carpenters 2.8.2011 court conference

24
1 128LUSAC Conference 1 UNITED STATES DISTRICT COURT 1 SOUTHERN DISTRICT OF NEW YORK 2 ------------------------------x 2 3 UNITED STATES OF AMERICA, 3 4 Plaintiff, 4 5 v. 90 CV 5722 (RMB) 5 6 DISTRICT COUNCIL OF NEW YORK 6 CITY and VICINITY OF THE 7 UNITED BROTHERHOOD OF 7 CARPENTERS and JOINERS OF 8 AMERICA, et al., 8 9 Defendants. 9 10 ------------------------------x 10 New York, N.Y. 11 February 8, 2011 11 9:52 a.m. 12 12 Before: 13 13 HON. RICHARD M. BERMAN, 14 14 District Judge 15 15 APPEARANCES 16 16 UNITED STATES ATTORNEY'S OFFICE 17 SOUTHERN DISTRICT OF NEW YORK 17 BY: BENJAMIN H. TORRANCE 18 TARA LAMORTE 18 19 DENNIS M. WALSH, REVIEW OFFICER 19 20 LATHAM & WATKINS, LLP 20 Attorneys for Defendant United Brotherhood of Carpenters 21 BY: KENNETH CONBOY 21 WILLIAM RECKLER 22 NATHANAEL YALE 23 WEISS & WEISS LLC 23 Attorneys for Movant Michael Bilello 24 BY: SCOTT WEISS 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

Upload: latisha-walker

Post on 09-Apr-2018

219 views

Category:

Documents


0 download

TRANSCRIPT

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 1/24

1

128LUSAC Conference

1 UNITED STATES DISTRICT COURT

1 SOUTHERN DISTRICT OF NEW YORK

2 ------------------------------x

2

3 UNITED STATES OF AMERICA,

3

4 Plaintiff,

4

5 v. 90 CV 5722 (RMB)

5

6 DISTRICT COUNCIL OF NEW YORK

6 CITY and VICINITY OF THE

7 UNITED BROTHERHOOD OF

7 CARPENTERS and JOINERS OF

8 AMERICA, et al.,

8

9 Defendants.

9

10 ------------------------------x10 New York, N.Y.

11 February 8, 2011

11 9:52 a.m.

12

12 Before:

13

13 HON. RICHARD M. BERMAN,

14

14 District Judge

15

15 APPEARANCES

16

16 UNITED STATES ATTORNEY'S OFFICE

17 SOUTHERN DISTRICT OF NEW YORK

17 BY: BENJAMIN H. TORRANCE

18 TARA LAMORTE

18

19 DENNIS M. WALSH, REVIEW OFFICER

19

20 LATHAM & WATKINS, LLP

20 Attorneys for Defendant United Brotherhood of Carpenters

21 BY: KENNETH CONBOY

21 WILLIAM RECKLER

22 NATHANAEL YALE

23 WEISS & WEISS LLC

23 Attorneys for Movant Michael Bilello

24 BY: SCOTT WEISS24

25

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 2/24

2

128LUSAC Conference

1 (In open court)

2 THE COURT: So I think what brings us here is the

3 motion or application by Mr. Bilello, and that would be you,

4 sir?

5 MR. BILELLO: Yes, sir.

6 THE COURT: And are you represented by counsel --

7 MR. BILELLO: Yes, I am.

8 THE COURT: -- are you proceeding pro se? I thought

9 the motion had been filed pro se.

10 MR. BILELLO: The motion was filed pro se.

11 THE COURT: But now you're represented.

12 MR. BILELLO: Now I have counsel.

13 THE COURT: Okay. And it's a motion seeking an order

14 scheduling -- reading now from the motion -- district council

15 elections on a date certain and declaring that the trusteeship

16 imposed on the district council be terminated upon installation

17 of newly elected district council officers.

18 Is that a fair statement of what you're seeking?

19 MR. BILELLO: Yes, your Honor.20 THE COURT: And so it was suggested that we have this

21 conference. I think it's a very good idea if anyone wants to

22 be heard, so we'll get a sense of whether there's going to be

23 motion practice and, if so, who is going to bring that motion

24 and what that timetable would be.

25 So I'm happy to hear from any or everybody.

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 3/24

3

128LUSAC Conference

1 Mr. Conboy.

2 MR. CONBOY: Good morning, your Honor, may I proceed

3 first?

4 THE COURT: Yes, sir.

5 MR. CONBOY: I did want to say at the outset -- and I

6 represent the United Brotherhood of Carpenters, that is the

7 supervisor in the trusteeship that has been imposed and is

8 ongoing -- I want to say at the outset, Judge, that we do not

9 have any significant difference with Mr. Bilello. The United

10 Brotherhood is comfortable with scheduling elections by the end

11 of the year or early in 2012.

12 I did want to though suggest to you, your Honor, that

13 there are a number of intractable problems that continue to be

14 addressed by the UBC in connection with the status of the

15 district council here in New York. And I do believe that

16 Mr. Bilello has suggested to the Court that an election

17 schedule, rules, and effectively a campaign be initiated

18 immediately. I've consulted with the United States attorney

19 and with Mr. Walsh, and I certainly expect them to speak for20 themselves, but I do not think that that schedule that's

21 suggested by Mr. Bilello is required by your stipulation and

22 order.

23 But, in any case, there are at least three general

24 problems that continue to be challenging to the integrity of

25 the operation of the district council. They are the issues of

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 4/24

4

128LUSAC Conference

1 racketeering, governance, and the administration of the benefit

2 funds.

3 Now, with respect to the racketeering problem, which

4 the review officer has indicated in his most recent report to

5 your Honor remains a serious challenge, the trusteeship has

6 endeavored to focus on this point directly by examining both

7 the business agents and the shop stewards. About 25 percent of

8 the business agents have been removed. And with respect to the

9 shop stewards, there are 1,600 of them who are presently under

10 examination and scrutiny so that an effective reconfiguration

11 of the shop steward cadre can be effected as quickly as

12 possible.

13 The fundamental issue that has plagued the district

14 council for many years under the consent decree is an ongoing

15 problem of connivance between certain shop stewards and

16 business agents and management. The United Brotherhood

17 understands that in order to have an effective anticorruption

18 program, there has to be a significant investigation and

19 reconfiguration of those two components of the district council20 and that is under way.

21 With respect to governance, your Honor, the consent

22 decree has at its heart the notion of union democracy. The

23 problem, however, is that union democracy has a hallow ring

24 when in the immediate aftermath of two court supervised

25 elections, the principal elected officer has gone to prison,

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 5/24

5

128LUSAC Conference

1 and I'm referring of course to Messrs. Devine and Forde.

2 What is critically necessary is a comprehensive review

3 of what kind of democratic mechanism ought to be in place here

4 to minimize this ongoing problem. The United Brotherhood is of

5 the view that there should be a significant change in the way

6 that officers of the district council and the executive board

7 are elected. The United Brotherhood will be submitting to the

8 United States attorney and to the review officer promptly a

9 very significant revision of the power structure of the New

10 York City District Council.

11 As your Honor knows, there is now a direct election of

12 these critical officers and board members by the rank and file.

13 The UBC believes that a much more effective method of

14 democratic engagement of the rank and file will be accomplished

15 by a different method of election. That method of election is

16 in fact in operation in many district councils across the

17 United States. I might add that none of these district

18 councils have had anything like the disgraceful and intractable

19 problem of corruption and racketeering that has plagued the New20 York District Council, indeed, throughout the entire life of

21 the consent decree.

22 The idea is to have delegates chosen in each local to

23 become not merely voters on election day, but to be integrated

24 into the governance of the New York District Council. The

25 concept would confer upon these delegates a critical, indeed, a

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 6/24

6

128LUSAC Conference

1 decisive role on a whole range of aspects of district council

2 business. For example, these delegates to the council, to be

3 called council delegates, they would in fact review and finally

4 approve all collective bargaining agreements with all of the

5 subcontractors who may or may not be problematically deficient

6 with respect to the integrity of these contracts.

7 Secondly, these delegates, these council delegates

8 would have the authority to oversee and approve all

9 expenditures at the district council level. These council

10 delegates would have the authority to require elaborate and

11 detailed reports from the executive board and the ultimate

12 right of approval of what would then be recommendations and not

13 fiat from this executive board.

14 There is, of course, an intent here to broaden the

15 franchise, to broaden the power structure of this union in New

16 York through a broad range of rank and file persons who would

17 be elected for a fixed term and who would be involved on an

18 ongoing and critical basis in the operations of the district

19 council.20 THE COURT: How many would there be?

21 MR. CONBOY: I'm not certain yet, Judge, because we

22 don't have even a preliminary draft of this.

23 THE COURT: I see.

24 MR. CONBOY: But I have assured the United States

25 attorney and the review officer that we expect to have a

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 7/24

7

128LUSAC Conference

1 blueprint for this operation within 30 days.

2 THE COURT: I see.

3 MR. CONBOY: We understand, of course, your Honor,

4 that the final judgment as to the adequacy of this, what we

5 believe to be a very substantial and important improvement, but

6 the obvious final approval this lies with the Court upon the

7 advice of the United States attorney and the review officer.

8 I think that the key factor in terms of the way this

9 new cadre of responsible, committed, and informed delegates

10 must turn on a national training program which is now in

11 being -- it's on the west coast -- and it addresses the entire

12 range with respect to legal, administrative, auditing, and all

13 other critical issues associated with the operation of this

14 council in accordance with the consent decree.

15 These delegates are going to have to be trained in

16 what questions to ask, what to do when they get a runaround,

17 and ultimately what their obligations are not only to the rank

18 and file, not only under the UBC constitution, not only under

19 the district council bylaws, but, most importantly, under the20 consent decree in this court and under the ultimate authority

21 of your Honor.

22 Now, the third area which in many respects is the most

23 troubling is the issue of the integrity of the benefit funds.

24 As your Honor knows from reading the indictments in the

25 criminal case and the history of this organization under the

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 8/24

8

128LUSAC Conference

1 consent decree, there has been a systematic concern with

2 respect to the interaction between the district council

3 officers, the executive board, and the funds. That is

4 precisely because the trustees of the fund are divided between

5 management and union trustees.

6 We know of highly questionable decisions taken by

7 Frederick Devine in his campaign for election with respect to

8 enlarging benefits to, in effect, the electorate. We know

9 there were similar derelictions with respect to Michael Forde,

10 particularly with respect to the officers' pension.

11 The objective fact is that these funds -- and I've

12 consulted with the benefit of very extensive explanations,

13 understandings, and really instruction by Dennis Walsh -- these

14 funds are in dire, dire financial trouble. It is very possible

15 that the funds will in fact collapse within ten years. And I

16 was advised the other day by Mr. Walsh that with respect to the

17 health and welfare fund, the amount of dollars going in

18 compared to the amount of dollars going out has narrowed very

19 precipitously from just 2008 to 2010. In two years there has20 been a very, very significant contraction. Part of the

21 problem, of course, is that members 55 to 65 who are not yet

22 eligible for Medicare are no longer paying in.

23 So the objective requirement here is to have a

24 complete and comprehensive investigation of the funds, an

25 independent outside audit, and, most importantly, either a

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 9/24

9

128LUSAC Conference

1 completely reformed internal administrative engine to deal with

2 this in a responsible way or, very possibly, independent third

3 party administration of that fund.

4 As your Honor is aware, there has been a regrettable

5 impasse at the funds over the past few months, and I'm sure you

6 noted that in Dennis Walsh's report to the Court. I am pleased

7 to say that the trustees have agreed upon new counsel for the

8 fund is Raymond McGuire, who's a very distinguished labor

9 lawyer in New York. And by the way, Judge, Mr. McGuire asked

10 me to apologize to the Court that he could not be here today.

11 He's in Albany. But he is putting in a notice of appearance

12 and will be submitting his own reports to the United States

13 attorney and to the review officer.

14 Now, fundamentally, the difficulty with the funds is

15 that a large number of contractors appear to have been given

16 waivers in terms of their obligation to contribute to the funds

17 under the collective bargaining agreements. It is unclear

18 whether those waivers are a function of the economic

19 catastrophe of 2008 and the very severe recession that has20 gripped the construction industry in New York, or whether those

21 derelictions are in fact the cause of meretricious

22 relationships between the contractors and the previous

23 occupants of the offices of the district council.

24 It is Mr. McGuire's intention to do what he has done

25 in the plumbers union, which is to do a thorough investigation

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 10/24

10

128LUSAC Conference

1 of the financial condition of the funds and a retrospective

2 inquiry as to what money is owed, who owes it, and how can it

3 be collected. This challenge will involve undoubtedly bringing

4 lawsuits against those parties who had legal obligations to

5 contribute to the fund and did not, and it will involve the

6 kind of administrative overhaul and reconfigurations of the

7 funds that I've already alluded to.

8 In summary, your Honor, I do want to reiterate again

9 that the United Brotherhood doesn't have any material objection

10 to Michael Bilello's application and his desire to see the

11 election process resume at the earliest possible date. But as

12 a final observation, I do want to share with you an observation

13 that Mr. Walsh made to me last week and that is we must be

14 certain that the house is strong before the keys are turned

15 over and the trusteeship returns to Washington.

16 Thank you very much, your Honor.

17 THE COURT: So you have no objection in principle, but

18 you seem to have an objection certainly with respect, practical

19 objection, with respect to the timing.20 MR. CONBOY: Yes, that's correct, Judge.

21 THE COURT: Okay. Who else would like to be heard?

22 MR. WEISS: I think it's me, your Honor.

23 THE COURT: Well, I don't actually. I think we'll go

24 around this way and see if there are any comments.

25 MR. WALSH: Judge, good morning. Dennis Walsh. I am

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 11/24

11

128LUSAC Conference

1 the review officer.

2 THE COURT: We still have this application pending,

3 and so somebody has to address how that's going to be responded

4 to and by whom and when.

5 MR. WALSH: The time line that Mr. Bilello indicates

6 in his application is one that I have already basically

7 adopted. As I said in the first report, I believe that it is

8 imperative that the elections be held so that there is overlap

9 between some portion of my tenure and the beginning of the

10 tenure of the new officers at the district council. My tenure

11 expires at the end of 2012. I said in the report that if we

12 could have that overlap occur in 2012, that the election would

13 have to occur by the end of 2011.

14 In the stipulation and order there is the provision

15 regarding my oversight and involvement with elections. It

16 requires that no later than 120 days before the holding of an

17 election, that I promulgate for comment the detailed rules and

18 procedures as to how the election would be conducted for

19 district council offices.20 So if we adopted for the sake of argument a date of

21 December 15, we would work back to an August time frame for

22 promulgation of rules to the members and to the parties for

23 comment, and that would I think leave a reasonable window of

24 opportunity for the district council and the funds to, using

25 their collective best efforts, implement what needs to be

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 12/24

12

128LUSAC Conference

1 implemented to address the concerns that Mr. Conboy articulated

2 to the Court.

3 I do have ongoing concerns about certain elements of

4 racketeering and the influence of La Cosa Nostra over

5 individuals who are employed at the district council. Those

6 matters are under zealous investigation and we are moving as

7 quickly as we can to develop sufficient evidence which will

8 pass muster in this court should I exercise the right of veto

9 with respect to certain individuals.

10 With respect to the administration of the district

11 council, I should mention that I have made recommendations

12 which were also published in the report as to how I believe the

13 district council and the UBC, while it supervises the district

14 council, should attempt to reconfigure the way the district

15 council is administered.

16 I specifically suggested that delegates be empowered

17 and that a way be found for them to be able to question

18 authority without fear of, for instance, economic reprisal.

19 One of the phenomena that we have seen over the years is that20 if one questions the acts of senior managers at the council, if

21 you are employed at the district council, you run the risk of

22 getting fired. And there are also ways of freezing people out

23 in the work force in the construction industry if they question

24 authority. We've seen that.

25 And I have also expressed concern about the singular

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 13/24

13

128LUSAC Conference

1 power allotted to the executive secretary treasurer which I

2 have seen, based on my investigations, was abused by Mr. Forde

3 and his top lieutenants at the district council. I suggested

4 to the UBC, to counsel from the DeCarlo firm, that in revising

5 the bylaws for the district council, which was a requirement of

6 the stipulation and order, that the UBC go beyond the changes

7 brought by the stipulation and order and actually address the

8 issue of empowering the delegates, making sure they have the

9 ability to question the decisions of the EST and his top

10 lieutenants and trimming the power of the executive secretary

11 treasurer.

12 They have stated that they will amend the bylaws to

13 provide solid direction as to the scope of the inspector

14 general, chief compliance officer, the human resources

15 department, which are all new functions at the council, and I

16 suggested that they also delineate the scope of a chief

17 financial officer to provide additional financial oversight for

18 the district council. I am awaiting those, that draft. It's

19 actually scheduled to be submitted to me at the end of this20 week and that is an important document. And I'm hopeful that

21 the UBC has seen fit to adopt the recommendation in the report

22 so that we can make that change in short order and not unduly

23 impact the election schedule which I have recommended in my

24 report.

25 Finally, with respect to the funds, there are problems

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 14/24

14

128LUSAC Conference

1 with the funds. There have been historically great problems

2 with respect to certain contractors. The single greatest

3 problem that the funds faces now is the downturn in man-hours.

4 Man-hours are the life blood of the funds, the pension fund,

5 annuity, welfare fund. And since 2008 the actuaries have

6 reduced the numbers that they're actually using from I believe

7 approximately 25 million just three or four years ago to most

8 recently 16 million, and certainly there is no guarantee that

9 the number will not have to be reduced again in short order

10 allowing for, unfortunately, the trickle-down resumed lending

11 by the banks with respect to the construction industry which

12 may not have much of an impact until 2012.

13 There are problems with the way certain contractors

14 have been treated over the years. They have been given

15 opportunities to enter into payment plans. We've questioned

16 the criteria for entering into the payment plan. We don't

17 think there are enough safeguards in that. But we've also

18 questioned the internal administration of the funds, whether

19 it's sufficient, whether it is built on best practices, whether20 there's too much cronyism, whether there are objective

21 standards, and that all needs to be done.

22 Unfortunately, the way the funds works, the operation

23 is dependent upon the vote of two blocks, the employer trustees

24 and the union trustees, and they rely on service providers,

25 professionals, to promulgate requests for proposals. There's

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 15/24

15

128LUSAC Conference

1 one going out now for a new law firm to serve as collections

2 counsel. And there's a question as to whether the

3 infrastructure of the administration funds should be preserved

4 or whether bids should be sought for outsourcing administration

5 of the funds to a third party.

6 So these are all things that I know need to be

7 addressed. But as of today, I don't know a reason why any of

8 these undertakings should unduly impact the schedule that I've

9 outlined in the report which, as I've said, is not inconsistent

10 with the schedule that Mr. Bilello has outlined in his

11 application.

12 THE COURT: Is that to suggest you don't oppose the

13 application?

14 MR. WALSH: I do not oppose the application, your

15 Honor. But I will say this -- my apologies to Mr. Torrance --

16 that I would suggest that the Court be kept closely informed of

17 any reason why the schedule should be enlarged.

18 THE COURT: I don't know what that means.

19 MR. WALSH: If there is a legitimate reason that would20 impact the time line, that as soon as I know that reason that I

21 would inform the Court and the parties as to my view on the

22 matter.

23 MR. TORRANCE: Good afternoon, your Honor, Benjamin

24 Torrance for the government.

25 It sounds to me that nobody opposes this motion. The

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 16/24

16

128LUSAC Conference

1 review officer has proposed the schedule that he referred to

2 and Mr. Bilello adopted in his motion. The UBC has told me

3 both before this conference and in court this morning that they

4 do not oppose that schedule either.

5 In terms of your Honor's question about how to

6 proceed, I would suggest perhaps that the parties continue to

7 confer -- the parties do include Mr. Bilello as the movant --

8 and that we report back to the Court periodically on our

9 progress on coming up with an actual schedule.

10 Much of the scheduling of the election, of course,

11 depends on the provisions of paragraph 5K of the stipulation,

12 the procedures that need to be followed there. As was

13 mentioned by Judge Conboy, there is also a need before coming

14 up with the rules to determine what the actual officerships and

15 structure of the power in the district council will be.

16 So I would propose that the parties work diligently to

17 confer about those matters, work to come up with a schedule,

18 report back to the Court at intervals that the Court deems

19 appropriate on our progress in doing that and see if we can20 reach agreement without motion practice on Mr. Bilello's

21 motion.

22 THE COURT: So how long do you think reasonably that

23 would take?

24 MR. TORRANCE: Well, I think the first step would have

25 to be conversations between the review officer and the UBC, so

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 17/24

17

128LUSAC Conference

1 perhaps the Court could ask them how much time they need for

2 that.

3 MR. CONBOY: Judge, I do believe that a preliminary

4 submission to Mr. Walsh and to the United States attorney can

5 be made, as I mentioned, within 30 days. Obviously, it is a

6 very significant, substantial reform; and there will

7 undoubtedly be details that will emerge in terms of the

8 collaboration post this 30-day period that will refine it and

9 will presumably improve it.

10 So my own expectation is that on this first critical

11 piece, we are probably looking at certainly 60 days, which by

12 itself is not going to impede Mr. Walsh's broader

13 responsibilities to formulate the rules, which is a slightly

14 different task but obviously does have some connection to

15 the --

16 THE COURT: Sure.

17 MR. CONBOY: -- actual power structure upon which the

18 election will be contested.

19 THE COURT: Sure. Okay.20 MR. CONBOY: And then I do believe also, Judge, the

21 funds question is so critical to the broader undertakings of

22 the UBC here that I would suggest that although Mr. McGuire is

23 not here, I do believe that in terms of the collaboration that

24 the United States attorney has invited, I think that

25 Mr. McGuire should also be involved in that collaboration

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 18/24

18

128LUSAC Conference

1 because his tasks are daunting, to say the least, and could

2 indeed be quite protractive. And clearly whoever is elected in

3 the balloting is going to be occupying those chairs at the

4 pension board hearing, so I do see a connectedness to all of

5 this.

6 And while I repeat we do not have any objection to a

7 goal of end of year elections, I do think that there is a great

8 deal of work to be done that will inform and shape the election

9 process.

10 And the one other thing I did want to mention, Judge,

11 because the general president of the UBC asked me to advise the

12 Court that should it be necessary, and we do not at this point

13 see why it would be, but should it be necessary, the UBC

14 commits now to extending Mr. Walsh's tenure beyond that which

15 is presently set in the documentation underlying his

16 appointment.

17 THE COURT: Great.

18 MR. WEISS: Scott Weiss on behalf of the movant.

19 We're encouraged that the parties seem to be on board20 in principle as to what is raised by the motion. There was

21 some concern that the trusteeship was coming to a close on

22 February 10, and we were counting the 120 days from the date

23 when the election process was commenced to begin on June 1,

24 which had a long detailed process that included nomination,

25 etc.

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 19/24

19

128LUSAC Conference

1 It's not lost on us that the elected officials who are

2 elected to the district council will likely become or will be

3 involved as trustees to the benefit funds, who obviously has a

4 challenge before them both economically and the auditing of

5 those funds.

6 It seems to me that now that the trusteeship is 18

7 months plus old, that these things are already in place and

8 that we're optimistic that it will take less than 60 days to

9 have district council's bylaws reformed and the election rules

10 adjusted accordingly.

11 I will point out to your Honor that when your

12 colleague, Judge Haight, was overseeing the consent decree, a

13 lot of the district council bylaws were reformed to include the

14 kind of accountability and transparency that was intended in

15 those bylaws as well as in the election rules later on and, as

16 pointed out by the other parties, there are things to be done.

17 Those safeguards are in place. They may need to be tweaked,

18 but at the end of the day the safeguards are there.

19 The key thing here, your Honor, is that -- and I close20 with what Mr. Conboy points out -- if the UBC is turning over

21 the keys to the house, I think history dictates that we have

22 that overlap. That's the reason why the movant hasn't come

23 forward and said stop it now. We want to have, with some of

24 the changes that are taking place, we want to have the guidance

25 of the review officer to make sure that the officers are

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 20/24

20

128LUSAC Conference

1 elected to that office understand the landscape.

2 So it seems to me I only argued that this be done

3 expeditiously so that the purpose of the consent decree, dare I

4 say it, was entered in 1994, can finally come to an end and

5 return this union to its membership. Thank you.

6 THE COURT: Okay. So does it make sense to schedule a

7 conference in early April to see where things stand?

8 MR. WALSH: Yes.

9 MR. CONBOY: Yes, your Honor. I think that's

10 advisable.

11 THE COURT: Could it be any sooner than that? Doesn't

12 sound like it, but it's up to you all.

13 MR. TORRANCE: The government, of course, will be

14 available whenever the Court.

15 THE COURT: The question is, as a practical matter,

16 when will there be something really meaningful to report on?

17 MR. TORRANCE: I might suggest that perhaps there be

18 at least a confirmation from the UBC within 30 days that they

19 have in fact submitted the bylaws and that process is moving20 forward. And then if the Court wants an in-person conference,

21 that be later April.

22 MR. WEISS: Your Honor, if I may, I apologize. With

23 the Court's indulgence, Mr. Bilello wanted to make a statement.

24 THE COURT: Sure.

25 MR. BILELLO: Your Honor, I just wanted to speak about

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 21/24

21

128LUSAC Conference

1 a couple things, especially regarding the delegate vote.

2 Prior to 1995, we had a delegate vote at the district

3 council and those elections brought us Fred Devine's first

4 term, Paschal McGuinness's term -- he was barred from holding

5 office in New York -- and Teddy Maritas before that, who

6 disappeared under the Throgs Neck Bridge or who knows while he

7 was on trial.

8 So the delegate vote back then, there were less

9 delegates, but we still had a delegate vote. And then the

10 consent decree ordered the rank and file elections which took

11 place in 1995. The problem with the delegate body now as it

12 was restructured in 1998 is that 80 percent or so of the

13 delegates held district council positions, paid positions, and

14 they were beholden to the administrations and it wasn't a lot

15 different than the previous delegate, you know, body that we

16 had then when there was one delegate from each.

17 So, the rank and file vote is still an important

18 thing. And I think now with the review officer in place, it

19 has a much better chance of succeeding. The delegate body now20 has really become a rubber stamp and the way to eliminate that

21 is by allowing regular rank and file people to hold those

22 positions as opposed to paid organizers, business agents, what

23 have you. Those delegates had somewhat training, but I think

24 that to stay focused on the rank and file election would be

25 very important for the membership at this point.

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 22/24

22

128LUSAC Conference

1 As far as everything else, reforms and the benefit

2 funds, I've always advocated for some of the type of reforms

3 that I've heard and I see no reason why, you know, none of that

4 can take place with the newly elected officers. And instead of

5 just handing over a set of keys and saying, okay, it's all

6 ready, take it -- that's what happened in 2000 when the Forde

7 administration was elected. UBC left, the IRO left at the

8 time, and the rest is history. Thank you.

9 THE COURT: You bet. Thank you.

10 So, I'll give you a schedule. Why don't we say early

11 April. Let's get together in early April and this is very

12 helpful.

13 How is for each of you April 6 at 11?

14 MR. CONBOY: Very good, Judge.

15 THE COURT: Does it work for everybody?

16 MR. WALSH: Yes.

17 THE COURT: Mr. Weiss?

18 MR. WEISS: Fine. Thank you.

19 THE COURT: That works?20 MR. TORRANCE: Sorry. One second, your Honor.

21 MR. WEISS: I was waiting for Mr. Torrance.

22 THE COURT: He has to be here. He's a civil servant.

23 MR. TORRANCE: April 6 is good. Thank you. At 11.

24 THE COURT: Yep.

25 MR. WEISS: And the purpose of that is to report on

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 23/24

23

128LUSAC Conference

1 status, your Honor?

2 THE COURT: Yeah. This is a very helpful discussion

3 today, which is not to say that if there is some report or some

4 suggestion that is transmitted in 30 days, let me know so I'll

5 know for this conference where things stand.

6 MR. WEISS: Thank you, your Honor.

7 THE COURT: Okay. Anybody else want to be heard? No.

8 Thanks very much. Very helpful.

9 o0o

10

11

12

13

14

15

16

17

18

1920

21

22

23

24

25

SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300

8/7/2019 Carpenters 2.8.2011 Court Conference

http://slidepdf.com/reader/full/carpenters-282011-court-conference 24/24