OFFICE OF THE INDEPENDENT HEARING OFFICER
IN THE MATTER OF |
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DOCKET NO. |
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LOCAL UNION 478 MIAMI, FLORIDA |
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99-17T |
ORDER AND
MEMORANDUM
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On March 30, 1999, Local 478 entered
into a voluntary supervision agreement with the Laborers’ International Union
of North America (“LIUNA”). All of the
members of the Local 478 Executive Board signed the agreement with the
exception of Mannie Chapman (“Chapman”), the Business Manager. The Independent Hearing Officer (“IHO”) held
a hearing on May 4, 1999, to determine whether the voluntary supervision should
continue. Following the hearing, the
IHO issued a verbal order that the supervision was entered into voluntarily and
should continue.
On May 25, 1999, the IHO rescinded his previous Order
because many members of Local 478 indicated via petition that they were
protesting the Local being placed under supervision. On that same date, General President Arthur Coia (“Coia”) imposed
an emergency supervision upon Local 478 pursuant to Article IX, Section 7 of
the International Constitution. On July
7, 1999, the Independent Hearing Officer (“IHO”) held a hearing in Miami,
Florida to determine whether the supervision should continue. On July 15, 1999, the IHO held a follow-up
hearing via telephone.
This Order and Memorandum addresses
the emergency supervision imposed upon Local 478 on May 25, 1999. Based upon the evidence presented, the
imposition of the supervision of Local 478 is warranted and should continue.
FINDINGS OF FACT
1. Pursuant to Section 3 of the LIUNA Ethics and Disciplinary Procedure and Article IX, Section 7 of the LIUNA Constitution, the LIUNA General President may appoint a trustee or supervisor when:
the General President finds, in his opinion, that action by him
is necessary for the purpose of correcting corruption or financial
malpractice, assuring the performance of collective bargaining
agreements or other duties of a bargaining representative,
restoring democratic procedures or otherwise carrying out the
legitimate objects of such subordinate body or the International
Union, or to protect the organization as an institution . . ..
LIUNA International Constitution, Article IX, Section 7.
In addition, the General President may determine that an emergency situation exists and
may appoint a temporary trustee or supervisor prior to a hearing on the trusteeship charges
against the local. Id.
2. The GEB Attorney is delegated the powers of the General President “to impose and review the imposition of trusteeships over any district council, local, or other entity within the Union.” See LIUNA Ethics and Disciplinary Procedure, Section 5.
3. Pursuant to Section 5 of the LIUNA Ethics and Disciplinary Procedure the IHO “shall preside over and provide rulings in” the imposition of all trusteeships.
4. Local 478 is located in Miami, Florida and has approximately six hundred members.
5. For at least two years the Executive Board of Local 478 has been virtually paralyzed by an ongoing dispute between Chapman, the Business Manager, and Albert Huston, Jr. (“Huston”), the President and Secretary/Treasurer. At the May 4, 1999, and at the July 7, 1999, hearings, the GEB Attorney emphasized that disciplinary charges had been filed against Chapman by the GEB Attorney. The IHO has specifically disregarded the evidence that Chapman had been charged by the GEB Attorney and does not rely on those charges as evidence of the need for a supervision over Local 478. The IHO will consider evidence of financial malpractice, which may be the subject of the charges.
6. In January of 1998, International Auditor Chris Brasseaux (“Brasseaux”) was assigned by the Inspector General’s office to conduct an audit of Local 478.
7. On January 26, 1998, Brasseaux submitted his audit to the Inspector General. The audit addressed the period of time from December 31, 1996, through January 9, 1998.
8. The audit disclosed that Local 478 had not properly maintained records of dues payments, suspensions and initiations. In addition, Local 478 was unable to obtain the necessary quorum at membership meetings and as a result, the proper authorization for non-incidental expenditures was not obtained.
9. The audit revealed that Local 478 had deficit spending of over $60,000 for the years of the audit. Local 478 had an outstanding mortgage of $80,000 which was to be paid in full in August of 1998, but was unable to make the payment. Local 478 did not have a budget to provide for this situation.
10. The audit also revealed that the accounting records and the job referral records were handled in two separate offices. As a result, the check-off authorization process that allows the accounting office to register individuals, determine membership, and confirm employer contributions was not taking place.
11. The audit revealed that the Local 478 hiring hall was not operating in compliance with the Amended Job Referral Rules. Instead of following the Amended Job Referral Rules, the Business Manager would compile a handwritten list of the out-of-work members but would dispatch only those members who were physically present in the hiring hall. Only when he could not complete job requests utilizing the members who were physically present in the hall would he telephone the individuals on the list.
12. Local 478 maintained an excessive fidelity bond in relation to its funds.
13. In January of 1998, after the completion of the audit, Brasseaux held an exit interview with the Executive Board in which he made various recommendations for Local 478 to implement.
14. In January of 1999, Brasseaux conducted a follow-up audit of Local 478.
15. Brasseaux found that Local 478 had implemented some of his suggestions, but many of the problems had not been corrected and other problems were uncovered. Local 478 had decreased its bond coverage and had achieved a quorum of the membership at some of the membership meetings. The follow-up audit revealed the following:
· Local 478 did not maintain proper per capita reporting;
· Local 478 did not have a budget in place;
· information was not being shared between the accounting office and the referral hall in order to ensure that the Local 478 pension funds were receiving the contributions they were entitled to under the collective bargaining agreement;
· Local 478 was not in compliance with the Amended Job Referral Rules;
· despite the fact that the collective bargaining agreement set a specific rate per hour, variances were given and some employers were paying less than the amount set in the collective bargaining agreement; certain members were paid an hourly rate greater than the amount set forth in the collective bargaining agreement while others received an hourly rate less than the amount set forth in the collective bargaining agreement;
· the tension between the Business Manager and the other members of the Executive Board, particularly Albert Huston, the Secretary/Treasurer, continued.
16. James Hale (“Hale”), the Southeastern Regional Manager testified that in 1998, he met with the Executive Board and Chapman 16 times in order to resolve the disputes. Hale said that due to the power struggle between Chapman and Huston, he was continually called upon to act as a mediator and advisor. Hale indicated that the disputes between Chapman and the Executive Board carried over into the general membership meetings and had an adverse affect on the affairs of the Local 478.
17. On July 30, 1998, General President Coia sent a letter to the Executive Board of Local 478 in which he indicated that the ongoing power struggle between Chapman and Huston was unacceptable. The General President also gave specific instructions that the Executive Board would be required to follow.
18. On August 13, 1998, the Executive Board sent a letter to General President Coia indicating their intent to comply with Coia’s instructions. All members of the Executive Board except Chapman signed the letter.
19. Hale testified that he learned that Chapman did not sign the letter because he did not agree with some of the instructions from the General President and planned to write his own response to the General President.
20. On February 25, 1999, Inspector General Douglas Gow (“Gow”) recommended to Michael Bearse, the LIUNA General Counsel, and Robert Luskin, the GEB Attorney, that Local 478 be placed under supervision. On March 24, 1999, Gow recommended to Hale that Local 478 be placed under supervision or trusteeship.
21. On April 5, 1999, the GEB Attorney filed disciplinary charges against Chapman. Regional Manager Hale removed Chapman from office on April 8, 1999. Hale testified that he removed Chapman from office not because of the pending disciplinary charges but because of Chapman’s mismanagement, some of which resulted in the charges.
22. Chapman testified at the hearing on July 7, 1999, and objected to the supervision. On July 15, 1999, the IHO held a separate telephonic hearing specifically to allow Chapman to present evidence concerning his objections. Chapman has since entered into an agreement with the International Union under which he has agreed to permanently resign his membership in LIUNA and any LIUNA affiliated entity, and any office or position that he holds within LIUNA. Under the agreement, Chapman may not seek to reinstate his LIUNA membership and will not attempt to directly or indirectly influence the affairs of Local 478 or LIUNA or a LIUNA affiliated entity. In exchange, the GEB Attorney has agreed to dismiss the disciplinary charges and discontinue all pending disciplinary actions against Chapman. Finally, pursuant to the agreement, Chapman is to receive $4,880, which he claimed owed to him for funds he expended on behalf of the union.
23. Based upon Chapman’s agreement to settle his dispute and his resignation from LIUNA, it is unnecessary to discuss his objections to the supervision.
CONCLUSIONS
1. The power struggle between Chapman and Huston has had an adverse affect on the affairs of Local 478.
2. Local 478 is not in compliance with the Amended Job Referral Rules.
3. There is substantial evidence of financial malpractice in the operation of Local 478.
4. There has been a breakdown in democratic procedures in Local 478.
5. A supervision is necessary to restore democratic procedures, to correct financial malpractice, to ensure that the entity survives as a Local Union, and to ensure that the legitimate objectives of LIUNA are carried out.
DECISION
The General President is authorized to continue the supervision over Local 478 in conformance with the provisions of Article IX, Section 7 of the LIUNA International Constitution.
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s/Peter Vaira
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PETER F. VAIRA |
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INDEPENDENT |
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Date: August 6, 1999 |
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Stephanie McCarthy, Esquire (via facsimile) James C. Hale (via facsimile) Local Union 478 (via facsimile)
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