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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------------ x
UNITED STATES OF AMERICA,

Plaintiff,

v.

DISTRICT COUNCIL OF NEW YORK CITY
AND VICINITY OF THE UNITED
BROTHERHOOD OF CARPENTERS AND
J OINERS OF AMERICA, et al.,

Defendants.



90 Civ. 5722 (RMB)


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Joint Memorandum in Support of Entry of the Proposed Stipulation and Order Regarding
the Appointment of an Independent Monitor

ZUCKERMAN SPAEDER LLP
Attorney for the District Council of New York City
and Vicinity of the United Brotherhood
of Carpenters

BARBARA S. J ONES
1185 Avenue of the Americas, 31st Floor
New York, New York 10036-2603
Telephone: 646.746.8838
Fax: 212.704.4256
E-mail: bjones@zuckerman.com

KAUFF MCGUIRE & MARGOLIS LLP
Attorney for Benefit Funds

RAYMOND MCGUIRE
950 Third Avenue, 14th Floor
New York, New York 10022-2705
Telephone: 212.909.0711
Fax: 212.694.1936
Email: mcguire@kmm.com
PREET BHARARA
United States Attorney for the
Southern District of New York
Attorney for the United States

BENJ AMIN H. TORRANCE
TARA M. La MORTE
Assistant United States Attorneys
86 Chambers Street
New York, New York 10007
Telephone: 212.637.2703, .2746
Fax: 212.637.2702
E-mail: benjamin.torrance@usdoj.gov
tara.lamorte2@usdoj.gov

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TABLE OF CONTENTS


BACKGROUND .................................................................................................................2

A. The J une 3, 2010, Stipulation and Order Regarding
Appointment of a Review Officer................................................................2

B. Progress Under the Review Officer’s Oversight .........................................4

1. The District Council .........................................................................4

2. The Benefit Funds ............................................................................7

C. The Need for Continued Oversight and Monitoring ..................................10

THE PROPOSED STIPULATION AND ORDER ...........................................................16

THE COURT’S AUTHORITY TO ENTER THE STIPULATION .................................19

IN THE EVENT THE COURT IS UNABLE TO DECIDE THE PARTIES’
J OINT MOTION BY J UNE 3, 2014, THE PARTIES REQUEST ENTRY
OF AN INTERIM ORDER ...............................................................................................23

CONCLUSION ..................................................................................................................24



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TABLE OF AUTHORITIES

CASES PAGE


Bano v. Union Carbide Corp.,
273 F.3d 120 (2d Cir. 2001)...............................................................................................21

City of New York v. Exxon Corp.,
697 F. Supp. 677 (S.D.N.Y. 1988) ....................................................................................21

Davis v. Blige,
505 F.3d 90 (2d Cir. 2007).................................................................................................21

Janneh v. GAF Corp.,
887 F.2d 432 (2d Cir. 1989)...............................................................................................21

Kozlowski v. Coughlin,
871 F.2d 241 (2d Cir. 1989)...............................................................................................19

McReynolds v. Richards-Cantave,
588 F.3d 790 (2d Cir. 2009)...............................................................................................21

Plaut v. Spendthrift Farm, Inc.,
514 U.S. 211 (1995) ...........................................................................................................20

Rufo v. Inmates of Suffolk County Jail,
502 U.S. 367 (1992) ...........................................................................................................20

Sierra Club v. U.S. Army Corps of Engineers,
732 F.2d 253 (2d Cir. 1984)...............................................................................................20

United States v. District Council of Carpenters,
1996 WL 221584 (S.D.N.Y. 1996) ......................................................................................3

United States v. International Brotherhood of Teamsters ("Senese & Talerico"),
941 F.2d 1292 (2d Cir. 1991).............................................................................................21

United States v. Lauersen,
348 F.3d 329 (2d Cir. 2003)...............................................................................................20

United States v. Local 1804-1,
90 Civ. 0963 (S.D.N.Y.) ....................................................................................................22


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United States v. Mason Tenders District Council of Greater, N.Y.,
No. 94 Civ. 6487 (S.D.N.Y.) .............................................................................................22

Wellman v. Dickinson,
497 F. Supp. 824 (S.D.N.Y. 1980), aff'd, 647 F.2d 163 (2d Cir. 1981) ............................21

Zhou v. Peng,
286 F. Supp. 2d 255 (S.D.N.Y. 2003)................................................................................21


STATUTES

18 U.S.C. § 1961 ............................................................................................................................20

18 U.S.C. § 1964 ......................................................................................................................19, 20

RULES AND REGULATIONS

Fed. R. Civ. P. 54(b) ......................................................................................................................20

Fed. R. Civ. P. 60 1946 advisory comm. note ...............................................................................20

Fed. R. Civ. P. 60(b) ......................................................................................................................19



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The government, the District Council of Carpenters, and the Benefit Funds respectfully
submit this memorandum in support of their joint application for entry of the proposed Stipulation
and Order Regarding the Appointment of an Independent Monitor (the “Stipulation”).
1
Dennis
Walsh, the current Review Officer, has informed the parties that he does not intend to serve in any
monitoring capacity beyond December 31, 2014, but will be available to consult with the parties,
the Independent Monitor, and the Court.
After months of careful consideration, the government, the District Council, and the Benefit
Funds agree that the continued presence of a Court-appointed monitor to oversee the District
Council and the Benefit Funds is necessary to ensure that the significant progress achieved over
the past four years under the current Review Officer is not undermined. While corruption no
longer pervades the union or the Funds, the parties expect that a continued period of supervision
will allow the reforms already in place to take firmer root in the culture of the District Council and
the Funds, from the top leadership down to rank-and-file union members, and is necessary to
ensure the effective implementation of other structural reforms that are needed to safeguard
against the resurgence of corrupt forces. Continued supervision will further allow the union,
under its recently elected leadership and under the leaders to be chosen in the election late this
year, to demonstrate that it can govern itself effectively, democratically, and in the best interests of
its members, without unlawful influence. Conversely, an abrupt end to this Court’s oversight at
this critical stage could put the achievements of the past four years and the union’s relatively new
reforms at risk.
As detailed below, the Stipulation vests the Independent Monitor with slightly reduced
oversight powers than those vested in the Review Officer pursuant to the J une 3, 2010, Stipulation

1
The Stipulation has been submitted to this Court’s orders and judgments clerk, and a
copy is attached to this memorandum for the Court’s reference.
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and Order (“the J une 2010 Stipulation and Order”). The powers, authorities, and responsibilities
vested in the Independent Monitor are designed to enable him to effectively monitor the status of
the reform efforts and take action if those efforts are in any way undermined—while at the same
time providing the union and the Funds with additional flexibility to govern themselves and
demonstrate their independence and integrity.
Accordingly, the parties respectfully urge the Court to enter the Stipulation.
Background
A. The June 3, 2010, Stipulation and Order Regarding Appointment of a Review Officer
The J une 2010 Stipulation and Order was designed to effectuate far-reaching and
long-lasting reform in response to the drastically corrupt state of the District Council at that time.
Among the numerous incidents prompting the Stipulation were drug use by former officers and
employees of the District Council, out-of-work list violations, embezzlement from local unions,
and an indictment unsealed in August 2009. That indictment—which charged the union’s top
officer, the president of its largest local, the executive director of a major employer’s association
(all three of whom were also trustees of the union’s Benefit Funds), and seven others with
extensive and longstanding racketeering schemes— resulted in guilty pleas and convictions, which
followed on the numerous other convictions involving the District Council in the preceding years.
The indictment, the convictions, the evidence behind them, the drug use, and the findings of the
United Brotherhood of Carpenters (“UBC”) pursuant to its trusteeship of the District Council
demonstrated that corruption and racketeering continued to pervade the union. See Memo. dated
J une 3, 2010, at 3-4 (Dkt. No. 990).
All parties and J udge Haight recognized that extraordinary remedies were necessary to
surmount these seemingly intractable problems. See id. at 4-5, 8. As the Court is aware, the J une
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2010 Stipulation and Order thus installed a new Court-appointed Review Officer, with sweeping
powers not only to investigate and remedy wrongdoing, but to address systemic, structural, and
cultural issues that have permitted corruption to thrive. Of note:
• The 2010 Stipulation and Order granted the Review Officer broad review and investigatory
powers and access to information, to permit him to exercise the traditional authority of
court-appointed monitors: to detect corruption and discipline the perpetrators. J une 2010
Stip. & Order ¶ 5.b–e. For example, the District Council was required to give the Review
Officer prior notice of each and every proposed expenditure, contract (except for collective
bargaining agreements), change to the by-laws, and appointment to office or employment,
see id. ¶ 5.b.i; the Review Officer was empowered to veto any action, proposed action, or
lack of action that he determined met one of a number of criteria, subject to a right of
judicial review by the aggrieved party, see id. ¶ 5.b.iii; and the District Council and Benefit
Funds were obligated to provide the Review Officer with reasonable advance notice of
their respective meetings, see id. ¶ 5.c.i.

• By their consent, the J une 2010 Stipulation and Order applied to the Benefit Funds.
2

From a corruption-eradication perspective, this was vital. The Forde indictment named as
defendants three of the Funds’ then-trustees—fully one quarter of the board—and
described how those defendants participated in the affairs of the District Council and the
Funds
3
to embezzle from and defraud the Funds; how they accepted bribes to influence
their decisions related to the Funds, particularly related to the collection of required
contributions; and how another defendant offered to have his daughter, a Funds employee,
destroy records at the Funds to cover up wrongdoing. United States v. Forde, Indictment
S3 08 Cr. 828 (S.D.N.Y.), e.g. ¶¶ 25–29, 39–40, 43–44, 77. Thus, the Review Officer’s
ability to investigate matters concerning the Funds and to assess their process for collection
of contributions was critical to preventing this type of embezzlement and, more generally,
to the elimination of racketeering for the benefit of union members and legitimate
employers.

• With an eye toward longer-term and more systemic reform, the J une 2010 Stipulation and

2
The government was and remains of the view that the Funds have been held by the
Court to be bound by the 1994 Consent Decree, 1996 WL 221584, at *4–*5 (S.D.N.Y. 1996), and
therefore should be bound by any stipulation that enforces and implements that Decree.
However, the agreement of the Funds to the J une 2010 Stipulation and Order and the proposed
Stipulation and Order (both of which the Funds expressly decline to concede that they are bound
by the Consent Decree) obviates the need for litigating that issue, and the government does not
contend in this application that the Decree applies to the Funds.
3
The enterprise defined in the Forde indictment for RICO purposes included the
same entities covered by the Stipulation: the District Council, its locals, and the Benefit Funds.
United States v. Forde, Indictment S4 08 Cr. 828 (S.D.N.Y.) ¶ 8.
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Order directed the Review Officer to conduct thorough assessments of many issues,
including the job referral rules, the electoral process, the structure of the local unions, and
the Funds’ collection processes. J une 2010 Stip. & Order ¶ 5.h. These assessments, and
the reports and recommendations they generated, were intended to (and did) allow the
Review Officer to go beyond simply purging those who would enrich themselves at the
expense of union carpenters, but assisted in reshaping the union and implementing changes
to prevent criminals from again controlling or influencing the union and stealing from its
members.

• Finally, the J une 2010 Stipulation and Order empowered the Review Officer to supervise
District Council elections, including the power to prescribe candidate qualifications and to
approve candidates, in order to prevent the perpetuation of corruption at the top level of the
union through the election of racketeers or those influenced by racketeers. Id. ¶ 5.k.

In short, the goal of the J une 2010 Stipulation and Order implemented a comprehensive
system of Court and government oversight of the union and Funds.
B. Progress Under the Review Officer’s Oversight
Exercising the powerful authorities bestowed by the J une 2010 Stipulation and Order, the
Review Officer has been largely successful in purging the District Council and Funds of corrupt
actors and instituting structural reforms designed to prevent and deter corruption from regaining
hold.
1. The District Council
Shortly after commencing work, the Review Officer observed that previous “efforts to
achieve systemic reform have been trampled by the seemingly limitless capacity of racketeers to
blithely disregard the orders of this Court and the risk of criminal prosecution as they pursue
wealth, political power, and satisfy their sybaritic yearnings.” 1st Rep. at 4. In the four years
since, with the involvement of the Review Officer, the District Council has dramatically changed
its ways of doing business, successfully implementing redundant safeguards that are specifically
designed to deter and detect corruption, and enable the union to operate much more efficiently.
For example:
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• Implementation of Multiple Internal Financial Controls. The District Council now has
several layers of meaningful financial oversight. Specifically, the union (1) hired a Chief
Accountant to oversee the day-to-day financial operations of the union; (2) retained an
independent accounting firm to perform audits, prepare all necessary Department of Labor
and IRS filings, perform quarterly reviews of the union’s internally prepared financial
statements, and identify any deficiencies in internal controls; and (3) established an Audit
Committee—comprising two elected delegates, the Inspector General, Chief Compliance
Officer, General Counsel, a representative from the UBC, and an additional independent
accounting firm—to, among other things, review District Council financial policies and
procedures to ensure best practices, check for fraudulent activities, and monitor
compliance with the by-laws. See generally 4th Rep. at 20-22; see also 5th Rep. at 15-16
(assessing initial progress); see also Declaration of Matthew Walker, Director of
Operations, dated May 27, 2014, (“Walker Decl.”) ¶¶ 11 (chief accountant), 12 (audit
committee). Moreover, all District Council expenditures are reviewed by the Chief
Accountant, the Director of Operations, and the Trustees, who must then recommend to the
Executive Committee and Delegate Body whether to approve, disapprove, or request more
information regarding each expenditure. 4th Rep. at 22; Walker Decl. ¶ 9 (discussing
numerous checks and balances regarding expenditures of union funds). According to the
Review Officer, “[f]iscal discipline and prudent budgeting have taken firm hold at the
District Council (and the local unions).” 3d Rep. at 5; see id. at 13; 4th Rep. at 43; 5th
Rep. at 24; see also Walker Decl. ¶¶ 5-8 (detailing implementation of policies to ensure
union funds are appropriately spent).

• Creation of the Office of the Inspector General. The Office of the Inspector General has
been established to conduct investigations of corruption and malfeasance involving the
District Council. 1st Rep. at 20; see also Declaration of Scott C. Danielson, Inspector
General, dated May 27, 2014, (“Danielson Decl.”) ¶ 1. The current Inspector General has
law enforcement experience and working relationships with federal and state law
enforcement, as well as experience in working on labor racketeering matters and
prosecutions with the United States Attorney’s Office for the Southern District of New
York. Danielson Decl. ¶ 3. Among other things, the Inspector General supplements the
work of the Business Representatives by conducting unannounced job site visits and citing
corrupt practices and contract violations, including manning and other compliance
violations. Id. ¶¶ 1, 5; see also id. ¶¶ 5-9 (detailing various duties and responsibilities).
The Inspector General’s Office maintains a 24/7 hotline for members and Council
employees to report concerns without fear of retaliation. See id. ¶ 5. The Review Officer
is “encouraged” by the development of this Office, 2d. Rep. at 49, while still offering
suggestions for improvement, see 7th Rep. at 19-20.

• Retention of a Chief Compliance Officer. The District Council has retained a Chief
Compliance Officer (“CCO”), who is charged with implementing and enforcing an
effective compliance and ethics program. See Declaration of F. J osiah Leicht, Chief
Compliance Officer, dated May 27, 2014 (“Leicht Decl.”) ¶¶ 1, 5-6, 8. The CCO provides
periodic compliance training to all District Council employees, see 5th Rep. at 19-20;
Leicht Decl. ¶ 7, performs audits to measure compliance with District Council by-laws,
Accounting Procedures and Human Resources Policy, and has created a “Compliance” link
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to major policy documents on the District Council website. See id. ¶¶ 5, 9-10.

• Implementation of a Human Resources Function. The District Council now has a
personnel office and Human Resources Director as well as a Personnel Handbook that sets
the rules for hiring, promotions, salary schedules, record retention, and discipline and
termination of employees. 2d Rep. at 8-9, 52; 3d Rep. at 11; see also Walker Decl. ¶ 9 &
Ex. A. Among other functions, these policies are intended to deter any corruption or
cronyism in connection with hiring and salaries.

• Overhaul of Business Representatives’ Operations. As the Review Officer noted, the
“business reps are in the front line of anti-corruption efforts at the Council,” as they are
“responsible for policing the entire jurisdiction of the Council . . . .” 7th Rep. at 8; see
also id. at 12; 1st Rep. at 36. In view of the importance of their anti-corruption role, the
Review Officer recommended overhauling business representative operations by, among
other things, (1) providing business representatives with their assignments electronically
instead of requiring them to attend time-consuming morning and afternoon debriefings; (2)
training all business representatives about all jurisdictions and all collective bargaining
agreements; and (3) partnering “specialty” representative with non-specialty
representatives. 4th Rep. at 16-17; 5th Rep. at 16-17; 7th Rep. at 7, 11-12. After a period
of inaction under the Bilello leadership, see 5th Rep. at 16-17, the District Council has
enacted the first two of these recommendations. See Tr. dated Mar. 3, 2014, at 9, 10. All
business representatives now have successfully transitioned to a remote reporting system
which captures data from job site visits on a near real-time basis, which permits timely
managerial oversight and fosters transparency. All reps are provided training in
leadership, ethics, and business practices on a yearly basis.

• Transition to Electronic Reporting at Job Sites: As the Review Officer observed, “[o]ne
of the most important responsibilities of the District Council and its Benefit Funds is to
ensure that employers pay appropriate wages to and benefits for union members in a timely
fashion. Maintaining accurate records . . . is an important tool to fulfilling this
responsibility.” 4th Rep. at 23-24. Prior to the Review Officer’s tenure, the District
Council relied upon hand-written shop steward reports to log job-site information,
including who worked on the job and the number of hours worked. 4th Rep. at 24. This
system was woefully deficient and easily exploited. 4th Rep. at 24-31. Accordingly, the
Review Officer recommended that an electronic system be used to record and transmit
job-site information in a timely fashion, pointing out that such a system would serve as an
important hedge against corruption. 2d Rep. at 50; 4th Rep. at 31-32; 5th Rep. at 9 (“It
appears to me that if the program is correctly implemented, it will represent a great leap
forward in the fight against fraud . . . .”). Since then, the District Council has
implemented a program of electronic reporting, including a feature allowing rank-and-file
members to verify the accuracy of the data captured and reported. See Dkt. Nos. 1330,
1359, 1381, 1409, 1431, 1456, 1472, 1487, 1500, 1508, 1509. This program was initially
rolled out with the Court’s oversight in connection with collective bargaining agreements
providing for so-called “full mobility,” allowing employers greater flexibility to select
union workers. See 6th Rep. at 7-8, 17-18; Dkt. Nos. 1315, 1332, 1358, 1378, 1386, 1394,
1426, 1434, 1481, 1497. While there are substantial additional technological reforms that
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need to be accomplished, the District Council has worked to ensure the accuracy of the data
collected under this program, and is expanding the program to include collective
bargaining agreements not subject to the Court’s supervision. See Tr. dated Mar. 3, 2014,
at 7, 8, 10, 13.

• Implementation of By-laws. New by-laws took effect on August 5, 2011. 3d Rep. at 5.
The by-laws “provide for unprecedented transparency and accountability of employees and
officials and an array of functions founded on best business practices.” 3d Rep. at 6; see
also 5th Rep. at 7.

As a result of all of these changes, “the business and administration of the District Council
remain on a sound footing.” 5th Rep. at 1; see also id. at 41 (“I recognize and applaud the progress
that this institution has made since the UBC supervision ended in J anuary.”). As to the presence
of organized crime and corruption, the Review Officer has determined that the District Council is
currently free of organized crime influence. 4th Rep. at 14. Virtually none of the calls placed to
the Review Officer’s hotline in recent times involve serious allegations of corruption. See, e.g.,
2d Rep. at 53; 3d Rep. at 17; 5th Rep. at 23; 6th Rep. at 14; 7th Rep. at 36.
2. The Benefit Funds
At the outset of his tenure, the Review Officer observed, among other things, that the
Funds’ workforce “has been subject to cronyism,” 1st Rep. at 5; see also id. at 51, and that the
Funds “have also suffered over the last decade from the impact of criminal fraud and the failure to
collect delinquent contributions from a plethora of contractors,” id. at 6; see also generally id. at
48-69. The Review Officer thus urged the Trustees to implement a number of reform measures,
including (but not limited to):
• Hiring a compliance officer and implementing an effective compliance and ethics program
that comports with Chapter Eight of the U.S. Sentencing Guidelines;

• Crafting and implementing a thorough document retention policy;

• Compiling and utilizing objective criteria in selecting able and efficient collections
counsel;

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• Hiring a Human Resources manager and creating a human resources department to define
employee functions and objectively hire, terminate, and monitor and assess the
performance of the employees of the Funds; and

• Upgrading the deficient IT system.

1st Rep. at 6-7; see also id. at 52; 2d Rep. at 24; Declaration of Ryk Tierney dated May 27, 2014,
(“Tierney Decl.”) ¶ 2 App. 1 (attached as Ex. B to the First Declaration of Raymond G. McGuire
dated May 27, 2014, (“First McGuire Decl.”)). The goal of this endeavor was to “implement a
system that is bigger and more powerful than any person or group of confederates who might seek
to enrich themselves at the expense of the Funds.” 1st Rep. at 54; see, e.g., 2d. Rep. at 23 (noting
that reforms are “critical hedge[s] against corruption”); 3d Rep. at 30. With the Review Officer’s
supervision, the Funds have successfully adopted each one of these recommendations, see, e.g., 3d
Rep. at 28-29; 4th Rep. at 45-51; 6th Rep. at 24-27; 7th Rep. at 36-42; see generally Tierney Decl.
& App. 1; Declaration of J ulie Block, Compliance Officer, dated May 27, 2014 (attached as Ex. D
to First McGuire Decl.), resulting in tremendous improvement in the Funds’ operations. See, e.g.,
7th Rep. at 36 (observing that the “Benefit Funds is being run professionally and a number of
important improvements are being made”); 4th Rep. at 18-19 (noting that the administration of the
Funds “continues to be greatly improved”). To take just one example, the Funds hired Virginia &
Ambinder as collections counsel to address the longstanding and critical problems regarding
collections of employer contributions (or lack thereof). As the Review Officer reports, Virginia
& Ambinder has “dramatically chang[ed] the professionalism and efficacy of collections
practices.” 3d Rep. at 34; see id. at 39-44; see also generally Declaration of Charles Virginia
dated May 27, 2014 (attached as Ex. C to First McGuire Decl.).
In addition, as the Court is aware, the Board of Trustees of the Benefit Funds is charged
with prudently managing the Funds’ assets. The Board of Trustees of the Funds are assisted in
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developing an investment strategy by Gallagher Fiduciary Advisors LLC, a large multi-national
financial services firm that oversees the investment portfolios of numerous Taft-Hartley plan
clients. See Second Declaration of Raymond G. McGuire dated May 27, 2014, (“Second
McGuire Decl.”) ¶¶ 6, 14 (attached as Ex. A to First McGuire Decl.). Specifically, the Funds
works with Frank Lily, who served as the Chief Executive Officer of the Funds’ previous advisory
firm before it merged with the Funds’ current advisory firm. Id. ¶ 7. Earlier in his career, Mr.
Lily was Chief Legal Counsel with the Department of Labor. Id.
Specifically, the Funds manage five Taft-Hartley, multi-employer fringe benefit
funds—the Pension Fund, the Welfare Fund, the Vacation Fund (which is part of the Welfare
Fund), the Training Fund, and the Annuity Fund. Id. ¶ 2. These funds are in good health.
According to the Funds’ counsel, the Pension Fund had assets of $2,492,975,025 as of December
31, 2013. Id. ¶ 4. As of the Pension Fund’s most recent actuarial evaluation, which was for the
year beginning J uly 1, 2013, the Pension Fund had assets with a market value of $2,416,857,686,
and had 10,969 active participants, 4,494 inactive vested participants, and was paying benefits to
13,366 retired participants and beneficiaries. Id. The Pension Fund is projected to be certified
under the Pension Protected Act as in the “green zone” for the year beginning J uly 1, 2014. Id.
¶ 9. Finally, the performance of the Pension Fund’s investments ranks above the median for all
Taft-Hartley funds for the trailing 1, 3, 7, and 10 year periods ending December 31, 2013. Id.
¶ 11; see also 7th Rep. at 42-43 (describing health of Pension Fund).
The Welfare Fund is a self-insured medical services plan providing benefits to an average
of 12,770 active participants and their dependents and to an average of 7,739 retired participants
and their dependents for the year ending J une 30, 2013. Second McGuire Decl. ¶ 12. According
to the Funds’ counsel, between December 31, 2010, and December 31, 2012, the market value of
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the Welfare Funds’ assets fell from $243,641,885 to $199,733,595. Id. ¶ 15. However, by J uly
1, 2013, the assets had increased to $213,095,609, and as of December 31, 2013, had risen further
to $225,150,310. Id. ¶¶ 15, 16.
As of J une 30, 2013 (the date of the most recent operating and budget projections), the
Welfare Funds’ assets represented a “‘continuation value reserve’ of 11.8 months of 2014
projected expenses.” Id. ¶ 16; see also id. ¶ 18 (projecting continuation value reserve of 11.9
months as of J une 30, 2015).
4
Based on these recent projections, the Welfare Fund is expected to
have an operating surplus for the year ending J une 30, 2014, of approximately $26,677,400. Id.
¶ 16. In terms of investment results, the Welfare Fund has outperformed its policy index in three
of the past five calendar years and is ahead of the policy index for the 1, 3, and 5 year periods. Id.
¶ 9; see also 7th Rep. at 42-43, 44 (describing condition of Welfare Funds).
5

C. The Need for Continued Oversight and Monitoring
While the District Council and the Benefit Funds have made tremendous improvements
under the Review Officer, abruptly ending oversight on J une 3 would place the entire reform
undertaking at risk.
As the Review Officer aptly observed over a year ago, “the District Council is still a
fledgling. When fully matured, it will surely soar to new heights. But now, it still faces grave
dangers from external forces and risks from within. It still has problems to solve. There is much

4
To put this in context, a broad rule of thumb is that 12 months’ reserve constitutes a
well-reserved fund.
5
As of December 31, 2013, the Annuity Fund had assets worth $1,860,257,359.
Second McGuire Decl. ¶ 2. Since the Annuity Fund is actually a collection of self-directed 401(k)
accounts managed by the account holders, the Funds’ Trustees have fewer responsibilities in
connection with that Fund. Id. The Training Fund is the smallest of the five funds and also has
adequate assets to discharge its responsibilities. Id.
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at stake, even the very future of the Union.” 5th Rep. at 39. This observation remains true today,
and succinctly states the rationale for continued oversight.
First, the District Council and Benefit Funds need time to test the long-term sustainability of
the institutional controls enacted during the Review Officer’s tenure. Through auditing and
testing, a Court-appointed officer must ensure that the reforms are in fact capable of continuing to
keep corruption and racketeering out of the union. See 7th Rep. at 1 (expressing concern
regarding the governance and fundamental business practices of the District Council); Tr. dated
Mar. 3, 2014, at 28-29 (explaining necessity of additional time to determine whether reforms are
sustainable); Declaration of J oseph Geiger, Executive Secretary-Treasurer, dated May 27, 2014,
(“Geiger Decl.”) ¶ 8 (recognizing that union needs to show that internal controls and enforcement
mechanisms will continue to function effectively); see also id. ¶ 11; Danielson Decl. ¶ 11; Leicht
Decl. ¶¶ 9-11 .
Second, more time is needed for the entire model of institutional reform to become standard
operating procedure. See Walker Decl. ¶ 13 (noting that union is “not well practiced in
self-management” and that a new monitor “with more limited oversight authority” would be a
“tremendous benefit” to ensure that reforms are “set in stone prior to release from federal
oversight”); Leicht Decl. ¶ 12 (noting that while union had made “great strides” in developing a
“‘culture of compliance,’” compliance program is still “relatively new and much work remains to
be done” to ensure compliance becomes “embedded”); see id. ¶ 10 (auditing of by-laws and
accounting manual has revealed areas of non-compliance); Danielson Decl. ¶ 12. Throughout his
tenure, the Review Officer has expressed serious concerns with the functioning of the union’s
Delegate Body, commented upon the desire of certain union members to return to outdated and
inefficient methods (methods which have been proven easily exploitable), and recognized the
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12
unwillingness of certain leaders at the District Council and Funds to embrace recommended
reforms. See, e.g., 7th Rep. at 20 (“Previous reports have documented concerns about the
democratic process at the District Council and what must be accomplished for an acceptable,
racketeering-resistant paradigm to be achieved. My concerns have not abated. As a democratic
institution, the Council has made little progress in the last two years.”); 4th Rep. at 14 (noting
desire of some union members to revert back to old ways of doing business); id. at 22-23 (noting
that delegates voted to bar rank-and-file members from attending future meetings of the delegate
body (which the Review Officer vetoed)); 5th Rep. at 2-3 (noting that Human Resources Director
of Benefit Funds was terminated for unsatisfactory progress in developing the human resources
program and hiring colleagues who were acquaintances rather than through best practices); 6th
Rep. at 19 (noting that former EST demonstrated “no interest” in implementing recommended
reforms regarding business representatives). Yet for this endeavor to succeed, the importance of
vigilant compliance and forward thinking needs to be institutionalized at all levels of the union and
Funds. Much of the progress is at risk if members do not take seriously their responsibility to
ensure adherence to the institutional controls and thoughtfully consider how to improve upon
them. See, e.g., 3d Rep. at 5, 6 (noting risks); id. at 11 (“The apathy of so many members serves
only to enable those resolute few who will always seek some selfish advantage when no one is
paying attention.”); 5th Rep. at 1 (recognizing that while “the business and administration of the
District Council and Benefit Funds remain on a sound footing,” identifying “member apathy” as
one of the “serious challenges” facing the union); id. at 3-4 (noting delegates are unprepared and
not well informed to meaningfully participate in Delegate Body meetings to the detriment of
protecting their constituents); 7th Rep. at 20-21 (describing problems with delegate body
governance).
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13
Third, there are additional critical structural reforms that still need to be implemented. Most
importantly, on September 16, 2013, the Review Officer filed a motion with the Court with the
goal of requiring the union to adopt his recommendations regarding the improvement of the
union’s IT system and its business practices. See Dkt. No. 1397. Significantly, both
recommendations are “imperative steps in insulating the District Council from corruption and
racketeering.” 7th Rep. at 4; see id. at 5-7 (detailing recommendations). While the District
Council has made some headway in effectuating these recommendations, see, e.g., Tr. dated Mar.
3, 2014, at 2, 4, 9, 10, substantially more remains to be done, see, e.g. id. at 8-9 (estimating two
years to complete IT upgrade); see also Geiger Decl. ¶¶ 9, 10 (acknowledging that “a lot of work”
needs to be done on these tasks, and that the continued guidance of a monitor “is essential” to the
process). Each of these projects, when completed, will provide transparency in the conduct of the
business of the union and enhance the anti-corruption compliance initiatives already begun. In
particular, business protocols will provide each department of the District Council with sound
policies and best practices to follow, thus providing a roadmap for management. The IT program
will aid in performing and monitoring the compliance measures of the District Council. This will
include timely electronic reporting of job hours to more efficiently detect discrepancies with
employers’ time keeping and delinquencies in benefits payments. The presence of a
Court-appointed officer for continued guidance and assistance as these critical efforts are moved to
final implementation is essential. See Geiger Decl. ¶¶ 9, 10; see also Leicht Decl. ¶¶ 11, 12
(identifying additional areas where presence of Independent Monitor would be “particularly
helpful”); Danielson Decl. ¶ 11.
Fourth, while organized crime no longer has influence in the District Council, they have
made attempts throughout the past four years to regain a foothold in the union. See, e.g., 3d Rep.
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14
at 12 (“Organized crime, predominantly through the Genovese family (though other families
continue to have interests and ‘turf’) remains active in its efforts to corruptly influence the District
Council and particularly some of its local unions.”); 4th Rep. at 3 (“The specter of organized crime
continues to loom large over all aspects of the construction industry in New York City.”); id. at 4
(while “[t]he District Council and its local unions have been purged of such associates and agents,
. . . because there is so much money at stake, the obsession of the Genovese family with the work
of the Carpenters and its membership has not abated”); id. at 8 (noting that potential rival union
was formed to “facilitate the restoration of the Genovese family’s control of the industries
currently served by the District Council”); 5th Rep. at 11 (“I also note that I continually collect
information regarding a small number of members suspected of having ties to Cosa Nostra. I
routinely forward information to law enforcement agencies . . . .”).
Indeed, even at present, the Review Officer continues to investigate attempts of racketeers to
infiltrate and exercise control in the District Council. 7th Rep. at 18. Ceasing judicial oversight
of the union and Funds at this critical juncture unduly risks facilitating organized crime’s reentry
and undoing all of the hard work of the past four years. Indeed, the past history of corruption in
this union has shown that unless institutional controls are fully realized and engrained in union and
Fund operations, organized crime and other corrupt elements will reassert control. See, e.g., Dkt.
No. 990, at 2; 5th Rep. at 1 (identifying challenges that need to be addressed “with the knowledge
that any failure will likely be exploited by opportunistic racketeers and their associates.”);
Danielson Decl. ¶ 12 (opining that presence of a monitor will deter those seeking to undermine
reform effort).
The District Council and Funds are at a critical juncture. While the institutional controls
in place are still fairly new, neither the union nor the Funds has had the benefit of continuous
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15
leadership.
6
Indeed, another round of union elections is scheduled to take place later this year.
The leadership may change over yet again to individuals either unfamiliar with the new ways of
conducting business or unwilling to commit to them. With a new leadership regime comes new
risk. As the Review Officer recognized,
The last, best hope for the happy future of this Union will be lost forever if democracy
hands the keys of this house over to charlatans, buffoons, or minions of a caporegime in the
Genovese family, without having built it upon a foundation of the surest granite.

2d Rep. at 2; see also Walker Decl. ¶ 14 (recognizing that having a monitor in place to vet potential
candidates “to ensure that the District Council continues to develop in the right direction is
critical”); Danielson Decl. ¶ 12 (observing that results of next election cycle “may well be critical
to the continued commitment to compliance and reform”).
With corrupt elements waiting to exploit any opportunity to regain influence in the union
and the Funds, safeguarding the gains made is of paramount importance. It is important that the
next round of elections be supervised and that the newly installed regime commence leadership
under the oversight of a Court-appointed monitor. See 6th Rep. at 3 (“[C]ompliance must be
embraced and indeed trumpeted by the ‘leadership’ of the Union in order for it to take hold.”).
Undeniably, there has been a tremendous investment in reform by the government, the
District Council, the Funds, and the Court. This progress made must be protected. The parties’
agreement reflects their recognition that notwithstanding significant improvements, it is simply

6
The District Council has seen three ESTs in the past four years, including Frank
Spencer (as the UBC’s trustee), Michael Bilello, and J oseph Geiger. 4th Rep. at 9, 11; 6th Rep. at
3; see also, e.g., 5th Rep. at 1-2 (President resigned upon receiving Notice of Possible Action from
the Review Officer pertaining to lying to the Review Officer). The Benefit Funds have had three
Executive Directors in the past four years, including Stuart Grabois, J oseph Epstein, and Ryk
Tierney. See 2d Rep. 14, 19-20; 3d Rep. at 27; 6th Rep. at 22-23. Partly as the result of the
turnover in the union’s leadership, there has also been substantial turnover among the Funds’
Trustees. See, e.g., 2d Rep. at 13-14.
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16
too soon to proceed without the benefit of a Court-appointed monitor.
The Proposed Stipulation and Order
The proposed Stipulation and Order is carefully calibrated to provide the Court-appointed
Independent Monitor with the powers and authorities necessary to guide the union through its
continued development and implementation of important initiatives while ensuring that corrupt
influences remain at bay. Indeed, the parties’ Stipulation only modestly reduces the powers of the
Independent Monitor from those vested in the Review Officer by the J une 2010 Stipulation and
Order, in ways calibrated to allow the union to operate independently and to demonstrate its ability
to accomplish its mission lawfully and with integrity. See Geiger Decl. ¶ 11; Walker Decl. ¶ 13;
Danielson Decl. ¶ 11. The Stipulation also updates the J une 2010 Stipulation and Order to take
into account events that have transpired during the Review Officer’s term. Material differences
between the J une 2010 Stipulation and Order and the proposed Stipulation and Order include:
• Whereas Clauses. The “Whereas” clauses have been modified to acknowledge that
numerous reforms have been implemented during the Review Officer’s tenure, and that the
parties agree that the continuing presence of a Court-appointed monitor, albeit with more
limited oversight authority, is advisable. See also Stip. ¶ 4.c. (noting that appointment of
the new monitor is intended to permit the union and the Funds to demonstrate the
fulfillment of the Stipulation’s goals and to permit the monitor to ascertain whether the
goals set out in the Stipulation, the J une 2010 Stipulation and Order, and the 1994 Consent
Decree have been attained).

• Appointment of Glen G. McGorty as the Independent Monitor. The parties share the view
that Glen G. McGorty of the law firm Crowell & Moring would serve as an excellent
Independent Monitor. Currently, Mr. McGorty is consulting with a port terminal operator
on a project involving the implementation of compliance protocols and anti-corruption
reforms in an international labor union. And as a former AUSA in this district, he has
substantial experience in investigating and prosecuting federal crimes, including organized
crime, money laundering, and RICO enterprises. The Stipulation provides that beginning
on J une 4, 2014, the Review Officer will begin the process of preparing for the transfer of
his duties and responsibilities to the Independent Monitor, and that the Independent
Monitor will assume the authority provided in the Stipulation on September 30, 2014 (the
“transition date”). See Stip. ¶ 3. Notwithstanding this transition date, the Independent
Monitor will exercise all authority over elections pursuant to paragraph 5.j. of the
Stipulation. Stip. ¶ 3.c.
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• Review and Oversight Authority. In accordance with the Court’s Order dated March 17,
2014, which eliminated the Review Officer’s authority to receive prior notice of certain
District Council activities (expenditures, contracts (except collective bargaining
agreements), proposed appointments to office or employment, and proposed changes to the
by-laws and other rules, policies, or practices), the Stipulation retains those modifications.
Stip. ¶ 5.b.i. As to the Benefit Funds, the Stipulation continues to allow review of all of
the Funds’ expenditures and investments, but includes the proviso that the Independent
Monitor, in exercising such authority, will not question the Funds’ reliance on advice
provided by retained investment professionals, unless he has reason to believe that the
Funds’ reliance on such professionals is “tainted by corruption or other improper
influences.” Stip. ¶ 5.b.ii.(1). This proviso simply makes express the understanding that
while the mission of the Court-appointed monitor includes instituting structural reform and
purging corrupt influences, it does not otherwise include making substantive investment
decisions best left to financial experts. Finally, in lieu of the Review Officer’s powerful
authority to veto actions he determines meet certain criteria, see J une 2010 Stip. & Order
¶ 5.b.iii., the Stipulation expressly provides that a meet-and-confer type process take place
before any petition to the Court. Specifically, if the Independent Monitor determines that
a matter reviewed meets one of the listed criteria, he shall notify the union or Funds, as the
case may be, and the relevant entity then has five days to provide a response. In the event
the Independent Monitor does not receive a timely response, or receives a response but
nonetheless determines that a reasonable basis for the action (or lack thereof) has not been
established, he may petition the Court to take appropriate corrective action. See Stip.
¶ 5.b.iii.

• Access to Information. While the Independent Monitor retains the authority to attend all
District Council meetings, the Stipulation no longer provides the authority to attend all
meetings of the Benefit Funds. Stip. ¶ 5.c.i. This change is consistent with the Review
Officer’s positive assessment of the Funds’ governance.

• Investigative Powers. While the Stipulation grants the Independent Monitor all of the
investigatory powers possessed by the Review Officer, this section is modified to require
the Independent Monitor to provide notice of any interview or deposition to the District
Council through its counsel, unless doing so would be prejudicial to the investigation.
Stip. ¶ 5.d.i. In that case, the Independent Monitor must provide the Court and the
government with his justification for conducting the interview or deposition without such
notice. Id. This modification to the J une 2010 Stipulation and Order is intended to help
effectuate the District Council’s transition to full self-governance.

• Disciplinary Authority. The J une 2010 Stipulation and Order charged the Review Officer
with ensuring that the District Council develop, implement, and maintain fair and effective
disciplinary procedures, and set out a timeline for doing so. See J une 2010 Stip. & Order
¶ 5.f. The Review Officer has successfully done so. See Stip. ¶ 5.f.; 7th Rep. at 33.
Accordingly, this section is revised to empower the Independent Monitor to ensure the
District Council continues to implement the adopted disciplinary procedures in a fair and
effective manner. Stip. ¶ 5.f.
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• Litigation Authority. The authority to authorize the initiation of civil actions on behalf of
the District Council to recover damages arising from any actions within the monitor’s
authority has been removed. See J une 2010 Stip. & Order ¶ 5.g. The power—which had
never been exercised by the Review Officer—was deleted to accord the union more
autonomy to effect self-governance.

• Assessments, Changes, and Recommendations. The J une 2010 Stipulation and Order
directed the Review Officer to make a number of specific assessments, see J une 2010 Stip.
& Order ¶ 5.h., which he has fully accomplished. In light of the fact that the District
Council and Benefit Funds have implemented a number of structural reforms, the
Stipulation requires the Independent Monitor to periodically assess these reforms, as well
as to examine the union’s progress in implementing its IT upgrade and enhanced business
practices and procedures. See Stip. ¶ 5.g.

• Supervision and Conduct of Elections. As noted previously, the Independent Monitor is
empowered to supervise all phases of any union election conducted by the District Council
during his tenure. Stip. ¶ 5.j. However, because election rules and procedures have
already been drafted and incorporated into the union’s by-laws, the Independent Monitor
(unlike the Review Officer) is not charged with proposing any election rules and
procedures, although he is empowered to assess the existing rules’ effectiveness and
recommend changes. Stip. ¶ 5.j.vi. In addition, unlike the J une 2010 Stipulation and
Order, the proposed Stipulation and Order specifies a list of factors that preclude approval
of a member for candidacy, if the Independent Monitor determines, in his final and
non-reviewable discretion, that one of the factors applies. Stip. ¶ 5.j.iv. In sum, these
factors are (1) the member is not eligible to run pursuant to the UBC Constitution; (2) the
member is prohibited from holding office pursuant to the Labor-Management Reporting
and Disclosure Act; (3) the member fails to demonstrate basic knowledge of the position
sought and the basic competence necessary to perform the duties of the position; and (4)
the member’s service as an officer of the union or in any other elected position of the union
was previously vetoed by the Review Officer for a violation of the J une 2010 Stipulation
and Order or the 1994 Consent Decree; or the member was found by the union’s Trial
Committee to have committed any such violation; or there is clear and convincing evidence
that the member has committed such a violation—absent clear and convincing evidence of
rehabilitation. Stip. ¶ 5.j.iv.(4). With the exception of the fourth factor, these factors
essentially codify the primary reasons that the Review Officer has vetoed potential
candidates for office. Notably, these factors are not exhaustive and do not otherwise limit
the Independent Monitor’s discretion to supervise elections. See Stip. ¶ 5.j.iv.

• Records Retention. As the District Council and Benefit Funds have developed records
retention schedules under the Review Officer, the Independent Monitor may simply
request that the union and Funds notify him prior to the destruction of any record or
category of records. Stip. ¶ 5.k.

• Reports to the Court. The Stipulation requires the Review Officer to file a final, closing
report to the Court on or before December 3, 2014. Stip. ¶ 5.l.ii. As was required of the
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19
Review Officer, the Independent Monitor may report to the Court in his discretion, but
must file written reports no less than every six months. Stip. ¶ 5.l.iii.

• Toll-Free Hotline. The Independent Monitor must maintain the toll-free hotline
established by the Review Officer. Stip. ¶ 6. The J une 2010 Stipulation and Order’s
provisions regarding the Independent Investigator preceding the Review Officer have been
deleted as irrelevant.

• Compensation & Hiring Authority. Pursuant to the Stipulation, the District Council is
responsible for continuing to pay the Review Officer and Independent Monitor for
specified work done before and after the transition date. Stip. ¶ 8.b.ii., iii. Consistent
with the Review Officer’s budget, the expenses of the Independent Monitor are presumed
to be approximately $75,000 per month. Stip. ¶ 8.b.i.

• Term. The term of the Independent Monitor is 18 months, effective on the transition date.
Stip. ¶ 8.c. The government is expressly permitted to petition the Court to reduce the
Independent Monitor’s powers or end his tenure if the union has achieved compliance.
Stip. ¶ 8.c.ii. If the government makes that same determination with respect to the Benefit
Funds, in consultation with the Independent Monitor, then the Independent Monitor’s
authority over the Funds “will cease,” subject to reinstatement upon a petition by the
government to the Court. Stip. ¶ 8.c.iii.

• Modification of the June 2010 Stipulation and Order. Provisions regarding modification
of the J une 2010 Stipulation and Order have been deleted as no longer applicable.

• Miscellaneous Provisions. Miscellaneous provisions concerning the authority of the
UBC Trustee and the amendment of the by-laws to conform with the J une 2010 Stipulation
and Order have been deleted as obsolete.
The Court’s Authority to Enter the Stipulation
As recited in the Stipulation, the Court has the authority to enter the agreement by virtue of
any or all of the following: the Court’s inherent power, including the inherent power to enforce
compliance with the Consent Decree and the J une 2010 Stipulation and Order; Fed. R. Civ. P.
60(b); and RICO’s remedial provision, 18 U.S.C. § 1964. Indeed, both the Court’s authority to
enter the Stipulation, as well as the advisability of the Stipulation itself, are uncontested.
With respect to the 1994 Consent Decree, “[i]f a federal court can validly enter a consent
decree, it can surely enforce that decree.” Kozlowski v. Coughlin, 871 F.2d 241, 244 (2d Cir.
1989). The Consent Decree, among other things, contained a permanent injunction against acts
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20
of racketeering as defined in 18 U.S.C. § 1961, which in turn incorporates the federal criminal
prohibitions on various types of fraud, bribery, embezzlement, obstruction of justice, and
violations of labor law. Here, the Stipulation is part of the government’s continuing effort to
remedy past acts of racketeering brought to light in the 2009 Forde indictment and ensure that they
do not recur, and thus enforce the injunctive provisions of the Consent Decree. Indeed, the
Stipulation expressly states that the Independent Monitor’s powers include the authority to “ensure
compliance with the injunctions set forth in the Consent Decree,” Stipulation ¶ 5.a; requires
violations of the Consent Decree to be reported to the Review Officer, ¶ 5.e.i; and in numerous
other places refers to achieving or furthering the objectives of the Decree, e.g., ¶¶ 4.a, 4.c, 5.g,
5.j.iv, 8.c.ii, iii, 11.e. The Decree itself, of course, was a settlement of a RICO action and thus
was grounded in the Court’s statutory authority to impose equitable remedies under 18 U.S.C.
§ 1964; that same authority permits the Court to act again to address racketeering, as alleged in the
Forde indictment, by extending the Decree’s remedies as spelled out in the Stipulation. Finally,
Rule 60(b)—which “reflects and confirms” the Court’s inherent power to modify judgments, Plaut
v. Spendthrift Farm, Inc., 514 U.S. 211, 233–34 (1995)—applies to consent decrees, and
implements a “flexible” standard for modifying them. Rufo v. Inmates of Suffolk County Jail, 502
U.S. 367, 378, 380 (1992).
In addition, with respect to the effect of the Stipulation on prior orders of the Court,
particularly the J une 2010 Stipulation and Order, the Court has the power to modify those orders in
the manner set out in the Stipulation. Unlike the Consent Decree, which as a “final” order is
subject to restrictions on modification, a non-final order is “subject to the complete power of the
court” to modify or vacate it. Fed. R. Civ. P. 60 1946 advisory comm. note; accord Fed. R. Civ.
P. 54(b); United States v. Lauersen, 348 F.3d 329, 338 (2d Cir. 2003); Sierra Club v. U.S. Army
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21
Corps of Engineers, 732 F.2d 253, 256–57 (2d Cir. 1984); Zhou v. Peng, 286 F. Supp. 2d 255,
260–61 (S.D.N.Y. 2003).
Under these authorities, the Court should enter the Stipulation. There is a “strong judicial
policy in favor of settlements.” McReynolds v. Richards-Cantave, 588 F.3d 790, 803 (2d Cir.
2009) (internal quotation marks omitted); Davis v. Blige, 505 F.3d 90, 104 (2d Cir. 2007). One
reason for that policy is to avoid needless and costly litigation, thus promoting both “financial and
judicial economy.” Bano v. Union Carbide Corp., 273 F.3d 120, 129–30 (2d Cir. 2001) (internal
quotation marks omitted); Janneh v. GAF Corp., 887 F.2d 432, 434–35 (2d Cir. 1989) (under
“strong judicial and public policies favoring out-of-court settlement . . . costs of litigation are
reduced and crowded dockets are relieved”), abrogated on other grounds, 511 U.S. 863 (1994).
The Stipulation here achieves that, avoiding possibly substantial litigation over such issues as the
need for further enforcement of the Decree and the J une 2010 Stipulation and Order, and the effect
of the Decree on the Benefit Funds. In addition, the presumption in favor of settlement is
particularly strong where, as here, “‘a government agency committed to the protection of the
public interest’ has participated in and endorsed the agreement.” City of New York v. Exxon
Corp., 697 F. Supp. 677, 692 (S.D.N.Y. 1988) (quoting Wellman v. Dickinson, 497 F. Supp. 824,
830 (S.D.N.Y. 1980), aff’d, 647 F.2d 163 (2d Cir. 1981)). The public interest here in strong
anti-corruption, anti-racketeering measures is undeniable and of paramount importance. United
States v. Int’l Bhd. of Teamsters (“Senese & Talerico”), 941 F.2d 1292, 1297 (2d Cir. 1991)
(“public has a compelling interest in eliminating the public evils of crime, corruption, and
racketeering in union activity”).
Indeed, other courts in this district have relied upon these authorities to modify orders and
consent decrees in a manner similar to that being proposed here, i.e., reducing the power of a
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22
court-appointed monitor in light of progress achieved by the supervised union, in recognition of
the union’s fragile state and the concomitant risk that corrupt elements will resurface. For
example, in United States v. Mason Tenders District Council of Greater N.Y., No. 94 Civ. 6487
(S.D.N.Y.), a civil RICO action culminating in a consent decree appointing a monitor to oversee
the union, its Executive Board, and the union’s trust funds, the court-appointed monitor
determined that the union and its constituent locals had made “excellent progress” in achieving the
purposes of the consent decree, which included the elimination of corruption and organized crime
and running the union and funds in a democratic manner. See Order dated February 4, 1999
(attached as Exhibit A to the Declaration of Tara M. La Morte, dated May 27, 2014 (“La Morte
Decl.”)). However, recognizing that “in the experience of the Government, organized crime often
attempts to reassert its influence into enterprises from which it has been removed,” and that the
parties sought “to further the purposes” of the consent decree and “protect against the infiltration
of corruption and organized crime influences,” the court entered a supplemental consent decree to
enable the union and funds to continue to consult with a court-appointed officer about the
operations of the union for a period of three years. Id. While the court-appointed officer’s
powers were reduced from those granted by the original consent decree, compare La Morte Decl.
Ex. A with id. Ex. B, the officer retained significant authority to monitor the affairs of the union
and funds and ensure that corrupt elements did not reemerge. See La Morte Decl. Ex. A. And in
United States v. Local 1804-1, 90 Civ. 0963 (S.D.N.Y.), another civil RICO action culminating in
the appointment of a court-appointed Administrator to oversee ILA Local 1588, the court modified
its order appointing the Administrator to extend the Administrator’s term for an additional 18
months, while eliminating the Administrator’s veto authority in light of the union’s progress under
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23
the monitorship. See Order dated December 8, 2008 (attached as Exhibit C to the La Morte
Decl.).
The proposed Stipulation advances the public interest with the government’s endorsement.
Moreover, both the union
7
and the Benefit Funds have agreed to the Stipulation to advance the
shared interest in ensuring the eradication of racketeering. For those reasons, the Stipulation
should be approved.
In the Event the Court Is Unable to Decide the Parties’ Joint Motion by June 3, 2014, the
Parties Request Entry of an Interim Order
As the Court is aware, the term of the Review Officer under the 2010 Stipulation and Order
is scheduled to expire on J une 3, 2014. In the event the Court is unable to reach a decision on the
instant application by that time, the parties respectfully request that the Court enter the enclosed
interim order.


7
On May 22, 2014, the delegates voted overwhelmingly to approve the proposed
Stipulation and Order. There was only a single “no” vote.
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24
Conclusion
For all those reasons, with the consent of the parties and the Benefit Funds, the Court should
enter the Stipulation.
Respectfully submitted,


Dated: New York, New York
May 27, 2014

Dated: New York, New York
May 27, 2014


ZUCKERMAN SPAEDER LLP
Attorney for the District Council

By: /s/ Barbara S. Jones
BARBARA S. J ONES
1185 Avenue of the Americas, 31st Floor
New York, New York 10036-2603
Telephone: 646.746.8838
Fax: 212.704.4256
E-mail: bjones@zuckerman.com

KAUFF MCGUIRE & MARGOLIS LLP
Attorney for Benefit Funds

By: /s/ Raymond McGuire
RAYMOND MCGUIRE
950 Third Avenue, 14th Floor
New York, New York 10022-2705
Telephone: 212.909.0711
Fax: 212.694.1936
Email: mcguire@kmm.com

PREET BHARARA
United States Attorney for the Southern
District of New York
Attorney for the United States

By: /s/ Tara M. La Morte
BENJ AMIN H. TORRANCE
TARA M. La MORTE
Assistant United States Attorneys
Telephone: 212.637.2703, .2746
Fax: 212.637.2702
E-mail: benjamin.torrance@usdoj.gov
tara.lamorte2@usdoj.gov




Case 1:90-cv-05722-RMB-THK Document 1522 Filed 05/28/14 Page 28 of 28