|
Transcript of hearing on voluntary supervision of mason tenders district Council Exhibits to hearing can be viewed at the following web site www.thelaborers.net
1 1
2 Docket Number 04-20T
3 -----------------------------------x
4 In the Matter of
5 Mason Tenders District Council of
6 Greater New York, New York, New York.
7 -----------------------------------x
8 St. Vartan's Cathedral 630 Second Avenue 9 New York, New York
10 September 7, 2004 2:15 p.m. 11
12 B e f o r e:
13
14 PETER F. VAIRA, ESQ. Messrs. Vaira & Riley 15 1600 Market Street, Suite 2650 Philadelphia, Pennsylvania 19103 16
17 Independent Hearing Officer.
18
19
20
21
22
23
24
25
2 1
2 A P P E A R A N C E S:
3 Messrs. VAIRA & RILEY 1600 Market Street, Suite 2650 4 Philadelphia, Pennsylvania 19103
5 BY: KATHLEEN M. NAGLE, Esq.
6 Messrs. PATTON BOGGS LLP GEB Attorneys 7 2550 M Street NW Washington, DC 20037-1350 8 BY: PATRICK J. SLEVIN, Esq. 9
10 *** RAYMOND POCINO 11 Vice President and Regional Manager Eastern District 12 Laborers' International Union of North America 13 104 Interchange Plaza, Suite 301 Monroe Township, NJ 08831 14
15 THOMAS R. LIMBERG, Inspector Laborers' International Union of North 16 America Office of the Inspector General 17 905 16th Street Washington, DC 2006-1765 18
19 JOHN R. BILLI, International Auditor Laborers' International Union of North 20 America 30904 Lytham Circle 21 Westlake, Ohio 44145
22 WITNESS: ROBERT BONANZA 23
24 JEAN WILM, RPR, CMRS Hearing Reporter. 25
3 1
2 PROCEEDINGS
3 HEARING OFFICER: Good
4 afternoon. I call the hearing to
5 order. I am Peter Vaira and I am the
6 independent hearing officer for the
7 Laborers' International Union of North
8 America. This is a supervision
9 hearing or a hearing to determine the
10 validity of the supervision of the
11 Mason Tenders District Council of
12 Greater New York. The docket number
13 of this case is 04-20T.
14 Seated beside me is
15 Ms. Kathleen Nagle, a lawyer from my
16 office, who is assisting me.
17 Presenting the information this
18 afternoon will be the attorney for the
19 union, Mr. Slevin.
20 MR. SLEVIN: Patrick Slevin
21 from the general executive board.
22 HEARING OFFICER: From the
23 general executive board, that's
24 correct. Seated with you?
25 MR. SLEVIN: To my left is
4 1
2 Inspector John Billi and to my right
3 is Inspector Thomas Limberg from the
4 office of the Inspector General.
5 HEARING OFFICER: Let me
6 explain to you what this hearing will
7 consist of, ladies and gentlemen.
8 The International Union can
9 place a union or a district council
10 under supervision if it's voluntary
11 without any sort of hearing. They can
12 simply make an agreement of both
13 parties.
14 The International Union has
15 declined to do that and even in cases
16 where there is a consent and all
17 parties agree, it still has to be
18 validated. In other words, the
19 International Union wants a record
20 that there is a cause for a
21 supervision or trusteeship; in this
22 case, a supervision, and that it is
23 voluntary to rebut any suggestion that
24 this is just a ruse to stifle dissent.
25 We are going to proceed here
5 1
2 this afternoon to verify that, to find
3 out if there is a cause for a
4 supervision and if so, is it
5 voluntary.
6 Mr. Slevin, you have the
7 floor.
8 MR. SLEVIN: Thank you very
9 much, Mr. Vaira.
10 Mr. Vaira, one of the primary
11 reasons we are here today at this
12 hearing is that recently there has
13 been a fairly substantial turnover in
14 key officer positions at the district
15 council.
16 What I would propose to do
17 today is just generally set forth the
18 chain of events that have caused those
19 resignations to take place and support
20 of the voluntary supervision that we
21 seek to have you approve today.
22 HEARING OFFICER: I assume
23 that some of those resignations or
24 changes came about as a result of
25 activities in Local 79 for one?
6 1
2 MR. SLEVIN: That's right.
3 The emphasis of the investigation
4 started with Local 79 and implicated
5 simultaneously officers who had a
6 position with the Mason Tenders
7 District Council.
8 HEARING OFFICER: There are
9 some, I guess, changes in the officers
10 of this district council also?
11 MR. SLEVIN: That's right.
12 HEARING OFFICER: Okay.
13 MR. SLEVIN: What I would like
14 to do is just make a record and I can
15 do that by essentially proffering a
16 set of exhibits rather than simply
17 putting on witnesses to establish the
18 record. What I would start with is
19 the initial investigation.
20 In January of 2003 the Local
21 79 accountants did their year-end
22 accounting and one of the things that
23 was of particular interest was to
24 determine documentation for expenses
25 that were incurred as a result of the
7 1
2 move to new offices of Local 79 of the
3 district council and a number of other
4 constituent entities.
5 The accountants took a look at
6 the records of Local 79 and determined
7 in part that the secretary-treasurer
8 of Local 79, who was also the
9 secretary-treasurer of district
10 council, Daniel Kearney, had embezzled
11 upwards of $150,000. The expenses
12 generally went to personal gifts for
13 himself, personal gifts for others,
14 other officers, employees, people
15 outside the union. In addition to the
16 expenditures, there was a lack of
17 documentation for expenses that
18 clearly needed documentation.
19 What happened shortly
20 thereafter is the executive board of
21 Local 79 and the business manager of
22 the district council were notified of
23 these problems and Mr. Kearney was
24 subsequently confronted with these
25 issues. He essentially admitted to
8 1
2 having embezzled money and he promptly
3 resigned. The date of his resignation
4 I believe was March 11, 2003.
5 HEARING OFFICER: Did he also
6 hold a position in the district
7 council?
8 MR. SLEVIN: He resigned his
9 position at Local 79 and resigned his
10 position at council.
11 HEARING OFFICER: Was he an
12 officer of district council.
13 MR. SLEVIN: Secretary-
14 treasurer of both entities.
15 Then the matter was referred
16 to the Inspector General's office.
17 When the Inspector General's office
18 received this information, there was
19 essentially three concerns: First of
20 all, what was the extent of the
21 Kearney embezzlement? Second of all,
22 was anybody else implicated in this
23 embezzlement of funds? Third of all,
24 was the embezzlement just limited to
25 Mr. Kearney or was it symptomatic of a
9 1
2 problem at Local 79 or the Mason
3 Tenders District Council. That became
4 the thrust of the focus of the
5 investigation.
6 Over the course of the coming
7 year the Inspector General's office
8 interviewed approximately 75 people.
9 They acquired documents from the Mason
10 Tenders, from Local 79, from various
11 vendors with whom both entities had
12 dealt with. It began to develop
13 information that went far beyond just
14 specific embezzlement of Mr. Kearney.
15 Shortly after the
16 investigation commenced, having found
17 sufficient evidence of criminality,
18 the Inspector General then referred
19 that matter, that discrete matter to
20 the government, to law enforcement for
21 them to proceed against Mr. Kearney if
22 they chose to do that.
23 Ultimately that case was based
24 primarily, if not exclusively, on the
25 information developed by the
10 1
2 accountants in the Inspector General's
3 office.
4 To make a long story short,
5 Mr. Kearney was ultimately charged in
6 a criminal information in April of
7 this year with embezzlement from a
8 labor union. The amount that was
9 placed in the information was -- the
10 restitution amount he ultimately paid
11 back to the union was approximately
12 $150,000.
13 In June of this year,
14 Mr. Kearney entered a guilty plea to
15 embezzlement from a labor union. The
16 plea acknowledged somewhere a range of
17 embezzlement somewhere between 70 and
18 a $120,000.
19 September 22nd of this month
20 Mr. Kearney is scheduled to be
21 sentenced. I don't know whether that
22 date will get pushed off into the
23 future.
24 At any rate, that is
25 Mr. Kearney's situation presently.
11 1
2 Having referred the case to
3 authorities on Mr. Kearney, as I said
4 the Inspector General continued to
5 pursue other areas of inquiry,
6 specifically relationships that the
7 local and district council had with
8 vendors.
9 In the summer of last year,
10 they developed information there might
11 be some problems in the relationship
12 that those entities had with Franklin
13 Square Ford, a car dealer with whom
14 the union had lease agreements for
15 automobiles.
16 Shortly after that, around
17 that time period, they started to
18 develop information regarding a
19 contractor by the name of Shemore
20 Construction with whom the district
21 council had contracted to perform
22 carpentry work and work at the
23 district council that came after the
24 initial construction and came after
25 the movement.
12 1
2 In addition, they developed
3 information regarding a vendor by the
4 name of Tribeca Office Supply.
5 Tribeca Office Supply had been used by
6 Local 79 and I believe by district
7 council for office supplies and
8 occasionally for a piece or two of
9 furniture to put in the old office
10 space. They were hired by Local 79 to
11 provide the new furniture to the new
12 office space. So the Inspector
13 General's office began to look at
14 that.
15 The investigation continued in
16 the fall of last year. In November of
17 2003, we sent a notice of deposition
18 to Mr. Kearney because we wanted to
19 get his statements regarding a number
20 of these areas that we had started to
21 get into.
22 In December of 2003, he
23 refused to sit for a deposition. He
24 refused through his attorney who
25 informed me that he would not sit and
13 1
2 speak to us, which as, Mr. Vaira, you
3 know, and the delegates may know, is
4 obstruction of the general executive
5 board attorney and obstruction of the
6 process generally.
7 Without the benefit of
8 Mr. Kearney's testimony, we continued
9 the investigation. In January of this
10 year we sent out approximately 10
11 notices of deposition to officers of
12 Local 79, officers of Mason Tenders
13 District Council, various employees
14 and asked them a series of questions
15 about these areas of inquiry.
16 As you know, within a
17 deposition individuals are entitled to
18 counsel. That is a right that the
19 majority of the deponents or people
20 who were deposed exercised. They were
21 represented by counsel and we
22 developed further information in those
23 depositions.
24 We conducted several more
25 depositions in May of this year to
14 1
2 follow up on leads that we had
3 developed either in deposition or that
4 the investigators had developed by
5 scrutinizing documents and interviews.
6 In May of this year, shortly
7 after those depositions, our office
8 made phone calls to individuals that
9 we believed were -- we had evidence
10 against who we believed were the valid
11 subjects of disciplinary charges.
12 As you know, generally
13 speaking, before we charge a person,
14 we will call them up and tell them
15 exactly what we plan to charge them
16 with and we gave them the option of
17 entering into a settlement agreement.
18 A settlement agreement can
19 range from permanent expulsion all way
20 the down to a short suspension or
21 recognition of guilt or paying back a
22 restitution amount.
23 Those calls were made to
24 various individuals. Some of the
25 individuals accepted the settlement
15 1
2 agreements, and that is essentially
3 where we are today. There are ongoing
4 discussions.
5 HEARING OFFICER: The three
6 that accepted were officers of the
7 district council?
8 MR. SLEVIN: So far there have
9 been three people that entered into
10 settlement agreements:
11 The first individual is
12 Anthony Silveri who presently is the
13 business manager of district council,
14 will stop being business manager of
15 district council pursuant to his
16 settlement agreement as of
17 November 1st of this year.
18 Frank Noviello who was
19 president of Local 79 but also an
20 executive member of district council
21 also resigned, I believe, in June of
22 this year.
23 The third person was Andrew
24 Cefalo who was an auditor of the
25 district council.
16 1
2 Each of those individuals
3 agreed to a permanent bar on
4 employment with LIUNA or any
5 LIUNA-related entity. Those are
6 essentially permanent resignations
7 from their position at least on the
8 district council, but LIUNA in
9 general.
10 What I would propose to do now
11 is just outline generally what the
12 findings were, what conclusions we
13 were able to draw as a result of our
14 investigation.
15 First of all, obviously the
16 embezzlement of Mr. Kearney came to
17 approximately $150,000. He had given
18 gifts to himself, to friends of his,
19 to other officers at the local, had
20 failed to document expenses
21 appropriately.
22 What I have provided in the
23 record in Exhibits 1, 2 and 3 are
24 charts that were drafted by the Local
25 79 accountant which document his
17 1
2 embezzlement using his union credit
3 card.
4 Keep in mind that this was an
5 embezzlement that occurred over three
6 years. It's always significant in any
7 dollar amount, but equally significant
8 is the fact that it occurred over a
9 fairly lengthy period of time and he
10 was not caught.
11 HEARING OFFICER: The credit
12 card he was using was his Local 79
13 credit card?
14 MR. SLEVIN: I believe it was.
15 HEARING OFFICER: Did he have
16 a credit card for business at district
17 council.
18 MR. SLEVIN: I can't say
19 definitively that he did, but I'm
20 fairly certain that the credit card
21 that he had was a Local 79 credit
22 card.
23 1, 2 and 3 essentially chart
24 the types of places where he purchased
25 things, things like Bally's Hotel &
18 1
2 Casino, Bed Bath & Beyond, Cohen
3 Fashion Opticals, San Diego Zoo,
4 things of that nature, which are
5 clearly personal in nature.
6 Mr. Kearney did make restitution in
7 the sum of $149,330.21. That is
8 Exhibit 4. Those are the checks that
9 were submitted to Local 79 to cover
10 that amount.
11 In the course of conducting
12 this audit, there was a document that
13 struck the accountants particularly
14 disturbing and it was a $21,000 check
15 that was written from Local 79 funds
16 for construction costs. That is what
17 the check said.
18 The backup documentation for
19 the $21,000 check actually though was
20 a document on PC Richard letterhead
21 which listed a number of items that
22 did not seem to be related to
23 construction costs for appliances
24 essentially and below that document
25 was half of a receipt and what was
19 1
2 strange about the half of the receipt
3 was that although the numbers matched
4 up, roughly $21,000 for the receipt
5 and $21,000 on the receipt or the
6 statement from PC Richard, below the
7 receipt was a description of
8 appliances and installation of
9 appliances and that didn't make sense
10 to the accountants. Why do you have a
11 check for $21,000 that is construction
12 costs and then you have underlying
13 documentation |