In the Matter of the Construction & General Laborers’ District Council of Chicago & Vicinity
Laborers’ International
Union of North America
Independent Hearing
Officer
Decided February 7, 1998
This Order and Memorandum addresses the Complaint for Trusteeship ("Complaint") filed on June 13, 1997, by the Laborers' International Union of North America ("LIUNA" or "International Union") General Executive Board Attorney ("GEB Attorney") against the Construction & General Laborers' District Council of Chicago and Vicinity ("District Council"). The GEB Attorney brought the Complaint pursuant to Section 3 of the LIUNA Ethics and Disciplinary Procedure ("EDP") and Article IX, Section 7 of the LIUNA Constitution.
The
Complaint arises out of the District Council's alleged association with
organized crime in Chicago. In four counts, the Complaint makes general allegations
that imposition of a trusteeship is necessary to: (1) correct corruption and
eradicate the influence of organized crime from the District Council; (2)
restore democratic procedures; (3) correct financial malpractice; and (4) carry
out LIUNA's legitimate objects.
In eighteen
numbered paragraphs, the Complaint alleges facts that demonstrate a knowing
association between the District Council leadership and that of the Chicago
organized crime syndicate, the "Chicago Outfit." The Complaint avers that the District
Council acts to benefit Chicago Outfit members, associates, and relatives by
placing and retaining them in union positions, giving them unauthorized
"dual salary" payments, and committing other financial abuses that
inure to the benefit of the Chicago Outfit.
Finally, the Complaint alleges that the association of the District
Council and Chicago Outfit leadership has resulted in the District Council's
failure to hold democratic elections, to properly appoint trustees to
affiliated employee benefit funds, to attempt to rid itself of organized crime,
or otherwise to comply with the EDP and the LIUNA Constitution.
For the
reasons set forth herein, I find that imposition of a trusteeship over the
District Council is warranted. The GEB Attorney has established by a
preponderance of the evidence, that three current District Council officers are
associates or made members of organized crime. Further, the evidence chronicles
a history of organized crime influence over the District Council that spans at
least 25 years. The knowing association with organized crime has had a direct
and indirect effect on democratic process and the selection of District Council
officers and trustees to affiliated benefit funds. As a result, organized crime members and associates have received
the benefits of union membership and the privileges of holding union office and
acting as trustees over union funds worth more than $1 billion.
A
trusteeship is necessary to expel the influence of organized crime, restore
democratic procedures, and otherwise carry out the legitimate business of the
union as alleged in the Complaint.
The rulings
on the specific allegations of the Complaint are as follows:
The GEB
Attorney has proved by a preponderance of the evidence that officers and delegates
of the District Council have been or are associates or made members of the
Chicago Outfit, as alleged in ¶¶ 7-8 of the Complaint.[1]
The GEB
Attorney has not proved that the District Council made threats or attempted
bribery to discourage LIUNA's investigation into organized crime, as alleged in
¶ 9 of the Complaint.
The GEB
Attorney has proved by a preponderance of the evidence that there has been and
there is a failure of democratic process in the District Council, as alleged in
¶¶ 10-14 of the Complaint.
The GEB
Attorney has not proved that the District Council made unauthorized "dual
salary" payments, as alleged in ¶ 15 of the Complaint.
The GEB
Attorney has not proved that the City of Chicago "no-show"
investigation affected the integrity or operation of the District Council, as
alleged in ¶ 16 of the Complaint.
The GEB
Attorney has proved by a preponderance of the evidence that corrupt individuals
were appointed to employee benefit funds affiliated with the District Council,
as alleged in ¶ 17 of the Complaint.
The GEB Attorney has proved by a preponderance of the evidence that the District Council has failed and continues to fail to take steps to investigate or eradicate the influence of organized crime from the District Council, as alleged in ¶ 18 of the Complaint.
The GEB
Attorney filed the Complaint on June 13, 1997.
The hearing on the Complaint ("Trusteeship
Hearing") lasted for 19 days, beginning July 16, 1997, and continuing
intermittently through October 23, 1997. The record contains 4433 pages of
transcript and approximately 250 exhibits offered by the GEB Attorney and the
District Council. Both parties filed extensive post-hearing briefs. The
District Council was represented by an experienced and able Chicago labor
lawyer. The GEB Attorney was represented by a team of able attorneys. Both
parties acquitted themselves well.
The Chicago District
Council
The District Council represents 21 affiliated local unions throughout the greater Chicago area. The District Council engages in collective bargaining with private contractors and the City of Chicago on behalf of the local unions and their membership. The District Council manages several affiliated benefit funds, worth more than $1 billion, on behalf of the members.
Organized Crime and the
Labor Movement
The issue
in this proceeding is whether the District Council has developed close ties
with organized crime, and, as a result, organized crime is in a position to control
the District Council and dictate decisions affecting the District Council's
operation.
There is no
doubt that organized crime exists in the United States. Its existence is no
longer a shadowy subject alluded to by fiction writers, but a powerful force in
the economic marketplace of America.
Although
there were reports of organized crime in various areas of the United States
dating from the early 1920s, the existence of a national organized crime
structure gained media attention in 1957, when a number of individuals were
arrested while attending a secret meeting in Appalachin, New York. Sixty-two
organized crime leaders from across the United States attended what appeared to
be a national conference at the home of Joseph Barbara. Among the attendees was
Sam Giancana of Chicago. See Symposium--Perspectives on Organized Crime,
16 Rutgers L. J. 439, 443 n.21 (1985) ("Symposium"). Other
attendees included Joseph Bonanno and Vito Genovese of New York City; Antonio
Magaddino of Buffalo, New York; Russell
Bufalino of northeast Pennsylvania; and Santos Trafficante of Tampa, Florida.
They all were high-ranking members of organized crime. See GEB Ex. 3 (FBI
Organized Crime Report 25 Years After Valachi (1988) ("Valachi
Report"). The investigative efforts that followed revealed an organized
crime network that extended across the United States.
Congress held hearings on organized crime in 1967-68 which resulted in the enactment the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1961, et seq. In passing the RICO statute, Congress made the following findings:
(1) organized crime in the United States is a highly sophisticated, diversified, and widespread activity that annually drains billions of dollars from America's economy by unlawful conduct and the illegal use of force, fraud, and corruption; (2) organized crime derives a major portion of its power through money obtained from such illegal endeavors as syndicated gambling, loan sharking, the theft and fencing of property, the importation and distribution of narcotics. . .; (3) this money and power are increasingly used to infiltrate and corrupt legitimate business and labor unions and to subvert and corrupt our democratic processes; (4) organized crime activities in the United States weaken the stability of the Nation's economic system. . . .
See Pub. L. No. 91-452,
1970.
Organized
crime's use of labor unions is well documented. Through control of labor
unions, organized crime has directly affected the shipping and construction
industries. See e g., GEB Ex. 1 (Decl. of Alphonse D'Arco, United
States v. Mason Tenders District Council of Greater New York, 94 Civ. 6487
(S.D.N. Y. Oct. 5, 1994); GEB Ex. 167. In the 1980s, the FBI concluded that the
International Longshoremen's Association ("ILA"), Hotel Employees and
Restaurant Employees International Union ("HEREIU''), the International
Brotherhood of Teamsters ("Teamsters" or "IBT"), and LIUNA
were "substantially influenced and/or controlled by organized crime."
GEB Ex. 4 (President's Commission on Organized Crime, Report to the President
and the Attorney General, The Edge: Organized Crime, Business, and Labor
Unions, 98th Congress, 1st and 2d Sess. 208 (1983-84) (hereinafter
"PCOC Report").
As recently
as 1996, congressional hearings highlighted the influence of organized crime on
labor unions: "La Cosa Nostra placed a lot of individuals in positions of
importance like this, and from there they were able to establish themselves in
union office-holder positions. Once they gained union office-holder positions,
their democratic removal was almost impossible from within the union." Administration's
Efforts Against the Influence of Organized Crime in the Laborers' International
Union of North America, Hearings Before the Sub Comm. on Crime of the Comm. on
the Judiciary House of Rep., 104th Cong., 2d Sess. 37 (statement of Jim E.
Moody, former Assistant Director, Federal Bureau of Investigation) (“1996
Judiciary Hearings").
Utilizing the RICO statute, the United States Department of Justice has brought many indictments charging organized crime families as RICO enterprises. See, e.g., United States v. Pungitore, 910 F.2d 1084, 1097 (3d Cir. 1990) (involving the Scarfo organized crime family of Philadelphia); United States v. Salerno, 868 F.2d 524, 528 (2d Cir. 1989) (involving a Commission of a number of New York organized crime families).
That there
is a national Commission of La Cosa Nostra ("LCN") leaders was
dramatically proved in Salerno.
In that case, LCN was named as an illegal racketeering enterprise in
violation of the RICO statute. Court-authorized electronic surveillance of
organized crime leaders revealed that the Commission of LCN existed and acted
as a unit for coordinating joint ventures and settling disputes among organized
crime units across the country. Salerno, 868 F.2d at 528.
In 1988,
the Department of Justice brought a civil RICO suit against the Teamsters,
alleging that the union was influenced by organized crime. United States v.
IBT, 88 Civ. 4486 (S.D.N.Y. 1988). On March 14, 1989, the Teamsters and the
United States entered into a voluntary consent decree ("Teamsters Consent
Decree") establishing a mechanism and procedure for disciplining union
officials who were associated with organized crime. The concept of using civil
process to discipline or remove individuals from unions for associating with
organized crime was established. As a result, many Teamster officials were
removed from office and suspended or expelled from union membership. See,
e.g., United States v. IBT (DiGirlamo), 19 F.3d 816 (2d Cir.
1994); United States v. IBT (Sansone), 981 F.2d 1362 (2d Cir. 1992); United
States v. IBT (Cimino), 964 F.2d 1308 (2d Cir. 1992); aff'g United
States v. IBT (Cimino), 777 F. Supp. 1130 (S.D.N.Y. 1991); United States
v. IBT (Senese & Talerico), 941 F.2d 1292 (2d Cir. 1991), aff'g United
States v. IBT (Senese & Talerico), 745 F. Supp. 908 (S.D.N.Y. 1990); United
States v. IBT (Friedman & Hughes), 905 F.2d 610 (2d Cir. 1990).
The
Department of Justice also used civil sanctions against the ILA, HEREIU and the
United Brotherhood of Carpenters and Joiners of America ("Carpenters
Union") on both the international and local union levels, for associations
with LCN. See, e.g., United States v. HEREIU, Civil Action
No. 95-4596 (GEB) (D.N.J. 1995); United States v. ILA, 812 F.
Supp. 1303 (S.D.N.Y. 1993); United States v. District Counsel of New York
and Vicinity of the Carpenters Union, 90 Civ. 5722 (S.D.N.Y. 1990).
In 1995,
LIUNA entered into a voluntary agreement with the United States to reform the union
and remove the influence of organized crime. See Agreement (Feb. 13,
1995). Pursuant to that agreement, LIUNA adopted the Ethical Practices Code
("EPC") and EDP and amended the LIUNA Constitution to effect these
changes. The positions of GEB Attorney, Inspector General ("IG"), and
Independent Hearing Officer ("IHO") were created by these changes. See,
LIUNA, Innovation at Work (1996). The present Complaint was filed
pursuant to the reform effort.
The
Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. §§
461-466, empowers an international union to place its member organizations in
trusteeship to correct certain problems, provided that the union constitution
provides for such procedure and the union follows the procedure.[2] The GEB Attorney must establish the grounds
for a trusteeship by a preponderance of the evidence. The language of the LIUNA
Constitution mirrors that of the LMRDA provision. LIUNA Constitution, Art. IX,
Sec. 7.
The
Complaint alleges generally that a trusteeship is necessary to rid the District
Council of the influence of organized crime. The EDP permits LIUNA to impose a
trusteeship over a subordinate body of LIUNA to correct mismanagement and
corruption caused by individuals' barred conduct, including knowingly
associating with organized crime.[3]
Under the EDP, the term "knowingly associate" means that: (a) an individual knew that the person with whom he or she was associating was a member or associate of LCN; (b) the association related directly or indirectly to the affairs of the union; and (c) the association was more than fleeting or casual. EDP, Section 1. An association related directly or indirectly to the affairs of the union was further defined by the IHO in In the Matter of Napoli and Fallacara (Fallacara), IHO Order and Memorandum, 96-65D (1-2) (Sept. 25, 1997). There, the IHO stated:
The requirement that the association be directly or indirectly related to the affairs of the union will be liberally construed by the IHO to effect the purpose of the EDP. It is apparent from the agreement between LIUNA and the Department of Justice and the text of the EDP and the EPC that the major aim of the reform process is to rid the union of the influence of organized crime. It follows that the drafters of the agreement would not expect that the reform effort will be subjected to unduly restrictive definitions, so as to thwart the plain purpose of the initiative. The phrase directly and indirectly related to the affairs of the union will be construed to encompass any reasonable relationship to the affairs of the union, its members, or its officers. The relationship to the affairs of the union need not on its face affect the operation of the union; it need only reflect that the "knowing association" permits the undesirable individuals to have easy access to the union officers and members in the total atmosphere of the labor union operation.
Fallacara, at 6 ¶ 20.
In the
litigation under the Teamsters Consent Decree, the term "knowingly
associate" is used as it is in the law governing restrictions on the
activities of individuals on parole after conviction. DiGirlamo, 19 F.3d
816. The restrictions on parolees are not limited to associations that involve improper
activities, but are designed to penalize the parolees' "calculated
choice" to associate with a particular, designated class of prohibited
persons. Id. at 822.
The
International Union previously has placed a large local union under supervision
after alleging the local was under the influence of organized crime. In 1995,
LIUNA filed a complaint for trusteeship against Local Union 210, in Buffalo,
New York. See Complaint, In
re Local Union 210, IHO 95-35T (Dec. 18, 1995). That complaint resulted in
a settlement agreement between Local Union 210 and the GEB Attorney, under
which the parties agreed to a supervision by an outside supervisor, which is
still in effect. See Order, In re Local Union 210 (Feb. 26,
1996); Settlement Agreement (Feb. 22, 1996).
The
District Council argues in its post-hearing brief that imposition of a
trusteeship is improper because LIUNA's motivating purpose is reprisal against
District Council President/Business Manager Bruno Caruso for running against
Arthur A. Coia in 1996 for the office of LIUNA General President. See
Post Hearing Memorandum for District Council ("CDC Brief") at 109.
The GEB Attorney, however, has alleged and proved by a preponderance of the
evidence that a trusteeship is warranted for more than one proper purpose as
alleged in the Complaint. A union need establish only one proper purpose to
impose a trusteeship. Mason Tenders District Council v. LIUNA, 884 F.
Supp. 823, 836 (S.D.N.Y. 1995). Here, as set forth below in Section VI, the GEB
Attorney has established that a trusteeship is necessary to rid the District
Council of the influence of organized crime, restore democratic procedures, and
otherwise carry out the legitimate business of the union.
Evidentiary
Considerations
The District Council argues in its post-hearing brief that it was denied a full and fair hearing because the GEB Attorney failed to produce prior statements of its witnesses in a procedure similar to that required by the Jencks Act, 18 U.S.C. § 3500. See CDC Brief at 10001. The Jencks Act, however, applies only to criminal proceedings brought by the United States. 18 U.S.C. § 3500(a). The United States Department of Justice is not a party to this proceeding, and no federal or state action is implicated.
It is well
established that a trusteeship hearing "need not include all of the
formalities of judicial proceeding." Becker v. Industrial Union of
Marine and Shipbuilding Workers of America, AFL-CIO, 900 F.2d 761, 770 (4th
Cir. 1990). Moreover, in labor arbitrations such as this, there is no right to
discovery as in a formal civil case or even an administrative hearing. Hardy
v. International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths,
Forgers, and Helpers, 682 F. Supp. 1323, 1328-29 (E.D. Pa. 1988); In re
Local Union 210, IHO Order and Memorandum (Jan. 23, 1996). In an analogous
matter, a federal appeals court has held that Procedural Due Process concepts
applicable to criminal cases do not apply to union disciplinary proceedings. See
Senese & Talerico, 941 F.2d at 1296-98.
The
District Council notes that a trusteeship is proper only to correct "an
existing cause," not past improprieties. CDC Brief at 7. The District
Council emphasizes that much of the GEB Attorney's proof involves events that
occurred before 1987, and that imposition of a trusteeship is improper because
the GEB Attorney submitted insufficient proof of current Chicago Outfit
influence over the District Council. Contrary to the District Council's
assertions, however, the GEB Attorney offered sufficient competent evidence to
establish the Chicago Outfit's substantial presence on the District Council
today. See infra, Section VI, ¶¶ 36-195.
Evidence
regarding events that occurred in the 1970s through the late 1980s, while not
determinative, does have probative value. First, the duration and quality of
the contacts over the years between current members of the District Council and
known Chicago Outfit figures is evidence of an improper association with
organized crime. Senese & Talerico, 745 F. Supp. at 918; Fallacara,
supra. Second, the 25-year pattern of undemocratic procedures, in which
several of the current District Council officers with organized crime ties have
played a role, is evidence that the Chicago Outfit is embedded in the District
Council to this day. See infra, Section VI, ¶¶ 197-224.
Once established, the strong influence of organized crime does not undergo a
sea change and suddenly disappear of its own volition. 1996 Judiciary
Hearings at 37-39, 71 (statements of Moody).
The IHO,
like all labor arbitrators, must base his decision on reliable evidence. As is
the practice and custom of labor arbitrators, the IHO must engage in a thorough
review of what is probative and reliable. The fact that a document or certain
testimony admitted during the proceeding does not guarantee that, after the
close of the record, it will be deemed probative.
Certain criteria will be followed in this evaluation process.
Reliable
hearsay evidence is admissible in labor arbitrations. Associated Cleaning
Consultants and International Brotherhood of Printing and Allied Trades Local
327, 94 LA 1246 (1990); In the Matter of Joseph P. Crincoli, IHO
Order and Memorandum, 97-04D (Oct. 27,1997); Elkouri and Elkouri, How
Arbitration Works (4th ed. 1994). Hearsay evidence has been admitted
regularly in union disciplinary proceedings arising under the Teamsters Consent
Decree. Cimino, 964 F.2d at 1312; Senese & Talerico, 941 F.2d
at 1297. The test is whether the evidence is reliable. Senese & Talerico,
941 F.2d at 1298 (citing Richardson v. Perales, 402 U.S. 389, 402
(1971).
In Cimino,
964 F.2d at 1312, the court gave evidentiary weight to hearsay declarations of
three LCN members that were related by an agent of the Federal Bureau of
Investigation ("FBI"). The
court used a number of factors to evaluate the reliability of the statements.
The court noted that the statements corroborated each other in crucial
respects, the reports painted a consistent picture of the relationship of the
individuals, and the statements matched the FBI agent's declaration in the same
subject matter. The court held that these declarations constituted relevant
evidence that a reasonable mind might accept on the subject of association with
organized crime. Id.
In a LIUNA
trusteeship hearing, the same reliability criteria for hearsay apply as in a
disciplinary hearing; however, in some particular circumstances, information
from a confidential informant related by a witness is also admissible. See
Crincoli, supra. The
information must be related by a current or former law enforcement
professional, and the informant must be qualified as reliable by a recognized
method for testing reliability. Id. (discussing the difference between
reliable testimony from a qualified informant and testimony from a witness who
merely refuses to be named).
Contrary to
the District Council's assertion that the GEB Attorney was required to disclose
the identities of the confidential sources, maintaining the secrecy of
informants’ identities is appropriate under these circumstances. Here, the GEB
Attorney witness, a former agent of the FBI, qualified each confidential
informant using accepted standards, requiring that each be a proven, reliable
witness who has inside information about organized crime. Tr. 232. These
circumstances are distinguishable from those of Crincoli, supra,
where the witness merely summarized the testimony of several unidentified
witnesses without demonstrating their reliability.
Academic Opinion
Evidence
During the
Trusteeship Hearing both parties called as a witness a labor law professor. Tr.
1848-939, 4343-423. The witnesses' credentials were impressive, and the lengthy
testimony of each was interesting. In the end, the professors' testimony did
not advance either party's position and was not helpful.
Credibility of Certain
Witnesses
The GEB
Attorney called, among others, John O'Rourke, Thomas Bohling, John Dineen,
Robert Pecoraro, Gene Scaramella, Ronald M. Fino, Robert Cooley, Charles
Francis Bills, and Michael Corbitt. The GEB Attorney also relied upon
statements of Ken Eto, a former high-ranking Chicago Outfit associate who
became a government witness after a failed attempt on his life. Their
backgrounds require comment for a better understanding of their testimony.
John
O'Rourke served with the FBI for more than 25 years. Tr. 219-21. From 1973
through 1995, O'Rourke worked in the FBI Chicago office investigating organized
crime. Id. After retiring from
the FBI in 1995, O'Rourke spent 18 months as an inspector in the Cook County
Sheriffs Office, assigned to the FBI task force primarily engaged in
investigating organized crime in Chicago. Id. O'Rourke testified in this
proceeding in the capacity of an expert in criminal investigations and
organized crime matters. This technique has been accepted in similar union
disciplinary matters. See e.g., Senese, 745 F. Supp. at
914-15.
In his
investigation, O'Rourke used tested and accepted investigative techniques to
verify the credibility of the informants whose information he related. Tr.
231-32. O'Rourke related information and hearsay statements of eight named
individuals and 11 others he defined as reliable, confidential informants. Tr.
287-333. Before concluding that an individual named in the Complaint was an associate
or made member of the Chicago Outfit, O'Rourke required the independent
statement of two reliable witnesses who themselves were mob associates. Tr.
231. When O'Rourke used information from confidential informants to corroborate
statements of named witnesses, he relied upon no fewer than five confidential
informants. See infra ¶¶ 50, 70, 90, 146, 170, and 189. This
corroboration renders O'Rourke's conclusions reliable.
I find that O'Rourke is a qualified witness, expert in criminal investigations and organized crime matters, and his testimony, in conformance with accepted investigative techniques, is reliable.
O'Rourke
related information given to him by eight named individuals, all of whom, with
the exception of one, have cooperated with federal authorities. It is
appropriate that their background and experience be examined at this point.
Joseph
Granata is a member of the Cicero Crew[4]
and the son of Frank Granata Sr., a Chicago Outfit member who operated
the Galewood Funeral Home. Tr. 289. Granata's brother, Frank Granata Jr., also
is a member of the Chicago Outfit. Id. Granata became a cooperating
witness for the FBI and wore a recording device during conversations with
narcotics dealers and individuals involved in murder for hire. Tr. 289-90.
O'Rourke spoke to Granata as recently as July 14, 1997. Tr. 289-91. Granata's
information has been verified independently and has been found to be reliable
by O'Rourke and other law enforcement agents.
James Peter
"Duke" Basile was a collector and enforcer for the Cicero Crew and
worked with Jerry Scarpelli, Tony Borsellino, Butch Petrocelli, Michael Sarno,
and several other members of the Crew. Tr. 294. Basile agreed to cooperate with the FBI in an undercover capacity
for two years between 1986-88, and wore a concealed body recorder at meetings
with Chicago Outfit members. Tr. 294-95. Basile gave inside information on
robberies and murders. His information
was always reliable as he was in a position to observe the criminal activities
of the Chicago Outfit. O'Rourke spoke to Basile about Chicago Outfit activities
in 1996. Tr. 294-95. Basile's
information has been verified independently and has been found to be reliable
by O'Rourke and other law enforcement agents.
Leonard
Patrick was an associate of the Chicago Outfit for more than 50 years. Tr. 297.
At the direction of mob boss Sam Giancana, Patrick reported to Gus Alex. Id.
Patrick was a conduit for major bookmakers on the West Side, and then later on
the North Side of Chicago. Tr. 297-98.
In 1991,
Patrick was indicted, along with Mario Rainone, Gus Alex, and Nicholas Gio, on
RICO charges alleging acts of arson, intimidation, and extortion by the North
Side Crew. Tr. 298; GEB Ex. 19 (United States v. Rainone, 32 F.3d 1203
(7th Cir. 1994)). In that case, Patrick pled guilty and testified against his
co-defendants. Rainone, 32 F.3d at 1205. Patrick thereafter testified in
other criminal cases in which convictions were obtained, including the
prosecution of Sam Carlisi and more than a dozen co-defendants.[5]
Tr. 292, 298. O'Rourke debriefed Patrick extensively during 1990-91 about
the structure of organized crime in Chicago. Tr. 297-300. This information has
been verified independently and has been found to be reliable by O'Rourke and
other law enforcement agents.
James
LaValley was a collector and enforcer for the Chicago Outfit. Tr. 291. He
worked for Leonard Patrick, Mario Rainone and Gus Alex; his partner was Nick
Gio. Id. LaValley was indicted after an FBI investigation and agreed to
cooperate. Tr. 291-92. He provided information and testified in several trials,
including Rainone, supra. LaValley also testified in the Sam
Carlisi trial. Tr. 292. Beginning in 1988 and as recently as September 1996, LaValley
provided O'Rourke with information on the structure of organized crime in
Chicago. Tr. 292-9 This information has been verified independently and has
been found to be reliable by O'Rourk and other law enforcement agents. Id.
Umberto
Fillippi was born in Italy and came to live in Chicago. Tr. 301. Fillippi was a
professional waiter and a friend of Sal Mango (also known as Sal Tennini). Id. Fillippi became Mango's confidant, driver,
cook, and helper when Mango became terminally ill with cancer. Id. While in Mango's company, Fillippi saw Mango
meet with many Chicago organized crime figures. Fillippi provided information
on organized crime issues as recently as 1996. Id. This information has been verified
independently and has been found to be reliable by O'Rourke and other law
enforcement agents.
Richard
Mara is a former resident of the 26th Street neighborhood and ex-member of the
26th Street Crew. Tr. 262. Mara was a burglar, armed robber, and cartage thief
who operated in the 1960s and 1970s. Id. Mara testified in a theft from
interstate shipment case in federal court and was a cooperating witness in an
investigation in which he was a subject. Tr. 263. Because of Mara's cooperation
and testimony, all of the defendants entered guilty pleas before trial. Id. Mara entered the witness protection program
in the early 1980s. Tr. 263-64. Mara's information has been verified
independently and has been found to be reliable by O'Rourke and other law
enforcement agents.
William
Wemette was a member of the North Side Crew, operated a pornographic bookstore,
and was an FBI informant for approximately 20 years. Tr. 302. He collected
street tax payments for the Chicago Outfit and later testified at the federal
trial of Frank Schweihs and Mandy Daddino, both of whom were convicted and
given prison sentences. Tr. 302-03. In 1994-95, O'Rourke interviewed Wemette
about organized crime activities. Id. Wemette's information has been
verified independently and has been found to be reliable by O'Rourke and other
law enforcement agents.
Sam Louis
is a former Chicago police officer (1971-81) and former business agent for the
HEREIU. Tr. 303-05, 413-15. In 1997, O'Rourke interviewed Louis about organized
crime activities and testified in this proceeding about statements Louis
allegedly made during those interviews. Id.
The
District Council called Louis as a witness to contradict O'Rourke's testimony
that Louis told him that James DiForti and John Matassa Jr. were made members
of the Chicago Outfit. Louis denied having made the statement to O'Rourke. Tr.
4336-40. The District Council argues that this testimony casts doubt on all of
O'Rourke's testimony regarding informants. Louis's denial does not carry such
weight. Louis admitted to speaking with O'Rourke on at least two occasions, and
admitted to knowing Matassa, but denied knowing or hearing of DiForti. Tr.
4338-39. Louis's direct and cross-examinations indicate he was a reluctant
witness who was evasive, and at times purposely unresponsive. Tr. 4320-43. His
cross examination testimony, though evasive, indicates he knew many of the
respondents in this matter, and that he was in a position to know whether they
were associates of organized crime. Tr. 4323-40. I find that Louis did make the statements to O'Rourke, but
repudiated them when his identity was revealed.
Although I do not find that Louis's denials undercut the testimony of O'Rourke, I will not rely upon Louis's testimony at the hearing or any of the statements attributed to Louis by O'Rourke.
William
Jahoda was a Chicago Outfit member in the 1980s in charge of the gambling
operations for the Cicero Crew. Tr. 305.
Jahoda then became a cooperating witness, was debriefed extensively by
the Internal Revenue Service and FBI, and wore a concealed body recorder. Id. Jahoda testified against Rocco Infelise and
approximately 20 members of the Cicero Crew, all of whom were found guilty. United
States v. Infelise, 835 F. Supp. 1466 (N.D. 111. 1993). Jahoda has provided information to the FBI
about the structure of the Chicago Outfit. Tr. 307. Jahoda provided information
to O'Rourke on September 9, 1996. Tr. 301-07. This information has been
verified independently and has been found to be reliable by O'Rourke and other
law enforcement agents.
O'Rourke
testified about 11 confidential informants, upon which he relied to form some
of his opinions contained in his testimony. As seen below, O'Rourke did not use
consecutive numbers to identify the confidential informants.
Confidential Informant 1 is a Chicago Outfit associate who
had conversations over a period of 40 years with Anthony Accardo, Joseph
Aiuppa, and Joseph Ferriola[6]
and who provided information to O'Rourke from 1988 to 1996. Tr. 318-20.
Confidential
Informant 2 is a mob associate and former burglar and jewel thief who knew Tony
Spilotro and Joseph Lombardo Sr. Tr. 321. This informant has provided
information to O'Rourke from 1968 to the present. Tr. 321-22.
Confidential
Informant 5 is a mob associate who was affiliated with the Cicero Crew, has
worked in the past as a burglar, armed robber, and enforcer and is currently
employed by the City of Chicago. Tr. 322. He provided information to O'Rourke
before and after O'Rourke left the FBI. Id.
Confidential
Informant 6 is a mob associate who worked in the 26th Street/Chinatown Crew's
gambling operations, worked in connection with the Cicero Crew, and was in
regular contact with Michael Sarno, Sal Gruttadauro, Duke Basile, and Jerry
Scarpelli. Tr. 323. O'Rourke testified that Confidential Informant 6 has
provided information from 1985 to the present. Id. His information was
used to obtain search warrants and Title III wiretaps which resulted in the
arrest and conviction of mob members in the Infelise case. Id.
Confidential
Informant 7 is a mob associate who worked for Cook County and was in contact
with Al Pilotto, Al Tocco, Jerry Scarpelli, Jerry Scalise, Duke Basile,
Salvatore "Solly" Delaurantis, and Rocco Infelise over a number of
years. Tr. 324-25. This informant's information was used to support search
warrants and Title III affidavits over a number of years and led to the arrest
of several Cicero Crew members. Id.
Confidential
Informant 9 provided O'Rourke with information only for this proceeding.
O'Rourke stated that Confidential Informant 9 is from the 26th Street/Chinatown
area and has limited knowledge of organized crime. Tr. 325.
Confidential
Informant 10 is an organized crime associate familiar with the North Side Crew
and has been an FBI informant since the late 1970s. Tr. 325-26. Confidential
Informant 10 provided information to O'Rourke only for this proceeding. Id.
Confidential
Informant 11, although not a mob associate, has personal knowledge of organized
crime activity through his direct contacts with several organized crime
members. Tr. 326-27. He provided accurate information to the FBI over a period
of years. Id. He provided information to O'Rourke before and after
O'Rourke left the FBI.
Confidential Informant 12 is a mob associate who was
affiliated with the Elmwood Park Crew. Tr. 327. He was in personal contact with
Chicago Outfit members Marco D'Amico, John DiFronzo, and Peter DiFronzo, among
others. Id. He provided information to O'Rourke before and after
O'Rourke left the FBI. Id.
Confidential
Informant 13 is an associate of the Elmwood Park Crew who provided information
to both O'Rourke and the FBI in the 1990s and as recently as July 1997. Tr.
328.
Confidential
Informant 14 had contact with high-ranking Chicago Outfit members such as
Joseph Aiuppa and Tony Spilotro. Id.
He provided information to O'Rourke before and after O'Rourke left the
FBI.
Thomas
Bohling has been commanding officer of the Cook County Sheriff 's Office for
approximately three years, involved in, among other duties, organized crime
cases. Tr. 531-32. Prior to his
position with Cook County, Bohling spent approximately 20 years with the
Chicago Police Department investigating prostitution, obscenity and gambling,
and acquired an understanding of the influence of organized crime in those
areas. Tr. 532-37. In particular, Bohling's work in pornography investigations
brought him into contact with Michael Glitta and Tommy Matassa. Tr. 538-42.
John Dineen
was a member of the Chicago Police Department for 38 years, from 1959 until his
retirement in 1997. Tr. 674. In 1963, Dineen was promoted to detective and
worked in the homicide section on the West Side of Chicago, and in 1967, began
work in the intelligence division where he concentrated on organized
crime-related matters. Tr. 675-76. In that capacity, Dineen worked as a street
officer conducting surveillance of suspected Chicago Outfit associates. Id.
Dineen also worked in the gambling squad in the late 1960s and early 1970s. Tr.
676-77. From 1979 through 1993, Dineen was president of the Fraternal Order of
Police, and during that period of time did not participate in regular police
duties. Tr. 677-78. In 1993, he returned to intelligence work, which involved conducting
surveillance of known or suspected organized crime figures, coordinating his
efforts with the Cook County Sheriff's Office and the FBI. Tr. 677-79.
Robert Pecoraro became an FBI special agent in 1970. Tr.
621-22. He spent his first 18 months in Louisville, Kentucky, and Oklahoma
City, transferred to New York City in 1972, and then moved to Chicago in 1978,
where he worked until his retirement in 1993. Tr. 622. Beginning in 1972,
Pecoraro worked as an agent in the organized crime unit, first in New York, and
then in Chicago. Id. From 1978
until approximately 1981, Pecoraro was assigned to the downtown Chicago
organized crime squad, and then covered the south suburbs until his retirement
in 1993. Tr. 622-23.
Pecoraro's
work included various RICO and other cases leading to convictions of organized
crime figures. Tr. 622. For the past two years, Pecoraro has been employed by a
major insurance carrier in its special investigations unit. Tr. 616.
Gene
Scaramella has been in law enforcement for 16 years. Tr. 757-58. From 1981-86
he served in the Arlington Heights Police Department, and then served in the
Chicago Police Department as a patrol officer from 1986-91. Tr. 758. In 1991,
Scaramella became a detective in the organized crime division where he
conducted surveillance of suspected and reputed Chicago Outfit members. Tr.
758-59. At the request of the commander of the intelligence division and with
the help of Dineen, over an 18-month period Scaramella updated all of the police
records concerning the Chicago Outfit. Tr. 755.
As a result
of his police work and his project compiling Chicago Outfit members, Scaramella
has an in-depth understanding of the Chicago Outfit. Tr. 762-63.
Currently
Scaramella is a detective for the Cook County Sheriff s Office in the special
operations unit and is also the director of the Office of Organized Crime
Research. Tr. 757. He is an adjunct professor in the criminal justice
department of the University of Illinois. Id.
Ronald M.
Fino became a LIUNA member in 1964 and was Business Manager of Local Union 210,
Buffalo, from 1973 until early 1988. Tr. 1411-13; see also 1996
Judiciary Hearings at 80-81. In the 1970s, Fino's father was the acting
boss of the Buffalo crime family. Fino, became an FBI informant in 1971, and
provided the FBI with information regarding Local 210 for 18 years, including
the entire time he was Local 210 Business Manager. Tr. 1410-12.
Fino testified extensively in In the Matter of Bifulco,
IHO 96-48D(1-28), a LIUNA disciplinary hearing involving twenty-eight LIUNA
members. The decision in that matter is pending. Fino's position in LIUNA Local
210 and his access to the highest-ranking members of the Buffalo mob, as well
as other families in other cities, including Chicago, give his testimony
credibility in this matter. His information has been verified independently and
has been found to be reliable.
Robert
Cooley testified extensively during the Trusteeship Hearing regarding the
structure of organized crime, First Ward politics, and the involvement of
several of the District Council members in organized crime matters. Cooley was
a Chicago police officer from 1962 to 1970. Tr. 825. Over five years while
working as a full-time police officer, Cooley attended law school at night and
became a licensed Illinois attorney in 1970. Tr. 846-48. Cooley is now in the
federal witness protection program. Tr. 821.
Cooley's
position as a police officer in the 1960s and 1970s, and then as an attorney
during the 1970s and 1980s, gave him access into the world of organized crime,
and made him privy to a wealth of information. Cooley took bribes as a police
officer. Tr. 824-25. During his legal career, Cooley worked for various members
of the Chicago Outfit and, from the beginning of his practice,
"fixed" court cases. Tr. 1066-67. In the mid-1970s, Cooley's law
partner was John D'Arco Jr.[7]
Tr. 857-58.
Cooley's
initial contact with the Department of Justice lends credibility to his
testimony. Cooley had no compelling reason to contact the Department of Justice
and confess his illegal activities. Tr. 1016-20. When Cooley began cooperating
with the Department of Justice, he was not the subject of any investigations,
warrants, or criminal complaints. Id. Although the District Council
suggests that an outstanding gambling debt was the motivation for Cooley's
cooperation, I find that Cooley's debt was, relatively speaking, not
significant enough to be considered a catalyst for Cooley's actions. Tr. 1093-96.
Most
important, Cooley's long-term cooperation with the Department of Justice,
beginning in 1986, led to many federal convictions. Tr. 806-19. Cooley
surreptitiously recorded conversations for the FBI for approximately three
years in a project known as "Greylord." Id. More than one hundred (100) tape recordings
were made. Tr. 819. He cooperated at great personal risk. He testified in seven
trials regarding corruption in the court system and organized crime in the City
of Chicago. In each case, all of the defendants were convicted.[8] Tr. 806-19.
Based on
the foregoing, I find that Cooley's position as a police officer, and later as
a lawyer, the manner of his cooperation, and the quality and quantity of his
testimony in several major federal trials qualify Cooley as a credible witness.
His information has been verified independently and has been found to be
reliable.
Charles
Francis "Guy" Bills was born and raised in Chicago. Tr. 1106-07.
Bills's father, Charles "Duckie" Bills, was a bookmaker associated
with the 26th Street Crew. Tr. 1119-21. For years Duckie Bills was a friend of
Gus Alex, who ran organized crime activities in the Chicago Loop area and was
influential in Chicago's First Ward in the 1970s. Tr. 1121-23. Bills's father was
shot and wounded by Angelo LaPietra, later the head of the 26th Street Crew,
after a fistfight with LaPietra. Tr. 1233-34, 1280-8 1.
Bills has a
long history of criminal activity. In the early 1970s, Bills served time for
trafficking in stolen goods. Tr. 1116. He was also convicted of transporting
stolen automobiles over state lines and was later convicted of a RICO offense.
Tr. 1117-18.
Bills was
associated with the 26th Street Crew. Tr. 1110, 1236. Bills made juice loans
for LaPietra, collected street tax from car thieves and chop shop operators,
and was involved in gambling.[9]
Tr. 1242-45. Bills testified that
he owned, and stole cars for a chop shop. Tr. 1115
Bills was
prepared to testify in United States v. Frank Calabrese Sr., but
Calabrese pled guilty. GEB Ex. 24. In Spring 1997, Bills provided testimony
against Philip J. Fiori, who was found guilty. Tr. 1186, 1191. Bills's
information has been verified independently and has been found to be reliable.
Michael
Corbitt was a Willow Springs, Illinois, police officer beginning in 1965, and
police chief from 1973 through 1981. Corbitt Tr. 8-10. After leaving the police
force, Corbitt worked as an investigator for the Clerk of Court of Cook County
until 1987, when he was indicted on RICO charges related to his participation
in organized crime chop shop and bookmaking operations. Corbitt Tr. 5-9. He was
convicted on those charges in 1988. He was convicted in a second prosecution on
RICO conspiracy charges related to his part in hiding the body of Diane
Masters, the wife of a politically influential south suburban businessman,
after she was murdered.[10] Corbitt Tr. 5-6. At the time he testified
before the IHO at a federal correctional facility, Corbitt had served 10 years
of a 20 year sentence. He will be eligible for parole in less than two years.
Corbitt Tr. 7.
Corbitt admittedly associated with the Chicago Outfit from
his first day on the job with the Willow Springs police force. Corbitt Tr. 11.
Corbitt testified that Sam Giancana, head of the Chicago Outfit at the time,
secured Corbitt's job as a policeman, and said "[w]ell, if it works out
good, just remember your friends, just remember who put you in this
position." Corbitt Tr. 19-20.
Corbitt
testified at the Trusteeship Hearing that he agreed to cooperate with the GEB
Attorney's investigation because he believes that the Chicago Outfit has turned
against him. Corbitt Tr. 115-16. Although the GEB Attorney has offered to
inform Corbitt's sentencing Judge of Corbitt's cooperation in this matter, it
is unlikely that the GEB Attorney's offer influenced Corbitt's testimony,
inasmuch as Corbitt already has served most of his sentence.
Corbitt's
testimony detailed his associations with and activities of several individuals
affiliated with the Chicago Outfit, including Sam Giancana, Vincent Solano, Al
Pilotto, Pat Marcy, Fred Roti, and Bruno Caruso. His testimony is corroborated
by other evidence of record and by other witnesses in material aspects. Based
on Corbitt's detailed testimony, close association with the mob and the
corroboration of his testimony, I find that Corbitt's testimony in this matter
is credible.
Ken Eto was
long recognized by law enforcement authorities as a high-ranking mob associate
in the North Side Crew. Tr. 365. On February 10, 1983, Eto was shot three times
in the back of the head by John Gattuso and Jasper Campise. GEB Ex. 4, Tab
"Ken Eto Testimony"; GEB Ex. 73. He survived the shooting and became
a government informant, providing the FBI with details about the inner-workings
and structure of the North Side Crew. Id.
Eto told authorities that he, Gattuso, and Campise had been on their way to meet Vincent Solano for dinner when Gattuso and Campise shot him. Eto testified that he believed that Solan ordered Eto killed because Solano suspected Eto was cooperating with the government. GEB Ex. 73. On July 14, 1983, the mangled bodies of Campise and Gattuso were found in the trunk of a car in Naperville, Illinois. GEB Ex. 73.
Eto has
provided testimony in several trials and before the President's Commission on
Organized Crime ("PCOC"). See GEB Ex. 4, Tab "Ken Eto
Testimony." Based upon his former position in the organized crime
hierarchy, and the manner in which he began to cooperate, I find his testimony
is credible. His information has been verified independently and has been found
to be reliable.
1.
La Cosa
Nostra is a tightly structured criminal organization which operates in various
cities throughout the United States. It is in the business of crime for a
profit.
2.
The LCN of
today had its origins in secret societies formed in Sicily and southern Italy
in the late 19th Century. See Symposium at 440. Similar secret
societies emerged in the United States toward the end of the 19th Century. Id.
These societies were the antecedents of the present LCN. Id. at 441.
3.
In the late
1930s, one criminal group attempted to form an alliance of all the groups
involved in bootlegging. See id. at 441 (citing D. Cressey, Theft
of the Nation: The Structure and Operations of Organized Crime in America
(1969)). A power struggle erupted
between Sicilian and non-Sicilian groups. The struggle led to a violent,
private vendetta known as the Castellammarese War in New York. Id.
4.
The war
began in April 1931 and lasted through September 1931. During September 1931,
in a three-day period, forty (40) Italian or Sicilian organized crime leaders
were murdered. Id. at 442. The structure of the Italian-Sicilian
organized crime organization in the United States today was created by a peace
treaty ending the Castellammarese War. The resulting confederation became known
as LCN. Id.
5.
La Cosa
Nostra is comprised of groups of individuals organized into entities called
families.
6.
A number of
such families are located across the country, including New York City, Buffalo,
and Milwaukee. In Chicago, the group is not known as a family, but the Chicago
Outfit.
7.
The
hierarchy of the leadership of each LCN family consists of the head (the
"boss"), his assistant (the "underboss"), and an advisor
(the "consigliere"). The boss, underboss, and consigliere oversee the
activities of LCN members and their associates.
8.
La Cosa
Nostra members within the family operate in small groups called
"crews" which are headed by men called "capos" or
"crew bosses."
9.
A
"made member" has undergone an initiation ceremony conducted with
specific rituals and formalities. Tr. 185, 226; Fallacara at 4, ¶¶
12-13. Members share in the profits of the organization and have the ability to
operate their own crews. Tr. 226.
10. A mob
"associate" is one who works on behalf of made members and
facilitates mob activities. Associates either run day-to-day illegal operations
for the mob or are in legitimate business under the control and influence of
organized crime. Tr. 227-28; Fallacara at 3, ¶ 11.
11. As used in this opinion,
"street tax" is extortionate money paid to the Chicago Outfit by
individuals involved in illegal activities. Tr. 233. A "chop shop" is
a salvage yard where stolen cars are dismantled and their parts sold in an
illegal market. Id. A "juice loan" is an illegal loan made at
extraordinary rates, the interest on which is collected weekly with threats of
physical harm for non-payment. Tr. 234-35.
Structure of the Chicago
Outfit[11]
12. The Chicago Outfit is
headed by a boss who oversees the activities of a number of crews defined
geographically. Each crew's territory is fairly well defined, although the
areas have expanded, contracted or overlapped somewhat over the years.
13. Sam Giancana was the
boss of the Chicago Outfit from approximately 1956 until 1968, when he fled to
Mexico after being jailed for a year for refusing to testify before a federal
grand jury during his leadership of the Chicago Outfit. Giancana was described
by one writer as "the most powerful archcriminal in the world" when
he was the head of the Chicago Outfit. See Ovid Dernaris, Captive
City at 4 (1969). Giancana returned to Chicago in 1974, but was killed
shortly thereafter when he attempted to return to power in the Chicago Outfit.
14. In the mid to late 1970s, Anthony Accardo headed the Chicago Outfit, aided by two underbosses, Joseph Aiuppa and Jack Cerone Sr. GEB Ex. 4, Tab "Ken Eto Testimony"; 185, 686. In the mid 1980s, Accardo retired and Aiuppa succeeded him. Tr. 266. In 1986, Aiuppa and Cerone were sentenced to prison after being convicted of interstate gambling charges; at the time, Joseph Ferriola briefly took Aiuppa's place as head of the Chicago Outfit. GEB Ex. 167 at 81.
15. After Aiuppa was
convicted and Ferriola became ill, Sam Carlisi took over as head of the Chicago
Outfit, aided by underboss James Marcello. Tr. 261, 720, 1560; see also
GEB Ex. 49. James's brother, Michael Marcello, assisted James with gambling
operations. Tr. 721. In 1992, Carlisi and James Marcello were indicted on RICO
charges arising out of their illegal gambling, juice loan, and street tax
collection activities. GEB Ex. 27. Both were convicted. James Marcello is still
in prison; Carlisi died there. Carlisi was the brother of Roy Carlisi, who was,
until his death, a high-ranking member of the Buffalo LCN. Tr. 1507.
16. Historically, the Cicero
Crew has encompassed Cicero and the western suburbs of Chicago. Tr. 236. In the
mid to late1970s, Joseph Ferriola became the boss of the Cicero Crew. See
Infelise, 835 F. Supp. at 1478. After Ferriola became debilitated with
heart disease, Rocco Infelise became crew boss. GEB Ex. 49; Infelise,
835 F. Supp. at 1480. Members or associates have included Joe Granata, Duke
Basile, William Jahoda, and Solly Delaurantis. Granata and Jahoda have been
government informants and supplied information to O'Rourke for this proceeding.
Delaurantis, an enforcer, is serving a prison sentence for a RICO conviction.
Tr. 696.
17. The Elmwood Park Crew is
based in a nearby western suburb of Chicago. John DiFronzo was the crew boss as
of 1988. GEB Ex. 49. Other members or associates have included Marco D'Amico,
Frank Granata (brother of Cicero Crew associate Joseph Granata), Roland
Borelli, and Joseph Spadavecchio. Tr. 256, 289, 328, 417, 696, 830, 852,
997-98, 1182. D'Amico referred
mob-related clients to Robert Cooley when Cooley was a practicing lawyer. Tr.
848-50. D'Amico was second-in-command until his guilty plea to RICO charges
arising in 1994 from his organized crime activities. GEB Ex. 31. Spadavecchio,
an Elmwood Park Crew supervisor, was an associate of Donald Angelini and
Dominick Cortina, both of whom were convicted of gambling offenses. Tr. 696. In
1995, Borelli pled guilty to bookmaking offenses involving D'Amico, Robert
Abbinanti, Cooley, and others. GEB Ex. 22, 23.
18. The Grand Avenue Crew
encompasses a neighborhood in western Chicago near North Grand Avenue. Joseph
Lombardo Sr. was the boss of the Crew in the mid to late1970s until he was
convicted on federal charges and sentenced to prison. Tr. 261, 341; GEB Ex. 49.
Other members or associates included Tony Spilotro, William Wernette, and
Joseph "Caesar" DiVarco. Tr. 268, 274.
19. The Rush Street or North
Side Crew encompasses the Near North Side of Chicago. Dominic DiBella was boss
of the Crew until his death, when Vincent Solano took over, continuing as boss
through the mid to late 1980s. Tr. 336; Corbitt Tr. 71; GEB Ex. 49. Solano was
also the President of LIUNA Local 1 and a member of the District Council. At
the time, members and associates of the North Side Crew included Caesar
DiVarco, Joe Arnold, Jaspar Campise, Johnny Gattuso, and Michael Glitta. Tr.
274, 538.
20. Apparently, there is
some overlap in the jurisdiction of the Grand Avenue and North Side crews. For
example, Wernette and DiVarco have been identified with both crews. Tr. 274,
302.
21. In the 1980s, Michael
Glitta was the street boss of the North Side Crew working under Solano and
collecting street tax for the Chicago Outfit from pornographic bookstores. Tr.
538, 709; GEB Ex 5 at 177; GEB Ex. 98 at 2.
22. Beginning in
approximately the 1970s, John Matassa became affiliated with the Chicago Outfit
and the North Side Crew; he became a made member by at least 1989. Tr. 397,
418-19. At the time, Sal Gruttadauro and Frank "Babe" DeMonte, also
LIUNA officials, were members. Corbitt Tr. 98. Ken Eto was an associate of the
North Side Crew until 1983, when Campise and Gattuso shot him in a murder
attempt believed to have been ordered by Solano. GEB Ex. 4.
23. The evidence set forth
below establishes that in 1992, Matassa, a current officer of the District
Council, succeeded Solano as the boss of the North Side Crew as well as
President/Business Manager of Local 2, and two appointed positions affiliated
with the District Council. See infra ¶¶
172-92,
216.
24. The South Suburban or
Chicago Heights Crew encompasses Chicago Heights, Calumet City, and parts of
Lake County, Indiana, areas southeast of Chicago. Tr. 259. In the mid to
late1970s, Al Pilotto was the boss of the Chicago Heights Crew. Pilotto also was
President of Local 5 and a District Council member until his conviction, along
with James Caporale, another LIUNA member, on RICO charges related to a LIUNA
employee benefit plan. See infra ¶¶ 73-82.
25. After his incarceration
in 1981, Pilotto was succeeded as boss of the Chicago Heights Crew by Al Tocco.
GEB Ex. 49. Other members or associates of the Chicago Heights Crew included
Nicholas Guzzino, an employee of a District Council affiliated benefit fund,
who was a crew boss under Tocco. Tr. 767, 1688; Corbitt Tr. 97. Dominick
Palermo was a member of Local 5 and also was affiliated with the Crew. Tr. 626,
1199. Dominick's brother, Michael Palermo, has been a LIUNA member since 1982,
was a District Council Delegate until 1995, and currently is Vice President of
Local 1001.
26. The South Side or
Chinatown or 26th Street Crew (hereinafter the "26th Street Crew")
encompasses the old Italian neighborhood at 26th Street and Princeton Avenue in
southwest Chicago. GEB Ex. 49. Beginning in the 1950s, Bruno Roti headed the
26th Street Crew and was succeeded by Frank "Skids" Caruso
("Skids Caruso"), father of Frank "Toots" Caruso
("Toots Caruso"). In the 1970s or early 1980s, Angelo LaPietra became
the boss of the 26th Street Crew. Tr. 431-32. Other members or associates
included James LaPietra, Richard Mara, and Guy Bills. Joseph LaMantia was an
enforcer under Skids Caruso. Tr. 271.
27. In the 1980s, members or
associates of the 26th Street Crew included Ronnie Jarrett, Frank Calabrese,
Angelo Imperato, Anthony Imperato, James Cordovano, Jerry Scalise, and Jerry
Scarpelli. Corbitt Tr. 101. Currently, John Monteleone is the boss of the 26th
Street Crew and also runs gambling operations on the Chicago's west side. Tr.
432, 722. Alphonso Tournabene, Sam Carlisi's cousin, is an underboss to
Monteleone. Tr. 721-22.
28. James DiForti,
associated with the Chicago Outfit at least since 1988, and currently
affiliated with both the Cicero Crew and the 26th Street Crew, was an officer
of Local 5 and a District Council Delegate until his arrest for murder in July
1997. Tr. 513, 728, 768; Corbitt Tr. 102.
29. The evidence set forth
below establishes that Bruno Caruso and Leo Caruso, current officers of the
District Council, are either members or associates of the 26th Street Crew. See
infra ¶¶ 53-72.
30. To understand the
relationship among the District Council, Chicago politics, and organized crime,
one must be aware of the significance of Chicago's First Ward and its leaders.
The Chicago Outfit, and the 26th Street Crew in particular, was long aligned
with Chicago's First Ward. In the 1950s through 1962, during his tenure as
First Ward Alderman, John D'Arco Sr. was closely associated with Chicago Outfit
members such as Anthony Accardo and Gus Alex. See Captive City
at 151-52; Tr. 432.
31. In 1965, a grand jury
investigating organized crime subpoenaed several Chicago politicians, D'Arco
Sr., and Pat Marcy, an officer of the First Ward Democratic Organization, who
refused to testify. See Captive City at 160. Marcy remained an
influential political figure until his indictment in 1991 on RICO charges
related to his role in fixing criminal trials, civil cases, zoning changes, and
judicial appointments. GEB Ex. 40.
32. In the 1970s, the First
Ward maintained a reserved table at Counselor's Row, a restaurant across the
street from the Chicago City Hall and downstairs from the First Ward offices.
Tr. 953. The restaurant was a known meeting place for Chicago politicians,
union officials, and mob figures. At the First Ward table, D'Arco Sr., Marcy,
and Alderman Fred Roti conducted business. Tr. 954-55.
33. The testimony of Robert
Cooley and Michael Corbitt details the operations of the First Ward officials
at Counselor's Row. In a hallway, D'Arco Sr., Marcy, and Roti had private
conversations with various individuals. Tr. 955, 959. Over the years, several
individuals associated with the Chicago Outfit and LIUNA were often seen at the
First Ward table and also meeting in the hallway with Marcy and Roti. Tr.
975-82. Two of the current District Council officers, Bruno Caruso and Leo
Caruso, were often seen at Counselor's Row having private discussions with
Marcy. Tr. 976-78.
34. As an attorney, Cooley
began to represent organized crime figures in criminal matters in the 1970s.
Cooley fixed mob-related bench trials, often working with Marcy, who arranged
payments to judges. Tr. 887-89.
35. In the mid 1980s, Cooley
began cooperating with the government in an investigation of the First Ward's
connection to organized crime and fixing cases, which became known as
"Greylord." Tr. 806-19. His cooperation resulted in several
convictions, including that of Alderman Fred Roti.
Allegations
of Specific Individuals' Ties to Organized Crime (Complaint ¶¶ 7-8)
36. The Complaint alleges
that several former and current members of the District Council are associates
or members of the Chicago Outfit and that several of them have been arrested,
indicted and/or convicted of organized crime-related offenses. Complaint ¶¶ 7-8. Definitions of
"associate" and "member" are set forth herein supra
¶¶ 9-10.
37. The Complaint also alleges that several individuals who are relatives of organized crime figures have positions with the District Council or benefit funds affiliated with the District Council. Complaint ¶ 7. A son or near relative of an organized crime figure should not be penalized for the activities of his family member, unless he has been an active participant with the relative in prohibited activities.
38. In the context of this
proceeding, one may question why the sons or nephews of organized crime figures
are drawn to this union, especially if they have little or no prior experience in
the labor movement. A legitimate inference may be drawn, based upon the actual
organized crime associates and the sons and nephews of organized crime figures
in the District Council, that this union is a safe haven for the employment of
relatives of organized crime figures.
39. Frank "Toots"
Caruso was President of Local 1006 from at least 1986 to the early 1990s, was a
Delegate to the District Council from at least 1982 through April 1995, and
served as the Sergeant at Arms for the District Council from at least 1983
until April 1995. GEB Ex. 117; 116 at D001170, D002694. He was a Trustee to the
District Council Laborers' Pension Fund ("Pension Fund") from 1984 to
1994 and Trustee of another affiliated benefit fund from 1990 to 1994. GEB Ex.
126-34.
40. Toots Caruso is the son
of Skids Caruso, his uncle is former Alderman Fred Roti, and his brother is
Bruno Caruso, as described below. Tr. 431-32, 680-82, 1138-40, 1286; GEB Ex. 5
at 179. There is substantial testimony from John O'Rourke, John Dineen, Robert
Cooley, and Guy Bills that Skids Caruso was the boss of the 26th Street Crew
from the 1950s to the 1970s. Tr. 431-32, 680-82, 1138-40, 1286; GEB Ex. 5 at
179. Upon Skids Caruso's death in the early 1980s, Angelo LaPietra became the
boss of the 26th Street Crew. Tr. 271, 431-39.
41. Cooley was introduced to
Toots Caruso through Robert Abbinanti, a member of the Chicago Outfit. Tr.
867-68. Cooley said that Toots Caruso and Abbinanti had a close relationship.
Tr. 874. Cooley stated that Toots Caruso often sat at Pat Marcy's table at
Counselor's Row. Cooley said that he, Toots Caruso, Abbinanti, Marco D'Amico,
and Richie Catazone, as a group, frequented various Rush Street establishments.
Tr. 872-78. Catazone told Cooley that at two of the restaurants (which were
named at the Trusteeship Hearing) the group received free drinks. Tr. 875-76.
Cooley observed that Toots Caruso and Catazone were treated with great
deference by the staff at these two establishments.
42. Bills had a close
relationship with Toots Caruso as a teenager and in his early twenties. Tr.
1130-37. Bills testified that, in the early 1960s, he and Toots Caruso
socialized and were participants in some bar fights as the result of their
socializing. Tr. 1146-47. Bills also testified that the two participated in
various illegal activities together for a short period of time. Tr. 1142-44.
43. Bills testified that, on
four occasions, from 1979 until the early 1980s, Toots Caruso brought four
"give-up" cars[12]
to Bills's chop shop to be
dismantled. At the time, Bills worked for the 26th Street Crew. Tr. 1142-44.
44. Bills testified that he,
Toots Caruso, and Bills's cousin burglarized a dress shop on Wentworth Avenue.
Tr. 1138-39, 1164-65. The day after the burglary, Toots Caruso informed Bills
that his father, Skids Caruso, ordered them to return the goods. Id.
Bills then returned dresses to Toots Caruso's home. Id. Skids Caruso
warned Bills he was not to do any illegal job in the neighborhood without first
speaking to him. Id.
45. According to Bills, in
the 1970s, Toots Caruso obtained a job with the City of Chicago through Gus
Alex. Tr. 1155. Alex was not affiliated with the City. Id. Toots Caruso
also obtained a LIUNA position through LaPietra. Tr. 1156. LaPietra was not
affiliated with LIUNA. Id.
46. Richard Mara informed
O'Rourke that he had been involved in an armed robbery of a wealthy Chinese
businessman, Peter Pons, which had been set up and participated in by Toots
Caruso. Tr. 467-68.
47. Mara advised the FBI
that Toots Caruso and Larry Pusiteri owned the Hungry Hound Restaurant, located
at 300 W. 26th Street, and that various LCN-related activities occurred there.
GEB Ex. 73 at 28-50. Mara said that Toots Caruso set up robberies with his associates
via a telephone at the restaurant, and that Pusiteri and Toots Caruso operated
a juice loan and bookmaking operation from the restaurant. Id. Larry
Pusiteri also informed Cooley that Toots Caruso had an ownership interest in
the Hungry Hound dice game. Tr. 905-07.
48. Michael Corbitt
corroborated Mara's statement that Toots Caruso was involved in the juice loan
business. Corbitt Tr. 92. Also, he saw Toots Caruso with LaPietra, John
Monteleone, and several other Chicago Outfit figures at a restaurant named at
the hearing. Id.
49. Toots Caruso was
publicly identified as a member of the Chicago Outfit and 26th Street Crew in a
1983 Senate hearing on organized crime. GEB Ex. 5 at Tab "Chart."
50. O'Rourke testified that Toots
Caruso was a member of the 26th Street Crew base on information provided by
Mara, Joseph Granata, James LaValley, Duke Basile, William Jahoda, and eight
confidential informants. Tr. 468-90.
51. On April 10, 1995, Toots
Caruso received a notice of deposition from the GEB Attorney in relation to the
investigation of the District Council and, on April 11, 1995, resigned his
position as District Council Delegate and Sergeant at Arms, as well as all
positions at Local 1006. GEB Ex. 190-91. At the same time, however, Toots
Caruso retained his position as Associate Director of the District Council
Pension Fund. GEB Ex. 130 at D002573.
52. There is proof by a
preponderance of the evidence that Toots Caruso is at least an associate of the
Chicago Outfit.
53. Bruno Caruso is
currently the President/Business Manager of the District Council and the
President/Business Manager of Local Union 1001. Bruno Caruso has been a
Delegate to the District Council since November 1982, serves as a Trustee of
the Laborers' Welfare Fund, and is the Chairman of the Laborers' Political
League.[13]
See Tr. 3487; GEB Ex. 116 at D001015; GEB Ex. 132.
54. Bruno Caruso is the son
of Skids Caruso, brother of Toots Caruso and cousin of Leo Caruso. Tr. 431-32,
680-82, 1138-40, 1145, 1286.
55. Robert Cooley stated
that he was very well acquainted with the 26th Street Crew. Tr. 938-39. On
several occasions, Cooley had conversations with "Dirge" Imperato, an
associate of the Crew, in which Imperato implied that both Bruno and Leo Caruso
ranked above Imperato in the Crew's hierarchy. Tr. 922-23.
56. In 1993, Joseph LaMantia
entered a guilty plea to federal extortion charges. In the plea colloquy,
LaMantia admitted that he was a supervisor of the 26th Street Crew, heading up
the illegal gambling operations and collecting gambling debts, juice loans, and
street tax. GEB Ex. 74 at 4. Guy Bills said he often saw Bruno Caruso with
LaMantia. Tr. 1154-55.
57. Cooley attended the
Hungry Hound dice game run by Larry Pusiteri approximately a dozen times over a
period of three years beginning in 1978-79, and saw Bruno Caruso there with
Pusiteri and Richie Catazone. Tr. 939-50, 1154. Bills corroborated this
information, saying he often saw Bruno Caruso with other Chicago Outfit
associates, including Pusiteri, LaMantia, Donny Catazone, "Captain D"
DiFazio, and Leo Caruso, at different Chicago restaurants and the Hungry Hound
dice game. Tr. 1153-55, 1170-71, 1275.
58. Michael Corbitt
considered himself a "very close associate" of Pat Marcy and, over a
period of six to seven years, he delivered large sums of money from the Chicago
Outfit to Marcy as part of the First Ward machine at Counselor's Row. Corbitt
Tr. 85-86. On a number of occasions, Corbitt saw Bruno Caruso in Marcy's booth
when he arrived at Counselor's Row.
Corbitt Tr. 92-93. On two occasions, Corbitt saw Bruno Caruso pass an
envelope to Marcy. Id.
59. On a number of
occasions, Corbitt saw Bruno Caruso sitting with Angelo LaPietra at bars on
Chicago's Near North Side. Corbitt Tr. 81-82.
60. In the early to mid
1970s, Corbitt was involved in illegal activities with John Monteleone, a
member of the 26th Street Crew who has since ascended to 26th Street Crew
boss. Tr. 721-22. On one occasion, when
Corbitt met Monteleone in a restaurant on Rush Street, Bruno Caruso was at the
table. Corbitt Tr. 101-02.
61. John O'Rourke identified
Bruno Caruso as a member of the 26th Street Crew based on information from four
witnesses: Duke Basile, Richard Mara, James LaValley, and Joseph Granata. Tr.
493. Mara has known Bruno Caruso for 30 years, grew up in the same neighborhood
with him, and is familiar with the entire Caruso family. Tr. 499-501. He said
Bruno Caruso was involved in keeping organized crime's influence in the unions.
Tr. 501. LaValley and Granata corroborated that statement. Tr. 493-99.
62. On June 16, 1997, Bruno
Caruso was served with the Complaint for Trusteeship in this matter in the
parking lot of the Old Oak Country Club in Orland Park, Illinois. Tr. 772-76.
At that time, he was under surveillance by the Cook County Sheriff s Office. Id. Approximately an hour after receiving the
Complaint, Bruno Caruso left the country club in a car followed by fellow LIUNA
member Nicholas Gironda, and traveled to the home of former First Ward Alderman
Fred Roti. Tr. 773-75; GEB Ex. 53-54. Roti, a powerful figure in the First Ward
Machine, is Bruno Caruso's uncle and was convicted in 1982 on racketeering and
other charges based upon testimony by Cooley. GEB Ex. 41. Although Bruno Caruso
testified that he went to his mother's house, next door to Roti's, to read the
Complaint in the quiet of her home, Tr. 3605-06, I do not find this testimony
credible.
63. At the Trusteeship
Hearing, Bruno Caruso testified that he knew Angelo LaPietra through the
Italian-American Club, but was not aware of the circumstances surrounding
LaPietra's imprisonment. Tr. 3618, 3658-60. He said that, although he had known
LaMantia for years, he was not aware of his occupation or his criminal
affiliations with LaPietra or his own relatives, Skids and Toots Caruso. Tr.
3661-65. Bruno Caruso also stated that, although he knew Larry Pusiteri and
Dirge Imperato, he was not aware of their line of work. Tr. 3682. I do not find
this testimony credible.
64. Cooley testified that he
saw Bruno Caruso at the Italian-American Club socializing with various members
of the Chicago Outfit. Tr. 940-42. The District Council has argued that it is
unfair to conclude that a LIUNA member is associating with LCN because the
union and LCN members belong to the same ethnic social club. I am aware of the
danger of finding such meetings as evidence of an active association because
ethnic groups socialize together at such clubs, which many honest, hard-working
individuals attend. The mere meeting of any suspect individuals at a function
open to all is not evidence of any such association. I do not, therefore, give
any weight to evidence of meetings at a public function at a social club.
65. The contacts between
Bruno Caruso and the mob are too numerous and too repetitive to be accidental.
The testimony of witnesses who were well situated in the Chicago Outfit is well
corroborated. Caruso's testimony regarding his lack of knowledge of the
individuals is not credible. There is proof by a preponderance of the evidence
that Bruno Caruso is at least an associate of the Chicago Outfit.
66. Leo Caruso has been a
District Council Delegate since 1986, is currently Sergeant at Arms for the
District Council and is a Trustee to the District Council Pension Fund. Leo
Caruso is also President/Business Manager of Local Union 1006. GEB Ex. 116 at
DOO 1353, D002774; GEB Ex. 117.
67. Leo Caruso is the cousin
of Bruno and Toots Caruso and the nephew of Skids Caruso. Tr. 1145.
68. Robert Cooley has known
Leo Caruso for more than 20 years. Cooley saw Leo Caruso meet with Pat Marcy in
Counselor's Row during the period 1976-80. Tr. 975-81, 1101-03. Cooley also
observed Leo Caruso with Richie Catazone and Larry Pusiteri at the Hungry Hound
dice game. Tr. 903-07. Pusiteri told Cooley that Leo Caruso had an ownership
interest in the game. Id.
69. Guy Bills corroborated
Cooley's testimony about the dice game. Bills had a close relationship with Leo
Caruso over a number of years and testified that, on his first visit to the
Hungry Hound dice game, he witnessed Leo Caruso and Joseph LaMantia listening
to a police radio and acting as "look-outs" for the dice game. Tr. 768,
785, 1148-54.
70. John O'Rourke testified
that Leo Caruso was an associate in the Chicago Outfit. Tr. 509. O'Rourke based
his conclusion on information from Richard Mara, Joseph Granata, James
LaValley, Duke Basile, and eight confidential informants. Tr. 506-09. Mara
stated that he had known Leo Caruso for more than 30 years and that he was an
associate in the 26th Street Crew working in the gambling business. Tr. 506-07.
Granata corroborated Mara's testimony. Tr. 508-09.
71. At the Trusteeship Hearing,
Leo Caruso denied the existence of or attending the dice game. Tr. 4041.
Although Leo Caruso admitted knowing Catazone, Pusiteri, LaMantia, and
"Captain D" DiFazio, all members of the Chicago Outfit, he denied
having a social relationship with any of them. Tr. 4042-44. Leo Caruso stated
that there was no such entity as the Chicago Outfit and people who make such
accusations are discriminating against Italian-Americans. Tr. 4054-69. Caruso's
statements in this regard are not credible.
72. There is proof by a
preponderance of the evidence that Leo Caruso is an associate of the Chicago
Outfit.
73. Al Pilotto served as
District Council Vice President from at least 1979 until 1982 and was a Trustee
of the District Council Welfare Fund from 1976 until 1982. Pilotto was also
President of Local 5 from 1970 to 1982. GEB Ex. 116 at D000672, D001015; GEB
Ex. 117.
74. John O'Rourke stated
that Pilotto was a boss and made member of the Chicago Heights Crew in charge
of loan sharking, gambling, and street tax for approximately 20 years, until he
was convicted on racketeering charges in 1981. Tr. 339.
75. Michael Corbitt, mob
associate and former police chief of Willow Springs, said that Pilotto ran the
Chicago Heights Crew and that, in the late 1960s, Pilotto personally gave
payoffs to Corbitt. Corbitt Tr. 46-52. Corbitt testified that the Chicago
Outfit maintained a group of bookmaking and prostitution operations in Willow
Springs and that the Willow Springs police aided the Chicago Outfit in
maintaining peace at these establishments. Id. The police chief and the
mayor of Willow Springs each received separate envelopes of money in exchange
for protecting the Chicago Heights operations in their community. Id.
76. In 1970, the District
Council engaged a consulting firm, Consultants and Administrators
("C&A"), to perform dental and vision services for the District
Council Health and Welfare Fund. Tr. 1357-61; GEB Ex 11. Consultants &
Administrators was started by Dan Milano Sr., a LIUNA International Auditor. Id.
The firm was a thinly disguised mechanism to provide kickbacks to union
officials and Chicago Outfit members from the profits obtained by C&A. Id.
77. Dan Milano Jr., the son
of Dan Milano Sr., was himself a former C&A dental plan officer. Tr.
1366-68 and Exhibit 17. Milano began to cooperate with the government after a
disagreement with his father resulted in violence against Milano by members of
the Chicago Outfit, at the direction of Milano's father. Id. His
cooperation led to a search warrant executed at the C&A headquarters, which
eventually led to a federal indictment of Pilotto, James Caporale, and others
in Florida on June 3, 1981, in United States v. Accardo, 81 Cr. 230
(S.D. Fl. 1981). GEB Ex. 11.
78. In 1981, while serving
as District Council Vice President and Trustee of the Health and Welfare Fund,
Pilotto was indicted in Accardo for conspiring to defraud LIUNA funds of
approximately $2 million. GEB Ex. 11. The indictment alleged that Pilotto,
Caporale, and others collected kickback money from the contractor, C&A, to
distribute to others. Id. The kickbacks were paid from proceeds received
from LIUNA trust funds. Id.
79. Milano testified in Accardo
and provided a sworn declaration to the Department of Justice in 1994. Tr.
1358-65; GEB Ex. 17 at 4-5. The declaration tracked Milano's testimony in Accardo
and detailed the kickback scheme between the leaders of the District Council
and the Chicago Outfit, including Pilotto:
I was instructed by my father to deliver sums of money to James Caporale, Angelo Fosco and Alfred Pilotto in return for their having assisted C&A in obtaining the CLDC [Chicago Laborers District Council] contract. I personally delivered sums of money ranging between $1,200 and $1,800 to Angelo Fosco between January of 1972 and June of 1976. 1 delivered similar amounts to James Caporale during the same period. Often, after I told Mr. Caporale that these were the papers I was to deliver, he would say that he had to take the papers "out West." The term "out West" was a term commonly used around our offices among C&A employees and the CLDC people with whom we had the most contact. That term was commonly understood among the C&A and CLDC people to refer to Anthony Accardo who lived in River Forest, Illinois on the near west side of Chicago.
Id.[14]
80. Milano also detailed the
influence of the Chicago Outfit over LIUNA.
During
the time I worked for C&A, I often went to dinner with Angelo Fosco and
other employees of C&A and Alfred Pilotto. I specifically recall that on
one of these dinner engagements in 1975, either Agostino's or Armando's
restaurant in the Rush Street area of Chicago, Angelo Fosco, James Norton, and
James Caporale were present with Alfred Pilotto and me. During the evening,
Norton, Caporale, and Fosco began bragging about who had done the most to get
CLDC dental contracts awarded to C&A. The disagreement was resolved when
Pilotto said that he had been the person responsible for getting the CLDC
dental contracts awarded to C&A and afterwards said to Fosco 'we made you
General President, we made your father General President before you and we made
Moreschi General President before him. We can unmake you General President just
as fast.' After that Fosco and Norton were quiet on the subject. I found
the tone of Pilotto's voice when he made these comments to be frightening.
GEB Ex. 17 at 5
(emphasis added); see also Tr. 1264-65.
81. Pilotto survived a
murder attempt, stood trial and, on June 18, 1982, was convicted on RICO
charges, in Accardo, supra, and sentenced to twenty (20) years in
prison.[15] GEB Ex.12, 15. Shortly after his conviction,
Pilotto retired as District Council Vice President, Trustee of the Health and
Welfare Fund, and Local 5 President. GEB Ex. 4; 12; 15; 116 at D001015; 117.
82. I find there is proof by
a preponderance of the evidence that Pilotto was, prior to his incarceration, a
member of the Chicago Outfit and boss of the Chicago Heights Crew.
83. James Caporale served as
the Secretary-Treasurer of the District Council from sometime prior to 1970[16]
until 1987. Caporale was the Business Manager/Secretary-Treasurer of the
District Council from 1982 to 1987 and served as a Trustee to two affiliated
benefit funds from sometime prior to 1970 until at least 1982. GEB Ex. 116 at
D002378.
84. According to John
Dineen, Caporale was seen regularly by Chicago police meeting with Chicago
Outfit members Jack Cerone, Dominick Cortina, and Donald Angelini at a retail
gasoline station on North Harlem Avenue. Tr. 727. All three individuals ran
syndicated gambling rings for the Chicago Outfit and each was convicted of
interstate gambling. Tr. 696.
85. Michael Corbitt
testified that, from the late 1960s to early 1980s on Wednesday nights, Anthony
Accardo and Joseph Aiuppa, then the highest-ranking members of the Chicago
Outfit, met regularly in the private dining room at a restaurant in Norwood,
Illinois, which was named in the record. Corbitt Tr. 73-78. Corbitt was
frequently a guest at these dinners and recognized all of the dinner guests as
members of organized crime. On several
occasions, Corbitt saw Caporale in the private dining room with Accardo and
Aiuppa and, on at least three of these occasions, saw Caporale give a package
to Accardo. Corbitt Tr. 79.
86. On March 27, 1986,
Cerone, Aiuppa, and many others were convicted of conspiring to skim proceeds
from Las Vegas gambling casinos and were sentenced to prison. Cerone and Aiuppa
both died in jail. GEB Ex. 5 at 169; GEB Ex. 30.
87. In 1981, Caporale was
indicted with Al Pilotto and others in United States v. Accardo. See
supra ¶ 78.
88. On February 17, 1982,
while under indictment, Caporale, then the District Council
Secretary-Treasurer, was unanimously appointed as District Council Business
Manager by the Executive Board upon the recommendation of District Council
President Joe Spingola, despite Caporale's outstanding indictment in Florida.
GEB Ex. 116 at D001049.
89. On June 18, 1982, Caporale
and Pilotto were convicted of RICO charges in Accardo. GEB Ex. 15. On September 14, 1982, Caporale
was sentenced to 12 years in prison. GEB Ex. 13. On October 6, 1982, the court
ordered Caporale to forfeit all of
his District Council positions pending appeal. GEB Ex. 14. The Executive Board
then promptly reappointed Caporale to his posts despite the fact that
Caporale's convictions centered around kickbacks received to the detriment of
LIUNA members. The District Council permitted Caporale to continue as District
Council Business Manager/Secretary-Treasurer until his appeal was decided in
1987.[17] Tr. 1372-77, 1727-34.
90. John O'Rourke testified
that Caporale was an associate of the Chicago Outfit and North Side Crew based
upon information he received from two identified witnesses and five
confidential informants. Tr. 348.
91. There is proof by a
preponderance of the evidence that, while he was a member of the District
Council, Caporale was an associate of the ChicagoOutfit
92. Nicholas Guzzino was
Field Representative to the Laborers' Pension Fund from at least 1978 until
1980. GEB Ex. 115. Guzzino was also a member of Local 5's Executive Board. GEB
Ex. 117; Tr. 1688-89.
93. Michael Corbitt stated
that Guzzino was a Chicago Heights Crewmember working under Al Pilotto. Corbitt
Tr. 97.
94. Guy Bills corroborated
Corbitt's testimony. Bills testified that he knew Guzzino through Al Tocco and
Billy Dauber, a notorious and violent individual who ran chop shops and was
murdered for failing to pay street tax. Tr. 640-41; GEB Ex. 109. Bills
testified that Guzzino was a crew boss under Pilotto in the late 1970s. Tr.
1177-78. Gene Scaramello testified that Guzzino was a high-ranking member of
the Chicago Heights Crew that controlled Chicago Outfit activities in the
southern suburbs of Chicago as well as northwest Indiana. Tr. 767.
95. In 1988, Al Tocco was
indicted on charges arising from his organized crime activities. GEB Ex. 109.
The indictment alleged the involvement of Tocco, Bills, and others in multiple
acts of murder, extortion, and arson, including the murder of Dauber and his
wife. Id.
96. On May 14, 1990, Al
Tocco was convicted and sentenced to 200 years. GEB Ex 112. Information leading
to Tocco's conviction was provided by Tocco's wife, Betty. Tr. 65560. In a 1989
interview with FBI agents, Betty Tocco recalled an incident on June 16, 1986,
that involved Tocco, Guzzino, and Dominick Palermo. Betty Tocco stated that she
received a telephone call from Tocco to pick him up approximately 50 miles from
their home at a location along Route 41 in northern Indiana. Id. Betty
Tocco said that when she reached Tocco, he was irate and said that he, Guzzino,
Palermo, and Chuckie Roviero had buried the Spilotro brothers the previous
night. Id.
97. Tony and Michael
Spilotro, were notorious members of the Chicago Outfit who had been murdered
days before. Tr. 653-55. Tocco told his wife that, after the burial, something
had frightened the group, and they split up and left Tocco stranded along Route
41 without transportation to return to Chicago. Tr. 655-60. The geographic
location in Indiana where Betty Tocco met her husband was one mile from the
site where the bodies of the Spilotro brothers were found buried in a shallow
grave. Tr. 661; GEB Ex. 109-114.
98. On January 11, 1991,
Guzzino was indicted with Palermo and others in a federal racketeering case
which involved the collection of street tax and juice loans in Indiana. GEB Ex.
107.
99. Both Guzzino and Palermo
were convicted and sentenced to lengthy federal prison terms for their crimes.
GEB Ex. 108. Guzzino was fined $185,000. Id.
100. Guzzino and Palermo were
the subjects of electronic surveillance prior to their arrests. Excerpts of
these conversations were played at Guzzino's trial. GEB Exhibit 108. The
excerpts revealed that in the 1980s, Bernard J. Morgano was the central
gambling figure for the Chicago Outfit in northwestern Indiana. Id. He
traveled to Illinois frequently to meet with Palermo and Guzzino, at a restaurant
in Calumet City. Id These meetings were electronically monitored by the
government. Id. The taped conversations revealed that Palermo was
Morgano's boss and the person to whom Morgano delivered the street tax he
collected. Id. Guzzino assisted Morgano's efforts to collect street tax,
serving as Morgano's second-incommand. Id.
101. There is proof by a
preponderance of the evidence that, while he was a Field Representative to the
District Council Pension Fund, Guzzino was an associate of the Chicago Outfit.
102. Dominick Palermo was a
District Council Delegate and Local 5 Field Representative from sometime prior
to 1970 until 1991. GEB Ex. 12 1. Palermo served as an officer of Local 5 until
his conviction with Nicholas Guzzino on RICO charges. See supra ¶
99.
103. Guy Bills identified
Dominick Palermo as a Chicago Heights mob boss in the 1978-79 time period. Tr.
1178-79. Bills stated that he met Al Tocco on various occasions and, on one
occasion, met with Tocco at a lounge near Route 30. Id. Palermo was
there discussing how much street tax a new owner of a Chicago Heights brothel
should pay the Chicago Outfit. Id.
104. Gene Scaramello stated
that Palermo was a high-ranking member of the Chicago Heights Crew who
controlled LCN activities in the south suburbs and northwest Indiana. Tr.
767-68.
105. Michael Corbitt
testified that he had known Palermo for 30 years. Corbitt Tr. 96. Palermo
was involved with organized crime, was one of "Al Pilotto's guys" and
was also associated with Angelo LaPietra. Id.
106. In May 1990, Palermo was implicated in the Tocco
trial in the gangland-style murder and burial of the Spilotro brothers. Supra ¶ 96.
107. In 1991, Palermo was indicted on racketeering
charges involving the collection of juice loans and street tax, and he was
convicted. See supra ¶¶
98-99.
108. Robert Pecoraro stated
that, based on his familiarity with both the Tocco and Palermo criminal cases,
Palermo was a made member of the Chicago Outfit. Tr. 671-72.
109. There is proof by a
preponderance of the evidence that, while he was a member of the District
Council, Dominick Palermo was at least an associate of the Chicago Outfit.
Michael Palermo
110. Michael Palermo has been
a District Council Delegate since 1984 and
has been the Local 1001 Vice President since 1989. GEB Ex. 116.
111. Michael Palermo is the
brother of Dominick Palermo. Tr. 1181.
112. James DiForti became a District
Council Delegate in 1989 and the Coordinator of Committees in 1994.[18]
GEB Ex. 116 at D002513. Beginning in 1985, DiForti served as an officer or
Business Agent at three different LIUNA local unions, each affiliated with the
District Council. DiForti held office in Local 1002, Local 1006, and finally,
Local 5. GEB Ex. 117 at 000376. At Local 5, he was Secretary-Treasurer. GEB Ex.
121.
113. Michael Corbitt
testified that he met DiForti on several occasions on Rush Street and that he
knew DiForti put juice loans "on the street" in the mid 1970s to
early 1980s. Corbitt Tr. 102-03. Corbitt also saw DiForti meeting with John
Monteleone, Vincent Solano, and Angel LaPietra. Id.
114. On December 8, 1993,
John O'Rourke, who was then an FBI agent, interviewed John Evans, a cooperating
witness for the FBI, and Evans recounted via a handwritten statement an
incident in February 1988. Tr. 520-23; GEB Ex. 83. Evans stated that he and James DiForti participated together in various
clothing and jewelry store burglaries. Id. Evans stated that he knew
DiForti was a business agent for a union. Id.
115. Evans recounted a night
in February 1988, when DiForti awakened him in his Chicago home. GEB Ex. 83.
DiForti had been shot twice, in the forehead and his right side. DiForti stated
"the guy owed us a lot of money, he wouldn't pay and he was going to go
the Feds. . . . [W]e had an argument and the guy shot me, so I shot him -
you've got to help me." At DiForti's insistence, the two men returned that
night to the crime scene, and Evans entered the building twice to retrieve
DiForti's gun, attaché case, and pager.
Id. While inside, Evans
saw the slumped body of a person he knew as Bill "the pallet man,"
DiForti's close friend. Id. "The pallet man" is the same
person described as the murder victim in DiForti's arrest report, described
below. Id.
116. Evans stated that, after
the incident, DiForti resided with him for several days to nurse his wounds.
GEB Ex. 83. DiForti told Evans that he had "OK’d" his friend Bill
"the pallet man" to receive a juice loan, and when Bill failed to
pay, DiForti had to "stand good" for the money owed. Id. Evans
stated that "the pallet man" owed DiForti approximately $50,000. Id.
Evans said that DiForti "led me to believe he was a member of Organized
Crime" in Chicago. Id.
117. Walter Zischke was also
a cooperating witness for the FBI. Tr. 513-14. Zischke told O'Rourke he had
committed burglaries with Evans and DiForti, and that DiForti used his union car
in the commission of burglaries in the Chicago suburbs. Id. Zischke
corroborated Evans's account of the February 1988 incident and said that Evans
had recounted the same incident to him as stated above. Id.
118. On July 11, 1997,
DiForti was arrested by Chicago police for the 1988 first degree murder of
Billy J. Benham, the owner of the B&S Pallet Company. GEB Ex. 84. The
arrest report alleges that the murder occurred on February 13, 1988, and that
DiForti "shot and killed Benham in a dispute over a $100,000 'juice
loan."' Id. On the day of his arrest, DiForti resigned from his
LIUNA positions. GEB Ex. 84, 170. He was indicted for the murder during the
Trusteeship Hearing, and he awaits trial. GEB Ex. 182.
119. O'Rourke testified that
Confidential Informant 5 told him that:
DiForti was a lieutenant reporting to [John] Monteleone, that he was in charge of gambling and juice and street tax collections for the 26th Street Chinatown Crew, a long-time member of that crew, and also involved with the Cicero Crew, that both had been placed under John Monteleone and that DiForti being a trusted lieutenant had been dispatched on orders of John Monteleone out to Chicago Heights to take over Local 5 and to conduct organized crime operations in the south suburban, Chicago Heights area.
Tr. 512-13.
120. There is proof by a
preponderance of the evidence that, while he was a member of the District
Council, DiForti was an associate of the Chicago Outfit.
121. Salvatore Gruttadauro
was a District Council Delegate from sometime prior to 1970 until 1984. GEB Ex.
116 at D001022, D001048, D001015. During that same time period, he was also
Vice President of LIUNA Local Union 1 under President Vincent Solano. GEB Ex.
119.
122. During Senate hearings
on organized crime on March 4, 1983, Gruttadauro was identified as a member of
the Chicago Outfit working under crew boss Joseph Ferriola. GEB Ex. 5.
123. Ken Eto testified before
the PCOC in 1985, that Gruttadauro was a member of the Chicago Outfit. GEB Ex.
4, Tab "Ken Eto Testimony" at 42.
124. In 1985, while an
officer at Local 1, Gruttadauro was indicted for receiving illegal payments
from a union contractor in violation of 29 U.S.C. § 186(b)(1). Gruttadauro was
convicted on March 24, 1986, and sentenced to two years probation and fined
$22,000. GEB Ex. 102, 103. His conviction was affirmed on May 7, 1987. GEB Ex.
106.
125. There is proof by a
preponderance of the evidence that, while he was a member of the District
Council, Gruttadauro was an associate of organized crime.
126. John Galioto has been a
District Council Delegate since 1995, and currently is the Local 225 Business
Manager. GEB Ex. 116 at D002752, D002977.
127. Galioto is the nephew of
James Marcello, identified by John Dineen as being the underboss of the Chicago
Outfit before his conviction.[19] Tr. 720, 4432; GEB Ex. 28.
128. The GEB Attorney
presented evidence that Galioto is involved in an illegal gambling operation.
Tr. 767. There is a separate complaint for trusteeship filed against Local 225,
and these same allegations were put forth in that proceeding. See Complaint
for Trusteeship, In the Matter of Local 225, IHO Order and Memorandum,
97-54T (Nov. 14, 1997). These allegations are being addressed in the Local 225
trusteeship proceeding.
129. Nicholas DiMaggio was an
employee of the District Council affiliated Training Fund from 1991 to 1993,
and a Local 225 member from 1988 to 1993. GEB Ex. 144.
130. Ron Fino, the son of the
former underboss of the Buffalo LCN, testified that he successfully ran for
Business Manager of Local 210 in Buffalo in 1973, the only contested election
in the history of Local 210. Tr. 1421-28. Fino testified that DiMaggio, then a
member of Local 210, publicly opposed Fino during the election campaign. Id.
Shortly after the election, Fino was forced to appoint DiMaggio as an
instructor on the Local 210 Training Fund by Roy Carlisi, DiMaggio's uncle and
a capo in the Buffalo crime family. Id.
131. In the mid-1970s, Fino,
owned a snow plowing business with DiMaggio. Tr. 1430-33. Fino testified that
DiMaggio acquired a 50-percent financial interest in the company because Fino's
father insisted that Fino take DiMaggio as a partner. Id. The
partnership ended in 1978. Id. Fino gave DiMaggio $30,000 in cash and
equipment as part of the settlement. Id. In 1985, based on this payment,
DiMaggio was indicted and convicted of submitting a false income tax return,
and was sentenced to three years probation. Tr. 1430-33; GEB Ex.32.
132. Shortly after his
conviction, DiMaggio moved to Chicago and obtained a LIUNA position arranged by
his uncle, Roy Carlisi. Tr. 1438. DiMaggio became a Local 225 member in 1988. Id.
133. There is proof by a
preponderance of the evidence that, while he was an employee of the Training
Fund, Nicholas DiMaggio was an associate of the Chicago Outfit.
134. Dominick DiMaggio has
been a District Council Delegate since 1992, and served as a District Council
Field Representative from 1987-89. GEB Ex. 144. Dominick is currently the Vice
President of Local 2 under President John Matassa Jr. GEB Ex. 117 at 000499.
135. Dominick DiMaggio is the
nephew of Sam Carlisi. Carlisi was a Chicago Outfit boss until his conviction
on RICO charges. GEB Ex. 27, 28. He died in prison. Tr. 720.
136. Joe Mazza was a Delegate
to the District Council from 1987 until 1995, and the LIUNA International
Regional Manager for the Chicago area. GEB Ex. 116. He was Business Manager of Local
225 from 1986 until 1995. GEB Ex. 122.
137. In June 1987, at a LIUNA
International meeting in California, Ron Fino, who at the time was Business
Manager of Local 210 in Buffalo, testified that, at Mazza's request, he went
for a car ride around Lake Tahoe with Mazza and LIUNA International Vice
President John Serpico. Tr. 1512-16. During the ride, Mazza told Fino that LCN
was concerned about Fino because he spoke without permission from LCN. Id.
Mazza told Fino that he must receive permission from Buffalo LCN boss Joe
Todaro Sr. when dealing with LIUNA matters. Id. Mazza stated that he and
Serpico, at one time, had to clear their LIUNA decisions with James Caporale
and later with Vincent Solano. Id. At the time of this meeting, Solano
was President of Local Union 1 and ranked far below both Serpico and Mazza in
the LIUNA hierarchy. Id.
138. Fino testified that, in
his opinion, "this is organized crime that ran the Laborers' International
and we answered to them." Tr. 1517.
139. Mazza resigned his union
positions in 1995, after LIUNA undertook its reform efforts and the IG's office
began to investigate the District Council. GEB Ex. 144.
140. There is proof by a
preponderance of the evidence that, while he was a member of the District
Council, Mazza was an associate of the Chicago Outfit.
141. Vincent Solano was a
District Council Delegate and Coordinator of Committees from sometime prior to
1970 until his death in 1992. GEB Ex. 144. Solano was also the Local 1
President and Business Manager during the same time period. GEB Ex. 119. Solano
served as a Trustee to the District Council Pension Fund from 1978 until his
death. GEB Ex. 144.
142. In the 1983 Senate
hearings, Solano was identified as "the capo in charge of the north
side" who had succeeded Dominick DiBella. GEB Ex. 5. John Serpico, LIUNA
International Vice President and Local 8 President, testified before the PCOC
in 1985 that Solano was a territorial boss who reported to Joseph Aiuppa and
Jack Cerone. GEB Ex. 4.
143. Ken Eto said that he
believed Solano had ordered John Gattuso and Jasper Campise to kill him when he
suspected Eto of cooperating with the government. GEB Ex. 73. Soon after
Gattuso and Campise botched the killing, they were murdered. Tr. 374.
144. Eto reported to Solano
for almost a decade. GEB Ex. 4. After the attempt on his life, Eto testified
before the PCOC. That report summarized Eto's testimony regarding Solano:
Solano controlled all forms of illegal gambling, including poker, bolita, zinganetta, horse bookmaking and sports bookmaking in his area. Solano also ran extortion rackets against bars, restaurants, topless clubs, pornographic bookstores, and massage parlors, and supplied these businesses with vending machines, such as cigarette and jukeboxes. Solano used the local's headquarters as a contact point for his criminal organization. Solano confirmed meetings at prearranged locations near the union hall, and met with members of his crew to receive payoffs, give directions, and in the words of Eto, receive "respect" from those who worked for him. Eto personally paid Solano, a share of the proceeds of his illegal gambling operations. At Solano's direction Eto made regular payments to other LCN members.
Id.
145. Michael Corbitt
testified that from the 1960s to 1987, as a police officer working for the
Chicago Outfit, he used garbage bags to deliver large amounts of cash to
several top Chicago Outfit bosses, including Solano. Corbitt Tr. 56, 72-74.
146. John O'Rourke testified
that, based on his interviews with five witnesses and 11 confidential
informants, and consistent with the FBI's classification, Solano was the boss
of the North Side Crew in the Chicago Outfit. Tr. 336-38.
147. Thomas Bohling and John
Dineen corroborated O'Rourke's testimony. Tr. 543, 687-88.
148. There is proof by a
preponderance of the evidence that, while he was a member of the District
Council, Solano was a member of the Chicago Outfit and the boss of the North
Side Crew.
149. Anthony Solano has been
the Administrator of the District Council Training Fund since 1986. GEB Ex.
142.
150. Anthony is the son of
Vincent Solano, who was the boss of the Chicago Outfit North Side Crew. See
supra ¶¶ 141-48.
151. Ernest Kumerow served as
District Council President/Business Manager from 1987-94, following District
Council President Joe Spingola and District Council Business Manager James
Caporale. GEB Ex. 116. Kumerow was a Trustee of the District Council Welfare
Fund from 1982-94, a Trustee of the District Council Training Fund from
1988-93, and Chairman of the Laborers' Political League from 1993-94. GEB Ex.
144. Additionally, Kumerow was Local 1001 President and Business Manager from
1982-94. GEB Ex. 123.
152. Kumerow was the
son-in-law of Anthony Accardo. Tr. 363.
153. Michael Corbitt saw
Kumerow in the private dining room of a restaurant with Anthony Accardo and
Joseph Aiuppa on at least three or four occasions from the early 1970s to the
early 1980s. Corbitt Tr. 73-79. Corbitt also observed Kumerow at Accardo's Palm
Desert home and the Brookwood golf course. Corbitt Tr. 80. He also saw Kumerow
meeting with Vincent Solano, Pat Marcy, John Spano, and John Serpico. Corbitt
Tr. 80-81. Corbitt saw Kumerow with Solano at several restaurants. Corbitt Tr.
136-37. Based on his observations and his own work within the Chicago Outfit,
Corbitt stated that Kumerow was associated with organized crime. Corbitt Tr.
81.
154. It is reasonable to
infer that Kumerow's rise through the ranks of the District Council has been
because of the support of his father-in-law, Accardo. Shortly after Accardo
died, Kumerow left the union. GEB Ex. 116 D001100-01; GEB Ex. 117 at 006143.
155. There is proof by a
preponderance of the evidence that, while he was a member of the District
Council, Kumerow was an associate of the Chicago Outfit.
Craig Kumerow
156. Craig Kumerow has been a
District Council Delegate since 1989. GEB Ex. 116.
157. Kumerow is the son of
Ernest Kumerow and the grandson of Anthony Accardo. Tr. 363.
158. Joseph Abate was a
Delegate to the District Council from 1993, and Local 225 President from 1996
until his suspension in June 1997. GEB Ex. 144.
159. On March 3, 1997, the
Chicago police searched Abate's apartment and discovered evidence leading to
Abate's arrest and felony charge for syndicated gambling in violation of
Illinois law. GEB Ex. 7-8. He awaits trial.
160. Pursuant to the LIUNA
Ethics and Disciplinary Procedure, Abate is currently suspended from his LIUNA
positions. See GEB Ex. 117 at 000248.
161. Since 1990, Vincent
DiVarco has been a Delegate to the District Council and the Recording Secretary
for Local Union 2 under President John Matassa Jr. GEB Ex. 116, 144.
162. DiVarco is the son of
Joseph "Caesar" DiVarco, Tr. 364, a boss of the North Side Crew who
worked under Vince Solano in the 1970s and 1980s, and who died in prison. Tr.
27475; Corbitt Tr. 59; GEB Ex. 4, Tab "Ken Eto Testimony" at 18-19;
GEB Ex. 92-93.
163. DiVarco is the
son-in-law of Chicago Outfit associate James Caporale. Tr. 3901-02.
164. Frank "Babe"
DeMonte was a District Council Delegate from sometime prior to 1970 until his
death in 1992. GEB Ex. 116. DeMonte was also a Local 1 Business Agent under
Vincent Solano for the same period of time. GEB Ex. 119.
165. During the PCOC hearings
in 1985, DeMonte's father was identified as a member of the Chicago LCN. GEB
Ex. 4.
166. In statements to the
government, Ken Eto identified DeMonte as a member of Vincent Solano's Crew and
stated that DeMonte, along with Vic Arrigo and John Matassa Jr., was
responsible for making the initial calls to North Side businesses to collect
street tax. GEB Ex. 97, 98.
167. Michael Corbitt
corroborated Eto's testimony, saying that he had known DeMonte for 25 years and
identifying him as a juice loan collector. Corbitt Tr. 98.
168. Arrigo is a
self-admitted member of the Chicago Outfit who entered the witness protection
program in 1986. GEB Ex. 73 at 32. Arrigo supplied information to the FBI and
said that he and DeMonte were sponsored for membership into the Chicago Outfit
at the same time.
169. Joseph Granata informed
John O'Rourke that DeMonte was a lieutenant to Solano in the North Side Crew
and had been a made member of the Chicago Outfit since the late 1970 or early
1980s. Tr. 409. James LaValley and Leonard Patrick corroborated Granata's
information. Tr. 409-10.
170. O'Rourke testified that,
in his opinion, based on his interviews with five named witnesses and eight
confidential informants, DeMonte was a made member of the Chicago Outfit. Tr.
405-09.
171. There is proof by a
preponderance of the evidence that, while he was a member of the District
Council, DeMonte was a made member of the Chicago Outfit.
John Matassa Jr.
172. John Matassa Jr. is
District Council Vice President and has been a District Council Delegate since
1987. Tr. 3775-84, 3963-64; GEB Ex. 116, 126-34. Matassa served as an auditor
of the District Council in 1987 and as a Coordinator of Committees of the District
Council in 1992. GEB Ex. 144. Matassa has been a Trustee of the District
Council Pension Fund since 1992, a Trustee to the Laborers' Political League
since 1993 and Trustee to the District Council Training Fund since 1994. Id. Matassa became a LIUNA member and field
representative of Local Union 2 in 1985 and in 1987, two years after his
initial membership, and was selected as Business Manager of Local Union 2. GEB
Ex. 120. In 1989, Matassa became President/Business Manager of Local 2. Id.
173. Ken Eto identified
Matassa as an enforcer and collector for the North Side Crew working under
Vincent Solano with Joe Arnold, Mike Glitta, Jasper Campise, Caesar DiVarco,
and Frank DeMonte. GEB Ex. 97; GEB Ex. 98. Eto stated that, prior to becoming a
Chicago Outfit boss, Matassa was a member of the North Side Crew working for
Solano and DiVarco. Id.
174. Matassa admitted to
associating with Campise. Tr. 3903-04. Matassa stated that he was only aware
through television news reports, however, that Campise had been murdered. Tr.
3904-14. Matassa testified that, after Campise's murder in July 1983, he gave
hair and fingerprint samples to the FBI, but that, during these procedures, he
was not aware of what crime was under investigation. Tr. 3912-14.
175. Thomas Bohling testified
that, during the 1980s, while conducting police surveillance, he regularly saw
Matassa driving Glitta around Chicago. Tr. 593. Bohling further testified that
Matassa's cousin, Tommy Matassa, was the manager of a pornography store, the
Cupboard on Hubbard on West Hubbard Street in Chicago. Tr. 540-41. Based on his
own observations and a review of police databases, Bohling believes that
Matassa was in the "middle management to upper management" of
organized crime and involved in the adult pornography business. Tr. 546.
176. Matassa admitted that he
drove Glitta around Chicago on a daily basis in the 1970s and 1980s. Tr.
3804-07. Matassa testified that he ate several daily meals with Glitta and that
he and Glitta often met DeMonte, DiVarco and Arnold for coffee at a restaurant.
Tr. 388385. Matassa also stated that he helped Glitta and his wife stock the
shelves for the Cupboard on Hubbard, but testified that he did not have an
ownership interest in the establishment. Tr. 3806-07. Matassa testified that,
although he saw Arnold two to three times a week during the period he was
driving Glitta around, he did not know what Arnold did for a living, and, in
particular, was not aware of Arnold's activities with the Chicago Outfit. Tr.
3884-92.
177. Arnold, DiVarco,
DeMonte, and Glitta were well-known organized crime figures.
178. Umberto Fillippi told
John O'Rourke that he was introduced to Matassa in 1989 by his friend and
employer Sal Mango. Tr. 421-22. Mango told Fillippi that Matassa was a member
of the North Side Crew. Tr. 422. Fillippi further said that he cooked breakfast
for Sal Mango in his home and he observed that, in 1993-94, Matassa, his cousin
Tommy Matassa and John Serpico, a LIUNA International Vice President, met with
Mango on a monthly basis to discuss a company called Health Marketing, Inc. Tr.
422-23. Mango ran the company, which provided services to labor unions,
including LIUNA. Tr. 423. Fillippi said that, at these monthly meetings, Mango
provided kickback payments to Matassa, Tommy Matassa, and Serpico. Tr. 423-24.
179. Matassa admitted knowing
Fillippi and Mango, but denied any involvement with them in illegal matters.
Tr. 3799-3803. Matassa said that he had met Fillippi at a dinner meeting with
Mango and Tommy Matassa at a restaurant where Fillippi was a waiter. Id. Matassa said he was only slightly acquainted
with Fillippi. Id. Matassa said
that he met Mango at a lunch with his cousin Tommy. Id. Although Matassa
admitted being in Mango's house on at least one occasion during Mango's
illness, he denied ever being at Mango's house with Serpico or being involved
in a kickback scheme. Id.
180. James LaValley told
O'Rourke that Matassa is a made member of the Chicago Outfit. Tr. 420-21.
LaValley stated that, in the early 1980s, he had seen Matassa with Jack Cerone
at the Brookwood Country Club. Id.
181. John Dineen, relying on
Chicago police surveillance reports, stated that Matassa was seen with known
mob members in the Chicago Outfit. Tr. 695; GEB Ex. 100. Dineen said that
police reports indicated that Matassa was seen meeting with Joseph Spadavecchio
in February 1988 at a restaurant which was named in this proceeding. Tr. 696.
Spadavecchio is a gambler and Chicago Outfit supervisor in the Elmwood Park
area. Tr. 710. Matassa was seen in March 1990 at a restaurant at Diversey and
Naragansett with DeMonte and Robert Dominic. Tr. 710. DeMonte, when alive, was
a Chicago Outfit member working in the North Side area. See supra
¶¶ 164-71. Dineen stated that Dominic is an associate of the Chicago Outfit who
was involved in the pornography business. Tr. 706.
182. Matassa admitted meeting
Dominic one time in a restaurant (named in the record) while accompanied by
DeMonte. Tr. 3882-86. Matassa also testified that he "could have"
eaten a meal at the same restaurant with Glitta and Solano and admitted to
socializing with Michael Marcello. Tr. 3832-35. Dineen testified that Marcello
is an active member of the Chicago Outfit who has taken over gambling
operations for his brother, convicted underboss James Marcello. Tr. 720-21.
183. Matassa admitted meeting
DeMonte with his uncle at a restaurant on Rush Street. Matassa also admitted to
collecting money from a bar on behalf of DeMonte, but denied that this
collection was a street tax, and instead characterized the money collection as
a loan. Tr. 3895-98. DeMonte was a made member of the Chicago Outfit. See
supra ¶¶ 164-71.
184. Dineen, as a Chicago
police officer, personally conducted surveillance of Matassa in 1995 and 1996.
Tr. 719. Dineen testified that in February 1995, Matassa met with Michael
Marcello at a restaurant named in the record. Tr. 719-21.
185. In October 1995, Matassa
met with Michael Marcello and Alphonso Tournabene at a restaurant on Harlem
Avenue in Elmwood Park. Tr. 721-23. In April 1996, Matassa again was seen
meeting with Marcello and Tournabene at the restaurant. Tr. 723. Dineen
testified that, when the three exited the restaurant, Tournabene drove away and
Matassa and Marcello engaged in a conversation in the parking lot. Id. On
May 2, 1996, Dineen saw Matassa meeting with Tournabene and Marcello at a
restaurant on Roosevelt Road in Forest Park, Illinois. Tr. 72326. Dineen
testified that Matassa and Marcello sat on one side of the booth, Tournabene on
the other, and Matassa and Tournabene were pointing at each other in a heated
argument. Id. Dineen stated that the meeting lasted two hours. Id.
Dineen testified that he believes Matassa is a made member of the Chicago
Outfit and boss of the North Side Crew reporting to Tournabene. Tr. 723-32.
186. Matassa admitted meeting
with Marcello and Tournabene at a restaurant named in the record. Tr. 3840-43.
Matassa testified that the meeting was not planned and he initially was in the
neighborhood involved in a work project, and went into the restaurant to use
the restroom. Id. He saw
Tournabene and Marcello there and sat down with them and ate a banana split. Id.
187. As set forth above,
Matassa admitted to meeting with Tournabene. Tr. 3835-40. He claimed, however,
that he was simply ordering pizzas from Tournabene's shop, and, as a courtesy,
the pizza were brought to Tournabene's home so that Matassa would not need to
travel to Tournabene's store. Id.
188. O'Rourke related
information he obtained from six witnesses and ten confidential informants
regarding Matassa. Tr. 411-412. O'Rourke stated that Matassa was a made member
of the Chicago Outfit and replaced Solano as the boss of the North Side Crew
after Solano's death in 1992. Id.
189. Confidential informant 12,
an Elmwood Park Crew associate, told O'Rourke that Matassa was a made member of
the Chicago Outfit based on his conversations with Solly Delaurantis and other
mob members. Tr. 415-20. The informant told O'Rourke that, in the fall of 1989,
Delaurantis informed him that he, along with Matassa, had recently become a
made member of the Chicago Outfit. Id. O'Rourke and Dineen both
identified Delaurantis as a Chicago Outfit member who is currently in federal
prison for racketeering. Tr. 419-20, 696.
190. Matassa stated that he
had no knowledge of any Chicago Outfit connections within LIUNA and did not
know that any of the people with whom he associated - Vincent Solano, Michael
Glitta, Frank DeMonte, Joe Arnold, Caesar DiVarco, Jasper Campise, Michael
Marcello, James Marcello, Alphonse Tournabene, Sam Carlisi, John DiFronzo,
Rocco Infelise, and Marco D'Amico - were involved with the Chicago Outfit. Tr.
3940. Matassa also testified that, although he had known James Caporale since
childhood, he did not know why Caporale was imprisoned in 1987 and did not ask
anyone on the District Council. Tr. 3873.
191. Matassa testified that
the mob did not exist in Chicago. In particular, Matassa testified that he was
unfamiliar with the occupations of Anthony Accardo and Al Capone, both infamous
Chicago Outfit figures. Tr. 394044. Matassa's statements in this regard are not
credible.
192. Matassa's meetings and
associations with the various known mob figures are too numerous to be
accidental. His day-to-day job of driving Glitta, a known mobster, about
Chicago, is proof in itself of an association with the mob. I find there is
proof by a preponderance of the evidence that Matassa is a made member of the
Chicago Outfit. The meetings with high-ranking made members of the Chicago
Outfit indicate that he is deeply involved with organized crime in his daily
activities.
Joseph Lombardo Jr.
193. There is no evidence in
this record to indicate that Joseph Lombardo Jr. member or associate of the
Chicago Outfit.
194. There was credible
evidence presented at the Trusteeship Hearing that Lombardo is a hard worker
who has ascended the ranks by doing a good job. Every witness who was
questioned indicated that Lombardo Jr. is knowledgeable about union business
and dedicated to his job. See Tr. 2703, 2834-35, 3070-71, 3789; CDC Ex.
44A-R (letters attesting to Lombardo Jr.'s character).
195. The evidence set forth
in findings 36-194 establishes that the association of the District Council
members with the Chicago Outfit, past and present, affects the integrity and
operation of the District Council under the standards set out in Fallacara,
supra.
Allegation of Threats of Violence and Use of Bribes by District Council Members (Complaint ¶ 9)
196. The GEB Attorney offered
as evidence of threats a phone message received by LIUNA Inspector General Doug
Gow at the beginning of the investigation into the District Council. See
GEB Ex. 58B. Although the phone message was a very vocal and explicit threat
aimed at Gow, there is no other evidence that the threat was instigated by the
District Council or was related to the District Council investigation.
Allegations of Failure
of Democratic Process in the District Council (Complaint ¶¶ 10- 14)
197. The records of the
District Council establish that, from 1979 through 1995, no single contested
election of officers was held. See GEB Ex. 116; Tr. 2157. No opposition
candidate has ever been nominated to run against an incumbent officer. No
vacancy has ever occurred at the end of a candidate's term; all vacancies occur
by resignation before a scheduled election, and the vacancies are then filled
by a vote of the Executive Board. The vote of the Executive Board is always
unanimous.
198. Clearly, the Executive
Board has authority under the Uniform District Council Constitution
("UDCC") to fill vacancies as they occur. See UDCC, Art. VI,
Sec. 3(a). Here, however, for 25 years the District Council Executive Board has
filled vacancies immediately preceding each scheduled election. This is one
indication that someone or some entity has absolute power over the District
Council and that democratic process is nonexistent.
199. Witnesses called by the
District Council testified that dissenters always have had the opportunity to
offer opposition candidates, but that the spirit of unity within the District
Council is so great that all of the Delegates agree with the Executive Board's
choices to fill the vacancies that occur.
See, e.g., Tr. 3274.
200. These same witnesses
were unable to describe the process by which the Executive Board interviews or
selects potential officers, or the process by which a member may bring himself
to the attention of the Executive Board as a potential candidate. See, e.g.,
Tr. 3278-79. The record contains no evidence of interviews or meetings with the
Executive Board by any prospective officer.
201. None of the Executive
Board members or Delegates of the District Council who testified could describe
how the Executive Board decides to fill a vacancy in its own ranks, even though
it has filled vacancies approximately 20 times in 20 years.
202. Statements of
cooperating witness Joseph Granata provide insight into the selection of
District Council officers. Granata told John O'Rourke that, in the late 1960s,
the office of Business Manager became vacant. Frank Granata Sr. and some other
members of the District Council wanted Thomas Crivellone to be appointed. Tr.
355. Anthony Accardo, then the head of the Chicago Outfit, selected Joe
Spingola. Tr. 355-58. A meeting was held by organized crime leaders in the
basement of the Galewood Funeral Home, which was operated by Frank Granata Sr.,
the father of Joseph Granata. Id. Accardo sent Jack Cerone to the
meeting to convey his decision to select Spingola. Joseph and Frank Granata Sr.
both attended. Spingola was kept waiting upstairs in the funeral home. Later,
Joseph Granata was sent to bring Spingola to the meeting where he was told he
would be appointed President and Business Manager of the District Council. Id.
203. In 1969, charges were filed
against Spingola for willfully failing to file LM-2 reports for several years
for Local 1001, of which he was Secretary-Treasurer. GEB Ex. 44. A jury
convicted him, but the conviction was reversed on appeal, because the trial
judge failed to instruct the jury on Spingola's good-faith defense. GEB Ex. 45;
Tr. 566-67; United States v. Spingola, 464 F.2d 909 (7th Cir. 1972).
Although Spingola was the Business Manager of a 5,000-member local, his defense
was that he knew nothing about LM-2 reports and, over a 10 year period, was
incapable of preparing the reports himself. Spingola, 464 F.2d at 911.
204. On February 11, 1982,
Spingola resigned as President/Business Manager of the District Council. GEB
Ex. 116 at D001097. Spingola suggested "installing" Caporale as
District Council Business Manager and Secretary-Treasurer and appointing Ernest
Kumerow as President. Id. Kumerow was Anthony Accardo's son-in-law. Tr.
363. At the time, Caporale was under indictment, accused of participating in a
scheme to defraud a benefit fund affiliated with the District Council. GEB Ex.
11. The Executive Board voted unanimously to appoint Caporale and Kumerow as
suggested. GEB Ex. 116 at D001097.
205. On February 22, 1982,
Spingola resigned from his positions on the Health and Welfare Fund. GEB Ex.
116 at D001095. On the same day, Caporale informed the administrator of the
Health and Welfare Fund that Kumerow had been appointed Trustee of the fund,
replacing Spingola "on all Committees in the same capacity as Mr. Spingola
served." GEB Ex. 116 at D001094.
206. Caporale was convicted
in June 1982. GEB; Ex. 13. The District Council minutes reflect that, on
October 5, 1982, two weeks after Caporale's sentencing, the District Council
called a special meeting "to support Br. James Caporale as acting
Secretary-Treasurer and Business Manager upon motion ... and standing vote of
applause - unanimous approval." GEB, Ex. 116 at D001022. The U.S. District
Court ordered Caporale to forfeit his union
position. See GEB Ex. 14. The District Council then promptly voted to
reappoint Caporale to his same position. GEB; Ex. 116. Caporale continued as
Secretary-Treasurer/Business Manager until July 1987, when the appellate court
affirmed his conviction. See supra ¶ 89. No member of the
District Council raised the issue of Caporale's fitness to continue.
207. The officers and
delegates of the District Council breached their fiduciary duty to the
membership by failing to raise the issue of Caporale's conviction and continued
service.
208. In 1986, an election of
District Council officers was held a year earlier than scheduled. A regular
election was scheduled for August 1987. GEB Ex. 118, Tab "P. " There
was no indication in any of the District Council minutes of 1986 that the 1986
election occurred.
209. Despite the filing of an
LM-2 form in March 1987, which indicated an election would be held in August
1987, the failure to record the 1986 election was not discussed until January
1988. At that time, Hugh Arnold, attorney for the District Council, could
locate no minutes for a nomination meeting or election. Tr. 2167. Arnold
testified that, to rectify the situation, he personally interviewed all members
of the District Council who were present at the August 1986 election who
remembered what occurred. Tr. 2168-70.
210. In a letter to Kumerow
on January 19, 1988, Arnold explained that the special nomination meeting and
election of officers occurred in 1986, "one year prior to the necessity
for such a meeting. . . . " GEB Ex. 116 at D001395. Arnold concluded that,
because the incumbent officer for each position was renominated, no officer was
prejudiced by serving less than the required time. Tr. 2177-78. At the hearing,
upon questioning by the IHO, Arnold stated that none of the members he interviewed
who attended the nomination and election meeting could give an explanation as
to why the election was held one year ahead of schedule. Tr. 2168-72.
211. The holding of an
election one year ahead of schedule without offering an explanation or obtaining
a waiver from the LIUNA General President is indicative of the cavalier
attitude the District Council has for democratic process. The fact that there
was no mention of the meeting in the minutes raises an inference that the
purported election 1986 never occurred.
At the time of the reconstruction of the minutes, in January 1988, John
Matassa, Bruno Caruso and Leo Caruso - all current District Council officers -
were delegates to the District Council. See supra ¶¶ 53, 66, 172.
212. One of the officers
reelected a year early was James Caporale, Secretary-Treasurer/Business
Manager, whose conviction for defrauding the LIUNA Health and Welfare Fund was
on appeal. See supra ¶ 89.
213. On December 31, 1986,
the appellate court affirmed Caporale's conviction. See United States
v. Caporale, 806 F.2d 1487 (11th Cir. 1986). On July 9, 1987, the United
States Supreme Court denied Caporale's petition for certiorari. See GEB
Ex. 166.
214. On July 22, 1987, at a
special District Council Executive Board meeting, Caporale moved the Executive
Board to appoint Ernest Kumerow as Business Manager. GEB Ex. 116 at D002378.
The motion passed unanimously. Id. Kumerow moved to appoint Joseph
Lombardo Jr. as Secretary-Treasurer. Id. The motion passed unanimously. Id.
The same day, the District Council unanimously accepted the Executive Board's
appointments. Id. at D001456.
215. Lombardo Jr. became
Secretary-Treasurer even though he was not a Delegate to the District Council
as required by the UDCC, Art. VI, Sec. 1. Nothing in the records of Local 1 or
the District Council indicates that Lombardo Jr. was ever a Delegate to the
District Council. Hugh Arnold, attorney for the District Council, testified
that LIUNA General President Angelo Fosco told him informally that appointing
Lombardo Jr. to the position in this manner was proper. Tr. 1979. Arnold relied
upon that conversation and took no steps to follow proper procedure in electing
Lombardo. Id.
216. In 1992, Vincent Solano
died, leaving vacancies in the positions of Trustee to that Pension Fund and
Chairman of the North and South Side Committee. See supra ¶ 141. On November 18,
1992, the Executive Board voted unanimously to appoint Matassa to both
positions. GEB Ex. 116 at D002036. This appointment coincides with Matassa's replacement
of Solano as boss of the North Side Crew. See supra ¶¶ 189.
217. On March 9, 1994,
Matassa resigned his positions as District Council Trustee and Chairman of the
District Council Committees. GEB Ex. 116 at D00228 1. A day later, Joseph
Neroni resigned his position as Vice President and Matassa was installed in his
place. Id. At D002515. The Executive Board also unanimously approved
James DiForti as Matassa's replacement as Chairman of the District Council
Committees.[20] Id. at D002519.
218. On September 27, 1994,
Ernest Kumerow resigned as Trustee of the Health and Welfare Fund. GEB Ex. 116
at D002407. On the same day, he resigned as President of the District Council,
and the Executive Board appointed District Council Business Manager Bruno Caruso
to replace Kumerow as President, resulting in Caruso's dual offices of
President and Business Manager. Id. at D002368.
219. On October 1, 1994,
Toots Caruso resigned as a Trustee of the Pension Fund. GEB Ex. 116 at D002342. He was replaced by
Leo Caruso on October 5, 1994. Id. at D002339.
220. On October 18, 1994,
Bruno Caruso resigned as Trustee of the Training Fund. GEB Ex. 116 at D002341.
On October 19, 1994, the District Council Executive Board appointed John
Matassa Jr. to replace him. Id. at D002351.
221. At the District Council
meeting on February 15, 1995, Bruno Caruso "mentioned that Br. Frank
Caruso will assume the position of Director of the Pension Fund and Assistant
Treasurer." GEB Ex. 116 at D002573.
222. On April 11, 1995, Toots
Caruso resigned as District Council Delegate and Sergeant at Arms. GEB Ex. 116
at D002681. On September 20, 1995, the District Council Executive Board
appointed Leo Caruso Sergeant at Arms. Id. at D002774.
223. On September 20, 1995,
the District Council Executive Board voted to "keep with past practice and
coordinate both Welfare and Training Fund's Labor Trustee appointments . . . .
That is, have all current Trustees automatically renew every three years
without any further action from the District Council Executive Board or the
Delegates." GEB Ex. 116 at D002775. The failure to adhere to three-year
terms violates the trust agreements. GEB Ex. 130.
224. District Council
attorney Hugh Arnold acknowledged that the District Council often prepares minutes
of meetings before the meetings occur; the scripted minutes describe
motions as if they have already passed, but leave spaces for the names of
moving and seconding parties, which are then filled in during the meeting. Tr.
2175-79. The GEB Attorney offered GEB Exhibit 116 D002394, as an example of the
pre-scripted minutes. This practice highlights the lack of democratic process
within the District Council.
Allegations of
Unauthorized Union Salary Payments (Complaint ¶ 15)
225. The UDCC and Uniform Local
Union Constitution ("Uniform Local Constitution") require approval of
the LIUNA General President before a member may serve as an officer or employee
of a local union and another LIUNA body and receive a salary for both. UDCC,
Art. V, Sec. 3; Uniform Local Constitution, Art. IV, Sec. 3.
226. Through present day,
various District Council officers, including current officers John Matassa,
Bruno Caruso and Leo Caruso, also served as officers of local unions and
received "dual salaries" without obtaining formal approval of the
LIUNA General President. Tr. 1793-95, 3846.
227. The officers who
testified indicated they were unaware of the approval requirement. See, e.g.,
Tr. 3591, 4080.
228. The officers' acceptance
of dual salaries without receiving formal approval demonstrates a general lack
of vigilance; however, there has been sufficient confusion union-wide on this
practice that prevents a finding of improper intent. The issue of dual salaries
is left to the trustee to clear up the confusion and to follow the dictates of
the constitutions.
Allegations of
Misconduct Related to the City of Chicago "No Show" investigation
(Complaint ¶ 16)
229. In 1991, the City of
Chicago Inspector General's Office investigated allegations that certain city
workers failed to work during work hours.
230. During the "no-show
investigation," Nick Gironda, at the time a District Council Delegate, was
demoted and suspended from his City job for failure to manage his employees
properly. Tr. 1780-81; GEB Ex. 158 at 142-45.
231. Shortly after Gironda
was suspended from his City position, on September 19, 1991, his status at
Local 1001 was changed from part-time to full-time on a motion by Ernest
Kumerow and Bruno Caruso, and the minutes reflect that his salary was to be
"whatever Ernie and Bruno Caruso decides." GEB Ex. 117, BN 005126.
232. From 1965 until 1991,
Leo Caruso worked for the City of Chicago in the streets and sanitation
department, first as a garbage collector, and then, after an accident, carrying
"light duty" as a street sweeper for approximately two years. Tr.
4020-24.
233. Leo Caruso was a LIUNA
member throughout his City employment. Tr. 4024.
234. In 1965, Leo Caruso
joined Local 1001. Tr. 4025. In approximately 1985, he switched to Local 1006
to take a job as a part-time Field Representative. Tr. 4025-29. Leo Caruso
testified that he received this position through the help of Local 1001
Business Manager Ernest Kumerow, and his cousin, Local 1006 Business Manager
Frank Caruso. Id. He remained a part-time Field Representative from 1985
to 1989. Id.
235. In 1989, in addition to
his Field Representative duties, Leo Caruso obtained another union job as Local
1006 Secretary-Treasurer. Tr. 4028-29; GEB Ex. 125. Despite Leo Caruso's
admittedly increased hours working for Local 1006, he continued to hold his
full-time City position. Tr. 4025-34.
236. Guy Bills testified at
the Trusteeship Hearing that Leo Caruso often abandoned his City job duties
during the day. Tr. 506-07; 1157-59.
237. Leo Caruso was suspended
pending the outcome of the no-show investigation. Tr. 4032; CDC Ex. 47. At the Trusteeship Hearing, Leo Caruso
testified that he resigned from his post during the investigation because of
rumors that the afternoon shift was being abolished and that his resignation
had nothing to do with the investigation. Tr. 4030-33.
238. The connection of the
no-show investigation to the operation of the District Council is tenuous at
best; the evidence presented by the GEB Attorney fails to demonstrate the
influence of the Chicago Outfit on the operation of the District Council.
Allegations
of the Appointment of Corrupt Individuals to Affiliated Funds (Complaint ¶ 17)
239. Of the individuals found
in ¶¶ 36-195, supra, to be either associates or members of the Chicago
Outfit, the following have held, or currently hold, positions of trust within
the employee benefit funds affiliated with the District Council: Alfred
Pilotto, James Caporale, Vincent Solano, John Matassa Jr., Bruno Caruso, Frank
Caruso, and Leo Caruso.
240. The District Council
offered testimony of several consultants and account managers that the
affiliated benefit funds are healthy and well administered. See generally
Tr. 2239-2402, 2457-92, 2506-41, 2554-82, 2590-2640.
241. Under questioning of the
GEB Attorney and the IHO, an outside consultant to the Pension Fund and the
Health and Welfare Fund admitted that it was not a consultant's job to
determine how the fund trustees complied with their fiduciary duties, whether
they engaged in any prohibited transactions, or even whether the trustees were
required to file financial forms related to prohibited transactions. Tr.
2408-10.
242. Two District Council
witnesses also testified that, in their opinion, it would not be appropriate
for members of organized crime to act as trustees to the affiliated benefit
funds. Tr. 2444, 2495.
Allegations of a Failure
to Take Steps to Investigate or Eradicate Mob Influence from the District
Council (Complaint ¶ 18)
243. The District Council
argues in defense of its membership that it merely accepts the Delegates put
forth by the affiliated local unions. Tr. 175-76; CDC Brief at 10.
244. While District Council
Delegates are selected at the local level, once an individual becomes a
delegate to the District Council, the officers and other delegates have a
fiduciary duty to ensure that the District Council membership is acting in the
best interests of the District Council, the affiliated local unions and each
affiliated LIUNA member, including a duty to ensure its membership is not
influenced by organized crime. See EPC, "Business and Financial
Activities of Union Officials." The burden is on the District Council to
monitor its membership.
245. In 1982, Toots Caruso
was indicted with Joseph LaMantia, Fred Bruno Barbara, and Aldo Piscitelli Jr.
on charges of extortion. GEB Ex. 70. At the time, Toots Caruso was a Local 1006
Business Representative and District Council Delegate. See supra
¶ 39. A review of the District Council records reveals no investigation into or
discussion of the charges by the District Council, even though Toots Caruso was
appointed Sergeant at Arms only nine days after his arrest. Tr. 1747. Toots
Caruso was acquitted of the charges and continued as Local 1006
President/Business Manager and District Council Sergeant at Arms until his
resignation from both positions in April 1995. Tr. 1748; GEB Ex. 191.
246. In 1983, John Matassa
and Frank De Monte were indicted on charges of extorting money from North
Sidebars. GEB Ex. 87. At the time, Matassa was not yet a LIUNA member, but De
Monte was Local 1 Recording Secretary and a District Council Delegate. GEB Ex.
119, Tab N.
247. Nothing in the District
Council records reflects any investigation into or discussion of the charges
against DeMonte.
248. In 1984, Matassa and De
Monte were acquitted. Matassa became a LIUNA member and Local 2 Field
Representative in 1985, and a District Council Delegate in 1987. See supra
¶ 172.
249. In 1985, the PCOC
subpoenaed De Monte to testify at the Chicago hearing. De Monte refused to
testify, invoking the Fifth Amendment. GEB Exhibit 4. The PCOC concluded De
Monte was a member of the Chicago Outfit. Id.
250. A review of the District
Council records reveals no investigation into or discussion of DeMonte's
refusal to testify before the PCOC or alleged membership in the Chicago Outfit.
DeMonte continued as Local 1 Recording Secretary and Delegate to the District
Council until his death in 1992. See supra ¶ 164.
251. In 1985 the PCOC subpoenaed
Vincent Solano, then President/Business Manager of Local 1, Delegate to the
District Council, and Trustee of the District Council Pension Fund, to testify
at the Chicago hearing. GEB Ex. 4. Solano asserted his Fifth Amendment
privilege and refused to testify. Id.
252. The PCOC concluded that
Solano was a territorial boss of the Chicago Outfit. GEB Ex. 4.
253. Chicago area media
widely reported on Solano's affiliation with the Chicago Outfit. GEB Ex. 56B.
254. Despite the extensive
publicity of Solano's alleged role in the Chicago Outfit, a review of the
District Council records reveals no investigation into or discussion of
Solano's activities. Solano remained Local 1 President/Business Manager,
District Council Delegate and Pension Fund Trustee until his death in 1992. See
supra ¶ 141.
255. In the mid- to late
1970s, Sal Gruttadauro was associated with the North Side Crew of the Chicago
Outfit. See supra ¶¶ 121-25. He also was an officer of Local 1 and a
District Council Delegate from 1970 through 1984. Id.
256. In 1985, the PCOC
subpoenaed Gruttadauro to testify at the Chicago hearing. GEB Ex. 4.
Gruttadauro refused to testify, challenging the subpoena power of the PCOC. Id.
The PCOC concluded that Gruttadauro was a member of the Chicago Outfit. Id.
257. In 1985, a federal grand
jury indicted Gruttadauro on charges of receiving improper payments from an
employer in Gruttadauro's role as union official and employee representative in
violation of 29 U.S.C. § 186. GEB Ex. 101.
258. A review of the District
Council records reveals no investigation into or discussion of the charges by
the District Council. Nothing in the records reflects that Gruttadauro's union
membership ended after the charges were filed. Gruttadauro was convicted of all
counts on March 24, 1986. GEB Ex. 102. The United States Circuit Court for the
Seventh Circuit affirmed his conviction in May 1987. GEB Ex. 106.
259. Al Pilotto and James
Caporale were indicted in 1981 on charges that they participated in a RICO
conspiracy to receive kickbacks from a consulting company which had contracted
to provide dental and vision care services to the affiliated Health and Welfare
Fund. GEB Ex. 11. At the time, Pilotto was President of Local 5, Vice-President
of the District Council and a Trustee of the Health and Welfare Fund. See
supra ¶ 73. Caporale was Secretary-Treasurer of the District Council and
a Trustee of the Health and Welfare Fund. See supra ¶ 83.
260. While under indictment,
Pilotto was shot by Daniel Bounds in an attempted mob hit approved by Anthony
Accardo, a co-defendant of Pilotto and Caporale. GEB Ex. 4.
261. A review of the District
Council records reveals no investigation into or concern about the charges
against Pilotto or Caporale.
262. Several current District
Council delegates and officers are associates or members of the Chicago Outfit.
See supra ¶¶ 36-195. In particular, the President/Business
Manager, Vice President and Sergeant at Arms are all associates or members of
the Chicago Outfit. See supra ¶¶ 53, 72, 172-92. Their presence
establishes that the District Council continues to fail to attempt to rid
itself of the influence of organized crime.
Conclusions
1.
The GEB
Attorney has proved by a preponderance of the evidence that members of the
District Council have been and currently are associates of the Chicago Outfit,
and that association has had a direct and indirect effect on the operation of
the District Council under the standards of Fallacara, supra page
8.
2.
The GEB
Attorney has presented credible evidence that the District Council has a
relationship with the Chicago Outfit. The history of the Chicago Outfit's
association and domination dates from at least the 1960s. In the 1970s and
1980s, two District Council officers were also high-ranking bosses in the
Chicago Outfit, who oversaw the Chicago Outfit's illegal moneymaking activities
in their geographic areas.
3.
Currently
three made members or associates of the Chicago Outfit are officers of the
District Council. In the past twenty-five years at least thirteen members or
associates of organized crime named in the Complaint have been delegates to the
District Council.
4.
The GEB
Attorney has proved by a preponderance of the evidence that, as a result of the
influence of the Chicago Outfit, there has been and there is a failure of
democratic process in the District Council.
5.
The Chicago
Outfit has selected officers on the District Council, ensuring that certain
individuals remain in the District Council to maintain the Chicago Outfit's
control over LIUNA's labor jurisdiction.
6.
The
District Council has not held a contested election for more than twenty-five
years. No officer has retired from office at the end of his term; all vacancies
have occurred by an officer resigning during his term, thus giving the
Executive Board the opportunity to appoint his successor.
7. In 1986, the election of officers for the District Council was held one year ahead of schedule; yet it was not discovered by the attorney for the District Council until more than one year later. District Council meeting minutes did not reflect that an election occurred. The attorney for the District Council testified that he reconstructed the election by interviewing all of the members who were present at the meeting in question. No explanation was given why no one questioned the deviation from the ordinary election schedule.
8.
District
Council delegates who testified had no idea how the Executive Board determines
who becomes an officer, nor could they describe how a delegate who wants to
become a member of the Executive Board can bring his name to the attention of
the appointing officers.
9.
The GEB
Attorney has proved by a preponderance of the evidence that the District
Council has appointed individuals associated with the Chicago Outfit as
trustees to the affiliated benefit funds.
10. The members or
associates of the Chicago Outfit are approved as trustees to these funds in the
same manner as officers are selected for the Executive Board of the District
Counsel District Council records establish that trustees' terms renew
automatically, in violation of the trust agreement. The District Council has
control over pension and welfare funds worth more than $1 billion.
11. Although the trustees
have retained highly qualified outside investment managers for the funds, the
trustees file no disclosure forms regarding their possible conflicts of
interest or prohibited transactions which are prescribed by federal law.
12. The International Union
has jurisdiction over the acts of LIUNA trustees to affiliated benefit funds
and may bring disciplinary charges against trustees for mismanagement. See
In the Matter of Fresina, IHO Order and Memorandum, 97-46D (Jan. 7,
1998).
13. The trustee appointed as
the result of this Order should require all trustees of the affiliated benefit
funds to file extensive financial disclosure forms aimed at discovering
conflicts of interest or prohibited transactions. Failure to do so would
frustrate the effectiveness of the trusteeship.
14. The GEB Attorney has not
proved by a preponderance of the evidence that members of the District Council
used threats of violence against the LIUNA Inspector General.
15. The GEB Attorney has not
proved by a preponderance of the evidence that the members of the District
Council intended to award unauthorized "dual salary" payments. Although such payments are prohibited by the
LIUNA Constitution absent approval from the General President, the union-wide
practice regarding these payments is unclear, and the clarification of this
matter is left to the trustee.
16. The City of Chicago
no-show investigation revealed wrongdoing by two District Council delegates.
The GEB Attorney has not proved by a preponderance of the evidence, however,
that their misconduct had any affect on the integrity or operation of the
District Council.
17. The GEB Attorney has
proved by a preponderance of the evidence that District Council delegates and
officers have failed to take steps to investigate positive allegations of
organized crime influence and violations of the law by its officers and
members. Over the years, delegates and officers were put on notice by
indictments or convictions of District Council members, often for crimes of
violence, loan sharking, syndicated gambling, or frauds on union funds, and
often resulting in lengthy prison sentences. Members have been publicly named
by congressional and other government committees as being members of or
associated with organized crime. The minutes of the District Council reflect no
inquiry into these events in the past twenty-five years.
18. The day has long passed
when unions can regard investigations of their members by the government or the
media as "us against them" or as attacks against the solidarity of
the labor movement. If labor is to remain a viable force in the marketplace
today, it cannot rely upon the government, which has limited facilities and
often limited labor experience, to effect a clean up. It is the responsibility
of this union to clean its own house; this should be the highest priority in
the labor movement today. The labor movement can no longer close its eyes to
corruption within.
19. The GEB Attorney alleged
in Count III of the Complaint that a trusteeship is necessary to correct
financial malpractice. In support of this allegation, the Complaint refers
generally to allegations that members or associates of the Chicago Outfit are
serving as officers of the District Council and trustees of the affiliated
benefit funds and that these members and associates continue to appoint each
other to these positions. The Complaint also refers to "dual salary"
payments made to District Council officers.
20. Financial malpractice is
a definitive term generally indicating financial losses, imprudent investments,
and improper or gross overpayments for expenses or salaries.
21. The fact that organized
crime members or associates are officers of the District Council or trustees of
the affiliated benefit funds standing alone does not constitute financial
malpractice. This fact may be troubling from an administrative standpoint, and
in light of the fact that the Chicago Outfit is in the business of crime for a
profit, but on this record there is no evidence that the District Council's
finances are unstable, or that the benefit funds are in jeopardy.
22. I have found that the
GEB Attorney has failed to prove that the officers intentionally made improper
"dual salary" payments based upon the lack of standard application of
this policy union-wide. I also have found that the GEB Attorney has failed to
prove a relationship between the no-show investigation and the District
Council. Without such evidence of actual wrongdoing within the District
Council, the GEB Attorney has not proved by a preponderance of the evidence
that a trusteeship proceeding is necessary to correct financial malpractice.
23. The GEB Attorney's
concerns regarding possible financial malpractice are matters that should be
pursued actively by the trustee and accounting professionals he may retain.
Decision
A trusteeship is warranted to correct corruption and remove the influence of organized crime, to restore democratic procedures, and to carry out LIUNA's legitimate objects.
PETER F. VAIRA
INDEPENDENT HEARING OFFICER
[1]The
factual allegations of the Complaint are set forth in 18 numbered paragraphs,
but I have grouped them in my findings to simplify this Order and Memorandum.
[2] Section 462 of the LMRDA
provides:
Trusteeships
shall be established and administered by a labor organization over a
subordinate body only in accordance with the constitution and bylaws of the
organization which has assumed trusteeship over the subordinate body and 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 labor organizations.
[3]
"Barred conduct" includes: (1) committing any racketeering act as
defined under RICO; (2) knowingly associating with a member or associate of
LCN; (3) knowingly permitting LCN influence over union affairs; or (4) interfering
with the activities of the IG, GEB Attorney or IHO. See EPC, Barred Conduct; EDP, Section 1.
[4]
The
description of the Chicago Outfit, including the makeup and operation of the
crews, is set forth, infra, Section VI, ¶¶ 12-35.
[5]
The case is described, infra ¶ 15.
[6]
The
organized crime figures listed in this subheading will be described further in
findings 12-195, infra.
[7]
D'Arco Jr. is the son of John D'Arco Sr., a First Ward
Alderman in the 1950s who had close ties to the Chicago Outfit. See infra ¶¶
30-33.
[8]
Cooley testified in United States v. Lee On Leong, United States v.
John D'Arco. Jr., United States v. Stillo, United States v.
Lucious Robbinson, United States v. Tom Maloney and Robert McGee, United
States v. Pat Many and Fred Roti, and United States v. David
Shields and Pat DeLeo.
[9]
"Juice loan," "chop shop," and "street tax" are
defined infra ¶ 11.
[10]
Corbitt testified that he assisted in covering up the murder by putting
Masters's body in a Cadillac and dumping the car into a canal. Corbitt Tr. 125.
[11] Additional
support for findings 12 through 35 is supplied in findings 36 through 195, infra.
[12]
A
“give-up" car is an automobile that the owner reports stolen and disposes
of to collect insurance money.
[13]
The record does not reflect the purpose or nature of the
Laborers' Political League.
[14]
Angelo Fosco was acquitted of the charges in Accardo;
Albert Pilotto and James Caporale were convicted. See infra 1181,
89.
[15]
In July 1981, after his indictment, Pilotto was shot by
Daniel Bounds in a botched murder attempt. Bounds confessed to the FBI, entered
the witness protection program, and cooperated with the government.
[16]
In this proceeding, the GEB Attorney introduced LM-2 forms, required by federal
law to be filed annually, only as far back as 1970.
[17]
The GEB Attorney and the District Council presented conflicting evidence on the
issue of Caporale's relinquishment of his Trustee positions in the District
Council after his 1982 felony conviction.
The District Council, through attorney Hugh Arnold, introduced evidence
that Caporale had resigned from the affiliated benefit funds after his
conviction in 1982. Tr. 1727-28; 2003-04. Nothing in the minutes, however, establishes
that Caporale resigned either of his Trustee positions until his imprisonment
in 1987. 2003-04.
Nothing in the minutes, however, establishes that Caporale resigned
either of his Trustee positions until his imprisonment in 1987.
[18]
The record does not reflect the nature of the duties of the
"Coordinator of Committees."
[19]
James Marcello is the brother of Michael Marcello, an active
member of the Chicago Outfit. Dineen testified that, in February 1995, Michael
and James Marcello were seen associating with District Council Vice President
John Matassa Jr. at a restaurant on Cumberland and Lawrence avenues. Tr. 720.
[20]
As a member of Local 1006 from 1989-94, DiForti was a Delegate to the District
Council. GEB Ex. 116. In March 1994, DiForti became a member of Local 5.
Nothing in the records of Local 5 or the District Council show that DiForti was
actually appointed Delegate in Local 5; however, District Council records
indicate DiForti served as Delegate from Local 5 until after his indictment in
1997. Local Union 5 records do indicate that, upon his becoming a member of the
local, DiForti was appointed Secretary-Treasurer without dissent. GEB Ex. 117
at 000376.