or criminal intent to deprive the union of its funds.”United States v. Welch 728 F.2d 1113 (8th Cir. 1984):

United States v. Thoradarson, , 646 F.2d 1323 (9th Cir.) cert. denied 454 U.S. 1055 (1981)

12 The IHO has previously applied the totality of the circumstances test to detertimine the specific intent as required by 29 USC 501 ( c ) In the Matter of Martire IHO Order and Memorandum, 96–54D (April 29, 1997).

13, Applying the above test to thec facts presented here of Fosco accepting consulting fees, for which no work was done in return, the IHO concludes that Fosco intended to unlawfully convert union funds to his own use in violation of 29 U.S.C.§ 501 ( c ) as alleged in Counts ()ne, Three, and Five. The acts also constitute a violation of the EPC as alleged in Counts One, Three, and Five.

14– Whcn Ordered by the General President to cease receiving outside compensation, Fosco simply changed the method of compensation and continued to receive outside income in return for which the Kentucky District Council, Louisiana District Council, and Local 692 received no benefit.

15. As Part of his scherne, Fosco caused the Kentucky District Council to pay all part time officers at a salary of $5,988 a year, then later $6,000 a year. He then caused the District Council to elect hirn to the newly salaried position of Sergegnt–at–Arms in order to receive the salary, He did no work for the salary. The Sergeant–at–Arms is generally paid only an expense stipend for attending the meeting, This venture was a blatant example of misuse of power. The fact that a regional manager and International Vice President wouId arrange to fund a Sergeant at–Arms position and then cause his election to that position is an insult to union democracy and the dues paying members.

16 Count Seven alleges a violation of Article IV, Section 3 of the Constitution which requires the approval of the General President for an officer or employee of a local union to hold

office in or be employed by another entity of LIUNA, and receive compensation for such a position.

17 By seeking and obtaining the Sergeant–at–Arms position, Fosco sought and obtained a multiple salary not only without the General President’s approval, but in direct contradiction to the General President's directive, thereby violating Article IV, Section 3 of the Constitution as alleged In Count Seven.This conduct also violated the EPC as alleged in Count Eight.

18. Fosco caused the Louisiana District Council to pay his cellular telephone bills without regard to apportionment of expenditures on behalf of the Louisiana District Council. Fosco caused Local 692 to pay delegates to the district councils a salary of $100 a month for each distict council to which they were representatives. Fosco initially received $400 a month as a delegate to four district councils, then received $300 a month for sending as a representaive to three district councils. That a regional manager was a paid delegate to four district councils is a misuse of power. These activities are evidence of Fosco’s intent to gain unauthorized funds, and evidence of his overall scheme.

19. Count Nine alleges that Fosco breached his fiduciary duty in violation of 29 U.S.C. § 501 (a) and the EPC by operating the "staff fund”.

20. Fosco' s “staff fund” was not voluntary and staff members were required to contribute. It was clearly a breach of his fiduciary duty.

21. Fosco did not maintain adequate records regarding the “staff fund” and no evidence exists of how Fosco spent the money he collected from his staff.

22. Fosco maintained absolute control over the “staff fund,” and made all decisions regarding how much money to collect and how to spend the funds.

23. Fosco’s attempts to justify the “staff fund" were in reality attempts to mislead investigators. His accounting was clearly a ruse.

24. Fosco’s conduct in running the “staff fund” was entirely illegal, and violaterd the EPC and 29 US.C. 501 (a) “ as alleged in Count Nine.

25 Count Eleven and Thirteen allege that Fosco violated his fiduciary duty by receiving gifts from the Kentucky and Louisiana District Councils in violation of 29 U.S.C. 501 (a).

26. Count Ten and Twelve a1lege that Fosco converted union funds to his own use by receiving gifts from the Kentucky and Louisiana District Councils, in violation of 29 U.S.C. § 501 ( c )

27. Fosco devised a scheme in which the Kentucky District Council and the Louisiana District Council asked Fox to designate his choice of a Christmas gift and thereafter followed Fosco’s wishes. The gifts were substantial.

28. The IHO recognizes that it is a practice in LIUNA, as in other unions, of giving Christmas gifts which, in part, may be politically motivated. Whether such gift giving violates the EPC should be examined on a case by case basis, and should be the subject of a policy decision by the IG. In this case, however, the borderline between Christmas gifts to offieers as a political gesture, and the misuse of a position of authority was long crossed. Fosco well knew that the gifts were exccssive, and the gift givers well knew that Fosco expected them to provide significant gifts.

29. The IHO does not credit Fosco’s explanation that the donors wanted to give him a gift and he simply cornplied with their request in making the selection. The IHO finds the practice of a senior executive selecting his ovn gift, a practice that affronts the EPC.

30 The IHO does not conclude that the receipt of gifts by Fosco was in violation of 29 U.S.C. 501(c ) as alleged in Counts Ten and Twelve. Although Fosco knew the gjfts were excessive and he requested them, the gifts were within the discretion of the district councils and were not on their face illegal.

31 The gifts, however, were clearly in violation of 29 U.S.C. 501 (a) and the EPC as alleged in Counts Eleven and Thirteen. It is a violation of the EPC and an officer's fiduciary duty to safeguard Union funds, for a high ranking Union Officer to suggest on a regular basis, the excessive and expensive gifts that he would like to receive from his subordinates, and to continue to accept them as a matter of course. The IHO finds that Fosco's receipt of gifts were inviolation of 29 U.S.C. 501 (a) and the EPC as alleged in Counts Eleven and Thirteen.

32. There is insufficient evidence to dernonstrate Local 692’s gifts were part of Fosco’s scheme. The gifts rom Local 692 are factually distinct and do not fit the pattern of gifts were in violation by the Kentucky and Louisiana District Councils

33 In Count Fourteen the GEB Attorney charged Fosco with obstruction of the Inspector General.

34. Fosco deliberately withheld information from the GEBAttorney and the IG Inspector General regarding the origin of the newsletters he was issuing in his name.

3 5. The EDP and EPC prohibit LIUNA officers from engaging in barred conduct. Barred conduct includes "obstructing or interfering with the LIUNA Inspector General, the GEB Attorney, or the Independent hearing Officer…. EDP, Section 1, Ethical Practices Code: EPC, Barred Conduct.

36 The Appellatc Officer has previously established the standard by which to determine obstruction charges.

All LIUNA members have "an affirmative duty to cooperate fully with any investigation conducted by the Inspector General or the GEB Attorney.” Matter of Catania 1998 A.O. at 5,9 (97–020 IHO) see also Matter of Martire. 1997 AO. 81,92–93 (97–008–IHO). The duty is not to acquiesce grudgingly, or to relent only aftcr all avenues of resistance have proved futile, it is to cooperate fully in every particular with those who represent the Union’s members as a body…When interviewed they [members] must speak the full and complete truth withow evasion, shading or concealment. See Martire, 1997 A 0, at 93. They may not withhold any information frorn the representatives of the union or direct others to do so. See Garcia 1996 A.0. at 125: Matter of Gutierrez, 1997 A.0. 139, 160–64 (97––015–IHO).

Matter of Everett Caci 1998 A.0. 55, 66–67 (97–016–IHO),

37. In assessing the materiality of a statement during an investigatim the IHO has articulated the following standard, inspired by the requirements under 18 US.C. 1001:

Whether the Statement had a natural tendency to influence or be capable of influencing the decision of the decision making body to which it was addressed and whether his statement was such that its natural and probable effect would be to interfere with the due administration of justice. In the Matter of Dernis Martire (Martire–III), IHO Order and Memorandum, 96–54D (May 19,1999.

38. By deliberately concealing from the IG Inspector and the GEB Attorney the fact that he had copied Obcrdank’s work as his own, Fosco gave material statements which were deliberately evasive and had the natural tendency to influence the GEB Attorney's determination of the investigation against him, Fosco’s deliberate evasiveness violated the EPC and EDP as charged in Count Fourteen,

DECISION

The GEB Attorney has proved Counts 1, 2, 3. 4, 3. 6, 7, 8, 11, 13, and 14 by a

preponderance of The evidence–

The GEB Attorney has not proved that Fosco violated 29 US.C. 501( c ) as alleged in Count 10 and 12

PENALTY

Fosco is ordered to repay the Kentucky District Council, the Louisiana District Council and Local 692 the amounts he collected from those organizations as a consultant. The amounts are as follows:

Kentucky District Council $28,040

Louisiana District Council $15.300

Local 692 $10,000

Total: $53,340

FOSCO is also ordered to repay the Kentucky District Council $26,946, the total salary paid to him for scrving as the Sergeant–at–Arms for the Kentucky District Council.

The total amount of Fosco’s repayment is $80,286.00

The GEB Attorney has the the discretion to negotiate a time repayment schedule .

The Inspector General should determine if Fosco is entitled to the pension fund credits resulting from his unauthorized consulting Agreements.

Fosco’s membcrship in LIUNA is permanently revoked– Fosco is permanently barred, from holding an office in or being employed by any LIUNA affiliated entity or fund.

Fosco has a right to appeal this Order to the LIUNA Appellate Officer by filing a Notice of Appcal with the Appellate Officer within 10 days of the date of this Order,

The Appellate Officer is,

W. Neil Eggleston; Appellate Officer

1299 Pennsylvania Avenue, N,W

Washington, D.C. 20004

(202) 793–0300

(202) 383–6610 (fax)

This Order does not take effect until 10 days after the date of this Order, and if appea1ed upon the decision of the Appellate Officer.

PETIER F. VAIRA

INDEPENDENT HEARLNG OFFICER

Date, October 14, 1999

James J. O’Connor, Esquire

Robert M. Thomas, Esquire

Local union 692

Louisiana District Council

Kentucky District District Council

APPENDIX

IHO Fig. 3 Fosco’s Outside Compensation Income with entities in His Region

Consulting Income

Year:	Loca1692 Consultant	Louisiana D.C. Consultant	Kentucky D.C. Consultant	Total.
1990	$400	$2,100	$5,980	$8,480
1991	$2,400	$3,600	$5,980	$11,980
1992	S2,400	$3,600	$6,240	$12,240
199S	S2.400	$3,600	$6,240	$12,240
1994	$2,400	$2,400 ,	$3,600	$8400
Totals:	$10,000	$15,300	$28,040	$53340

CONSULTING Compensation Substitutes

Year:	Local 692 Delagate	Louisiana D.C. Cell Phone	Kentucky D.C. Sgt.–U–Arms	Totals.
1994	x	$437.91	$1,996	$4,933.91
1993	$2,500	$3,116.15	$5,988	$9,104.15
1996	x	$2,552.73	$5,982	$8,540.73
1997	x	$2,310–24	$5,988	$8,298.24
1998	x	$1,413.72	$5,988	$7,401.72
1999	x	$193.27	$998	$1,191.27
Totals.	$2,500	$10,024.02	$26.946

Qutside Compensation Totals 1990–1999:

I	I Loc2l 692	Louisiana D.C.	Kentucky D.C.	Tot2ls–
Consultant	$10,000	$15,300	$28.040	$53,340
Substitution	$2.500	$10,024,02	$26,946	$39,470.02
Totals.	$12,400		$54,99	$92, 810. 02

[1] The GEB Attorney presented evidence of $28,060,$15,300 and $ 10,000, respectively”; the IHO found the amounts to be $28,040 $15,300 and $10,000 respectively, for a total of $53,340.

[2] The IHO found the amounts to be $26,946; $10,024.02 and $2,500 respectively, for a total of $39,470.02..

[3] The IHO found the amount to be $92,810.02

[4] This sum includes $140,000 as Regiona1 Manager and $25.000 as Vice President. Tr, 1108. Fosco's Regional Manager salary began at $65.000 in 1987,was raised to $72,000 in 1998, was raised to $100,000 by the mid 1990s, and was raised to $135,000 in 1996. Tr. 1104—06, GEB Ex 61. In 1997, Fosco also began receiving an additional

salary, as a Vice President. GEB Ex. 61.

[5] Twenty—two states participate in the Laborers' National Pension Fund, including states in the South Central Region. Tr— 319.

[6] The record is silent as to the date when Local 692 joined the Kentucky District Council, and the date when Fosco became a delegate to the Kentucky District Council

[7]Richard Beck was—the Kentucky District Council President and an International Representative at the time.

[8] As Fosco was paid a weekly sum of $120, he actually received $6,240 per year, not $6,000 per year (GEB Ex. 5—7

[9] There is no evidence that the vote taken in December 1991 was applied retroactively, therefore, instead ofthe calculations offered by the GEB Attorney, the IHO attributes to Fosco a total receipt of $5080, not $6000, for the year 1991. This sum does not include the $500 bonus.

[10] No evidence has been presented to clarify what compensation if any Fosco received during September 1994, therefore, giving Fosco the benefit of the doubt, the IHO assumes Fosco did not receive my compensation in September 1994 from the Louisiana District Council.

[11] No evidmce has been presented to demonstrate that Local 692's consultant payments were retroactive; the IHO only assigns an amount of $400 in consulting fees for 1990. For 1994, however, the evidence shows that payments continued through and includuig December 1994; the IHO assigns $2,400 as the total amount received for 1994.

[12] Employees and Fosco were authorized $300, the Executive Board $ 150, Auditors $ 100, and Aubrey Young $100. The IHO notes thzt Fosco rcceived a larger amount in a consultant position for which he was doing no work than other inditiduals who did render services

[13] As by his own admission, since he backdated several letters, it is unclear when Fosco bcgan to send the newsletters..

[14] At the time, Beck was Fosco's Assistant Regional Manager.

[15] LM—2 reports are required by federal law to be sent to the Deparment of Labor— A copy is also senit to the International Union

[16] Dale Brasseaux, Francis Bello, Jr. (former Secretaty—Treasurer Louisiana District Council from approximately 1987 or 1988), and Jamie Peers (current Seactary—Treasurer Louisiana District Council).

[17] It is highly unusual for a local union to havc delegatc representation on three district Councils

[18] The tenns “staff funds” and “club dues” were used interchangeably throughout the proceedings and it is uncontcsted that the Respondent, all Attorneys, and all witnesses were referring to the same practice

[19] Harold Gerhardt served as Assistant Regional managerr in Texas under Rollin P. “Bud” Vinall. Gerhardt was also the North Texas District Council Regional Manager until his retirment in December 1993, prior to Texas becorning part of ‘Fosco’s region: there is no indication that Gerhardt was ever a member of Fosco’s staff.

[20] South Central Regional Conference held in New Orleans, Loulsiatia, late November or early December 1995

[21] At the tirne, Nfilenkoff was based in the sarne fegion, the South Central Region as Chris Brasseaux.

[22] Bafrick made monthly contributions to the “staff fund’.’ for nine years, from when he became a special international representative until his retirement. Tr. 393,

[23] 23 Lynsky estimated that between 1991 and 1995, he had contributed between $2,00 and $2,500 to the “staff fund” in cash and stated that his $600 yearly payment was not a voluntary situation. Tr. 66, 152.

[24] When Calvin daughter was in an accident, he received $ 1,000 frorn the staff fund and Calvin also received a gift from the staff fund when his daughter got married Tr. 570,1665—67— When Bob Hanna had a fire at his residence he received a gift of approximately $300. Tr. 1666,16—93—94.

[25] Fosco contends the value of the silver dollars is not an even dollar amount since the silver dollars are valued at more than face value, not an even dollar amount.

[26] 26 ARer shippir—ig and taxes were added, the Disrsict Council was billed S372.96 for The.Bone system. GEBEx4727

[27] Kaufman indicated that a telephone poll actually meant a form smt to the board mernbers by’ facsimile. Tr. 201

[28] Including shipping and taxes, the District Council paid $477.25. GEB Ex— 48.

[29] The total cost was $431.98.