Bureau of National Affairs



Leading the News




Laborers, Justice Department Negotiate Oversight Agreement for Another Year



By Michael Bologna and Brian Lockett

Friday, January 8, 1999


CHICAGO--The internal reform process aimed at ridding the Laborers' International Union of North America of corrupt influences and associations with organized crime will be extended for another year, the U.S. Department of Justice announced Jan. 7.


Negotiations between the union and the Justice Department resulted in an extension of the so-called "oversight agreement" through Jan. 31, 2000. This marks the second time the Justice Department has extended the agreement since it was first implemented Feb. 13, 1995. The original oversight agreement allowed the union to root out corrupt practices through a variety of internal reforms. At any time, the Justice Department has authority to impose a consent decree and appoint officers to take over day-to-day operation of the 700,000-member union if it feels the union is not making adequate progress toward reform and purging itself of organized crime influence.


The department expressed satisfaction with the progress achieved by LIUNA's Office of the Inspector General and the Office of the General Executive Board Attorney--the two independent bodies established to investigate and prosecute cases against union officials. At the same time, the department suggested that the process needs additional time to achieve its objectives.


"While progress continues to be made, this extension recognizes that additional time is needed to complete efforts to eliminate corruption from the union," said Scott Lasser, U.S. Attorney for the Northern District of Illinois. "This extension of the LIUNA oversight agreement gives this unprecedented experiment the chance to be successful and accomplish the goals of reform."


Assistant U.S. Attorney Craig Oswald said the extension differs in two respects from the original oversight agreement and the one-year extension that was scheduled to expire on Jan. 31. The biggest change is a provision making it more complicated for the federal government to take over the union. The original agreement permitted the government to impose a Teamsters-style reform process whenever it believed the union was responding inadequately to its problems. Under the extension, Oswald said the government needs to meet a higher legal threshold to impose such a process.


In addition, Oswald said the extension recognizes the huge financial obligations the reform effort places on the union and permits LIUNA to make adjustments. He noted, however, that no "material changes" in the program can be made without the consent of the Justice Department and no changes can be made that affect the integrity and effectiveness of the program.


Oswald rejected assertions by some critics that the government is letting LIUNA off easy. He described the work of the Office of GEB Attorney as "independent, aggressive and honorable." Unlike the process directed at the Teamsters, Oswald pointed out, LIUNA's reform is also being accomplished at very little cost to taxpayers.


"It's not a perfect process but they've done a lot," Oswald said. "They've removed 100 members for associations with organized crime. They've charged the general president. They've achieved election reform. This may not be everything we'd like it to be, but I think this is now a better institution. The mob took over the union and now we're leveling the playing field so the membership can take back the union."


Coia Report Expected Soon


Among other reform actions, Oswald said the union filed disciplinary charges against Arthur A. Coia, LIUNA president in November 1997 (216 DLR A-7, 11/7/97). A report from the union's independent hearing officer on the three-month hearing last spring on charges against Coia is expected this month. Coia remains in his job as president while the charges are pending.


Also the subject of recent disciplinary charges is Peter Fosco, a union vice president based in New Orleans. A hearing on the charges against Fosco for allegedly accepting payments for work that should have been covered by his salary as a regional manager is set for March 22 in New Orleans, sources close to the investigation told BNA.


"Our innovative internal reform program has made significant progress in eliminating corruption and organized crime from our union over the past four years" said Michael Bearse, general counsel for the union. "This new cooperative agreement acknowledges that we have made real success and operated in good faith. It also provides greater rights and protections for our union and enables us to continue our efforts in making this union the best possible union for our members."


LIUNA reform programs have resulted in increased membership participation in reform efforts throughout the union's more than 600 local unions, Bearse said. The union held its first rank-and-file election for president and secretary-treasurer in December 1996, he said, under the supervision of an independent election officer. The union will conduct membership elections for all international officers in 2001, also under government supervision. Unlike with the Teamsters situation, LIUNA has been paying for the costs associated with government supervision.


Since the reform program began, Bearse said, more than 450 investigations have been opened with some 132 charges filed. The result has been that more than 189 people have been forced to leave the union and 31 trusteeships and supervisions have been imposed, he said.


Luskin: LIUNA-Justice Relationship Affirmed


Robert D. Luskin, the attorney and in-house prosecutor for LIUNA's general executive board, said Jan. 7 the extension of the agreement with Justice "won't change what we do on a day-to-day basis" but will merely "affirm our cooperative relationship with the government."


As the relationship between the prosecutor's office and Justice has developed over the past four years, Luskin said "we've earned the trust" of the various government officials who have been more forthcoming with information regarding members of the union under investigation. One example, Luskin said, was a favorable outcome in a LIUNA request to Justice regarding the Privacy Act. The Federal Bureau of Investigation agreed to change its internal regulations to enable the agency to provide Luskin's office with information unavailable in the past, he said. While not a sensational development, he said the revised regulations made certain aspects of his job far easier.


Asked about the origins of "budgetary constraint" language in the new agreement, Luskin said the reform program has been an expensive undertaking for the union at about $7 million in each of the past four years. Added to that is nearly $7 million in supervision fees for the election of officers in 1996. Language negotiated in the new agreement was the result of an effort by the parties to "figure out how to do our job" and not financially destroy the union in the process, he said.


Luskin explained that reform program costs should be expected to cost more in the early years when issues of what he referred to as "deferred ethical maintenance" are addressed.


The agreement on language requiring a greater burden on Justice before imposing a takeover under a consent decree was "recognition of our track record," Luskin said. "We have earned a certain amount of confidence and trust," he said, with the result that the government is not as likely to be concerned about the efficacy of the reform effort if the union momentarily falters as it may have been earlier in the process. "In the beginning," the government "had no way to gauge our good faith or competence," Luskin said. The change in the triggering mechanism "is recognition that the process has proven itself," Luskin said. He added that the union will be no less aggressive in pursuing reform in 1999 than it was in the preceding years.


Critics Call Agreement 'Inadequate'


The National Legal and Policy Center, a conservative policy group in McLean, Va., condemned the one-year extension as inadequate and called for the Justice Department to impose the terms of the consent decree immediately. They also called for removal of Arthur A. Coia as president of the union and demanded that Luskin be replaced as the GEB attorney.


"The so-called LIUNA 'internal reform effort' is a failure and a sham," according to NLPC President Peter Flaherty. "This latest extension is extremely inadequate. It's an outrage. Justice and common sense require that Arthur Coia and Robert Luskin be ousted without further delay."


Flaherty asserted that Luskin and the reform program in general have not been as effective in ridding the union of corruption as a court-appointed team would be. He said his organization continues to get reports from union dissidents around the country of widespread corruption in many LIUNA local unions.


Jim McGough, a spokesman for a small union reform group in Chicago called Laborers for Justice and Democracy, said he continues to be disappointed with the pace and aggressiveness of the internal reform process. He also noted that the extension was not surprising given the scale of problems within the union and continued need for reform.


"They couldn't not extend it," McGough said. "They still haven't concluded with Coia and that will probably be appealed and then it might be appealed to district court. The whole thing could go on for more than a year. We hoped it would be extended for more than a year."


Text of the LIUNA-Justice Department agreement appears in



Copyright © 1999 by The Bureau of National Affairs, Inc., Washington D.C.

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