2010-05-20 stipulation hearing CSH

2010-05-20 transcript

Condensed Transcript

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usao

Thursday, May 27, 2010

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1 1 UNITED STATES DISTRICT COURT
1 1 SOUTHERN DISTRICT OF NEW YORK 1 is presented to the Court jointly by counsel for the government
2 2 ------------------------------x
2 2 and for the district council, and when I say counsel for the
3 3 UNITED STATES OF AMERICA,
3 3 district council, I mean, of course, the district council as it
4 4 Plaintiff,
4 4 presently exists under supervision -- supervision imposed by
5 5 v. 90-CV-5722 (CSH)
5 5 the UBC as a result of recent events, not in this case but in
6 6 N.Y.C. DISTRICT COUNCIL OF
6 N.Y.C. & VICINITY OF THE 6 that other criminal case, United States v. Forde and others,
7 7 UNITED BROTHERHOOD OF
7 CARPENTERS, et al., 7 now pending before District Judge Marrero. But what gave rise
8 8
8 Defendants. Hearing 8 to that indictment has furnished the background and the
9 9
9 ------------------------------x 9 impetus, I think it's fair to say, for the present application
10 10 New York, N.Y.
10 May 20, 2010 10 before the Court in this case, a joint application, as I've
11 11 2:34 p.m.
11 11 said, by the government and by the district council to create a
12 12 Before:
12 12 new and expanded and enlarged protocol, regimen, of discipline,
13 13 HON. CHARLES S. HAIGHT,
13 13 of oversight, of governance, in which a newly appointed court
14 14 District Judge
14 14 officer would play the leading role, with a considerable number
15 15 APPEARANCES
15 15 of supporting players. That new officer, as described in the
16 16 UNITED STATES ATTORNEY
16 FOR THE SOUTHERN DISTRICT OF NEW YORK 16 stipulation, would be called the review officer, or RO. This
17 17 For Plaintiff
17 BY: BENJAMIN H. TORRANCE, AUSA 17 is the way we speak in this case. We all remember the initial
18 18 TARA M. LaMORTE, AUSA
18 18 court-appointed officer, Judge Conboy, who was the
19 19 SCHULTE ROTH & ZABEL LLP
19 Attorneys for Defendant District Council 19 interventions and review officer, or IRO, and then there have
20 20 BY: RONALD E. RICHMAN, ESQ.
20 20 also been two independent investigators, or IIs, over the
21 21 DeCARLO, CONNOR & SHANLEY, P.C.
21 Attorneys for Defendant District Council 21 years -- the first one being Walter Mack and the second one
22 22 BY: JOHN T. DeCARLO, ESQ.
22 22 being the company called Unitel, of which William Callahan is
23 23 O'DWYER & BERNSTEIN, L.L.P.
23 Attorneys for Defendant District Council 23 the president.
24 24 BY: GARY P. ROTHMAN, ESQ.
24 24 I have to say that it's a little disappointing,
25 25 ALSO PRESENT: DENNIS WALSH, Proposed Review Officer
25 WILLIAM CALLAHAN, Independent Investigator 25 sobering, sad, to realize that the original action in this

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1 (Case called)
2 THE CLERK: Counsel, please state your name, beginning
3 with the government.
4 MR. TORRANCE: Thank you. Good afternoon, your Honor.
5 Benjamin Torrance for the government.
6 MS. LaMORTE: Tara LaMorte for the government.
7 MR. WALSH: Dennis Walsh, mentioned in the proposed
8 stipulation and order, your Honor.
9 THE COURT: Yes, Mr. Walsh.
10 MR. DeCARLO: John DeCarlo, your Honor, for the
11 district council.
12 MR. RICHMAN: Ronald Richman, Schulte Roth & Zabel,
13 for the employer trustees of the benefit funds, your Honor.
14 MR. ROTHMAN: Gary Rothman of O'Dwyer & Bernstein for
15 the union trustees of the benefits fund.
16 THE COURT: I know you, Mr. Rothman; don't I?
17 MR. ROTHMAN: We've met.
18 THE COURT: Yes, we have, yes.
19 Welcome to counsel and also to all other people who
20 are interested in these proceedings. You are always welcome at
21 the hearings of this Court in this important case, and you're
22 welcome to this one.
23 What we come together this afternoon to do is to
24 consider -- by which I really mean the Court, by which I really
25 mean me -- to consider a proposed stipulation and order which
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1 case, the civil RICO action, was filed by the government in
2 1990 -- 20 years ago -- and here we are still dealing, still
3 confronting, still trying to get our arms around continuing
4 problems of corruption and malfeasance and dishonest acts and
5 dishonest people in the district council and its constituent
6 locals. A lot of people in this room have worked hard to make
7 that stop happening. I'm one of them. And it's sad to realize
8 that here we are after 20 years and, to put it mildly, there's
9 a long way to go before we clean out the Augean stables. It
10 must be a source of genuine embarrassment and disgust and
11 distress on the part of the UBC. This is an important district
12 council, and for 20 years, it has been something of a disgrace.
13 Mr. McCarron cannot be happy with that, and I imagine that the
14 impetus towards and the form of this most recent stipulation
15 presented to me for approval is a reflection of the UBC's deep
16 concern. And of course the concern is genuine and it is
17 entirely appropriate, because the real victims of 20 years of
18 malfeasance are the honest and honorable and patriotic and
19 hard-working and conscientious carpenters, a number of whom I'm
20 quite confident are here today. And they've been in hearings
21 like this in the past, because they're caught up in this. It's
22 important to them, and they care about it.
23 Now what I have to do is to decide whether or not the
24 Court should approve the stipulation and also approve the
25 appointment of Mr. Walsh as the new RO. The effect of that

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1 would be to terminate the office of independent investigator, 1 have some questions for counsel and for Mr. Walsh, and I will
2 or II, currently held by Mr. Callahan and his company Unitel. 2 ask those questions and then take whatever further comments may
3 I take this opportunity to thank Mr. Callahan and to compliment 3 be made so that I'm fully advised about what this stipulation
4 him for a gracefully phrased and highly professional statement 4 really means as far as the future of the case is concerned.
5 he's filed with the Court accepting this, agreeing to it, 5 I've read the stipulation, of course, but certain
6 saying in substance it makes sense and he's available to give 6 questions arise with respect to how it will work out in
7 every assistance he can to the RO, if the RO takes office, and 7 practice, and that is the sort of thing I need to know before
8 a transition period has been agreed. I think that the grace 8 deciding whether or not to accept it. The parties have
9 and professionalism of Mr. Callahan's statement is 9 stipulated to it, which is a lawyer's way of saying they've
10 characteristic of his service over five years as the II, and I 10 agreed to it, but because the RO would be the next
11 take this opportunity to thank him for it. 11 court-appointed officer and because, by virtue of ordering the
12 But I have the independent responsibility of 12 stipulation, everything in it becomes an order of the Court,
13 considering whether or not to approve the stipulation and to 13 which has very real consequences for anybody who is affected by
14 appoint Mr. Walsh as my next court officer. And it seems to 14 its terms, I must give careful consideration to whether or not
15 me, it's accurate to say, that we've sort of gone back in time. 15 to approve it, and while of course I pay careful attention to
16 The circumstances now seem to me to be much closer in fact to 16 the agreement, the stipulation, if you will, of the able and
17 that which existed right after the first RICO action was filed 17 experienced counsel for the government on the one hand and the
18 and the trial began and the consent decree was entered than 18 district council, which means in this circumstance the UBC as
19 they are at the time the II was appointed. There was a time 19 well, I'm not bound by them. I would abdicate my
20 between the 1990 action, the original civil RICO case, and the 20 responsibility if I considered myself as bound by them. And so
21 2009 indictment of Mr. Forde and the other defendants, when, 21 I want to expand the record and learn a little bit more about
22 from the surface at least, things seemed to be going along, 22 it.
23 there were efforts at reform, there were reports indicating 23 And having said all that, let me put a question or two
24 some ground for optimism that reform was succeeding or might 24 to you, Mr. Walsh. I asked you to come here today and you did
25 succeed. And during that period of time the II, the 25 so, and I appreciate that. And I've read the very impressive

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1 independent investigator, seemed to be, to all of us, 1 résumé you sent. A couple of questions for you. Tell me a
2 sufficient to deal with the problems and the concerns that 2 little bit more -- and I ask this because the brief in support
3 confronted the union and the membership. But then the events 3 of the stipulation makes a point of it. Tell me a little bit
4 of last August occurred, and it seems to me we're back much 4 more about the contacts you had with this union in this case,
5 closer in time to the bad old days of 1990 when the first RICO 5 the district council of Carpenters case. The sense I have from
6 action was filed. Then the primary concern was the corrupting 6 the papers is that there was a time when you were working with
7 presence of the Genovese organized crime family in the district 7 and assisting Judge Conboy. Fill me in a little bit more on
8 court affairs. Those particular villains seem to have left the 8 that. I ask you to do that because one of the things it said
9 stage, but what the most recent indictment indicates is 9 in your papers is, he already knows the case, he knows some of
10 continuing and pervasive corruption, contamination of the job 10 the people, he has a familiarity. Focusing, as far as your own
11 referral rules, which lie at the heart of the consent decree, 11 experience is concerned, on your experience in this case, just
12 and the deprivation of funds, properly aligned at the benefit 12 tell me a little bit more about that.
13 funds, because disreputable, dishonest contractors and 13 MR. WALSH: May I stand, your Honor?
14 disreputable and dishonest union officers combined to let work 14 THE COURT: You don't have to. Whatever makes you
15 be done off the books for cash and with no contributions to the 15 more comfortable. This is an informal place.
16 benefit funds. So in a way we seem to be going backwards in 16 MR. WALSH: Either way. As long as I can be heard, I
17 time to things that were bad in 1990 and we hoped had gotten 17 suppose.
18 better since then. 18 THE COURT: Yes.
19 It's perfectly clear that if this stipulation is 19 MR. WALSH: I joined Mudge Rose back in 1991 and began
20 approved, the RO will have much more responsibility, more 20 my career there as a litigator in somewhat more conventional
21 things to do -- running elections, dealing with job referral 21 cases, but when Kenneth Conboy joined the firm, having just
22 rules, conducting investigations, issuing subpoenas. The RO is 22 left the bench here in the Southern District, I was immediately
23 going to be a lot more like IRO Conboy, it seems to me, than he 23 introduced to him because the first matter that he was going to
24 would be like II Mack or II Callahan. 24 focus his attention on as a partner at the firm was his role as
25 And having said all that, by way of preliminary, I do 25 the investigations and review officer. I had worked before law

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1 school as an investigator at Kroll Associates, the
2 international investigative firm, and that was generally known
3 at Mudge Rose, so I was assigned to the case to basically be
4 the attorney in the trenches, I think is a good way to put it,
5 and began to be the first responder, along with a colleague of
6 mine who's here today, Jack Mitchell, who was an investigator
7 for IRO Conboy. And Jack and I had the privilege of assisting
8 Judge Conboy in responding to the calls that we got, conducting
9 the investigation of the Genovese family influence at the
10 Javits Center, responding to the reports of corruption in the
11 field, the violations of the job referral rules, handling the
12 direct calls from hundreds and hundreds of members, traveling
13 to all of the local unions to meet the members and the
14 management of the locals, attending meetings, which is really
15 quite a rare privilege for the average citizen who is not a
16 member of the union to actually be allowed into those
17 proceedings, which were very illuminating. But I also
18 conducted many dozens of depositions and interviews with
19 people. I was the drafter of I think the first nine reports
20 that we filed with this Court every six months, reporting on
21 our activities. And a singular memory is being the
22 representative from Judge Conboy's office who assisted in
23 taking the padlock off the door at the Borough of Manhattan
24 Community College in 1995 when the first monitored election
25 held pursuant to the rules that we drafted in the IRO's office
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1 was held, which led to the reelection of the late Frederick
2 Devine as the head of the carpenters union.
3 THE COURT: Fix a time frame for when these activities
4 you just described began. I assume it must have been on or
5 about 1994 when the consent decree was entered.
6 MR. WALSH: Yes. It was right at the beginning of
7 Judge Conboy's tenure, and the Javits investigation was one of
8 the key investigations that we worked on in the beginning
9 phase. There was significant media attention, if you'll
10 recall, about the pool list at the Javits Center, which was a
11 list of approximately a hundred members of the union with
12 significant ties to organized crime or who had criminal records
13 themselves, who received first preference in the hiring out of
14 the carpenters union for the exposition companies at the Javits
15 Center. And we compiled a list of charges against the chief
16 carpenter at the Javits Center, a fellow named Anthony Fiorino,
17 if you'll recall, and those charges were heard before
18 Mr. Curran and his team, which resulted in them rendering an
19 opinion expelling Mr. Fiorino from the union, a decision which
20 was I think appealed to your Honor and upheld.
21 And as a result of the investigation at the Javits
22 Center, it was one of the significant contributing factors
23 towards one of the things we then worked on. In addition to
24 the core investigation required by the consent decree, we
25 decided that there needed to be systemic change at the union.
2010-05-20 transcript
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1 I think it was recognized by all who worked on it that we could
2 chase the bad guys, so to speak, forevermore but that there
3 needed to be a fresh start and a new system for the union. So
4 I --
5 THE COURT: There was a hope, wasn't there, that the
6 job referral rules would at least be a step in that direction?
7 MR. WALSH: There was, and we, I think, took very
8 significant steps to bolster the efficacy of the job referral
9 rules. When we first started to visit the locals and in fact
10 did many surprise visits into the hinterlands of the district
11 council's jurisdiction, members were still shaping up in the
12 local unions. There were fellows who'd show up with their
13 tools early in the morning hoping for a referral directly out
14 of the local union. And from Staten Island into Local 17 in
15 the Bronx, to the Manhattan locals, that was the case.
16 The temptation, however, to abuse the system could not
17 be avoided by many of the people who were in charge at the
18 locals, and we recognized that it would be advantageous to
19 centralize and computerize the job referral system. We started
20 to really make some progress on that after we persuaded
21 Mr. McCarron's team to, I believe in 1996, install a
22 trusteeship at the district council. I recall traveling down
23 to Washington, I believe on four or five occasions, with stacks
24 of evidence compiled by our office, deposition transcripts and
25 investigative reports, and sitting down with Mr. McCarron,
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1 Mr. DeCarlo's partner, Doug Baines, and other members of the
2 UBC team, and I think it was in the summer of '96 that
3 Mr. McCarron was convinced that something needed to be done and
4 they came up and they installed a trusteeship right down to
5 changing the locks --
6 THE COURT: Time came when, in the dead of night, they
7 went in and changed the locks; isn't that so?
8 MR. WALSH: Yes.
9 THE COURT: And that's trusteeship number one.
10 Well, the sense I get from what you've said -- and
11 it's very helpful to me -- is that you were working under Judge
12 Conboy, the lawyer, perhaps the principal lawyer in the
13 trenches. That began when the consent decree created the
14 office of the IRO. How long did you serve in that capacity?
15 MR. WALSH: Judge, I -- you might recall that Mudge
16 Rose dissolved under unfortunate circumstances at the end of
17 1995 --
18 THE COURT: Yes.
19 MR. WALSH: -- and a couple dozen of us then went to
20 Latham & Watkins, where we continued our efforts in furtherance
21 of another consent decree.
22 THE COURT: Right.
23 MR. WALSH: I left Latham & Watkins at the end of 1998
24 and within a few months had realized an opportunity that I had
25 coveted for some time to join law enforcement proper, and I was
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1 appointed to a position as an assistant deputy attorney general
2 in the New York State Organized Crime Task Force, which is a
3 branch of the attorney general's office.
4 THE COURT: Okay. That I've got in your résumé. I do
5 apologize; we're conducting what is the first cousin of a job
6 interview in this public place, but I hope you'll forgive me.
7 I feel it's part of my duty.
8 And I want to now come to where you are now, your
9 present situation, and the questions I'm going to put to you
10 are prompted by my sense that if the stipulation is approved
11 and the RO takes office, there will be very considerable
12 resources, investigative, legal, a wide variety of resources
13 that you'll need to perform as the RO in the way that everybody
14 hopes that officer will. So tell me a little bit about your
15 present firm, Mr. Walsh. How big is it and how many people do
16 you have? I just want to get a sense of that.
17 MR. WALSH: Your Honor, 100 percent of the firm is
18 here today. If I can introduce my partner, Mark Fitzmaurice,
19 who is in attendance.
20 MR. FITZMAURICE: Good afternoon, Judge.
21 MR. WALSH: He was a career prosecutor up until the
22 time we decided to form the firm in 2005. But I also have some
23 other people who will be actively involved in the matter, if
24 the Court approves.
25 I'd like to introduce Bridget Rohde, who is a member
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1 of the firm Mintz Levin. Bridget was the chief of the criminal
2 division in the Eastern District of New York and served for
3 many years in the racketeering office in the Eastern District.
4 And I mentioned Jack Mitchell, who is here today.
5 Jack is at BDO Seidman, the international auditing and
6 consulting firm. Jack was not only the IRO's principal
7 investigator but was a fantastic investigator, criminal
8 investigator at the New York State Organized Crime Task Force.
9 THE COURT: You're a Conboy veteran too; are you?
10 MR. MITCHELL: Yes.
11 THE COURT: Or alumnus, I should say?
12 MR. MITCHELL: Yes, I am.
13 THE COURT: Good. All right.
14 MR. WALSH: And I would also use, on either a retained
15 basis or in some of the positions which your Honor has read
16 about in the stipulation and order, the line investigative
17 positions. I would use a number of ex-law enforcement people
18 with whom I have worked or have known for years, either on a
19 retained basis or in those positions.
20 The Court has recognized there's a tremendous scope to
21 the obligations of the office, and it would be my intent to
22 tailor the skills of various individuals, some of whom have
23 already contacted me based on various press accounts and rumors
24 which have flown about. I've made no promises to anyone, but I
25 am certainly grateful for their interest in assisting, should
2010-05-20 transcript
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1 this office come to be. But I would use those people and
2 specifically match their skills to the obligation described in
3 the proposed stipulation and order, so that the team would be,
4 at any given moment, specifically tailored, and I intend to be
5 mindful of the tremendous cost which could be incurred if this
6 is not run carefully. It is a principal objective of mine, if
7 this is approved, to do this on the most cost-effective basis
8 which is feasible.
9 THE COURT: Yes. I'm glad you addressed that. You
10 read my mind a bit because I was going to put a question or two
11 to you about the subject of compensation. And as we all
12 recognize, however that compensation or expenses are
13 characterized, it is the union members' dollars which will pay
14 for it.
15 So let me turn then to page 16 of the stipulation.
16 It's paragraph 8B. And there does seem to be one ambiguity or
17 uncertainty in the language. And I think this is a
18 sufficiently important and sensitive subject that we'd better
19 make sure we're all understanding each other. I direct your
20 attention to the top of page 16. Subparagraph 8B is captioned
21 Compensation and Expenses. And then the first sentence says,
22 "The compensation and expenses of the review officer and of all
23 persons hired under his authority must be paid by the district
24 council." Then the second sentence begins as follows: "The
25 parties agree that the review officer's expenses will typically
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1 be between 65,000 and 85,000 per month." The section begins
2 with the phrase "The compensation and expenses," but then this
3 limiting language appears only to the review officer's
4 expenses. Is compensation also included in the 65 to $85,000
5 spread? Do you see what I mean? I had a little trouble
6 understanding how the first sentence, with reference to
7 compensation and expenses, tracked with the second sentence,
8 which only talks about expenses.
9 MR. WALSH: Your Honor, I'll certainly defer to
10 interpretation of the language --
11 THE COURT: As I suppose you must.
12 MR. WALSH: -- to the parties, but if I may, I can say
13 the following: that I was asked from the beginning by the
14 parties, particularly by the UBC, what my thoughts were on what
15 the monthly number would be, and I could tell the Court that
16 despite this language, which the Court has noted, it is my goal
17 and my view to make the monthly number fall within that range
18 so that there is no special exception for compensation
19 unspecified to be some mysterious number while expenses run
20 routinely between 65 and 85. It is my goal to make sure that
21 all compensation and expenses fall within that dollar range.
22 THE COURT: Well, I think I understand what you're
23 saying. Of course I would also like to hear from the authors
24 of this language. To the extent that there is an uncertainty
25 or an ambiguity, I suppose it would be cured by beginning the
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1 first sentence of B1 as follows, "The compensation and expenses
2 of the review officer," and then beginning the second sentence
3 with, "The parties agree that the review officer's compensation
4 and expenses will typically," so that it's perfectly clear
5 we're just talking about the same thing.
6 Mr. Torrance, what do you think about that? Am I
7 having a needless bit of trouble with this?
8 MR. TORRANCE: No, your Honor. This is one of those
9 instances where one can read the language literally hundreds of
10 times and not notice something like this, and of course your
11 Honor has noticed it right off the bat.
12 My understanding was what Mr. Walsh just said; the
13 total package would fall within that range, 65 to 85, the total
14 payment. I would say, I think that your Honor's proposal to
15 correct that ambiguity would work, but I would also say I'm not
16 sure there's a need to, necessarily, because as we see, the
17 last clause of that sentence specifically says that there's
18 going to be some flexibility in the number anyway.
19 THE COURT: Well, that's true, but it's flexibility in
20 what. It doesn't really cure the uncertainty that I'm calling
21 to your attention.
22 MR. TORRANCE: Understood. Certainly from the
23 government's perspective, we understood that 65 to 85 number is
24 to cover the entire package of payments, including compensation
25 and expenses.
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1 THE COURT: All right. Help me out on this,
2 Mr. DeCarlo. Is that your perception?
3 MR. DeCARLO: That is my understanding, your Honor.
4 It's completely to cover compensation and expenses. So I think
5 we're all in agreement, and maybe it is a good idea to change
6 the language and add "compensation" to the second sentence.
7 THE COURT: Well, let's see. What I've been given is
8 various copies of the stipulation itself. Does the government
9 or any party have the original here? Or maybe that is what you
10 gave me?
11 MR. TORRANCE: The original, your Honor, was given to
12 the order and judgment clerk --
13 THE COURT: Oh, I see.
14 MR. TORRANCE: -- and my understanding is that the
15 order and judgment clerk typically sends that to chambers. I
16 don't know if Mr. Cardona or someone else received --
17 THE COURT: I'm not confirming or denying that. And
18 if we need to get another "original," I'm sure we can. But
19 perhaps on this record it would be appropriate for me to simply
20 make that change and initial it in the margin if I decide to
21 approve it, as to which I express no present view.
22 MR. TORRANCE: The government certainly would consent
23 to that.
24 THE COURT: All right. Well, I think it was
25 worthwhile bringing up.
2010-05-20 transcript
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1 MR. DeCARLO: Yes.
2 THE COURT: All right. This is the last question I
3 want to put to counsel for the parties and to Mr. Walsh as
4 well, because I really need your guidance on this.
5 It seems to me, having read the stipulation, that if
6 this protocol comes into being, if Mr. Walsh and the team that
7 he's described takes office, if these provisions become orders
8 of the Court, then the involvement of the Court on, if not day
9 to day, a relatively frequent number of times will necessarily
10 occur and more often and in more varied ways than under the
11 protocol which has existed since the IRO departed and IIs Mack
12 and Callahan were appointed and they did what they did and the
13 Court would occasionally get involved. But I remember those --
14 "happy days" isn't quite the phrase -- those different days of
15 the 1994s and '95s when IRO Conboy was there. The Court was
16 involved a lot with things that were going on. And my
17 impression is that that might come to pass again if this
18 protocol, this regimen goes into effect.
19 There are two provisions, at least, in the stipulation
20 which make me think that may be so. On page 20, paragraph 12G,
21 captioned Retention of Jurisdiction, it says this: "This Court
22 retains exclusive jurisdiction to supervise implementation of
23 this stipulation and order and retains exclusive jurisdiction
24 to decide any and all issues arising under this stipulation and
25 order and any and all disputes arising out of the issuance,
Page 20
1 interpretation, or application of this stipulation and order."
2 And then one looks at page 18, paragraph 11. It says
3 in part, "The review officer's decisions with respect to the
4 district council pursuant to paragraph 5B of this stipulation
5 and order and the certification of election results pursuant to
6 paragraph 5K(i) of this stipulation and order may be reviewed
7 by the Court upon a petition for review by the district
8 council, the government, or any aggrieved person." And the
9 history of this case indicates that circumstances quite often
10 cause aggrieved persons to come forward and say they are
11 aggrieved.
12 Now here's my question for you all. Given those
13 particular provisions and other provisions which lay out what
14 would happen and what the Court's role would be, do you think
15 it is accurate to say that the participation of the Court in
16 resolving disputes or passing judgment or listening to
17 aggrieved people or anything else would be considerably more
18 demanding? But I don't mean that word. Requiring more of the
19 Court's day-to-day attention than has been the case for the
20 past five, six, seven years, when all we had was an II? Do you
21 see what I'm asking? I want counsel's views of what you think
22 the change in the Court's life might be as the result of this.
23 Your lives are going to change, but I'm here too. With respect
24 to the number and variety of applications to the Court for
25 resolution, is my life going to change? I need to ask you
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1 about that. Not because I'm hoping you'll tell me I don't have
2 to work any harder, but one has to balance all of the concerns
3 involved. So let me hear from counsel, in any order you
4 prefer. If this stipulation is approved, what do you think the
5 effect will be, if any, on the amount of time that you'll be in
6 court or other people will be in court and judicial resources
7 will be appealed to? I need to know your thoughts about that,
8 and I'll take it from anybody.
9 MR. DeCARLO: Well, your Honor, I think, because the
10 role of the review officer is going to be much more expansive,
11 that there is a possibility that the Court will get involved.
12 If the review officer raises certain problems and the parties
13 are willing to address them, they might not end up in the
14 court, but I don't think it's realistic to believe that that is
15 going to happen. We're covering whole new areas. We're
16 covering the benefit funds under the stipulation and order, and
17 I think it's about time that that occurred. And I think that
18 alone will add certainly more work to the proposed review
19 officer, and I wouldn't be surprised if from time to time those
20 issues are not able to be resolved say between the review
21 officers and the benefit funds and then the Court is going to
22 be called on. You know, my hope is that this would be in the
23 beginning of the process and that people would learn that it's
24 better off to cooperate when they get a reasonable request to
25 do something.
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1 THE COURT: Yes. I'm struck by one phrase you just
2 used, Mr. DeCarlo. You said, "We're getting into new areas."
3 And then I think you illustrated that by saying principally the
4 benefit funds.
5 MR. DeCARLO: Right.
6 THE COURT: And that is, I must say, one of the most
7 interesting aspects of this stipulation. And it's interesting
8 to see how counsel for the government and the benefit funds
9 preserve their right to disagree professionally, politely,
10 about the extent to which the consent decree covers and binds
11 the benefit funds or not, and it's an interesting area of
12 litigation. There is one opinion that I wrote some years
13 ago -- we sort of tiptoed up to that subject -- and expressed
14 the view that the benefit funds were bound by some aspect of
15 it. But I think the stipulation properly recognizes a ground
16 for potential future litigation. But that potential is
17 deferred, if not entirely eliminated, by what I think is an
18 important aspect of the stipulation, and that is to bring the
19 benefit funds within the ambit of the stipulation, to have them
20 be affected by and be required to cooperate with the protocol
21 which would be created. But you're right. That's a new area
22 as far as court supervision is concerned; isn't it?
23 MR. DeCARLO: Yes, it is, your Honor.
24 THE COURT: Yes, yes.
25 MR. DeCARLO: You know, another one, your Honor, we've
2010-05-20 transcript
Page 23
1 touched upon is the money that the council is paying. As you
2 know, Unitel currently gets $45,000 a month from the council.
3 It's going to be increased to 65 to $85,000 per month. And in
4 addition, the council, on an annual basis, is willing to pay 70
5 to $90,000 for these additional line investigators. So what it
6 comes down to --
7 THE COURT: And potentially more than that, if you
8 read the language carefully, as I'm sure you have, but the
9 compensation figures refer to those spreads and then says
10 something like, and it could be a little more, or it could be
11 more on a given month.
12 MR. DeCARLO: Exactly, your Honor. And so the
13 council, knowing this, has just about doubled the amount of
14 money that it's going to be spending on investigatory services,
15 and the reason is because I think, as the Court does, we see a
16 problem. We see a big problem, and we don't think there's any
17 way to solve it other than to really attack it hard. And my
18 view of this is similar, in military terms, to something like a
19 surge, where you put as many investigators out in the streets
20 as you can, as quick as you can, and you send a strong message
21 that the crime isn't going to be tolerated.
22 THE COURT: I assume that you're also, in fairness,
23 prepared to double my salary as well.
24 MR. DeCARLO: Absolutely.
25 THE COURT: Just kidding. All right. Well, that's
Page 24
1 useful, because it addresses the question I was putting to you,
2 what the new rule would look like.
3 Would you like to add to that, Mr. Torrance?
4 MR. TORRANCE: I would only say, your Honor, that the
5 Court's premise in the question is, of course, correct, as the
6 responsibilities of the review officer are far greater than the
7 responsibilities of the independent investigator and that in
8 and of itself does create at least a potential that the
9 Court -- that there will be more demands placed on the Court's
10 time than there are now. Mitigating that, though, is that
11 unlike at the beginning of the 1990s, we have at least to
12 start, life under the stipulation -- which we hope the Court
13 will approve life under the stipulation, but at least at start,
14 the parties are working together. We have the UBC and
15 trusteeship of the district council, and so they are -- as
16 Mr. DeCarlo said, they agree with us this is a problem and they
17 agree that this needs a resolution. We also have, currently
18 the benefit funds has, as your Honor noted, agreed to put aside
19 our agreement on the applicability of the consent decree and
20 has agreed to cooperate with us in terms of this stipulation
21 and to open up their books to the review officer and allow
22 authority over them. So that may presage an era in which
23 everyone cooperates and there will be no need for the Court's
24 time.
25 THE COURT: Yes. I accept that as between the
Pages 21 - 24
 Page 25
1 immediate parties, the government and the district council,
2 there is, at the beginning, at least, of the new world, a
3 degree of harmony and cooperation, which really did not exactly
4 characterize the days of the early '90s and the days of the
5 consent decree. It's really quite a different atmosphere in
6 that respect, at least. But how about nonparties, individuals
7 whose interests are directly affected but are not parties of
8 litigation represented by counsel this afternoon -- members of
9 employment firms, contractor firms, individual union members,
10 local union officers, shop stewards? There is a considerable
11 universe of people out there who are going to be affected one
12 way or another, or potentially so, by actions which might be
13 taken by the RO or the parties themselves under this
14 stipulation. And it may not be possible to really look at a
15 crystal ball and figure out an answer to this, but do you have
16 any sense of what volume of litigation involving aggrieved
17 persons, I suppose one could call them, that might be generated
18 by this new protocol?
19 MR. TORRANCE: I regret that I have no answer to that.
20 THE COURT: You have no sense.
21 MR. TORRANCE: I would be only guessing.
22 MR. DeCARLO: Your Honor --
23 MR. TORRANCE: But I think really the only way --
24 there's really no way to predict at all, whether on that aspect
25 or whether with respect to the parties -- Mr. DeCarlo, I cut
Page 26
1 you off. I'm sorry.
2 MR. DeCARLO: That's okay. I was just going to say,
3 your Honor, I mean, possibly a potential aggrieved party might
4 be a trustee -- I could see that -- a trustee of the benefit
5 fund. And other than that, I really don't see a lot. I think
6 the -- a lot of the disputes of the members will be handled
7 through the disciplinary mechanism that's supposed to be
8 devised within 30 days after the hopeful signing of the
9 stipulation and order. So I think most of those complaints
10 from the members will be handled by that disciplinary
11 procedure, which we intend to make it a fair procedure where
12 there's no cronyism involved and people get a square hearing.
13 And we're thinking of having these proceedings maybe videotaped
14 to make sure that that happens. So we think a lot of the
15 member complaints can be handled internally, and as far as
16 the -- yeah, there might be a contractor that the Court signs a
17 subpoena for or that might, you know, balk at producing
18 documents, but I don't think it will be a lot more than what
19 the Court is facing currently.
20 THE COURT: Okay. All right.
21 MR. RICHMAN: Your Honor?
22 THE COURT: Yes. This is the review fund speaking.
23 MR. RICHMAN: No, this is the benefit fund.
24 THE COURT: I'm sorry, benefit fund. I don't know
25 where that word came from, "review." You are speaking
2010-05-20 transcript
Page 27
1 representing the benefit funds; are you not?
2 MR. RICHMAN: Specifically the employer trustees of
3 the benefit funds.
4 THE COURT: Thank you. Go ahead.
5 MR. RICHMAN: But my views may be joined in by the
6 union trustees as well.
7 THE COURT: Okay. Thank you. Go ahead.
8 MR. RICHMAN: I have a different take, slightly
9 different take than Mr. DeCarlo with respect to the potential
10 litigation that might arise that would involve, necessarily
11 involve the Court with respect to the benefit funds. The fact
12 of the matter is, it was and is the benefit funds' strong view,
13 with which we had a disagreement with the government, that the
14 benefit funds are not today subject to the consent order. But
15 we put that aside, particularly on the employer trustee side,
16 for whom I can speak, because we were very interested in having
17 the review officer come on board to particularly look at
18 collection fund issues and the interaction between the union
19 and the benefit funds with respect to those issues.
20 I can tell you, from the employer trustee side, I
21 don't anticipate any significant issues. Of course, they may
22 arise and I can't anticipate everything. But we have had an
23 opportunity to speak with Mr. Walsh, and I think the employer
24 trustees and Mr. Walsh and the government all share the same
25 view with respect to a desire to eliminate the underpayment of
Page 28
1 contributions to the benefit fund. So from that point of view,
2 I do not see a flood or hopefully not even a trickle of
3 litigation occurring that would require the Court's attention.
4 THE COURT: Okay. Mr. Rothman, do you want to add
5 anything from the point of view of the benefit fund interest
6 that you represent?
7 MR. ROTHMAN: Well, for the union trustees from the
8 benefit funds, I surely wouldn't expect there to be any -- any
9 new litigation for this run, if not for -- if not just for the
10 observation that the district council appoints the union
11 trustees.
12 THE COURT: Yes, that would give some ground for
13 reasonable hope, I suppose.
14 MR. ROTHMAN: And I do think that the union trustees
15 take their fiduciary duty to the benefit funds seriously and
16 have joined in this -- in this stipulation with the expectation
17 that a critical review of collection policies and commitment to
18 the obligation to collect all contributions that are due will
19 be carried out.
20 THE COURT: Okay. All right. All right. Good.
21 MR. WALSH: Judge, may I offer a view?
22 THE COURT: Yes, Mr. Walsh, by all means.
23 MR. WALSH: It's my thinking that this presents a
24 singular opportunity -- the Court has noted that this case was
25 filed 20 years ago. I think this is a singular opportunity for
Pages 25 - 28
 Page 29
1 the parties, the benefit funds, the district council, the
2 government, to continue the dialogue which I have seen
3 firsthand over the course of the last couple of months in
4 putting problems on the table and attempting to work them out,
5 first in the wording of this proposed stipulation and order,
6 but in jointly recognizing that the union -- and I'll use that
7 in the capital U sense -- really needs to revisit its systems,
8 its procedures, because if the objective of the consent decree
9 and this stipulation and order is to be achieved -- and I don't
10 think I overstate it if I say that it is nothing less than the
11 eradication of corruption and racketeering -- the parties need
12 to work together to try, in a very practical and pragmatic way,
13 to craft a system, to make sure that the union is bigger than
14 the authority of any one person who may yield to the dark side
15 of human nature in wanting to commit a corrupt act.
16 So I just wanted the Court to know that I think that
17 people are prepared to work together, and it is my intention to
18 give everybody a fulsome opportunity to be heard and let them
19 know what my thinking is on certain propositions so that they
20 can inform me if I'm missing something or there is additional
21 information that I should know. So in that sense, I would hope
22 that the parties could work together to try to fix this system
23 and create a better future for the members without creating an
24 undue burden on the Court's time.
25 THE COURT: All right. That's a useful comment.
Page 30
1 The last question I want to put to you is in a
2 somewhat more narrow scope, but it did catch my eye in reading
3 the stipulation. During the history of this case there's been
4 a constant refrain that the purpose of the consent decree is to
5 restore democracy to the union, honest democracy. And of
6 course, that's a general objective which everyone shared, or
7 said they did, which leads me to a particular provision in the
8 stipulation. It has to do with the review officer's authority
9 in respect of the supervision and conduct of elections,
10 page 12, subparagraph K, and then over on 13, subparagraph 4.
11 And it says this:
12 "Any candidate seeking to run for a position as an
13 officer of the district council during the review officer's
14 tenure must first be approved by the review officer, who will
15 determine whether, in light of the terms and objectives of the
16 consent decree, the candidate is qualified to run for office
17 and represent the union membership. Any such decision by the
18 review officer will be final and nonreviewable." Is this
19 democracy at work, as the successful candidate, Mr. Sestak,
20 said on television the other day? It makes one think of it
21 more of some wearing a bedsheet in Tehran, saying that, "You
22 can't run for office and you can't appeal my decision." But
23 look, this is why I'm raising it with you; this is why I need
24 you to comment on it. I have to be satisfied with all aspects
25 of this. And how about someone who wants to run for district
2010-05-20 transcript
Page 31
1 council office but for some reason or other does not ingratiate
2 himself or herself sufficiently with Mr. Walsh and Mr. Walsh
3 says, "No, you can't run, and there's no appeal from it"?
4 Anything to worry about there?
5 MR. DeCARLO: Your Honor, I think there's something to
6 worry about, but part of it is that the international has
7 worked with Dennis Walsh before, as we talked about, and we
8 know how he operates and we have a lot of trust in him. A
9 problem, a huge problem, maybe the biggest problem -- and the
10 Court has much more experience than I do, but looking at all of
11 the problems, it comes down to leadership, that there really
12 hasn't been good leadership in I don't know how long.
13 THE COURT: That may be something of an
14 understatement.
15 MR. DeCARLO: Yes, it is. And something's got to
16 change. And maybe this section, to a certain degree, tramples
17 on some aspects of democracy. But I think under the
18 circumstances, I think it's really necessary for -- if
19 Mr. Walsh -- and I'm sure he would have justifiable reasons,
20 but if he has reasons that somebody isn't qualified and because
21 they're for corruption purposes or something like that, I think
22 it's helpful to give somebody who the parties trust and -- the
23 government trusts him, the union trusts him, the benefit funds
24 trust him, and we all interviewed him and agreed upon him. We
25 think he's up to that task.
Page 32
1 THE COURT: That's a very interesting comment, and you
2 make it, of course, with the full authority and blessing of the
3 UBC and Mr. McCarron, whose interests in union democracy you
4 represent this afternoon.
5 MR. DeCARLO: Absolutely.
6 THE COURT: Yes. That's interesting.
7 Do you want to add at all to that, Mr. Torrance?
8 MR. TORRANCE: I'll second what Mr. DeCarlo said and
9 I'll also say that, you know, we took that provision in
10 drafting this from the Mason Tenders consent decree that was
11 approved by Judge Sweet in -- I'll get a year if you need it,
12 but --
13 THE COURT: Oh, tell me that again. That language
14 appears in Judge Sweet's order?
15 MR. TORRANCE: Exactly. The case is United States v.
16 Mason Tenders District Council. It's docket 94 CV 6487. And
17 Judge Sweet approved this consent decree on December 27th,
18 1994. And paragraph 8 of that consent decree contains
19 essentially the exact language that your Honor quoted.
20 THE COURT: Vesting in an individual like the RO, the
21 authority, nonappealable, and final and binding, to approve or
22 to disapprove a candidate for election of a union office; is
23 that right?
24 MR. TORRANCE: That's right. And I'm happy to read it
25 to your Honor or hand up the copy of the consent decree, if
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 Page 33
1 you'd like the exact language.
2 THE COURT: I've got to think about this some over the
3 next few days. Would you do this. Just, if you can spare that
4 copy, you can give it to me. If you can't, I would not snatch
5 it from you, but make a copy and mail it to me.
6 MR. TORRANCE: This copy is without my scribbling so I
7 certainly can spare it, and if you --
8 THE COURT: That would be very good if you can hand it
9 up to the Court.
10 MR. TORRANCE: The language I'm referring to is at the
11 bottom of page 24.
12 THE COURT: All right.
13 MR. TORRANCE: But I will say on the more general
14 point, your Honor, you know, we recognize that this is -- this
15 does vest quite a bit of power in the review officer, and your
16 Honor is correct to be concerned about it. But we believe that
17 that -- vesting that power in him is necessary in this case,
18 precisely because of the history, precisely because in the
19 past, the remedies that we had agreed to have set out that
20 elections will be supervised and set out that election rules
21 will be imposed and yet the people who get elected have
22 continued to serve not the interests of the union members but
23 have served the interests of themselves, in criminal ways. And
24 so it might fairly be called a radical proposal, but it is a
25 radical problem and it requires, we believe, this solution. We
Page 34
1 note that it's limited, of course by the time that Mr. -- that
2 the review officer would be in office for 30 months and that
3 this is not something that would go forward after that. So
4 that does, I think, reduce whatever danger there is.
5 THE COURT: Can that term be extended? I think
6 there's a provision for that; isn't there?
7 MR. TORRANCE: There is a provision. There's a
8 provision for a six-month extension, at his application, and
9 then there's also a provision for an extension with the consent
10 of the parties beyond that. But both would, I believe, require
11 the approval of the Court.
12 THE COURT: Yes. Yes. All right.
13 MR. WALSH: Judge, may I?
14 THE COURT: Yes, of course. No, I was going to invite
15 you, Mr. Walsh, to comment as a point of personal privilege
16 here. I've wrapped you up in the robe of an ayatollah. If you
17 want to explain that that's not accurate, now is the time.
18 MR. WALSH: I think, Judge, that this particular
19 passage is vitally important. It's very serious. And any such
20 decision needs to be handled in a very serious way. I think
21 the key language, to the extent that there is any kind of
22 limiting language here, is the reference to the terms and
23 objectives of the consent decree. There needs to be a
24 record -- and if this goes as legislative history in some stage
25 when it might need to be interpreted down the road, I will
2010-05-20 transcript
Page 35
1 offer that I think there needs to be a record made if any such
2 decision is made, whether I am a review officer or any other
3 person is a review officer, that I think that union democracy
4 is of such significant importance that the very idea that an
5 arbitrary decision could be made in this regard is abhorrent to
6 me, and I would expect that there would be some articulation of
7 any decision to bar someone from running for office expressed
8 in the terms of the objectives of the consent decree, that some
9 meaningful explanation in the decision would have to be
10 offered.
11 THE COURT: I entirely agree with that on principle.
12 If there is a problem within Democratic circles, in practice it
13 arises from the last sentence, which says, "Any such decision
14 by the RO will be final and nonreviewable." That is what
15 really loads the cannon, or whatever. I'm not coming up with
16 the right simile. But if there's a problem along the lines
17 that I've been raising in my question, it arises in that
18 sentence. You can take that sentence out and you would make
19 the same kind of record. But the disappointed officer could
20 then come and complain about it to me, I suppose.
21 MR. WALSH: I would say that if I were a member of the
22 carpenters union and I was subjected to a decision like that --
23 and this is strictly my opinion -- I would probably call my
24 lawyer and see what my options were under federal law and
25 whatever rights are guaranteed to me by federal statute in
Page 36
1 terms of my right to participate in some form of union
2 democracy, and if an independent suit in the district court was
3 an option, I would suspect that I would take that course.
4 THE COURT: Yes. And I won't extend this discussion
5 too much longer, but that particular provision, you've got to
6 approve a future candidate for election as a district council
7 officer and if you say he's not qualified, he can't run, and
8 then it says, "Any such decision by the RO will be final and
9 nonreviewable." Well, that is binding a nonparty to an order
10 denying him remedies; isn't it? This is some future officer
11 that you've turned down, and in a stipulation to which he was
12 not a party or a member, you say he can't appeal from your
13 order adverse to him.
14 I really don't want to get too much further down this
15 road. You know, and the recent remedy proceedings have sort of
16 a feeling of "been there, done that," but I have to deal with
17 the people and the parties who felt aggrieved. But the
18 language is what it is and it did give me some concern, which
19 is why we're having this colloquy. But Mr. DeCarlo argues, of
20 course, that it's a necessary and important provision to
21 restore the integrity of the union, and that comes from the
22 representative of the UBC itself, which gives it a certain
23 resonance. The government goes along. Well, it's simply
24 something I think I'm going to have to reflect on.
25 Now that's all I have to put to you. If counsel wish
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 Page 37
1 to make any further submissions to me, having been inspired or
2 provoked by what has taken place up until now, I'll be glad to
3 hear you. Then, if there are any individual carpenters who
4 would like to say something, that's a practice which I've
5 followed in the past, and I'm happy to do it again. I think
6 that any carpenters here who have concern about saying
7 something should realize that while we've had an important
8 discussion this afternoon, the issue before me is a relatively
9 narrow one, should this stipulation be put into effect, should
10 the broader investigative and disciplinary and supervisory
11 provisions in it, which have been agreed to by the government
12 and the union itself, the UBC, be put into effect, and should
13 Mr. Walsh be the RO contemplated by the stipulation. These are
14 important questions, but they're rather narrow. You know, they
15 do not and cannot address everything that someone might be
16 concerned about or angry about or upset about in your world of
17 carpentry. But it's been my practice to hear anybody out
18 there, a union member who wants to be heard. And does anybody
19 want to say something? You don't have to. But if you'd like
20 to, I'd be glad to hear you.
21 Yes, I see a hand. Come forward, sir. I don't know
22 if that microphone works or not, but give it a try. And just
23 tell me what your name is.
24 MR. BILELLO: Your Honor, my name is Michael Bilello.
25 I've been a member of the carpenters union since 1975. I ran
Page 38
1 in the first district council election in 1995, which was
2 supervised by Judge Conboy and Dennis Walsh and Jack Mitchell
3 in a more hands-on fashion, and I think that they've grasped
4 what the everyday carpenter is up against more than anyone that
5 I've been involved with in this whole process. To me, I'm very
6 comfortable if they were to get this appointment. I think
7 it's -- I think it's the last chance we have, and we've been --
8 we've been through this, like you said, for 20 years. Probably
9 longer for the everyday carpenter. It's just -- you know, it
10 just went into court proceedings 20 years ago. But we need to
11 do something drastic. I think this is the answer. I think
12 it's well -- well drafted. The language about being barred
13 from running for office doesn't scare me. I've run for office
14 many times. If you have nothing to hide, there's no problem.
15 That's my feeling.
16 I mean, I have a good feeling about this. I hope you
17 approve it. I appreciate your thoughtfulness. Thank you very
18 much.
19 THE COURT: Okay. Thank you, sir.
20 Yes, sir. Come forward.
21 MR. FRANCO: Good afternoon, your Honor. My name is
22 Dan Franco. I've been a carpenter since 1989. And I too agree
23 with this appointing of the RO. I think it's a step in a
24 better direction. I think the former investigation --
25 independent investigator really hasn't done enough, in my
2010-05-20 transcript
Page 39
1 opinion. I think the former independent investigator Walter
2 Mack did a superb job, in my opinion. But the cost does
3 concern me. Having 65 to $85,000 a month plus possible
4 doubling of that per month is a concern of mine. But I do
5 agree with having the RO appointed. Thank you.
6 THE COURT: Of course. Thank you.
7 Yes, sir.
8 MR. BRENNAN: Good afternoon, your Honor. My name is
9 Brian Brennan. I'm a 26-year member of the New York City
10 District Council of Carpenters.
11 And right now, as like everybody said, morale is at an
12 all-time low. We're disgusted with a lot of things going on,
13 but we can't give up. A new face to the -- I guess the party
14 would be welcome. Thank you.
15 THE COURT: Okay. Thank you.
16 Yes, sir.
17 MR. ZEMSKI: How are you doing, your Honor. My name
18 is Mike Zemski, member of Local 2287; been a member for 25
19 years.
20 What I find interesting here today is seeing all the
21 parties agreeing and working collectively on something. It
22 gives me a lot of confidence that we can move forward here.
23 As far as the cost goes, whatever it takes to clean up
24 the union will help greatly, and I'll be very impressed by
25 that. But like I said, just to see all the parties here in
Page 40
1 agreement, which I'm sure is a very rare thing, is a very good
2 thing today, and that's what I look forward to and hopefully it
3 continues. Thank you.
4 THE COURT: It's something of a first, Mr. Zemski, if
5 you want to look at the history of the case.
6 MR. ZEMSKI: I assume so.
7 THE COURT: All right. Anything else? Anyone else?
8 All right. I'm grateful for those comments.
9 Do counsel have any further submissions they care to
10 make? Nothing from the government?
11 MR. TORRANCE: If I may, your Honor.
12 THE COURT: Oh, I beg your pardon. Certainly.
13 MR. TORRANCE: I just want to circle back. I won't
14 belabor the point because I think the Court's opening statement
15 reflects that the Court recognizes the seriousness of the
16 problems that we face here, and we share in the Court's
17 disappointment in what has happened over the past 20 years, and
18 that's why we believe that a strong stipulation is necessary.
19 I wanted to just add one thing. Your Honor recognized
20 that the indictment unsealed in August is in large part the
21 precipitating event for this stipulation. I just wanted to
22 add, as we were in this conference today, we mentioned in our
23 papers, two of the defendants have pleaded guilty, and of
24 course we believe that substantiates the indictment and also
25 offers evidence in support beyond, of course, the indictment,
Pages 37 - 40
 Page 41
1 which is not evidence but it itself is evidence. As we were in
2 this conference today, a third defendant pleaded guilty to the
3 charges in the indictment. That defendant was Finbar O'Neill.
4 Mr. O'Neill, as stated in the indictment, is a contractor and
5 was charged with, and has now pleaded guilty to, personally
6 handing cash money to Michael Forde. In his allocution, he
7 stated that he made those cash payments to Mr. Forde and other
8 union officials on behalf of On Par, on behalf of another
9 contractor called KAFCI, K-A-F-C-I, and that those cash
10 payments were in excess of $100,000, over the course of 1994 to
11 2004. So I wanted to bring that to the Court's attention. I
12 think that that, as I said, not only substantiates a pattern of
13 racketeering that has been alleged in the indictment but
14 underscores the seriousness of the problems that are faced here
15 and underscores the need for this stipulation to be entered and
16 for the strong remedies to be -- to go forward on those strong
17 remedies. Thank you, your Honor.
18 THE COURT: All right. Very good. Was that the word
19 you got on your BlackBerry?
20 MR. TORRANCE: It turns out that Ms. Zornberg showed
21 up personally. I think she has stepped out. But she came in
22 personally to inform us. But that was exactly why I had my
23 BlackBerry on. Thank you, your Honor.
24 THE COURT: I thought as much.
25 All right. Well, if there is nothing further to be

Page 42
1 placed before the Court, I will say to you all that the Court
2 reserves decision on whether or not to approve the stipulation
3 and whether or not to appoint Mr. Walsh as the RO, but I
4 recognize the circumstances and the need for prompt action. I
5 will not think about this as long as I've thought about the
6 remedy order. You'll hear from me very shortly.
7 And I'm grateful to all of you -- to counsel for their
8 excellent submissions, but also for those carpenters who took
9 the time and the effort to come and tell me what was on their
10 minds. I appreciate that as well.
11 All right. Decision reserved.
12 o0o
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2010-05-20 transcript Pages 41 - 42