Order and Memorandum

A hearing in the above-captioned matter was held before the Laborers International Union of North America (“LIUNA”) Independent Hearing Officer ("IHO") on August 6, 1996. Based upon the evidence of record, a trusteeship is warranted.

1. Pursuant to Section 3 of the LIUNA Ethics and Disciplinary Procedure and Article IX, Section 7, of the LIUNA Constitution, the LIUNA General President may appoint a trustee:

[w]hen the General President finds, in his opinion, that action by him is necessary for the purpose of correcting corruption or financial malpractice, assuring the performance of collective bargaining agreements or other duties of a bargaining representative, restoring democratic procedures or otherwise carrying out the legitimate objects of such subordinate body or the International Union, or to protect the organization as an institution. . . .

LIUNA International Union Constitution, Article IX, Section 7.

2. The LIUNA General Executive Board Attorney ("GEB Attorney") is delegated the powers of the LIUNA General President "to impose and review the imposition of trusteeships, over any district council, local, or other entity within the Union." See LIUNA Ethics and Disciplinary Procedure, Section 3.

3. The LIUNA IHO ". . . shall preside over and provide rulings in . . ." the imposition of "all trusteeships[.]" See LIUNA Ethics and Disciplinary Procedure, Section 5.

4. On July 15, 1996, LIUNA Local Union 8 (“Local 8”) received written notice that the GEB Attorney concluded that an emergency situation existed and that the immediate imposition of a trusteeship over Local 8 was necessary to achieve constitutionally enumerated purposes. See Letter of LIUNA GEB Attorney to Officers and Members of Local 8 (July 1, 1996).

5. The emergency trusteeship of Local 8 was lawfully imposed on July 15, 1996, at the time the LIUNA GEB Attorney's July 15, 1996, notice letter was served on Local 8.

6. On July 15, 1996, Richard M. Johnson ("Johnson") was appointed as temporary trustee of Local 8. See LIUNA Exhibit (“Ex.”) 8. Johnson is appropriately qualified to serve as the trustee for Local Union 8. See LIUNA Ex. 6. As of July 15, 1996, at 9:00 a.m., no person other than Johnson was authorized to bind or take any of official action on behalf of LIUNA Local 8.

7. On August 6, 1996, a hearing was conducted by the LIUNA IHO. LIUNA GEB Attorney Dwight Bostwick, LIUNA Inspector Joseph E. Griffin (“Johnson”), Inspector John J. O'Rourke, Local 8 trustee Johnson, and attorney Robert E. Shapiro appeared to present testimony on behalf of the International Union. See Local 8 Trusteeship Hearing Ex. 1-13.

8. John Serpico ("Serpico"), the former President and Business Manager of Local 8 was issued a subpoena to appear and testify in the instant proceedings. Serpico did not appear at the August 6, 1996 hearing.

9. The deposition testimony of Alex J. Metro ("Metro") was presented at the hearing. Metro testified that he thought he was appointed President of Local 8 and that he was unaware if he or any other person was currently serving as the Business Manager for Local 8. See LIUNA Ex. 1at 17-19.

10. Based upon the presentation of counsel and the evidence presented, I find that financial malpractice exists at Local 8. Local 8 does not appear to be solvent. Expenditures for certain services cannot be substantiated. Poor fiscal and accounting controls have permitted large and possibly inappropriate expenditures to be made.

11. I also find that the enforcement and performance of collective bargaining agreements have broken down. It appears that the current and former officers Local 8 are unable to protect LIUNA's jurisdiction from encroachment of other unions. Organizational efforts are non-existent. Membership statistics reflect that Local Union 8 lost over half its membership in 1995. See LIUNA Ex. 5. Professional assistance from outside the local union is required to restore union procedures and processes.

12. Local 8's current and former officers failed to carry out the obligations of the local union. Metro and the others who filled Local 8 officer positions prior to the imposition of the emergency trusteeship are unaware of their duties to the membership of Local 8 and appear totally unable to carry them out if they attempted to do so. See generally Ex. 1.

13. Based upon the evidence presented at the hearing of August 6, 1996, the trusteeship over Local 8 is necessary to correct financial malpractice, assure the performance of collective bargaining agreements or other duties of a bargaining representative, and otherwise carry out the legitimate objects of the labor organization. The trusteeship upon Local 8 is authorized to continue until such time self-government can be restored in accordance with the International Union Constitution.

PETER F. VAIRA

INDEPENDENT HEARING OFFICER