BNA Daily Labor Reporter





Hearing Officer Affirms Trusteeship

Over Laborers Union Local in Chicago




By Michael Bologna

Thursday, March 4, 2004



CHICAGO--A Chicago local of the Laborers' International Union of North America has been placed under the control of a trustee, after the international union's hearing officer found the local to be influenced by organized crime, undemocratic, and tainted by gross financial malpractices.


In a decision dated March 2, Peter Vaira, LIUNA's independent hearing officer, affirmed in all respects a complaint for trusteeship over Local 1001 filed by LIUNA's General Executive Board attorney Robert Luskin. Vaira ruled that a trusteeship was warranted, "to correct organized crime influence over the local, correct financial malpractice and restore democratic practices" (In re Local Union 1001, LIUNA IHO, No. 03-21T, 3/2/04).


LIUNA responded March 3 by appointing Steve Hammond, a LIUNA international vice president, as the trustee. Hammond, who acted as trustee during the takeover of Local 79 of the Mason Tenders District Council of Greater New York, is expected to take control of the local March 4. Local 1001 represents approximately 2,800 laborers employed by the city of Chicago's departments of sanitation, aviation, and transportation.


Despite Vaira's ruling, it appears that Local 1001 will not surrender to the international without some additional legal dueling. Attorneys representing the local went to Cook County Circuit Court March 3, hoping to enjoin the international from imposing a trustee. A lawyer acting on behalf of the GEB attorney, however, was successful at getting Local 1001's petition removed to federal court. Luskin expressed optimism that Judge Robert Gettleman of the U.S. District Court for the Northern District of Illinois would affirm Vaira's decision, allowing for an orderly transfer of power.


Vaira's ruling relates to a complaint for trusteeship filed by Luskin Sept. 25, 2003. Luskin, who is responsible for investigating and prosecuting cases of official misconduct within the union, alleged that Local 1001 has been controlled by La Cosa Nostra for more than three decades. Luskin also alleged that the local made nearly $1 million in improper payments to pension and health and welfare funds on behalf of nonemployees and known organized crime figures.


With respect to organized crime, Vaira noted that Local 1001 had just two individuals serving in the joint capacity of business manager and president between 1984 and 2001. Vaira found that these union leaders, Ernest Kumerow and Bruno Caruso, were "recognized organized crime associates." In a Jan. 10, 2001, ruling, Vaira barred Caruso, who was a candidate for general president of the international union in 1996, from LIUNA for life because of his mob affiliations (10 DLR A-6, 1/16/01).


During hearings relating to the trusteeship complaint, Local 1001 tried to argue that it had undergone a meaningful and democratic transformation since Caruso's departure. Vaira, however, was unpersuaded.


"Local 1001 has had a long history of organized crime influence," Vaira wrote. "Due to the insidious nature of organized crime, once it has infiltrated a labor organization, organized crime influence does not disappear on its own despite the removal of some officials."


Vaira also found that Luskin had presented compelling evidence that Local 1001 had paid pension and health and welfare benefits for 33 individuals--many of whom were known organized crime figures--who were not salaried employees and had no right to such benefits. He said the local's activities were potentially criminal and described 1001's defense of such payments as lacking in credibility and in many respects "farcical."


"The potential financial ramifications based upon the contributions made and the benefits paid and potential benefits to be paid are substantial, and constitute clear evidence of financial malpractice and possible federal criminal violations," Vaira wrote.


Luskin told BNA that he was gratified to learn that Vaira had affirmed all of the allegations in his original complaint. He said the international union looks forward to an orderly transition and significant reform in a local that has for decades abused the rights of its members.


Local Seeking Restraining Order


Chicago criminal defense attorney Mathias Lydon, who represented the local in the matter, commented that "we're not necessarily surprised by Vaira's ruling given his relationship with Luskin and all of what's gone on. Obviously we disagree. I found the allegations with respect to organized crime to be very weak stuff."


Arguing that the international still has not made a viable case for controlling the local, Lydon said Local 1001 would pursue an order enjoining LIUNA from imposing the trusteeship. Lydon said he fully expects Judge Gettleman to make a determination March 4 on whether the issue can be remanded to state court. But a ruling on the local's petition for a restraining order and the validity of the trusteeship may take some time. If the trusteeship is ultimately imposed, however, he said the local will cooperate.


"We won't make this anymore difficult than it has to be," said Lydon, a partner in the Chicago office of Winston & Strawn. "If there is no temporary restraining order issued, we will be cooperative at that point."

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