CORE TERMS: consent decree, candidate, constituent, election, oversight, Proscribed Acts, court-appointed, appointment, effectuate, deposition, et seq, participating, affiliated, shop steward, disqualification, misdemeanor, appointed, veto, Administrative Procedure Act, business manager, organized crime, substantial evidence, standard of review, federal agency, binding, soldier, collective bargaining agreement, payments required, employee benefit, general power
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HeadnotesCOUNSEL: APPEARANCES:
HON. MARY JO WHITE, United States Attorney for the Southern District of New York, Attorney for United States of America, New York, NY, By: MANVIN S. MAYELL, ESQ., DANAIEL S. ALTER, ESQ., Of Counsel.
LAWRENCE B. PEDOWITZ, ESQ., Monitor, WACHTELL, LIPTON, ROSEN & KATZ, New York, NY.
MICHAEL CHERTOFF, ESQ., Investigations Officer, LATHAN & WATKINS, New York, NY.
BENEDICT MESSANA, Pro Se, Farmingville, NY.
JUDGES: ROBERT W. SWEET, U.S.D.J.
OPINIONBY: ROBERT W. SWEET
OPINION: OPINION
Sweet D.J.
Benedict Messana ("Messana") has appealed from the decision of the court-appointed Monitor dated May 13, 1997, disqualifying him as a potential candidate for president of Local 66 of the Mason Tenders District Council. The United States Government and the court-appointed Investigating Officer oppose Messana's appeal. The Investigating Officer has also moved for an order authorizing an affidavit submitted in support of the Monitor's decision to be filed under seal.
For the reasons set forth below, the Monitor's decision will be affirmed, and his motion to file the Department of Labor Agent Affidavit under seal will be granted.
Parties [*2]
The Mason Tenders District Council (the "MTDC") is chartered by the Laborers' International Union of North America ("LIUNA"), a national labor organization, to oversee the operations of LIUNA's constituent local unions in the New York City metropolitan area.
Messana has been a member of Mason Tenders Local 66 ("Local 66") since 1973. Messana served as a shop steward for Local 66 from 1973 to 1974, from 1986 to 1988, and intermittently from 1988 to the present.
Facts
The facts of this proceeding have been set forth in greater detail in several prior opinions of the Court, familiarity with which is assumed. See United States v. Mason Tenders District Council, 1997 U.S. Dist. LEXIS 2360, 1997 WL 97836 (S.D.N.Y. March 6, 1997) ("Lanza"); United States v. Mason Tenders District Council, 909 F. Supp. 891 (S.D.N.Y. 1995); United States v. Mason Tenders District Council, 1995 U.S. Dist. LEXIS 17049, 1995 WL 679245 (S.D.N.Y. Nov.15, 1995). Those facts relevant to the instant opinion are set forth below.
A. The RICO Action Against MTDC
On September 8, 1994, the United States instituted a civil action pursuant to the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1964 ("the RICO statute") [*3] and the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA") (the "Civil Rico Suit").
The Government alleged that executives and officers of the MTDC, as well as of its affiliated locals, were intimately linked with the Genovese, Luchese, and Gambino Organized Crime Families, organized criminal groups that operate throughout the New York City area and elsewhere ("La Cosa Nostra"). See United States v. Salerno, 868 F.2d 524, 528-29 (2d Cir. 1989); United States v. Salerno, 631 F. Supp. 1364, order vacated by 794 F.2d 64 (2d Cir. 1996) (S.D.N.Y. 1986).
More specifically, the Government alleged that over a period of twenty years, executives and appointees of the MTDC had: (1) extorted payoffs from employers in exchange for permitting the employers to use non-union labor and avoid making payments to the MTDC Trust Funds as required by collective bargaining agreements; (2) engaged in kickback schemes with companies and individuals providing services to the MTDC and its constituent local unions; and (3) knowingly condoned similar activities within the constituent local unions of the MTDC.
One of the individual defendants identified by the [*4] Government was Michael LaBarbara, Jr. ("LaBarbara Jr."), the Business Manager of Local 66. In 1989, LaBarbara Jr. pled guilty to six counts of receiving illegal labor payments while serving as Local 66 Business Manager, in violation of 29 U.S.C. § 186(b)(1) and (d)(2). United States v. Peter Vario, et al., 88 Cr. 719 (JM) (E.D.N.Y.), aff'd, 943 F.2d 236 (2d Cir. 1991). The Government alleged that LaBarbara Jr. is a "made" member or "soldier" in the Luchese Family, and that he enforced that Family's interests throughout the District Council and Local 66. The Government alleged further that LaBarbara Jr. installed his son, Michael R. LaBarbara, ("LaBarbara III"), as an officer of Local 66, so that the Luchese Family could continue to exert influence over the Local. In 1995, this Court granted a preliminary injunction barring LaBarbara Jr. from, inter alia, participating in any way in the affairs of the MTDC or any LIUNA local affiliate, including Local 66. United States v. Mason Tenders District Council, (S.D.N.Y. November 14, 1995), as modified, (S.D.N.Y. January 18, 1996). In May of 1997, the court-appointed Monitor initiated disciplinary proceedings against LaBarbara [*5] III, prohibiting him from participating in union affairs. An appeal of this prohibition is pending.
B. The Consent Decree
1. Purposes of the Consent Decree
On December 27, 1994, the Government, the MTDC and the employer-trustees of the MTDC Trust Funds entered into a Consent Decree approved by the Court. The purposes of the Consent Decree are: (1) to end any direct or indirect involvement by the La Cosa Nostra in the MTDC and its constituent locals; and (2) to ensure that the District Council shall be maintained and run democratically, with integrity, solely for the benefit of its members, and without unlawful outside influence. Consent Decree at 4. All officers, members and employees of the MTDC and its constituent locals are required by the consent decree "to assist the officers appointed by the Court pursuant to this Consent Decree" to achieve its purposes. Id.
The Consent Decree sets forth the following three categories of prohibited conduct (hereinafter "Proscribed Acts"): (a) any acts of racketeering as defined in the RICO Statute; (b) any knowing association with any member or associate of any La Cosa Nostra crime family or any other criminal group, or [*6] with any person prohibited from participating in union affairs; and (c) any obstruction or interference with the work of the court-appointed officers or with the purposes of the Consent Decree. See id. PP 3, 4(a).
The Consent Decree permanently enjoins all current and future officers, agents, representatives, employees, and members of the MTDC and its constituent locals from engaging in any Proscribed Acts. Id. P 3.
The Consent Decree provides for the appointment of a Monitor (the "Monitor") to oversee union activities and to ensure the goals of the Consent Decree are fulfilled. The Consent Decree also provides for the appointment of an Investigations Officer ("IO") to investigate alleged or Proscribed Acts. n1 Id. P 5(a).
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n1 On January 17, 1995, this Court appointed Lawrence B. Pedowitz, Esq. and Michael Chertoff, Esq. to act as Monitor and Investigations Officer, respectively, under the Consent Decree.
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2. Powers of the Monitor
The Monitor retains jurisdiction to ensure compliance with [*7] the purposes of the Consent Decree and with the union constitutions. Id. P 4(a). The Consent Decree sets forth a non-exclusive list of several specific areas subject to the Monitor's oversight authority. For example, the Monitor may review and veto any union expenditures or contracts which constitute racketeering, further the association of union members with organized crime, or are otherwise inconsistent with the purposes of the Consent Decree. Id. P 4(b)(1)-(2). The Monitor has the authority to review and veto any proposed appointments to office in the MTDC or the affiliated locals. Id. P 4(b)(3). The Monitor may develop educational and training programs and standards for several positions with the union, including shop stewards at the constituent locals. Id., P 4(b)(6).
A separate provision grants the Monitor oversight of the MTDC Executive Board Elections. Any candidate seeking to run for a position on the Executive Board must first be approved by the Monitor, who shall determine "whether in light of the express goals of this Consent Decree, the candidate is qualified to run for office and represent the union membership on the Executive Board." Id. at P 8. [*8]
Besides these specific powers, the Consent. Decree also grants the Monitor a broad general power of oversight, which permits him to "take any and all actions that are consistent with his responsibilities under, and effectuate the purposes of, this Consent Decree." Id., P 4(b)(7).
Decisions by the Monitor are final and binding, subject only to review by this Court. Representatives of the District Council must appeal a decision by the Monitor within ten calendar days of its issuance. The standard of review is that applicable to review of final federal agency action under the Administrative Procedure Act, 5 U.S.C. § 701, et seq.. Id. P 4(g).
3. Powers of the IO
Pursuant to the Consent Decree, the IO is authorized to "investigate and to prosecute any Proscribed Acts that either have occurred since January 1, 1982 or occur in the future at any time prior to the expiration of the Consent Decree, and to propose appropriate sanctions for such conduct." Consent Decree P 5(a). The Consent Decree further provides, "any proscribed act involving membership in or knowingly associating with La Cosa Nostra or any other criminal group shall be subject to investigation by the [*9] Investigations Officer regardless of when such offense occurred." Id.
C. The Investigation Regarding Messana's Qualification to Run for Office
In late April of 1997, the IO was asked to make recommendations regarding individuals seeking office in the up-coming elections at three of the local unions affiliated with MTDC, including Local 66. Pursuant to that request, the IO conducted an investigation regarding the fitness of each candidate for union office. One of the individuals seeking office in the Local 66 election was Messana, who intended to run for President.
The IO gathered information from three sources: a questionnaire administered to all candidates, including Messana; a deposition given by Messana on December 29, 1995; and an investigation conducted by United States Department of Labor Special Agent William Davidson, ("DOL Agent").
In the questionnaire, Messana stated that he had been arrested in 1968 and was convicted of a misdemeanor at some later point. Further investigation by the DOL Agent confirmed that Messana had been arrested in 1969, with a subsequent conviction for a Class A misdemeanor, and was convicted of a Class B misdemeanor in 1975.
In his [*10] deposition, Messana indicated that he had a relationship with LaBarbara Jr., the former business manager of Local 66, allegedly a "soldier" in the Luchese Organized Crime Family. LaBarbara Jr. appointed Messana as shop steward in 1986. See Deposition of Benedict Messana, December 29, 1995 at 68. Messana also expressed a preference for LaBarbara Jr. to the current business manager of Local 66, id. at 150-51, commenting that "I like the LaBarbaras ... in comparison to what we have now, I would like them over what we have now." Id. at 149. In general, Messana agreed that he was "in the camp that are fans of the LaBarbaras." Id. at 150-51.
Finally, the investigation by the DOL Agent revealed evidence that Messana had acted against the interest of union members by allowing a contractor to avoid making employee benefit payments required by the relevant collective bargaining agreement.
On May 12, 1997, a meeting was held between the Monitor, the IO and two of his assistants, the DOL Agent, and an FBI Special Agent to discuss each of the potential candidates for union office. At the meeting, the evidence concerning Messana was presented to the Monitor. The Monitor asked several [*11] questions regarding the reliability of the confidential sources for the DOL Agent's report, as well as Messana's criminal background. By the end of the meeting, the IO recommended that Messana, as well as a number of other individuals, be disqualified from seeking office. The Monitor accepted all but one of the recommendations of the IO.
On May 13, 1997, the Monitor sent Messana a letter informing him that he would not be permitted to run for union office. In the letter, the Monitor invoked his powers under P 4(b)(7) of the Consent Decree, granting the Monitor authority to take any actions to effectuate the purposes of the Consent Decree.
On May 21, 1997, Messana wrote to this Court protesting his disqualification from candidacy. His letter was treated as an appeal of the Monitor's decision. Because of the imminence of the elections on June 21, 1997, the parties agreed to an expedited schedule for submission of papers on the appeal. On June 13, 1997, the appeal was considered fully submitted.
Discussion
I. Standard of Review
The Consent Decree provides that decisions of the Monitor shall be final and binding, subject only to this Court's review. Consent Decree [*12] P 4(g). In reviewing decisions of the Monitor, the Court shall apply the same standard applicable to review of final federal agency action under the Administrative Procedure Act, 5 U.S.C. § 701 et seq. (the "APA"). Id. P 4(g)(2).
Under section 10(e) of the APA, a reviewing court determines de novo "all relevant questions of law." 5 U.S.C. § 706; see also Lanza, 1997 U.S. Dist. LEXIS 2360, 1997 WL 97836 at *6; United States v. District Council of New York City, 941 F. Supp. 349, 361 (S.D.N.Y. 1996). In considering a relevant question of law under the APA, "the reviewing court asks whether the agency's action was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." District Council, 941 F. Supp. at 362; see also 5 U.S.C. § 706(2)(A).
An agency's findings of fact "are entitled to affirmance on review if they are reasonable and supported by substantial evidence in the record as a whole." District Council, supra (quoting NLRB v. Gridon, 792 F.2d 29, 32 (2d Cir. 1986)). The APA "permits agency findings to be set aside only if they are 'unsupported by substantial evidence.'" United States v. International Bhd. of Teamsters, 964 F.2d 1308, [*13] 1311 (2d Cir. 1992). Substantial evidence is more than a mere scintilla, id. at 1311-12, but "something less than the weight of the evidence, and the substantial evidence standard may be met despite the possibility of drawing two inconsistent conclusions from the evidence." United States v. International Bhd. of Teamsters, 19 F.3d 816, 820 (2d Cir. 1994) (citations omitted).
In sum, the scope of review is narrow, and the reviewing court must ensure only that the agency has examined the relevant data and articulated a satisfactory explanation for its action, including a rational connection between the facts found and the choice made. Motor Vehicle Mfrs. Ass'n. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 77 L. Ed. 2d 443, 103 S. Ct. 2856 (1983); accord Henley v. Food and Drug Admin., 77 F.3d 616, 620 (2d Cir. 1996); Lanza, 1997 U.S. Dist. LEXIS 2360, 1997 WL 97836 at *7; RSR Corp. v. Browner, 924 F. Supp. 504, 510 (S.D.N.Y. 1996), aff'd 1997 U.S. App. LEXIS 5523, 1997 WL 134413 (March 26, 1997). The district court is not to substitute its own judgment for that of the agency. Henley, 77 F.3d at 620; RSR Corp., 924 F. Supp. at 510; See also United States v. International Bhd. of Teamsters, 981 [*14] F.2d 1362, 1368 (2d Cir. 1992) ("the district court must give 'great deference' to the decisions of the Independent Administrator") (quoting United States v. International Bhd. of Teamsters, 970 F.2d 1132, 1137 (2d Cir. 1992)).
II. The Monitor's Decision to Disqualify Messana from Candidacy Will Be Upheld
A. The Monitor's Decision to Disqualify Messana Was a Proper Exercise of His Discretion Under the Consent Decree
In disqualifying Messana from running for office, the Monitor acted pursuant to his general powers of oversight granted in paragraph 4(b)(7), which states: "The Monitor shall have the authority to take any and all other actions that are consistent with his responsibilities under, and effectuate the purposes of this Consent Decree." This grant of a general power of oversight recognizes that the Monitor may need to take actions not specifically enumerated in the Consent Decree in order to effectuate the Decree's purposes.
The Monitor's evaluation and disqualification of candidates for local office directly serves the goals of the Consent Decree. One of the primary purposes of the Consent Decree is to end all connection between La Cosa Nostra and the [*15] MTDC and its constituent locals. Consent Decree at 4. In meeting that goal, the Consent Decree directs that "all officers, members and employees of the MTDC and its constituent locals are to assist ... [in] achieving this purpose." Id. As well as severing all ties with organized crime, the Consent Decree is meant to ensure that the District Council is run "solely for the benefit of its members." Id. To reach these goals the Monitor may find it necessary to evaluate candidates for office and disqualify candidates. The Monitor's evaluation and disqualification of candidates for local office are within the general grant of authority bestowed by P 4(b)(7) of the Consent Decree.
The Monitor's exercise of his authority in the realm of local elections is further supported by a provision in the Consent Decree governing the MTDC Executive Board Elections. This provision grants the Monitor power to approve or veto candidates for the Executive Board of the MTDC "in light of the express goals of this Consent Decree." Consent Decree P 8(3). Certain of the Local 66 elected officers will be automatically entitled to serve on the Executive Board. See Uniform District Council Constitution [*16] of the Laborer's International Union of North America, Art. V. In order to ensure that the composition of the Executive Board meets the goals set forth by the Consent Decree, therefore, the Monitor should be able to evaluate candidates for the local elections.
B. There is Sufficient Evidence of Messana's Lack of Qualifications to Uphold the Monitor's Decision
Messana himself has acknowledged a relationship with at least one individual who has been deemed by the Monitor to be an associate of the Luchese Organized Crime Family, LaBarbara Jr., who was formerly Business Manager of Local 66. In his 1995 deposition, Messana states that he owed his appointment as shop steward in 1986 to LaBarbara Jr. Messana Deposition at 68. Messana agreed that he was "in the camp that are fans of the LaBarbaras," id. at 150-51, and remarked that the LaBarbara's tenure as leaders of Local 66 was better than "what we have now." Id. at 150.
The DOL Agent provided information from a confidential source, deemed reliable, indicating that Messana had acted against the interest of union members by allowing a contractor to avoid making employee benefit payments required by the relevant collective [*17] bargaining agreement. This information, along with Messana's own statements regarding his relationship with the LaBarbara's, establishes a "rational connection between the facts found and the choice made." Lanza, 1997 WL 97836 at *7.
To uphold the decision of the Monitor is difficult but necessary in this context. As set forth above, there was a lengthy and entrenched relationship between the union and La Cosa Nostra, which the MTDC, with the Government's supervision, is now attempting to eradicate. Stringent measures may be necessary to achieve this goal, and by seeking office Messana has placed himself within reach of such measures.
Conclusion
For the reasons set forth above, the Monitor's decision to disqualify Messana from running for office is hereby affirmed.
It is so ordered.
New York, N. Y.
June 19, 1997
ROBERT W. SWEET
U.S.D.J.