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UNITED STATES DISTRICT COURT


SOUTHERN DISTRICT OF NEW YORK
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UNITED STATES OF AMERICA,

Plaintiff,

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v.
DISTRICT COUNCIL, et al.,

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90 CV 5722

Defendants.
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New York, N.Y.
November 19, 2014
11:00 a.m.

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Before:
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HON. RICHARD M. BERMAN,


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District Judge
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APPEARANCES
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PREET BHARARA
United States Attorney for the
Southern District of New York
BENJAMIN TORRANCE
Assistant United States Attorney

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REVIEW OFFICERS:
BY: DENNIS WALSH
BRIDGET ROHDE

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ZUCKERMAN SPAEDER, LLP


Attorneys for District Council
BY: BARBARA JONES
THERESA LEE
SPIVAK LIPTON, LLP
Attorneys for District Council
BY: JAMES M. MURPHY
KAUFF McGUIRE and MARGOLIS, LLP
Attorneys for Benefit Funds
BY: RAYMOND McGuire
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(Case called; in open court)

THE COURT:

I originally thought it was a good idea to

meet the staff as it were.

I didn't realize at the time how

big the staff was.

I would do -- I have gotten your helpful agenda in terms of

talking to people -- is use your agenda.

Mr. Geiger, we'll start with you.

questions.

some gist or point that each of you wishes to make, do that

They are certainly welcome.

So, for example,

I have a couple of

I have read everybody's affidavit.

I am happy to hear it.

What I thought

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first.

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Mr. Geiger, who is the executive secretary treasurer of the

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District Council.

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Nice to meet you.

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MR. GEIGER:

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THE COURT:

Just that.

If there is

So how about

I think we met before.

Yes, your Honor.


So I note from your affidavit that you are

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a long-time member of the council and/or local union and now

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are in the position of executive secretary treasurer.

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a full-time position as I understand it; right?

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MR. GEIGER:

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THE COURT:

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That is

That is correct.
So you go first and then I have a couple

of questions after you.


MR. GEIGER:

First of all, I would like to thank you

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for having us here today to meet you and speak before you.

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think the District Council is in a much better place than it

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was four to five years ago.

I believe we've demonstrated that

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over the last couple years with the help of the RO and his

staff.

this day and age and we plan on continuing that and building

off what we have learned over the last two years.

honor to be here in front of you today.

most of the staff of the District Council here, the heads of

all departments, managers and directors here.

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We exemplified the way the council should be run and

THE COURT:

It is an

As you see here I have

I am not entirely clear of the setup.

are the top of the pyramid in terms of staff.

You

Below you or who

reports to you?

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MR. GEIGER:

Basically I have the director of

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operations underneath me, Matt Walker, who is here as well who

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will be speaking before you.

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managers.

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assistants.

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as Steve McGuinness who is the president of the District

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Council.

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Then you have your regional

I also an assistant to the EST -- I have two


Mike Cavna who is also the vice-president as well

They all fall underneath me.


THE COURT:

Those are a matter of elected positions or

appointments?
MR. GEIGER:

As far as being an assistant to the EST,

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those are appointed by myself.

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a duly elected office.

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Council and executive committee as well.

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THE COURT:

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MR. GEIGER:

President and vice-president is

They are offices of the District

They are full-time positions?


Assistant to the EST is a full-time

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position.

The position of president and vice-president --

THE COURT:

MR. GEIGER:

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Those are part-time.

They run the

meetings, delegate meetings of the District Council.


THE COURT:

So you have elections coming up in

December?

MR. GEIGER:

THE COURT:

MR. GEIGER:

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Those are part-time?

That's right.
Those are for what positions, yours?
For the EST, president, vice-president,

three trustees, warden and conductor.

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THE COURT:

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MR. GEIGER:

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THE COURT:

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MR. GEIGER:

Their terms?
For a three-year term.
Everybody is for a three-year term?
That's correct.

I took over in

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February 2014.

I took over for the last year of Mike Bolo, who

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had been vetoed.

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Fortunately this December I will be running unopposed.

I fulfilled the last year of his term.

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THE COURT:

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MR. GEIGER:

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unopposed.

That was going to be my next question.


Myself and the vice-president is running

We do have an election for the president spot.

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THE COURT:

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MR. GEIGER:

Who is unopposed.
Myself and Mike Cavna, who is the

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vice-president of District Council, and the trustees and

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conductor are running unopposed.

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president position.

We have an election for the

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THE COURT:

MR. GEIGER:

There are more than one candidate?


Just the president -- current president

Steve McGuinness and an individual 926 Local out of Brooklyn,

Sal Saglafarri.

THE COURT:

MR. GEIGER:

THE COURT:

MR. GEIGER:

THE COURT:

The voting, how does that happen?


Through a mail-in ballot.
It is all paper ballot?
Is it all paper ballot through the mail.
Has the mail-in date --

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MR. GEIGER:

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I believe next week.

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will be calculated the third week of December.

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THE COURT:

Everything has been set.

Ballots go out

They have to be in by mid-December.

All right.

They

I was going to wish you good

luck but...

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MR. GEIGER:

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THE COURT:

Thank you.
So you said that you've seen this some

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changes over the last four years.

I am sure you are referring

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to the period of the Ford presidency, which was somewhat

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disastrous in terms of criminal indictments, etc.

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rehash but it has always struck me and I never really

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understood how -- if you have an opinion about this and you may

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not -- that was able to happen even under the supervision of

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the trusteeship so to speak?

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over the union and it still happened.

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that able to occur?

So not to

We had people in place looking


How in your opinion was

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MR. GEIGER:

Well, it was more less like an inner

circle, the past regime.

They didn't have the robust internal

controls that they have today.

office back then.

have been implemented over the last couple years that were

never in place under the old regime.

place and all the internal controls and having a director of

operations, which by the way I want to mention he was a formal

major of the State Police of New Jersey.

We didn't have a robust IG's

There are a lot of various departments that

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THE COURT:

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MR. GEIGER:

With the safeguards in

I noticed that.
I think we are in a much better position

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with the safeguards in place today than we were four or five

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years ago under the old regime.

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THE COURT:
place?

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MR. GEIGER:

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THE COURT:

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You think there is greater transparency in

Absolutely.
So if there was something to go on, it

would be more easily uncovered?

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MR. GEIGER:

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THE COURT:

Yes.

Easily uncovered.

Why do you anticipate based on your

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experience with Mr. Walsh, whose term ends in December, what do

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you anticipate your relationship would be with Mr. McGorty, who

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takes over so to speak.

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MR. GEIGER:

Pretty much the same relationship that I

currently have with the review officer Dennis Walsh.


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I would

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like to continue the relationship with Glen McGorty as the

incoming monitor.

of his staff.

that have taken place over the past week or upcoming things and

preparing for certain situations.

open dialogue in our open meetings.

We have weekly meetings with the RO and some

We have open dialogue.

THE COURT:

We talk about things

We have good, constructive,

I am aware also that you have on your

staff a general counsel, a person who is called general

counsel.

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MR. GEIGER:

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THE COURT:

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MR. GEIGER:

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THE COURT:

Yes.
That is a full-time job?
Full-time, yes.
So how does that person fit in with your

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relationships with outside counsel and also with the monitor or

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the RO?

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MR. GEIGER:

That would be Mr. James Murphy.

He is an

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essential part the District Council as well sitting on various

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meeting of compliance.

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other week with the CCO, Josh Leicht, as well as RG, and the

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assistant EST and Mr. Murphy sits on them as well.

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lot of planning and policy-making going on at these meetings.

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THE COURT:

We also have compliance meetings every

There is a

My last question is what needs still to

occur or what are your objectives, goals for your next term?
MR. GEIGER:
create more manhours.

Some of the main objective goals is to


Outside of the past practices and the

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past corruption, we need to sustain our compliance measures and

also in order to do that have a robust department and council

staff we need to create more hours.

run by the amount of manhours that come in with the assessments

paid by the membership.

Without those manhours, we would be doomed.

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THE COURT:

The council is generally

That is exactly what runs the council.

You are essentially talking about the

health of the industry?


MR. GEIGER:

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THE COURT:

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MR. GEIGER:

The health, the market share.


And how is that?
Every day seems to be an ongoing struggle

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with the nonunion sector.

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able to sustain what we actually have, that piece of the market

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share, and create new and innovative ways to gain more of that

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market share.

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robust organizing department.

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McWilliams, who is doing a fine job with his staff and are

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going out each and every other day talking to the nonunion

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sector, talking to the contractors and various associations to

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create a partnership to see how we can go about gaining more of

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the market share.

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We have to keep chipping away to be

Every day is a constant struggle.

THE COURT:

We have a

We have our director here.

Ed

Your share of the market has gone up gone

down historically.

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MR. GEIGER:

It has gone down.

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steadily each and every year.

It has been decreasing

There were certain structures

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that were stronger with the prevailing wage.

market and the residential area, we are losing more and more of

those every day.

THE COURT:

MR. GEIGER:

THE COURT:

MR. GEIGER:

Nonunion, yes.
Those are my questions.

If you have any

I am here to answer any questions you

have now or later.

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THE COURT:

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MR. GEIGER:

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THE COURT:

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MR. WALKER:

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THE COURT:

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council since 2011?

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MR. WALKER:

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THE COURT:

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It is nonunion.

for me, I am happy to answer any.

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But the private

Thank you very much.


Thank you for having me.
Matt Walker.
Good morning, your Honor.
Good morning.

So you've been with the

That's correct.

March 2011.

Just tell us briefly what did you do

before that.

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MR. WALKER:

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Jersey State Police.

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major.

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Turnpike and Garden State Parkway.

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officer, which was the number two supervisor in charge of 2,000

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enlisted members of the New Jersey State Police.

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Prior to that I was a member of the New


Upon my retirement I achieved the rank of

I was a troop commander in charge of the New Jersey

THE COURT:

I was also the executive

Mr. Walker, tell me your role where it

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fits in vis-a-vis Mr. Geiger.

director of operations.

is that correct?

MR. WALKER:

For example, I am are also

Sounds like chief operating officer;

Pretty much, your Honor.

I am there to

assist and conduct day-to-day operations of the union.

Most --

all but two entities also fall under the supervision of

director of operations and then the the Inspector General's

Office and organizing departments.

oversight from my office.

Every other department has

I am there to assist the EST in his

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day-to-day operations.

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union and the fact that I am in there is to make sure

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compliance and that we follow the rules and regulations.

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think the very important thing over the last four years that

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I've seen is a culture change.

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force people to follow the rules, but I have actually seen the

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culture of the individuals working at the council and

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individuals that would like to work at the council through

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interview process, I have noticed there is a culture change and

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people do want to do the right thing and they are not simply

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doing it because they have to.

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to sustain what we want to do moving forward.

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THE COURT:

And I think most importantly for the

And I

We have the rules and you can

I think that is very important

In terms of the management of the council,

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do you get applications over the transom or do you look for

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people when you need them or how?

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MR. WALKER:

One of the changes that have been

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implemented since 2010 when the review officer was there is a

personnel policy.

people, how we discipline people and how we would fire them.

There is a very stringent interview process.

director of human resources that none of these things existed

prior.

functions is to make sure that process is followed and it is

proper.

they would go through an application process and eventually an

It very thoroughly details how we hire

We follow that process to the T and that is one of my

The membership would apply with the resume and then

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interview process.

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the executive committee.

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Ultimately the process is approved by the

THE COURT:

Did you mention one of the two principal

functions that reports to you is organizing?

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MR. WALKER:

They are the only two that don't, your

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Honor.

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the Inspector General.

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There is a

Organizing in the area of standard component and also

THE COURT:

I was also curious you discussed in your

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affidavit there had been a fleet of cars.

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that they were luxury cars, what kind of fleet of cars does the

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District Council have?

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MR. WALKER:

Apart from the fact

When I got there it was kind of a patch

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meal but I would say high-end luxury vehicles.

The amount of

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the leases were pretty startling to me.

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that we had a standard fleet obviously in the state police and

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I was familiar what those leases costs.

I came from a place

So that is when we

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changed from the cars that we had to a standard fleet of

Chevies, Chevrolets and Ford vehicles and we maintain that to

this this day.

other things there was no standardization of the parking for

the facility.

we prepaid for that now and it saves the council 40 percent of

what they were paying in the past.

It cost the cut significantly.

Within the six months we had that finalized and

THE COURT:

MR. WALKER:

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One of the

THE COURT:

How many union cars are there?


Approximately 60.
Is it is a perk or because people need

to --

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MR. WALKER:

It's both.

I wouldn't say distributed

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perk.

The hours of the District Council sometimes is 5:30 in

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the morning until 9:00 or 10:00 at night.

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to come and go and to respond to everything, I consider that

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not really a perk but a necessity.

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agents within the organizers, Inspector General's Office of

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investigations.

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is for sure.

To ask these people

Also, we have business

There is a need for vehicles at council that

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THE COURT:

What is your view of what needs to occur

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yet at the District Council?

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improvements need to be made at District Council?

What kind of changes or

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MR. WALKER:

I think it is certainly an easy thing to

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say would be sustainability.

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Specifically I feel that our new IT program is going to bring a

I think that is an obvious one.

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tremendous amount of assistance to the Council and to the

membership.

efficient but it is going to make the efficiencies of each

department that much greater.

number one project that we have going on now is to get that up

and running and I think we're well on our way to that happening

with a new IT manager and two members of the staff in-house at

this point implementing the changes from the vendor that we

hired.

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I think it is going to not only be more cost

I think that is probably the

It is up and running and they are already testing

certain portions of that.


Another very important component that I think we are

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implementing is the communications department to keep the

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membership notified.

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and within a few months I have seen a tremendous upgrade the in

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communications between in-house and all the membership.

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have implemented a new process now for mass robocalls and

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e-mails, text messaging, social media, the website.

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is the only thing holding us back there.

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IT program up and running, it will be enhanced more.

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communications director we have is very efficient and really

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into the union and the betterment of the union.

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her in charge, we're really going to be in good shape.

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THE COURT:

We hired a new communications director

We

And time

When we get this new

Up and running means what?

The new

I think with

Where is it in

terms of up and running?


MR. WALKER:

With communications the website is live,

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which has been for a while now.

She posts all the news on there.

Facebook, Twitter accounts that are being used every day.

put up things like rallies, picket duties up there and news of

the Council.

is we have hired a vendor that provides us with mass robocalls,

e-mails and texts messaging so we can get the messages out to

the members when important things come in.

working very well.

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It's pretty much day to day.


Also we have a social media.

The other entity that we have up and running now

THE COURT:

That seems to be

The positions you described as District

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Council, what is the entire staff of the District Council?

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many people does District Council employ?

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MR. WALKER:

North of 100.

So 120.

out-of-work lists, personnel, business agents, organizers.

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Soup to nuts.

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workers.

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Since then a lot of them have become permanent.

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dwindling that down to have a permanent workforce.

We did have a large percentage of temporary

That was the avenue that we had to bring workers in.

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THE COURT:

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MR. WALKER:

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How

That includes

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We

We're

Would you say it is 125 or less or more?


Yes.

It is about 120, but it goes up and

down, your Honor.


THE COURT:

I think that's really all I had in mind

unless you had something further I should know about.


MR. WALKER:

The one thing I would like to let you

know, your Honor, is over the last few years we had democratic
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election and we had an EST and the officers elected.

A lot of

things have happened since that time.

happy to be working with the people I am.

that they have there overcoming the obstacles.

to the industry, I am not here to negotiate a contract and

teach you hot to put drywall up in a building.

have seen is a turnaround in these individuals and their

dedication.

work with every day and it has been impressive to me.

I am really proud and


I see the dedication
As someone new

But what I

I was shocked at the dedication that they come to


They

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have gotten all the contracts signed.

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They are increasing manhours as we speak.

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measures, there is really not much resistance to any of the

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measures.

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will be bad.

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don't fight the things that I ask them to do or things that I

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remind them of.

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They are moving along.


The compliance

They actually take part in what will be good, what


They have certainly accepted me in my role and

So I just would like to say I think we're definitely

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going in the right direction.

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curveballs thrown at us, an arbitration with the NWA, which is

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tremendous, a whole new electronic reporting process with

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millions of dollars of devices and training shop stewards and

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that seems to be working.

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overcome and I don't see any reason any future obstacles cant

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be overcome.

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THE COURT:

We had a couple devastating

A lot of obstacles are being

So the election is largely uncontested as

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it were?

MR. WALKER:

THE COURT:

With the exception of one position.


Is that a good thing or a bad thing?

Does

that mean people are happy with the slate or is it bad because

there is apathy and people don't want to run?

MR. WALKER:

I think it is a good thing.

I think they

are happy with the slate.

opportunity to put up any opposition to the slate.

that they are happy and they see that the Council is moving

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They have had more than enough


I think

forward.

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THE COURT:

What kind of enthusiasm or participation

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do you get from members for programs that you're implementing

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and also for the officers of the District Council?

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MR. WALKER:

I think the programs that I spoke about

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in communications is increasing every day.

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out to volunteering and to be involved in the text messages and

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notification.

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way to go.

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officer of the union the full-time reps and the membership they

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want to work together and get more participation from the

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membership.

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on.

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The word is getting

It is not what we want it to be.

That is another plus.

It has a long

I know from speaking to the

That is one thing that I think everybody agrees

THE COURT:

I know others will speak, but do you have

any role with the benefit fund at all?


MR. WALKER:

No.

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THE COURT:

MR. WALKER:

THE COURT:

MR. DANIELSON:

THE COURT:

MR. DANIELSON:

THE COURT:

Thank you very much, Mr. Walker.


Thank you.
Scott Danielson, Inspector General.
Good morning, your Honor.

How are you?


Good.

So you've been at the Council for how

long?

MR. DANIELSON:

I've been a member of Local 257 in

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1981.

So I've been a member of the Carpenters Union.

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third generation carpenter.

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carpenters.

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of Carpenters Local at 257.

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taken over by the international.

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the District Council at that point.

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We went through mergers of various locals.

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Convoy was the review officer at that point.

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the out-of-work list to the District Council for I think 11

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locals at that point.

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out-of-work centralized work list.

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Convoy left in 2000.

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our own.

My father and grandfather are also

In 1995 I became the elected financial secretary


In 1996 the District Council was
I was recruited to work up at
I was pulled out of local.
That is when Judge
He centralized

I became in 1997 the supervisor of that


At that point then Judge

We had an election.

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THE COURT:

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MR. DANIELSON:

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I am a

Then we were back on

When did Walter Mack come in?


I will get to that.

Eventually the

District Council had their own anticorruption committee.


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It

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was run by an in-house security company, Barry Security.

that point then Walter Mack was appointed by the Court, Judge

Haight, as an independent investigator.

and at that point I worked along with Walter Mack because of my

law enforcement background.

investigations.

committee and at one point then his tenure ended and Bill

Callahan from Unitel was appointed as and II.

from that point and we've continued the program as it was.

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At

Walter Mack came on

I assisted him in his

We continued to built up an anticorruption

He took over

At that point we unfortunately had the indictments of

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the District Council personnel, business agents, members of the

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benefit fund trustees, also the trustees of the union.

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that point the RO is brought in.

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first.

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trustee and then through I guess negotiating with the U.S.

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Attorney's Office Dennis Walsh was appointed review officer.

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At that point we started a mini program of our own under Frank

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Spencer investigating certain jobs at the end of Mr. Callahan's

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tenure.

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Dennis Walsh and the International and have held that position

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to this day.

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And at

Well, International came in

In 2009 UBC by Frank Spencer came in as the union

At that point I was named the Inspector General under

THE COURT:

So how did it work?

Your investigations,

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how do they get triggered and then what do you do with the

24

results of your investigation?

25

MR. DANIELSON:

Well, we have an 855-UBC tips hotline.

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Any member can call or e-mail and we'll take that complaint and

then we investigate it.

including myself and including staff.

utilized retired carpenters as inspectors.

They work in groups of five.

week.

individuals.

check between 500 and 700 one- and two-person jobs per month.

That is their main focus.


steward.

11

out.

13
14

Also as you are aware I


I have 20 of those.

I put out five inspectors every

As reports to the Court reflect, we check those

10

12

I have a 11 full-time personnel,

They focus on one- or two-person jobs.

They do check jobs with a shop

I have my inspectors.

And we also do compliance.


THE COURT:

They

Investigators, they that go


We monitor.

The investigator goes out because they are

sent out?
MR. DANIELSON:

Well, they go out for two reasons.

15

Sent out on a complaint.

16

Pat Kennedy will dispatch our investigators to a site.

17

in our daily activity we do compliance business.

18

generated by myself with Pat or the investigator based on

19

activity and the out-of-work list.

20

list and we will send our investigators to go spot checks for

21

compliance.

22

compliance check if we are in a building and see other

23

contractors, we'll make those checks also.

24
25

We also

That is

We monitor the out-of-work

Also when we're investigating a complaint or

THE COURT:
Interview?

Myself or my Deputy Inspector General

When you investigate, what do you do?

Interviews?
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MR. DANIELSON:

They will do interviews, field

interviews.

send out summons to the member to come down do District Council

after working hours and we bring them in an interview room and

we have a process.

and we use those to where they can file grievance against

companies or for us to file an investigation for internal

charges.

9
10
11

We also have informal interview process where we

We take sworn statements in that process

THE COURT:
with you?

If you take the next step, who does that

Does Mr. Walsh or will it be Mr. McGorty?

MR. DANIELSON:

It is a two-prong process.

We do a

12

lot of stuff internally.

I have worked with Dennis Walsh.

13

Anything that arises to the occasion of high-level corruption

14

or organized crime, I always made the referral to Dennis.

15

some cases Dennis did it on his own and sometimes we did some

16

together to a point.

17

charges, I or my staff filed union charges and put it through

18

our own system --

Right now if there is any internal union

19

THE COURT:

20

MR. DANIELSON:

What is that system?


The trial committee.

We have three

21

attorneys that are chairs in that process and the actual

22

jurors, if you will, are carpenters.

23

under UBC constitution or the District Council bylaws.

24
25

THE COURT:

In

So I can file charges

If you do, you send a notice of what the

charges are, or is that what you do or somebody else does?


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MR. DANIELSON:

We will do an accusatory statement

similar to a criminal charge.

We give it to the -- actually

Mack Walker oversees the trial process.

It gets formalized.

It gets numbered and a letter gets out.

We do a first reading.

If you can put it in a criminal way, it is an indictment.

The

member comes in.

He

can plead guilty to them at that point.

on a calendar for trial and we go under the UBC constitution

for the trial process.

It is a process.

10

THE COURT:

11

MR. DANIELSON:

12

that they can bring an attorney.

13

Dennis Walsh files the charges.

14

THE COURT:

He hears the charges.

If not, he will be put

Can he bring a lawyer?


No.

Only if the RO has that provision


An attorney can come in if

So if he, Dennis Walsh -- I am familiar

15

with that -- interviews somebody that person can come to that

16

process with an attorney?

17

MR. DANIELSON:

18

THE COURT:

19

MR. DANIELSON:

20

THE COURT:

21

MR. DANIELSON:

22

THE COURT:

23

MR. DANIELSON:

Correct.

But not in -No.

Then the trial committee makes a ruling.


Yes.

For example?
For example, they basically come out

24

with fines or letters of reprimand.

25

comes out of that.

That is basically what

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THE COURT:

Do people go along with their decision?

MR. DANIELSON:

can get expelled from the union.

THE COURT:

MR. DANIELSON:

THE COURT:

MR. DANIELSON:

THE COURT:

MR. DANIELSON:

There is an appeal process.

They also

They could?
Yes.

By the trial committee?


Yes.

And what happens if they want to appeal?


They can appeal to the UBC and then

10

there is a process under the UBC constitution.

11

first vice-president of the UBC.

12

they want to take it to the next level, it goes to the next

13

general convention.

14

THE COURT:

15

MR. DANIELSON:

16

THE COURT:

17

THE COURT:

23

Not very often.

decisions of the trial committee, that's it?

19

22

If

Is it fair to say that most of the

MR. DANIELSON:

21

They make a decision.

Does that happen very often?

18

20

It goes to the

Yes.

Are most of the decisions in the nature of

a fine or a reprimand?
MR. DANIELSON:

Yes.

We do have the extreme cases

though for expulsion.


THE COURT:

So it sounds to me from what you said that

24

you have a pretty robust staff.

25

investigations?

Are there lots of

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MR. DANIELSON:

There is a fair amount of complaints.

We also clear shop stewards.

THE COURT:

MR. DANIELSON:

What might be a typical complaint?


A job is not called in.

We will get a

confidential caller saying, I know somebody is working 395

Hudson Street on the 12th floor and it is three carpenters

working and it doesn't have a shop steward.

technique they use, we'll find out.

would file a grievance against the contractor for violating the

Depending on the

And say that is true, we

10

CEA and then a hearing for that process.

11

membership can and brought up on charges through the UBC

12

constitution or the District Council bylaws.

13

use the grievance procedure.

14

THE COURT:

15

That is -- the

Contractors will

So that would happen -- this is a naive

question -- because the contractor wants to pay less or why?

16

MR. DANIELSON:

There could be many reasons.

They

17

could want to pay under scale or they just want to use their

18

personnel and they don't want a shop steward.

19

over two persons, both CBAs, and you have to have a shop

20

steward.

21
22

THE COURT:

And the CBA is

Is that a quality control function or not

really?

23

MR. DANIELSON:

Not really.

There are carpenters and

24

there are better carpenters, but it is a collective bargaining

25

issue.

It is non-debatable.
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THE COURT:
there.

Got it.

Then you have a lot of experience

How do you think things are going?


MR. DANIELSON:

I think things are going good.

The

problem -- not a problem.

Prior to before the new bylaws were

written there was really no rule or rhyme how the processes

worked.

personnel policy and we have the bylaws and now it is a lot

about process.

that is what we're working off of.

By that I mean you heard Mr. Walker speak about the

Everybody understands these are the rules and


It is a culture change not

10

only to the membership but District Council employees.

11

Everything has checks and balances.

12

Officer Josh Leicht.

13

There is a whole process how to do your weekly time sheets.

14

The whole process that was done prior to that, there was no

15

process taking days off.

16

now they are all -- there are all checks and balances and there

17

has been no resistence from any employee at District Council.

18

This gives me powers to investigate personnel, which is a good

19

thing.

20

staff know who to report to and even the membership.

21

You have compliance

I am the deputy compliance officer.

There was no drug testing.

There is checks and balances.

So right

If there is a problem,

I know you asked the question to Mr. Walker, How did

22

this happen.

Well, I interviewed hundreds, probably thousands

23

of carpenters over the years through Walter Mack, Bill Callahan

24

and Dennis Walsh's tenure.

25

people said there was so much corruption because they first of

Going back prior to Dennis Walsh,

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all didn't trust anyone and they didn't know who to call.

with the implementation of Operation Watchdog, members can

check his or her hours from the privacy of their own home and

it gives them two options what they can go.

crew size and hours of all brothers and sisters on the work

staff.

a button and send an e-mail to the IG's office and they will

investigate.

could call the review officer.

10
11

Now

They can check the

And if they do see something, right away they can push

Or you have the 855-UBC tips hotline or they


It gives options so members

don't have any excuses.


Years ago people said they used to call the local

12

unions and call nonunion jobs in or CBA violations and they

13

were never checked and they just lay there.

14

the reasons why prior to an indictment there was three to five

15

business agents that were part of the indictment.

16

nightmare.

17

District Council.

18

there was corrupt individuals running the organization, write

19

it up in a complaint.

20

have an IG.

21

compliance officer.

22

when there is a problem and there are people responsible to do

23

that job.

24

supposed to do and what I am supposed to look for.

25

a compliance officer that reviews all the processes on a

That is probably

It was a

Also, we had trustees for the benefit fund and


So if members, feel and they always thought

So now you have a system in place.

You have director of operations.

You

You have a

You have a direct roadmap of what to do

I have a job now that is detailed of what I am

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3
4

regular basis.
THE COURT:

Do you think that has given rise to, A,

more formalized complaints and more confidence?


MR. DANIELSON:

Yes.

People thanked us when we first

came on the job.

Our goal is the same day as the next day.

also had the investigators working late tours.

Saturdays.

Saturdays and Sundays.

getting someone to come check it out.

We work

We work nighttime, late afternoons into the night,

10

THE COURT:

11

MR. DANIELSON:

So when a member calls up, they are

Great.

Where do you see this all going?

I see it going good.

I welcome Glen

12

McGorty coming on.

I look forward to working with him.

13

think we need the constants what Dennis has left us with.

14

need to keep that in place and move forward.

15

some increase in staff, which I will hopefully next year work

16

with the EST to accomplish that.

17

support staff to get involved with more forensic activity and

18

getting involved with the back room investigations.

19

him and I spoke to Mat Walker and hopefully we can check the

20

budget and work toward that goal.

21

THE COURT:

22

MR. DANIELSON:

23

THE COURT:

24

MR. LEICHT:

25

THE COURT:

We

I did ask for

I feel I need some more

I spoke to

Thank you so much.


Thank you, sir.

Josh Leicht.
Yes.

Is it Leicht?

Good morning month, Judge.

Good morning.

How are you?

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MR. LEICHT:

I am good.

I am Josh Leicht, Chief

Compliance Officer for District Council.

I have been in the

position since it was created by the new bylaws in 2011.

Although, I began I think late 2010 it was.

history, I am an attorney.

for 10, 12 years.

organized crime task force.

construction industry strike force both in racketeering and

corruption in the construction industry.

As far as my

I was a prosecutor with the state

When I was with New York, it was in the

10

THE COURT:

11

MR. LEICHT:

I was appointed to the

When was that?


1988 to 1996 I believe.

I joined the

12

School Construction Authority Inspector General's Office where

13

I was counsel for criminal matters.

14

stint and then I went into --

15

THE COURT:

16

MR. LEICHT:

17

THE COURT:

18

'96 to '98?
Roughly.
The School Construction Authority was that

Howard Wilson?

19

MR. LEICHT:

It was Howard Wilson at the time.

20

worked with the IG's Office.

21

Pope.

22

That was about a two-year

THE COURT:

It was Toby Thatcher and Peter

Josh, how do you relate to these different

23

positions of IG, general council, compliance officer?

24

that's you.

25

Is there overlap?

MR. LEICHT:

Well,

I am not quite understanding.

Absolutely.

I don't see -- good business

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and good compliance are the same things.

closely -- particularly closely with the IG's Office.

an everyday basis with the director of operations, with the

EST, with the various department leads to the extent we need to

interact.

that way to work.

7
8

So I work very
But on

But it is a broad based thing and it needs to be

THE COURT:

Do you meet on a regular basis all of you?

Is there a weekly or a --

MR. LEICHT:

Joe Geiger has instituted a biweekly

10

compliance meeting where I believe as Matt described as Joe and

11

the other elected officer, the director of operations, the IG,

12

myself and again counsel.

13

staff meeting where people can get together and find out what

14

is happening.

15

THE COURT:

16

MR. LEICHT:

Joe has also implemented a biweekly

Is that a broader group?


Yes.

That is department leads.

We also

17

established a compliance committee that meets on a quarterly

18

basis.

19

representative.

20

We talk about any incidents that happened in the past few

21

months, any training issues, and just generally discuss what

22

needs to be done and how things are going with respect to

23

compliance in the organization.

24
25

That is comprised of EST or his designated


That is also comprised of department leads.

THE COURT:

You get tips of noncompliance, or do you

do your own proactive evaluations and investigations?


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MR. LEICHT:

I put together audit plans and for the

major policies, bylaws, personnel policy, accounting manual.

have done reviews of some of the other policies to see how they

are working.

me.

think it should be.

THE COURT:

MR. LEICHT:

Sometimes people lodge complaints directory with

Frankly, more often it is with the IG's Office, which I

Yes.
I work very closely and I think what

really makes my position I think able to function well is that

10

I work very closely with the IG's Office.

11

compliance officer.

12

work.

13
14
15

THE COURT:

Scott is the chief

That is really what helps make it all

How do you relate during the tenure of

Mr. Walsh and going forward with Mr. McGorty?


MR. LEICHT:

It has been an interesting process for me

16

because I have mostly served as an independent monitor.

I am

17

now inside an organization that learned a lot now -- well,

18

without going on about that, I worked closely with Dennis.

19

has great insight on the organization, not only from his term

20

as the RO but from his experience prior.

21

very closely with Mr. McGorty going forward.

22

important for me and the organization.

23

things that need to be done and I think he will be helpful in

24

how we get it done.

25

THE COURT:

He

I envision working
I think it is

I think there are

What are the big-ticket items that need be

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done in your opinion?


MR. LEICHT:

In my view, look, we're all talking about

sustainability and we have worked under the current bylaws and

so the other rules and procedures we put in place for four

years give and take now.

compliance to have a sustainable compliance program, that the

rules make sense, that they are workable and that they adapt

appropriately to the business to allow the business to

function.

I think it is very important for

Effectively it could also of course adapt.

In

10

addition to continuing to embed the compliance message, to get

11

it down to the stewards and members and build up what people

12

have been discussing as a culture of compliance and convince

13

people that it is real, I think we need to now look at the

14

rules as we've been operating under them and make sure they are

15

still fit for our purpose.

16

to evaluate it and see what needs to be changed and then go

17

through the process to change it.

18

to be critical in helping us do that.

19
20
21

THE COURT:

Great.

To the extent they are not, we need

I think Mr. McGorty is going

I don't have any further questions

unless you have something further you want to share with me.
MR. LEICHT:

The only thing I would add is that when I

22

left being a prosecutor, my view of the Carpenters Union was

23

probably the most -- one of the most corrupt, if not the,

24

organizations in the New York labor market.

25

about it much until I rejoined as the chief compliance officer.

I didn't think

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And I have to tell you I was surprised at how dedicated the

officers and the employers of the District Council are.

very pleased to be working with them and I think we're all

committed to doing the right thing and making sure the union

fulfills its purpose and everything it does is for the members

and organization.

deeply committed today.

THE COURT:

Is it Ryk?

That is the mantra.

10

MR. TIERNEY:

11

MR. WALSH:

I am

I believe everybody is

Thank you very much.

Ryk Tierney.
Your Honor, from Raymond McGuire, counsel

12

to the fund, Mr. Tierney and Ms. Block have put together a few

13

documents, which they will be referring to.

14

the bench and hand it up.

15
16
17

THE COURT:

If I can approach

Mr. Tierney, this is in addition to your

statement that your declaration that you sent?


MR. TIERNEY:

Yes, your Honor.

It includes a copy of

18

our current organizational chart, the compliance ethics policy,

19

and communications, the new newsletter that we sent out on a

20

quarterly basis to communicate to the participants of the fund.

21
22
23

THE COURT:

So your communications -- you have a sort

of parallel to the District Council or your own communications?


MR. TIERNEY:

We have our own communications

24

coordinator and he is responsible for the quarter newsletters

25

that go out, the revamped website, our Facebook page, and all
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the required communications that we have under regulations to

get out to the participants of the fund.

3
4

THE COURT:

Great.

So you came on board in 2013.

What is your background before then.

MR. TIERNEY:

Sure.

For the past 20 years I have been

involved in labor management relations.

I started out of the

service as a union president at Chemical Workers 217 in

Baltimore.

third-party administrator where I got my benefits

Coming out of that position I went to work for a

10

administration background.

11

representative in collective bargaining.

12

with that company before starting here in April 2013.

13

18 months.

14
15

THE COURT:

MR. TIERNEY:

So I spent 12 years
So about

As an executive director of the fund, what

does that mean exactly?

16

There I was the management

You don't invest the money?


No, absolutely not.

My job is to make

17

sure that the decisions made by the board of trustees are

18

implemented at the benefit fund office.

19

plan administrators responsible for deciding what provisions

20

the plan will be implementing.

21

my job is to take it back to the benefit fund office and

22

implement that strategy going forward.

23

THE COURT:

The trustees are the

Change things like that.

It is

Who is responsible to make sure all the

24

money that is supposed to be coming into the fund actually does

25

come in?

I am not talking about investments.


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MR. TIERNEY:

THE COURT:

MR. TIERNEY:

Contributions.
Right.
So our organizational chart has been

restructured into two main components.

and how we take it to the plan participants with regard to

their benefits.

The other major component services and that --

THE COURT:

MR. TIERNEY:

restructured.

One is member services

Go back a couple sentences.


So the organization has been

There are two main components.

Members services

10

is required to help the participants with their benefits and

11

the employer services, which handle the contributions that are

12

coming into their funds, the audits of those contributions to

13

make sure that the dollars are coming in and where it is

14

supposed to be.

15

to give you an example of how the board of trustees, the review

16

officer, the District Council and the benefit fund office work

17

together to improve that process.

18

December 1st with a new shop steward variance reporting

19

project.

20

benefit fund side and also on the District Council's side with

21

shop steward reporting to actually pare down the period of time

22

when we discover discrepancy from two and a half months to

23

three weeks.

24

of the board of trustees to work with review officer and

25

working together with the District Council to make that happen.

So I think this will be a perfect time for me

We're going live on

This allows us through the use of technology on the

I think that is a shining example of the action

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I think that is a key competent.

whether there are any major variations between what has been

reported on the job and what has been contributed to the fund.

THE COURT:

We'll know within three weeks

So your concern is that adequate

contributions or ones that match the work that has actually

been done are received?

MR. TIERNEY:

THE COURT:

MR. TIERNEY:

Correct.
How do you do that?
Through a combination of endeavors.

Of

10

course first is the employers' make contributions to the fund,

11

and the majority are through electronic system none as I Will

12

Remit.

13

make sure that those hours coming in are correct.

14

program will compare them to the election shop steward that

15

comes over from the District Council as well.

16

methodology in there that was more manual and that is the

17

process that took us two and a half months.

18

to reduce it to three weeks.

19

payroll audit procedures as well.

20

each contractor of the fund has a payroll audit conducted to

21

make sure the contributions that they are making to the fund

22

match what they are required to make under the collective

23

bargaining agreement.

24

afforded the opportunity to correct it and if not then legal

25

action may be taken upon them to recover as well.

There is a review process in the benefit fund office to


This new

There is old

We were now able

The plan also has in place


On every two-year basis,

If there are any discrepancies, they are

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THE COURT:

Hypothetically one might think that the

contractor might underpay as it were?

MR. TIERNEY:

THE COURT:

So how do you exactly determine whether it

is an underpayment?

I guess when the contribution comes in, it

is based on the number of hours worked?

MR. TIERNEY:

THE COURT:

Right.

Correct.
How do you determine whether that number

is too small compared to numbers that actual were worked?

10

MR. TIERNEY:

So under the old process, as I pointed

11

out it was a manual.

12

There would be hours.

13

come in.

We would get the old paper reports from the District

14

Council.

They will be converted under OCR to numbers that we

15

could read and we would make a comparison.

16

process and it took two and a half months later until we get

17

there.

18

computer system in the benefit fund, get the information from

19

the District Council electronically and make that comparison in

20

a very quick period of time.

21

Contractor ABC submitted contributions on 100 hours but the

22

shop steward revealed the men and women worked 120 and we'll

23

know that right away and address that issue before it builds

24

up.

25

We get the report in a computer system.


We know they are the hours that have

It wasn't the best

Now we're able to get that information into the

THE COURT:

We'll know within three weeks if

That is my question:

How often does that

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happen?

MR. TIERNEY:

THE COURT:

MR. TIERNEY:

THE COURT:

MR. TIERNEY:

On a weekly basis.
That the numbers are -That they are off?
That they don't match.
Well, it does happen.

Sometimes just

through clerical error it happens, but in other cases that does

take place.

time.

I wouldn't say it is a high percentage of the

The systems are in there will not let that happen even

10

on a more stringent basis especially now not to let it build.

11

In the past we had a two-and-a-half-month turnaround period and

12

if the employer was doing that over time, by the time we

13

realized it two and a half months later, the amount due could

14

be significant.

15

will allow us to catch the issue and correct it very quickly,

16

but also not let the amounts that are due to the funds build up

17

over time.

18
19
20

Now catching that within the first three weeks

THE COURT:

Historically was that a significant

problem?
MR. TIERNEY:

I think it is a continued problem.

Yes,

21

absolutely.

22

We're implementing that on December 1st and we'll constantly

23

looking at other ways we can take advantage of technology to

24

get even better.

25

I think the new process helps to improve that.

THE COURT:

So you also said in your declaration that

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you have now systems in place.

talking about December 1st?

MR. TIERNEY:

Are these the systems you are

This is an offshoot of those systems.

Prior to my taking the position in April of 2013, the benefit

fund had made the decision to move from the old benefits

processing software, the company called Standard Data

Corporation into what I would consider one of the top three

software vendors in the country, a company called ISSI.

Implementation had begun before I started.

But since I've

10

started, we actually went live with that on February of 2014.

11

So that represents huge improvements in the efficiency of

12

system, our ability to get data and our ability to take more

13

action as a result of that.

14

made before I got there and we're still working through the

15

system but implementation is in place.

16

THE COURT:

That's was a fantastic decision

I don't know if it is just my recollection

17

or if you actually used the terminology in your declaration but

18

is a goal of yours to detect if there is fraud of some sort

19

going on?

20

MR. TIERNEY:

Absolutely.

And that shop steward

21

variance report is one of the ways to pick that up.

22

Compliance Officer Julie Block is going to come after me, your

23

Honor, and as part of her presentation will talk to you about

24

the additional internal controls that we have put in place to

25

prevent any opportunity to take place against the fund.


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Chief

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2

THE COURT:

I do not have no further questions of you

unless you have something you want to add.

MR. TIERNEY:

I don't.

I have plenty of statistics.

I would like you to know the funds are doing extremely well.

As EST Geiger pointed out, hours are up.

battle for the DC to keep that market share.

doing well.

to as about 13 months of reserve.

that we have if we stopped receiving contributions today, we

10

It is a constant
The funds are

The welfare fund is in a position of what we refer


Meaning the amount of money

can keep paying benefits.

11

THE COURT:

12

MR. TIERNEY:

That has increased fairly substantially?


Yes.

And the trustees in the past few

13

months have taken joint action to reinstate the dental benefits

14

that were previously eliminated.

15

premium by 50 percent and they are continued discussions about

16

the potential restoration and other changes to the welfare

17

plan.

They reduced the retiree

I think that is all fantastic.

18

THE COURT:

19

MR. TIERNEY:

The returns on the fund has improved?


The welfare fund of course is a capital

20

preservation investment strategy.

So I think even with that we

21

returned six and a half percent last year.

22

a long-term investment strategy.

23

is in the teens so it was excellent this last quarter.

24

not on a calendar year plan.

25

first quarter of our plan of course wasn't the best few months

The pension fund is

Last year the overall return

We're on a July 1 plan.

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We're
So the

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for the market, but still it is in the green zone under Pension

Protection Act.

valuation.

4
5

funds.

You could just run through each of the

Give me a headline for each of the funds.


MR. TIERNEY:

Absolutely.

So with the pension fund as

of June 30th, 2014, your Honor --

8
9

So things are in a very good place there as well.

THE COURT:

6
7

It is 91.2 percent funded under that

THE COURT:

I never remember roughly how much is in

that?

10

MR. TIERNEY:

2.59 billion in assets in the pension

11

fund.

Our investment return for the last four years is 15.08

12

percent.

13

Just by way of example we issued 13,500 pension payments on a

14

monthly basis totally $15 million to pension payments to

15

carpenters.

We were in the green zone 92.1 percent funded.

16

THE COURT:

17

MR. TIERNEY:

You have how many retirees?


The overall number of retirees receiving

18

benefits is at 13,500.

19

surviving spouses as well.

20

That includes the retirees and

The annuity fund which is managed through Prudential

21

is self-directed individuals buying contribution accounts.

22

That fund is approaching $2 billion in assets.

23

fund as I mentioned as of June 30th is a $275.9 million in

24

assets.

25

result the trustees have been able to reinstate some of the

That represents 13 months of reserve.

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The welfare

As I noted as a

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benefits that were lost.

to its ownership of the building has about 13.9 million in

assets available as well.

expenses for all four funds combined is running at

6.54 percent.

be somewhere between eight and ten percent.

well from that perspective.

THE COURT:

MR. TIERNEY:

10

The apprenticeship fund in addition

Overall the fund administrative

The industry standard tell us that number should


We are doing very

What size staff do you have?


In the benefit fund office we have a

staff of 87.

11

THE COURT:

87.

12

MR. TIERNEY:

In labor technical college there is

13

about 20 administrative staff and 11 full-time instructors and

14

a category of part-time instructors as well.

15

THE COURT:

You are the executive staff?

16

MR. TIERNEY:

Correct.

When I came in, I reorganized

17

the organization.

I created what we refer to as the executive

18

leadership team.

19

each of the individual departments.

20

steers the organization based on a direction of the board of

21

trustees.

22

is the same group and all the managers within the organization.

23

And then we have staff.

24

the organization -- staff, management, and executive director

25

level.

That is made up of me and the directors of


That is the group that

The next level is called the leadership team.

That

So we only have three levels within

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THE COURT:

I am sure I should know this, but I don't.

Are the funds housed in the same location where District

Council is?

4
5

MR. TIERNEY:

Yes. 395 Hudson.

The District Council

has one half of the ninth floor and we occupy the other half.

THE COURT:

Thank you very much.

MR. TIERNEY:

THE COURT:

Julie Block is next.

MS. BLOCK:

Good afternoon, your Honor.

10

THE COURT:

Good afternoon.

11

MS. BLOCK:

Good.

12

THE COURT:

Good.

13

So if you can tell us, Ms. Block, as Chief Compliance

Yes, sir.

How are you?

How are you?

14

Officer before we get to what that means briefly what your

15

background is

16

MS. BLOCK:

I became Chief Compliance Officer for the

17

benefit fund in January of 2013.

I began my career as a

18

prosecutor in the Kings County District Attorney's Office where

19

I remained for 10 years.

20

Giuliani and Bloomberg where I served as the executive director

21

for the Mayor's commission to combat corruption.

22

civilian entity that monitors Internal Affairs Bureau and

23

oversees the NYPD anticorruption faculty and policies.

24

that I became associated commissioner at the New York City

25

Department of Investigation where I served as the Inspector

I then went to work for Mayors

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That is the

After

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General of about five different city agencies and I also had

approximately four inspector generals who reported to me.

left city work in 2009 and formed my own law firm with a

partner where we specialized in compliance and integrity

monitoring.

Now, the chief compliance officer's function over at

the benefit fund, the primary one is to investigate allegations

of misconduct, ethical violations and also to serve as the main

conduit for employees or members to report allegations of

10

misconduct.

I am also responsible for conducting

11

organizational risk assessments and audits to make sure that we

12

have and maintain robust internal controls and I also do

13

training for employees benefits on compliance matters.

14

THE COURT:

So what would misconduct be in your world?

15

MS. BLOCK:

It would range.

It could range from a

16

violation of our internal policies and our employee handbook or

17

it could be a violation of planned documents or the way we're

18

administering the funds.

19

THE COURT:

Give me a like.

20

MS. BLOCK:

We have had allegations of an employee

21

misusing computer resources.

22

an employee thought that a member of the funds was stealing

23

money or selling social security numbers for identity theft.

24

It could run the gamut.

25

THE COURT:

That would be a minor one.

Or if

Tell me what you do on a daily basis.

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MS. BLOCK:

I do a variety of things.

If I can

highlight some of the accomplishments of this past year.

THE COURT:

Sure.

MS. BLOCK:

Since I have gotten there, we have taken a

very methodical --

THE COURT:

Are you full time?

MS. BLOCK:

I am there two days a week.

I am not an

employee of the benefit fund.

I am independent monitor or

compliance officer, which I think is very important so that

10

employees feel secure in reporting information to me without

11

any fear of retribution or negative repercussions on their job.

12

THE COURT:

You still have your law firm?

13

MS. BLOCK:

I still have my law firm.

14

THE COURT:

And you do other work?

15

MS. BLOCK:

I do.

16

When I came in I did a very methodical review,

17

historical review of the benefit fund and what has gone on and

18

I did that by reviewing historical documents, reading the RO's

19

reports and sitting down and speaking with the employees.

20

Through that I identified areas that have been problematic in

21

the past and first took a look at those to make sure that we

22

have adequate internal controls on them.

23

enhanced, I worked on enhancing them.

24

audited on a quarterly basis.

25

these reviews in conjunction with Ryk Tierney, Executive

If items need to be

They are typically

Then I turn my -- as I was doing

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Director, we determined that there was a need to standardize

procedures across the organization.

call the standard operating procedure or SOP project.

of that project was to standardized all the procedures in the

agency to promote consistency and cross-training.

with the accounting department and worked very closely with the

comptroller and auditing department to develop standard

operating procedures or key financial functions such as

remittances, procurements, expenditures and expenses.

So we embarked on what we
The goal

We started

And we

10

then moved onto the entire benefit fund.

11

all the departments have developed SOPs for all their critical

12

functions.

13

anticipate they will all be finalized and implemented by the

14

end of the year.

15

going to go in and be auditing them on a regular basis.

16

drafted individual department audits and we're going to go in

17

and test and continuously make sure that they are strong

18

internal controls and that they work.

19

Over the past year

We're in the final process of reviewing them.

Once that is done, next year's goal is we're

THE COURT:

people are doing at District Council?

21

one another, or are you more self-contained?


MS. BLOCK:

I have

In your work is there overlap of what

20

22

We

Do you all interact with

A little bit of both.

I am self-contained

23

but I do interact with the union in terms of meetings, benefit

24

fund meetings.

25

transparent relationship with Josh and Scott.

There is a very nice, I think, healthy


Of course my

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role in compliance function wouldn't work without the support

of both the union and management trustees.

report that there is that support.

compliance function at other places where there is not support

and I think we all understand that it will not work without

that.

7
8
9
10

THE COURT:
questions of you.

I am very happy to

I have been in an IG or

So I think I don't have any further


I have read your declaration.

Is there anything else that you want to share with me?


MS. BLOCK:

I just wanted to mention that when I first

11

came into the benefit fund, the RO was gracious enough to allow

12

me to sit in on his employee interview project.

13

what I heard was an organization that it had a lot of turmoil

14

over the past few years with personnel changes and allegations

15

against top executive, morale was low, and I think employees to

16

a large extent had checked out.

17

I did an employee survey in the spring of this year and there

18

has been a sea change.

19

committed to the funds due to some policy changes.

20

internally post jobs.

21

advancement within the fund.

22

training environment where we are continuously giving training

23

to the employees and one thing that I think is particularly

24

significant is that Ryk Tierney is a certified benefits

25

specialist and he is able to teach a program that comes out of

What I saw and

I am very happy to report that

Morale is up.

People are especially


We now

There is a lot of room for personal


The trustees have committed to a

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the Wharton School of Business and the trustees authorized him

to teach it to all the employees of the benefit fund and I

believe we have 36 people, including myself, who are now

pursuing a degree from the Wharton School of Business.

that is a phenomenal accomplishment and has changed our

employees from being mere employees to stakeholders in the

business.

THE COURT:

Anybody we missed, Ms. Jones?

I think

Thank you very much.

10

MS. JONES:

No, your Honor.

11

MR. WALSH:

I think that pretty much does it for the

THE COURT:

For me that has been very helpful.

12
13

fund.
The

14

combination of these declarations and today's session has been

15

really very helpful to me.

16

place quite a professional organization and it sounds like

17

things are going well.

18

to do when he comes on board.

19

It does appear that you put in

Poor Mr. McGorty will not have anything

So unless there is anybody who wants to add anything

20

to that phase of today's proceeding, the only other issue, and

21

you may have others, Mr. Walsh's letter recently indicating

22

that pointing out of course that he remains in place until

23

December 31st and so that we couldn't easily change the rules

24

of the road before that time period elapses.

25

fix to that?

Is there an easy

That is to say to approve a new document that is


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effective January 1st?

Mr. Walsh's problem?

MS. JONES:

Does it work that way to solve

Do you know what I mean?


I do know what you are talking about, your

Honor.

In both the May 27th proposed stip and this one had the

same language in it and it was always the intent of the

government and District Council that the new stipulation would

take effect the day it was signed.

Mr. Walsh did bring this up with us and at least not for the

May 1 but for this one and at least from the standpoint of the

That was for both.

10

District Council we don't think there is any problems with

11

having the new stipulation take effect.

12

THE COURT:

Immediately?

13

MS. JONES:

Immediately.

14

MR. WALSH:

I really only have two questions, Judge, I

15

think can deal with this.

They're questions that I've talked

16

with Judge Jones about, but I still don't have an answer.

17

respect to giving findings to the executive committee action

18

hopefully by the executive committee upon the record built by

19

the independent monitor or proposed by the review monitor, will

20

the IO or IM be able to get an immediate answer or a prompt

21

answer to the question of whether some veto or some policy

22

should be stricken or will he have to wait for the next regular

23

meeting of the executive committee?

24

executive committee have to take it under advisement?

25

Court knows there is a trigger for further events based on the

With

How much time will the

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action or refusal to act on the part of the executive

committee.

that regard I think it will go a long way.

So if Judge Jones could perhaps enlighten us in

MS. JONES:

Your Honor, I have not spoken to

Mr. Geiger or the Council about those details.

you can correct me if I am wrong, Joe -- that the executive

committee can be called in if this were to occurr and there was

a need for the IM to present something to them and it wouldn't

have to wait.

10
11
12
13
14

I am certain --

I think that can be done.

MR. GEIGER:

We can certainly call a meeting for the

executive committee for the sole purpose.


THE COURT:
presented?

What would happen before if something were

Do you need to call a special meeting before?

MS. JONES:

Well, there is a monthly meeting of the

15

executive committee that occurs before the delegate body and

16

usually there is not a need, I don't believe, for the most part

17

to call them in more than on a monthly basis to discuss that.

18

I am saying if this were to arise where the IM needed to

19

present his determination that there can be a meeting called

20

expeditiously and we can set a time period in which the

21

executive committee has to get an answer or give an answer.

22

don't think that should take more than a few days.

23
24
25

THE COURT:

Is there a November meeting and December

meeting that will happen in the normal course anyway?


MR. GEIGER:

Well, we just had our November meeting.

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THE COURT:

MR. GEIGER:

You had it?


Last week.

Every second Wednesday of the

month is the delegate meeting, which is on a Wednesday and

prior to that either in Monday.

executive committee meeting for any specially called meetings

whenever needed.

THE COURT:

happen in December?

MR. GEIGER:

10

THE COURT:

11

MR. GEIGER:

12

THE COURT:

13

MR. GEIGER:

14

executive committee.

15

days after.

Prior to that there is

So if nothing else, the next one would

December.
On or about what date?
Second Wednesday of the month.
I see.
It would be the Monday before the
Delegate meeting takes place a couple

16

THE COURT:

Would that be adequate for your purposes?

17

MR. WALSH:

If as Judge Jones has said if necessary if

18

the RO or IM requested a special meeting that could be very

19

easily set up I assume within four or five business days.

20

after make the presentation we can get a decision within three

21

business days, I think that will be sufficient to address any

22

concerns about delay if any person thought that could be used

23

that way.

24

MS. JONES:

I am sorry.

I missed the last part.

25

THE COURT:

He was saying if there were a special

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If

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meeting needed and if one were held, would he get a response

within three days from the date that whatever he had to present

to the special committee?

MS. JONES:

I think that can be done.

MR. GEIGER:

MR. WALSH:

I also have a question about whether with respect to a

That's absolutely fair.


That will be helpable.

RO or IM matter that relates to a local union, must the

executive committee member from that local union recuse himself

10

from consideration of that matter, or is he absolute obliged to

11

be an advocate for the local in that situation?

12

an answer to that

13
14
15

MS. JONES:

I don't have

We had begun talking about this and

decided that that member should recuse.


MR. WALSH:

The last question I have is I understand

16

that the agreement does not grant the expressed right to the RO

17

or IM to attend meetings of the benefit funds.

18

board meeting which we had been planning on attending on the

19

20th and I would like --

20

THE COURT:

Of November?

21

MR. WALSH:

Yes.

This week.

There is a

I would like some

22

clarity as to whether the RO is authorized to attend that

23

meeting and if not whether an invitation could be extended for

24

that final board meeting, meetings which we always attended

25

going back too 2010.


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MS. JONES:

All I can say that is no different than

the proposed May stipulation, but I can't speak for the funds.
MR. GEIGER:

The RO attending the board meeting with a

new stip in order.


MR. McGUIRE:

Under the current stipulation order the

review officer has the authority and he has exercised it to

attend our meeting with his counsel as well as subcommittee

meetings.

stipulation order was that the independent monitor would not

One of the adjustments we made in the new

10

have the authority to come to our meetings but would have full

11

access to all our documents, minutes, and anything else he

12

thought was appropriate for him to review.

13
14

THE COURT:

invitation to the November meeting.

15

MR. McGUIRE:

16

THE COURT:

17

MR. McGUIRE:

18

MR. WALSH:

19
20

He is asking if he is going to get an

Certainly.

Mr. McGorty --

I think Mr. Walsh.


Oh, that is not a problem absolutely.
Thank you, Judge.

Those were the only

questions I had.
THE COURT:

I think I have all I need.

The

21

submissions you have made look good to me, including the

22

hypotheticals.

23

should be able to get you a sign-off.

Everything works.

In the next couple days I

24

MS. JONES:

Thank you, Judge.

25

THE COURT:

Anything else that you want to raise?

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Great.

Thank you very much.

Thank you everybody.

Good to see you all.

MS. JONES:

Your Honor, the District Council had a

couple of books as well, which we're just going to present to

you.

to look at.

7
8

A folder and a book and they have materials you may want

THE COURT:

We'll make them court exhibits to the

transcript.

MS. JONES:

Thank you.

10

THE COURT:

Nice to see you.

11

MS. JONES:

Nice to see you.

12

o0o

13
14
15
16
17
18
19
20
21
22
23
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25
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