The United States and Local 14 of the International Union of Operating Engineers Agree to Appointment of Union Corruption Officers
Court-Approved Consent Decree Resolves Prospective Civil Racketeering Claims
A consent decree between the United States and LOCAL 14 of the International Union of Operating Engineers, a 1500 - member union representing operating engineers who operate heavy equipment in the construction industry in New York City, was approved today by United States District Judge Sterling Johnson, Jr., at the U.S. Courthouse in Brooklyn, NY. The consent decree provides for the appointment of union corruption officers to monitor and investigate the activities of LOCAL 14, permanently enjoins LOCAL 14 from engaging in corruption, and requires the local to amend its by-laws to effect reforms and institute other measures designed to ensure that LOCAL 14 remains free from corruption and organized crime influence.
The consent decree was announced by Benton J. Campbell, United States Attorney for the Eastern District of New York, and Daniel R. Petrole, Deputy Inspector General for the United States Department of Labor.
The consent decree resolves prospective civil racketeering claims stemming from several criminal prosecutions brought in the Eastern and Southern Districts of New York, most notably United States v. Joel J. Cacace, Sr., Cr. 03-191 (EDNY) (Johnson, J.) and United States v. Muscarella, Cr. 03-229 (SDNY) (Buchwald, J.). The criminal cases, which targeted the Colombo and Genovese organized crime families as well as former top-level officers of LOCAL 14, were the culmination of a three-year investigation conducted by the Office of the Inspector General, Office of Labor Racketeering and Fraud Investigations for the United States Department of Labor, the Federal Bureau of Investigation, and the New York State Attorney General’s Organized Crime Task Force. The investigation established that the Colombo and Genovese families exerted corrupt influence and extortionate control over union representatives to secure no-show jobs for organized crime associates while receiving payments from those jobs. The investigation also revealed that union members and officials received kickbacks from no-show jobs and accepted labor bribes from construction contractors. Ultimately, more than 45 defendants, including leaders of the Colombo and Genovese families and the top officials of LOCAL 14, were convicted of racketeering, extortion, mail fraud, and unlawful labor payments, and related crimes.
The Consent Decree
A. The Court-Appointed Officers
Under the consent decree, the United States District Court will appoint an Ethical Practices Attorney and a Hearing Officer, each of whom will serve a five-year term that may be extended upon application to the Court. The Ethical Practices Attorney will have the authority to: conduct investigations and bring disciplinary proceedings; review appointment of union officials; review union expenditures and contracts; recover assets; review, reject and/or modify election rules; oversee and monitor elections; review, reject and/or modify job referral rules; and take such other action as may be necessary to eliminate the influence of corruption from LOCAL 14. The Hearing Officer will preside over disciplinary proceedings brought by the Ethical Practices Attorney and have the authority to remove, suspend, or fine union officials and members who have engaged in corruption.
B. Permanent Injunction
The consent decree permanently enjoins LOCAL 14 and its officers, employees, and members from engaging in corruption. Individuals will be subject to discipline if they:
(1) Engage in conduct which constitutes or furthers an act of racketeering;
(2) Knowingly associate with any member, associate, or other individual involved with any organized criminal group, including any LCN (La Cosa Nostra) family, or knowingly associate with any “Barred Person” ;
(3) Obstruct the work of the Court-appointed Ethical Practices Attorney and Hearing Officer, or the implementation of any other relief that may be imposed in this case;
(4) Knowingly permit, aid, or abet any member or associate of the LCN, or any other organized criminal group, to exercise control or influence in the conduct of LOCAL 14’s affairs;
(5) Violate any federal or state law involving the operation of a labor organization which could serve as the basis of a criminal charge under federal or state law;
(6) Violate any federal or state law involving an employee welfare plan or an employee benefit plan which could serve as the basis of a criminal charge under federal or state law; and
(7) Act in any way that furthers the influence of any organized criminal group.
The consent decree enjoins LOCAL 14 from holding elections until the Ethical Practices Attorney and the Court have determined that the local can conduct fair and untainted elections.
D. Amendments to Local 14’s By-Laws
The consent decree requires LOCAL 14 to amend its by-laws to establish new and more stringent membership eligibility criteria concerning competence to operate heavy equipment. The by-laws will also be amended to include an Ethical Practices Code that will regulate the business and financial practices of union officials, guaranty union democracy rights, and expressly prohibit corruption.
“This consent decree will help protect the LOCAL 14 membership from the pervasive influence of organized crime that has long plagued the union,” stated United States Attorney Campbell. “The cooperation of LOCAL 14 and the International Union of Operating Engineers in the investigation and resolution of the prospective civil racketeering charges, and LOCAL 14’s agreement to enter into the consent decree, are positive signs that the local is committed to making important reforms that will prevent future corruption.”
Deputy Inspector General Petrole stated, “Today’s announcement of a consent decree exemplifies the long-standing commitment from our office to fully investigate labor racketeering and eradicate the influence of organized crime within labor unions. It establishes a new direction for LOCAL 14 of the International Union of Operating Engineers. We will continue to work with our law enforcement partners and the U.S. Attorney’s Office toward that end.”
The government’s case was litigated by Assistant United States Attorney Richard K. Hayes and former Assistant United States Attorney Jennifer Schantz.
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