Complaint for trusteeship against Laborers Local 2, Chicago

Laborers’ Sewer & Tunnel Miners Union Local 2
6607 West Archer Avenue
Chicago, Illinois 60638

Copies of this Notice and Complaint must be posted at the offices of the Laborers’ Sewer & Tunnel Miners Union Local 2

To the Officers and Members of Local 2:

Pursuant to the LIUNA Ethics and Disciplinary Procedure, Section 3, the GEB Attorney is delegated all of the powers of the LIUNA General President “to impose and review the imposition of trusteeships, over any district council, local or other entity within the union.” Article IX, Section 7 of the International Constitution provides that the General President may appoint a trustee to take charge and control over the affairs of a district council when such action is necessary “for the purpose of correcting corruption or financial malpractice, assuring the performance of collective bargaining agreements or other duties of a bargaining representative, restoring democratic procedures, otherwise carrying out the legitimate objects of such subordinate body of the International Union, or to protect the organization as an institution.” Under this provision of LIUNA’s Constitution, a hearing must be conducted for the purpose of determining whether such a trustee shall be appointed..

By this letter and the enclosed trusteeship Complaint, I advise you that I have concluded that the imposition of a trusteeship over the Laborers’ Local 2 is necessary to correct corruption and financial malpractice, to restore democratic procedures and to carry out legitimate objects of the International. The grounds for trusteeship are more specifically set forth in the accompanying Complaint, which is being filed with LIUNA’s Independent Hearing Officer.

Any member or officer of Local 2 is welcome to attend the hearing and to present evidence to the Independent Hearing Officer. You will be further advised regarding the time, location and procedures of the hearing. After the hearing has been concluded, the Independent Hearing Officer will rule on whether a trusteeship is warranted and advise you of his ruling.
In addition, pursuant to Article IX, Section 6 of the L.I.U.N.A. Constitution, and Paragraph 3 of the LIUNA Ethics and Disciplinary Procedure, you are hereby ordered by the GEB Attorney not to dispose of any record referring or relating to the allegations set forth in the accompanying Complaint, or the individuals named therein, effective immediately, until further order of the GEB Attorney. Failure to comply with this order shall constitute a basis for

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Laborers’ Sewer & Tunnel Miners Union Local 2
April 23, 1999
Page 2

disciplinary action under the Ethics and Disciplinary Procedure.

Yours sincerely,

Robert D. Luskin

Trusteeship Complaint enclosed.

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OFFICE OF THE INDEPENDENT HEARING OFFICER
LABORERS INTERNATIONAL UNION OF NORTH AMERICA

COMPLAINT FOR TRUSTEESHIP

Pursuant to Section 3 of the LIUNA Ethics and Disciplinary Procedure and Article IX, Section 7 of the LIUNA Constitution, and after reviewing evidence that the Inspector General has acquired during his investigation of Local 2, the GEB Attomey has determined that a trusteeship of Local 2 is necessary to achieve the constitutionally enumerated purposes set forth below.

In support of this determination, the GEB Attorney states as follows:

GENERAL ALLEGATIONS

1.����������������� Local 2, located in Chicago, Illinois, consists of approximately 1,200 members. John Matassa, Jr. (“Matassa”), currently serves as both President and Business Manager of Local 2. The other members of the Executive Board are: Dominick DiMaggio, Vice-President; Michael Christopher, Secretary-Treasurer; Vincent DiVarco, Recording Secretary; Dennis Walthers, Dominck Mancini and Eugene Jagielo.

2. ���������������Since at least 1985, Local 2 has been corrupted by the influence of organized crime. The influence of organized crime has been perpetuated through the
   longstanding abuse of democratic process and has resulted in ongoing financial malpractice and in Local 2’s inability to carry out legitimate, constitutional objectives of a LILTNA affiliate such as independently fulfilling its obligation to address allegations of mob control.
   
   
3. ���������������Matassa, DiMaggio and DiVarco, who are either in the mob or have direct family ties to the mob, were each hired as salaried Field Representatives in the mid to late 1980s despite having no prior experience in Local 2. And, without any opposition from the Executive Board or the general membership, these individuals quickly took over the positions of President, Business Manager, Vice President and Recording Secretary of Local 2. Not a single contested election has been held at Local 2 during this time.
   
   
4. ���������������Matassa, Local 2’s current President and Business Manager, is deeply involved in the activities of La Cosa Nostra in Chicago, which is commonly referred to as the Chicago Outfit. At various times from the late 1970s to the present, Matassa has been an associate, made member or a boss of the Northside Crew of the Chicago Outfit. Matassa has repeatedly admitted under oath to a pattern of close associations with top mob leaders in Chicago for over 25 years. Some of these top mob leaders include: John “Apes” Monteleone, Alphonse Tornebene, Sam Carlisi, James Marcello, Michael Marcello, Mike Glitta, Joe Arnold, Frank “Babe” DeMonte, Joseph “Ceasar” DiVarco, and Vincent Solano. Even after the Chicago District Council was placed under trusteeship as a direct result of its corrupt ties to organized crime through Matassa and

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other officials, Matassa admitted under oath that he continues to meet with top mob figures in Chicago while holding the positions of President and Business Manager of Local 2.

5. ���������������Since joining the union in 1985, Matassa has enjoyed a meteoric rise to top leadership positions within Local 2. With the Executive Board’s unanimous approval and without consideration of other candidates, Matassa was hired in 1985 as a salaried Field Representative despite having never been a member of Local 2. One month after the minimum required time to be eligible to run for an official position under the Uniform Local Union Constitution, Matassa took over Local 2’s top elected position of Business Manager in an unopposed nomination process. In 1989, Matassa took over the consolidated positions of President and Business Manager in an unopposed process. Since at least 1989, Matassa has exerted complete authority over the salaries of elective officers in violation of Article IX., Section 6 of LIT-NA’s Uniform Local Constitution.
   
   
6. ���������������Vincent DiVarco, Local 2’s Recording Secretary and Field Representative, is the son of Joseph “Ceasar” DiVarco. Along with Matassa, Ceasar DiVarco was a ranking member of the Northside crew of the Chicago Outfit. Ceasar DiVarco was convicted of gambling charges and died in prison in approximately 1986. Matassa, who was once indicted with Ceasar DiVarco on extortion charges, has admitted under oath to closely associating with Ceasar DiVarco on a daily basis over a period of many years. Vince DiVarco is also the son-in-law of Chicago Outfit associate James Caporale, a

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former Chicago District Council official convicted of looting approximately $2 million from one of the union’s affiliated funds.

7. ���������������Within a year of taking over as Business Manager of Local 2, Matassa announced a new Field Representative position. Matassa took the recommendation of the Chicago District Council, which was under the influence of organized crime at the time, and hired Vince DiVarco. DiVarco filled Matassa’s newly created position with unanimous approval of Local 2’s Executive Board without consideration of other candidates and despite DiVarco’s never having been a member of Local 2. Currently, and throughout his employment in Local 2, Vince DiVarco has demonstrated an inability to act independently of Matassa in carrying out the legitimate, constitutional objectives of LIUNA.
   
   
8. ���������������Dominick DiMaggio (“DiMaggio”), Vice President and Field Representative of Local 2, is the nephew of Roy Carlisi and Sam Carlisi. DiMaggio was born and grew up in the Chicago area. He then moved to Buffalo, New York where he lived with his uncle, Roy Carlisi, who was a top mob figure ‘in Buffalo. While living with Roy Carlisi, Dominick DiMaggio was an active member of LIUNA Local 2 10 which was then under the influence of organized crime and is currently under an extended Supervision to rid itself of mob corruption. DiMaggio himself has been involved in organized crime activities.
   
   
9. ���������������Dominick DiMaggio returned to Chicago in approximately 1986.

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DiMaggio’s other uncle, Sam Carlisi, lived in Chicago and was also a top leader of the Chicago Outfit. Sam Carlisi was ultimately convicted on RICO conspiracy, gambling, extortion and tax charges in 1996. Upon DiMaggio’s return to Chicago, he immediately obtained a job in the Chicago District Council, which was then under the influence of organized crime and is currently under trusteeship to rid itself of mob corruption.

10. �����������As Vincent DiVarco had before him, DiMaggio obtained salaried employment with Local 2 when Matassa announced a new Field Representative position. DiMaggio filled this position at the recommendation of the mob controlled Chicago District Council. Like DiVarco and Matassa before him, DiMaggio entered Local 2 as a salaried Field Representative with unanimous approval and without consideration of other candidates despite DiMaggio’s never having been a member of Local 2. In addition, Matassa has testified under oath that DiMaggio arranged golf outings between Matassa and top mob boss Sam Carlisi. Currently, and throughout his employment in Local 2, Dominick DiMaggio has demonstrated an inability to act independently of Matassa in carrying out the legitimate, constitutional objectives of LIUNA.
    
    

11.������������� Michael Christopher joined Local 2 as a salaried Field Representative at approximately the same time as Matassa. Michael Christopher and the other members of the Executive Board of Local 2 have demonstrated an inability to act independently of Matassa in carrying out legitimate, constitutional objectives of a LIUNA affiliate. Examples of the Executive Board’s inability to exercise independent judgment on behalf

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of Local 2 or to separate their own interests from those of Matassa’s include, but are not limited to the following:

1. For over a decade, Local 2’s Executive Board has followed all of Matassa’s hiring recommendations and decisions. Not a single opposition or dissent to any decision or recommendation from Matassa on hiring is reflected in the minutes of Local 2;
2. Local 2’s Executive Board voted to give Matassa complete control over the salaries of all elective officers of Local 2 in violation of Article IX, Section 6 of LIUNA’s Uniform Local Union Constitution. Not a single opposition or dissent to any decision or recommendation from Matassa on salary is reflected in the minutes of Local 2. In exercising his control over salaries at Local 2, Matassa has raised his own salary and provided himself with special benefits such as a deferred compensation agreement which was not made available to other officers and was not disclosed to the Executive Board before it was signed. The deferred compensation benefit was not submitted to the members for voting in accordance with Article IX, Section 6 of the Uniform Local Union Constitution.
3. Local 2s Executive Board has failed in its duty to take adequate steps to investigate and eradicate the influence of organized crime within Local 2. Despite receipt of a 91 page opinion dated February 7, 1998 from LIUNA’s Independent Hearing Officer finding that Matassa is “deeply involved with organized crime in his daily activities” and identifying Vince DiVarco and Dominick DiMaggio as having direct family ties to

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ranking members of the Chicago Outfit, Local 2’s Executive Board has taken no independent, affirmative steps to investigate or eradicate organized crime influence within the local;

1. Local 2’s Executive Board has given approximately $70,000 in union funds to attorneys and investigators responsible for defending Matassa against charges of mob influence. Despite a UUNA GEB Policy that expressly prohibits a local union from paying Matassa’s attorney fees, and despite an affirmative duty to investigate allegations of mob corruption, Local 2’s Executive Board has repeatedly, and without dissent, voted to pay Matassa’s attorneys and his private investigator for a variety of services including the pursuit of an “investigation” of the corruption charges against Matassa. Local 2’s Executive Board also voted to give Matassa and Michael Christopher complete control over payment to attorneys and an investigator who are simultaneously defending Matassa. Local 2’s decision to hire and pay fees to attorneys and an investigator to conduct an independent investigation of John Matassa’s mob ties at a time when these same attorneys and investigator are actively defending Matassa against these very allegations is a waste of union assets and is evidence of the Executive Board’s inability to independently fulfill its duty to address allegations of mob control.
   
   

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GROUNDS FOR TRUSTEESHIP

A trusteeship of Local 2 is necessary to eradicate corruption, restore democratic practices, protect the finances of Local 2 and to carry out the legitimate objects of LIUNA. Local 2’s Executive Board has demonstrated that it is unable to act independently of Matassa and, even Matassa’s possible expulsion from LIUNA would not be sufficient assurance that the regime Matassa himself has put into place will be free from the influence of organized crime or able to conduct its affairs in a manner that furthers to interests of Local 2’s membership.

COUNT I

CORRECTING CORRUPTION AND

ERADICATING THE CORRUPT INFLUENCE OF ORGANIZED CRIME

12. �������In light of the evidence developed by LIUNA’s Inspector General’s office and the facts set forth in the above paragraphs, the GEB Attorney has formed an opinion that it is necessary to place Local 2 under trusteeship for the purpose of correcting corruption and eradicating the corrupt influence of organized crime. Given the past and current association and participation of Local 2’s President and Business Manager with top organized crime figures in Chicago; the action and inaction of Local 2 which has resulted in the placement and retention of mob members, mob associates and relatives of mob members in top positions of power within Local 2; the failure to hold a single democratic, contested election; the ceding of control over salary determinations to Local

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2’s corrupt President and Business Manager; and the failure to acknowledge or meaningfully address the issue of organized crime corruption within Local 2, imposition of a trusteeship over this entity is necessary to eradicate the influence of organized crime from the union.

13.��������� By placing Local 2 under trusteeship, LIUNA will be able to correct the corrupt abuses of that entity’s leadership, more closely monitor the activities of the Local and take informed, independent, affirmative steps to rid Local 2 of organized crime Corruption,

COUNT 11

RESTORING DEMOCRATIC PROCEDURES

14.��������� In light of the evidence developed by LIUNA’s Inspector General’s office and the facts set forth in the above paragraphs, the GEB Attorney has formed an opinion that it is necessary to place Local 2 under trusteeship for the purpose of restoring democratic procedures. Given the past and current association and participation of Local 2’s President and Business Manager with top organized crime figures in Chicago; the action and inaction of Local 2 which has resulted in the placement and retention of mob members, mob associates and relatives of mob members in top positions of power within Local 2; the failure to hold a single democratic, contested election; the ceding of control over salary determinations to Local 2’s corrupt President and Business Manager; and the failure to acknowledge or meaningfully address the issue of organized crime corruption

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within Local 2, imposition of a trusteeship over this entity is necessary to restore democratic procedures to the union.

15. By placing Local 2 under trusteeship, LIUNA will be able to foster open and democratic practices within Local 2 and to assure the proper, democratic appointment and removal of Local 2 officers as necessary.

COUNT III

CORRECTING FINANCIAL MALPRACTICE

16. In light of the evidence developed by LIUNA’s Inspector General’s office and the facts set forth in the above paragraphs, the GEB Attorney has formed an opinion that it is necessary to place Local 2 under trusteeship for the purpose of correcting certain financial malpractice. Given the ceding of control over salary determinations to Local 2’s corrupt President and Business Manager; the payment of large amounts of union funds to attorneys and investigators who are simultaneously working to defend Local 2’s President and Business Manager from charges of organized crime corruption; as well as other financial abuses that have benefitted or may have benefitted mob members, mob associates or relatives of mob members, the imposition of a trusteeship over Local 2 is necessary to correct financial malpractice.
17. By placing Local 2 under trusteeship, LIUNA will be able to correct financial abuses that exist within Local 2 and to achieve sound, ethical and independent financial management for the benefit of its membership.

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Count IV

CARRYING OUT THE LEGITIMATE OBJECTS OF
LIUNA AND ITS AFFILIATES

18. Certain “objects” of the International Union are set forth in Article 11, Section I of the LIUNA Uniform Local Union Constitution. The “objects” of Local Unions are set forth in Article 11, Section I of the ULUC and include the responsibility “to fulfill the objects of the International Union as specified in Article Il, Section I of the International Union Constitution,” ULUC, Art. 11, Section l(b). Thus, Local 2 is obligated to pursue the International’s objects in addition to those enumerated in the ULUC.
19. Additional objects of the International and its affiliated entities are set forth in the Llt- NA Ethical Practices Code (*’EPC”) and the LIUNA Ethics and Disciplinary Procedure (“EDP”), which form part of the International Constitution. The EPC sets forth certain specific ethical practices that “shall apply to the International Union, all District Councils, every Local Union, all subordinate bodies, and to every employee, member and officer thereof, and to every union trustee and employee of any benefit fund or political action committee.” The EPC and the EDP set forth and reinforce standards of conduct in the following areas: Democratic Practices, Financial Practices, Health, Welfare and Retirement Funds, Business and Financial Activities of Union Officials and Barred Conduct.

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20. �������In light of the evidence developed by the Inspector General and the facts set forth in the above paragraphs, the GEB Attorney has determined that it is necessary to place Local 2 under trusteeship to carry out the legitimate objects of LIUNA and its affiliates as expressed in the LIUNA International Constitution, the ULUC, the EPC and the EDP. Given the past and current association and participation of Local 2’s President and Business Manager with top organized crime figures in Chicago; the action and inaction of Local 2 which has resulted in the placement and retention of mob members, mob associates and relatives of mob members in top positions of power within Local 2; the failure to hold a single democratic, contested election; the ceding of control over salary determinations to Local 2’s corrupt President and Business Manager; and the failure to acknowledge or meaningfully address the issue of organized crime corruption within Local 2, Local 2 is currently unable to carry out the legitimate, constitutional objectives of a LIUNA affiliate. Specifically, Local 2 has failed:
21. �����������������������To fulfill the objects of the International Union as specified in Art. 11, Sec. I of the International Union Constitution, ULUC, Art. 11, Sec. I (b);

1. �����������������������To conduct its affairs in a manner which would most tend to enhance, conserve and protect the welfare and interest of the International Union, its affiliates and members. ULUC Art. 11, Sec. I (c);

c ������������������������� To perform and carry out its objects and functions in accordance with the provisions of this Constitution, the International Union Constitution and the Uniform District Council Constitution, ULUC, Art. 11, Sec. l(d);

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1. 
   �����������������������To unite under [LIUNA’s] banner all persons engaged in work within its jurisdiction… for their mutual benefit, aid and protection. LIUNA Constitution, Art. 11, Sec. I (a);
2. �����������������������To promote a better understanding by government and the public of the alms and objects of this Organization and the Labor Movement as a whole. LIUNA Constitution, Art, 11, Sec. 10);
   
   f. ������������������������ To take all such other action as may tend to conserve and promote the welfare and interest of this International Union, its affiliates and members. LIUNA Constitution, Art, 11, Sec. I (r);
   
   g.������������������������� To protect the democratic rights of LIUNA’s members to participate fully, without fear, abuse, or intimidation in all Union affairs; to ensure that each member shall have the right to run for office, to nominate through duly established constitutional procedures, and to vote in free, fair and honest elections; to ensure that the union’s operations shall be conducted in a democratic and fair manner; and to ensure that corruption, discrimination or anti democratic procedures shall not be permitted under any circumstances, EPC, Democratic Practice’s Section; and
   
   h. ����������������������� To make meaningful efforts to eradicate corruption and prohibit barred conduct, which is defined to include: committing any act of racketeering; knowingly associating with any member or associate of organized crime; knowingly permitting any member or associate of the LCN to exercise control or influence over the affairs of the Union; or obstructing or interfering with the LIUNA Inspector General. EPC and EDP, Barred Conduct Sections.

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CONCLUSION

Wherefore, the GEB Attorney respectfully requests that, upon due notice and hearing, the Independent Hearing Officer impose a temporary trusteeship on LIUNA Local 2.

Respectfully submitted,

s/Robert D Luskin
Robert D Luskin, GEB Attorney
Dwight P. Bostwick
Mathew E. Paul

Date: April_, 1999

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