Office of Dennis M.

Walsh The Review Officer 90 Civil 5722 (SDNY)
15 Chester Avenue White Plains, NY 10601 914.437.9058

Decision Regarding the District Council Trial Committee

In my Fourth Interim Report to the District Court filed on June 4, 2012, I remarked on the performance of the District Council Trial Committee (“TC”), finding it to be a “scrupulously fair forum.” I said that its administrative functions were “ably and tirelessly performed” by Mr. Mack’s office. I expressed my gratitude to Walter Mack and James Zazzali for their zeal, commitment and steady shepparding of the Trial Committee. However, based on my familiarity with then-recent undertakings and actions of the TC, I did for the first time criticize the operation, saying I must note for the record that I do have some concerns. The TC is not federal court and it is not an arbitration forum; its chairman and vice chairman are not arbitrators deciding controversies which otherwise might have been brought to a court of law. They are principally responsible for meticulously applying the TC Rules and administering the system. The TC is an internal union forum no different in status or function than any other trial committee in any other jurisdiction of the UBC (albeit with special rules in light of the District Council’s history of corruption). Of necessity, there are two aspects of the TC which will have to be addressed in the near term: the cost of its operation (which is over $500,000 per year) and the requirement of strict adherence to the TC Rules (which far exceed the standards of fairness established by the LMRDA and the UBC Constitution) and the simple precepts upon which the Rules were founded. Fourth Interim Report at 13-14. These matters have not improved since then. On September 26, 2012, the Delegate Body of the District Council overwhelmingly approved a plan presented by District Council Director of Operations Matthew Walker to


drastically reduce the costs of the TC by restoring responsibility for its administration to the District Council, limiting the number of regularly-scheduled sessions to twice per month and by paying a flat fee of $3,000 to the presiding officer for attending any such session. The Memorandum prepared by Mr. Walker is attached hereto as Exhibit 1. On the next day, September 27, 2012, I met with Walter Mack, James Zazzali, District Council Inspector General Scott Danielson, District Council Advocate Josh Leicht, and District Council General Counsel James Murphy, to discuss the Walker Plan. Among other matters discussed, I asked Mr. Mack and Mr. Zazzali to respond in writing to the Walker Plan. They did so via email on October 9, 2012. See Exhibit 2. I also met with Messrs. Mack and Zazzali on October 3, 2012. Among other subjects of our discussion, they said that they would lower their annual fees from $162,000 (paid to each) to $75,000 each. On both occasions they expressed strong dissatisfaction and deep concern that they had not been consulted by Mr. Walker. They also questioned whether the District Council had sufficient personnel on staff to handle the administration of the TC (for which Mr. Mack receives an additional $8,000 per month, plus copying charges and mailing costs). They expressed their strong commitment to the program and their opinion that it was fair and a benefit to the membership. I emphasized my expectation that the TC Rules be strictly applied, that their practice of both attending all TC sessions was never intended to occur and that the District Council faces the prospect of financial difficulties which might result from pending litigation matters. I do not view the budget and compensation provisions set forth in the Walker Plan as violating the District Council’s obligation to adequately fund the Trial Committee pursuant to Section 25 of its Bylaws. However, the Walker Plan does not adequately address all compensation and scheduling issues which will arise if the present TC Rules are kept in place.


For example, the scheduling of a third session each month should not be in the discretion of the Executive Secretary-Treasurer (and proposes no rule for him to apply in considering the necessity of additional sessions), and does not provide for a method to compensate a presiding officer if called upon to perform his or her function pursuant to TC Rule 13.B.2 (requiring a review of the record and a judgment independent of the panel’s verdict). The Role of the Trial Committee As I said in my Fourth Interim Report, the TC is an internal union forum no different in status or function than any other trial committee in any other jurisdiction of the United Brotherhood of Carpenters and Joiners of America (“UBC”). Its rules (The District Council Charge and Trial Procedures, or “TC Rules”), which I drafted and implemented in consultation with the UBC, go into greater detail than Section 52 of the UBC Constitution and were drafted to insure fairness in matters presented by the Review Officer (for example, by providing for a right to counsel and the safeguard against juror nullification provided by Rule 13.B.2) as well as in matters undertaken after the tenure of the Review Officer. The District Council Trial Committee is in no way analogous to the Independent Review Board established by the Consent Decree in the Teamsters matter, or even to the Independent Hearing Panels once in place in this matter. See the Consent Decree in U.S. v. District Council at Sections 4.b, 4.c and 6. Appeals of TC verdicts are heard exclusively by the UBC, not the District Court. TC Rule 17. The Necessity of Strict Adherence to the TC Rules Before and after I filed my Fourth Report in June, there have been occasions where the Rules of the Trial Committee have either been misinterpreted or simply not been applied. For example, (1) the Rules clearly intended that the Chairman and Vice Chairman would alternate in presiding at sessions (and that the attendance of the other at off sessions was never


contemplated); (2) the Rules make it plain that the TC and persons participating in its proceedings do not have subpoena power or power to compel attendance or disclosure of any material; (3) the UBC Constitution, which is expressly referenced in the TC Rules, does not contemplate bifurcation of proceedings by adjudging guilt in one session and sentencing a defendant in another (with a multi-week time lag in between proceedings); (4) the TC Rules strictly state who may deliberate and do not allow for non-panel members to be present for deliberations; (5) the TC Rules do not contemplate panel members being summoned for duty when no trial has been scheduled; and (6) TC Rule 13.B.2 defines the procedure and standard to be applied when a party moves for a review of the record by the presiding officer and requests that a judgment contrary to a panel verdict be entered. Despite the foregoing, the TC Rules have too frequently not been applied, to the detriment of the process and participants, and at the financial expense of the District Council. See the District Council Charge and Trial Procedures dated July 30, 2010; Section 52 of the UBC Constitution; the Decision of Messrs. Mack and Zazzali dated July 10, 2012, attached as Exhibit 3; and the Decision of Messrs. Mack and Zazzali dated October 3, 2012, attached as Exhibit 4). The Erosion of Decorum Since the adoption of the Walker Plan by the delegates, the relationship between the presiding officers of the TC and the District Council (principally in the form of the Inspector General and the Advocate) has deteriorated. Decorum, the sine qua non of properly conducted professional matters, has deteriorated. There has been a lack of respect demonstrated by both sides. See e.g., the two emails attached as Exhibits 5.a and 5.b. The Authority of the District Council and Review Officer in the Present Circumstance


The current Trial Committee Rules have been in place since July 30, 2010. They are incorporated by the District Council Bylaws implemented by the District Council in August 2011. Section 25 of the Bylaws requires that the operation of the TC be sufficiently funded so that the District Council’s “Charge and Trial Procedures are continued and maintained in full force and effect.” Section 4.A of the TC Rules provides that the Chairman and Vice Chairman may be replaced upon the agreement of the District Council and the Review Officer. Section 13.D of the TC Rules contains a similar provision. The District Council may amend its Bylaws upon the initiative of local unions after a special convention of the delegates is held in which proposed changes are ratified; consent to implement an amendment must then be obtained from the Review Officer, the government and the General Vice President of the UBC. Separately, Section 5.f.v of the Stipulation and Order entered in this matter (United States v. District Council, et al., 90 Civ. 5722) on June 3, 2010, states that “if the Review Officer determines, in his sole and unreviewable discretion, that the disciplinary process as it is being conducted by the District Council is not fair or effective, the Review Officer may require the District Council to make whatever changes the Review Officer determines are necessary.” The Current Rules and Consideration of UBC Constitution Section 52 Procedures and Rules I have also considered whether it would be best for the District Council trial process to return to the rules and procedures stated in Section 52 of the UBC Constitution. I have discussed the prospect of this with various officials of the District Council, including Executive SecretaryTreasurer Michael Bilello and Vice President Michael Cavanaugh. The District Council officials strongly support such a prospect, and view it as an opportunity to demonstrate that the District Council is a law abiding and compliant institution capable of conducting its affairs appropriately.


Although I concur with the view that the District Council must aspire to autonomy in the administration of its business, I noted in my discussions with District Council officials that certain safeguards would be required in order for any such plan to be considered and implemented. I asked that a memorandum summarizing the system and the safeguards be sent to me for review. The memorandum, from District Council Inspector General Scott Danielson, is attached as Exhibit 6. The safeguards for such a program would include the use of a licensed attorney -- familiar with the due process requirements of the LMRDA -- as the chairman contemplated by Section 52 and quarterly written certifications of the Chief Compliance Officer of the District Council that he has reviewed the Section 52 system as utilized by the District Council and found it compliant with the UBC Constitution, LMRDA due process requirements, and that it is effective in achieving the objectives of the Stipulation and Order. The costs of such a program would be far less than the current system and consistent with those projected in the Walker Plan. Conclusion Section 4.a of the Stipulation and Order states “the responsibility of the District Council to (i) take all reasonable steps to eliminate criminal elements, criminal activities, racketeering and corruption from any part of the District Council and its operations; (ii) maintain and run the District Council democratically and without unlawful influence; and (iii) comply with and work in good faith to achieve the terms and objectives of this Stipulation and Order.” The District Council should be given an opportunity to demonstrate that it is capable of meeting its responsibilities. The fair and effective running of a charge and trial program based on the rules and procedures of Section 52 of the UBC Constitution would help demonstrate such progress.


Having given due consideration to all of the foregoing, pursuant to Section 5.f.v of the Stipulation and Order, I find that the disciplinary process as being conducted by the District Council is not effective, that its costs are excessive and can be drastically reduced and that -with the safeguards delineated in the Danielson memorandum -- the District Council should have the opportunity to run the charge and trial program pursuant to the strictures of Section 52 of the UBC Constitution. Accordingly, the District Council is directed to establish a charge and trial program as described in the Danielson memorandum by Friday, November 30, 2012. The current charge and trial system and TC Rules will remain in place until then. Any trial which has already begun (i.e., in which any opening statement has been made) must be finished under the present system and rules. All participants and responsible persons must work in good faith to fulfill their obligations and to effect an orderly transition. The new District Council charge and trial system will maintain the 24 rank and file members of the Trial Committee who will continue to serve in the new system. Dated: October 31, 2012 Dennis M. Walsh Review Officer