United States v. International Brotherhood of Teamsters, 88 Civ. 4486 (LAP).
| Decision Date | 22 August 2003 |
| Docket Number | 88 Civ. 4486 (LAP). |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS. APPLICATION 102: William T. Hogan and Dane M. Passo, Defendant. |
| Court | U.S. District Court — Southern District of New York |
I. Background
Before the Court is Application 102 of the Independent Review Board ("IRB") of the International Brotherhood of Teamsters ("IBT") to affirm the disciplinary action taken against IBT members William T. Hogan, Jr. ("Hogan") and Dane M. Passo ("Passo").
Hogan and Passo were charged with bringing reproach upon the IBT and violating the IBT Constitution by colluding with a non-union employer to enter into a sub-standard contract with IBT Local 631, to the detriment of IBT members. The IRB conducted a hearing on the charges on October 18 and 19, 2001. By decision dated May 29, 2002 (the "IRB Decision"), the IRB concluded that the charges were established and permanently expelled Hogan and Passo from the IBT.
Hogan and Passo filed lengthy objections to the IRB Decision, the Chief Investigator filed a Memorandum of Law in Support of Application 102, and Hogan filed a reply.
Hogan and Passo held high-level positions with the IBT during the time period covered by the instant charges. Prior to his expulsion, Hogan had been a member of the IBT for some 40 years, Objection of William T. Hogan, Jr. to Application 102 of the IRB ("Hogan Br.") at 33, and had served as an IBT International Representative, President of IBT Joint Council 25, and Director of Organizing and Political Director of IBT Local 714, Vice President of IBT Local 179; he was a member of IBT Local 714 in Chicago, IRB Decision at 3; IRB Investigative Report ("IRB Rep.") Ex. 14, at 3-5; IRB Hearing Transcript ("Tr.") at 279-80. Hogan was appointed an IBT International Representative by IBT General President James P. Hoffa ("Hoffa"). Id. at 14. Hogan was appointed to his position with Local 714 by his son, Robert Hogan, the current Secretary-Treasurer and principal officer of Local 714. Id. at 5.1
Hogan has extensive experience in the convention and trade show industries, both in Chicago and around the country. IRB Decision at 3. Hogan dealt for decades with conventions and trade shows at McCormack Place, the major convention center in Chicago, and was involved with the Chicago Convention and Tourism Bureau. Tr. 280-84. Nevertheless, General President Hoffa never appointed Hogan to any International position concerning that industry and never appointed him to any position that would give him any authority or assignment with respect to Local 631 in Las Vegas. IRB Rep. Ex. 78 at 35.2
Prior to his expulsion, Passo had been a member of the IBT since 1971. IRB Rep. Ex. 20 at 4. In January, 1999, following General President Hoffa's election to office, Passo was hired to serve on the General President's staff as a member of the transition team. IRB Rep. Ex. 11 at 3. On March 23, 1999, General President Hoffa appointed Passo to serve as an International Representative. IRB Rep. Ex. 11 at 8. On April 13, 1999, General President Hoffa appointed Passo to serve as the Special Assistant to the General President. IRB Rep. Ex. 11 at 10. No other person held that same title at the IBT. IRB Rep. Ex. 78 at 13.3 On November 5, 1999, General President Hoffa appointed Passo as his Personal Representative to Teamsters Local 631. IRB Rep. Ex. 10. Before his involvement with Local 631, Passo had never negotiated a contract on behalf of the IBT and he had no experience in the convention industry. IRB Decision at 2; Tr. at 455, 505.
_______ United Services Companies ("United") was founded in Chicago forty years ago by Ben Stein ("Stein"). IRB Decision at 4; IRB Rep. Ex. 28. For decades, United has supplied convention services, including janitorial and maintenance services, to the McCormack Place convention center in Chicago and to convention centers in other major cities. IRB Rep. Ex. 27. Stein was convicted in 1966 of labor racketeering and bribery in connection with United's services at McCormack Place. IRB Decision at 4; IRB Rep. Ex. 28. Specifically, Stein made payoffs to IBT officials in Chicago to allow his non-union employees to work at McCormack Place. Id. Although his conviction was overturned on appeal, Stein subsequently pled guilty to bribing Teamster officials and was sentenced to a year in prison. Id. Stein also associated with organized crime figures in Chicago, including La Cosa Nostra ("LCN") member Dominic Senese ("Senese"), the former President of IBT Local 703 in Chicago. IRB Exs. 28-31. Senese was expelled from the IBT in 1990 for being a member of organized crime and for knowingly associating with other LCN members in Chicago. IRB Rep. Ex. 29. See United States v. IBT ("Senese"), 941 F.2d 1292 (2d Cir. 1991).
Stein's companies are managed today by United chairman Rick Simon ("Simon"), who had worked closely with Stein and has been with Stein's companies for thirty years. IRB Decision at 4; IRB Ex. 28. In 1988, the FBI interviewed Simon about the mobrelated shooting that year of Senese. IRB Rep. Ex. 30. In that interview, Simon acknowledged that "he had known Dominic Senese and his family for so long he could not remember how long." IRB Rep. Ex. 30 at 1. Currently, United has ties to both the Stein and Hogan families. Stein's daughter, Carol Stein, now owns United. IRB Decision at 4. Hogan's brother, Michael Hogan, is an officer of United.4 IRB Decision at 5. Michael Hogan was also the CEO of Show Biz USA, a trade show contractor in Las Vegas. IRB Decision at 5. Michael Hogan had been chief steward at IBT Local 714 in the trade show division in the 1970s. IRB Decision at 5; IRB Rep. Ex. 175 at 128.
Hogan has known Simon for ten to fifteen years. IRB Rep. Ex. 15 at 30. Hogan also knew Stein and his daughter Carol from their involvement with the Chicago convention and tourism industries. Id. at 59.5
Local 631 is an IBT local union in Las Vegas Nevada, with approximately 4,500 members. IRB Decision at 6; Tr. at 403. Local 631 had a collective bargaining agreement with trade show contractors in Las Vegas, including Greyhound Exposition Services ("GES") and Freeman Decorating ("Freeman"). IRB Decision at 6. Pursuant to this contract (referred to as the "Red Book contract"), these trade show contractors were required to call upon Local 631 when they needed workers. Id. Local 631 responded to such calls by dispatching workers to the contractors through its dispatch office in accordance with dispatch lists. Id. The list was open to both IBT members, who paid dues to Local 631, and to non-IBT members, who paid Local 631 a dispatch fee. Id. When Local 631's dispatch office ran out of registered workers to send to a contractor, Local 631 would contact other IBT local unions in Las Vegas for additional available workers to send; and when those other IBT locals were exhausted as a source of workers to respond to a call, Local 631 would contact other Las Vegas unions, such as the Carpenters and Electricians, for any members of those unions who needed work. IRB Decision at 8.6 All workers, including those from other IBT locals and other unions, who were dispatched through Local 631 were entitled to the wages and benefits of the Red Book contract. IRB Decision at 9. Under the Red Book contract, wages and benefits depended upon the number of hours worked in the industry and the time of day worked. During the relevant time period, IBT members (and other workers dispatched through Local 631) were paid hourly wages ranging from $12.40 per hour to $20.53 per hour. Id. at 7.
United served as a labor broker in Las Vegas and could supply non-union workers to trade show contractors at cheaper rates than the wages required by the IBT under the Red Book contract. Unfortunately for the contractors, the Red Book contract allowed them to avoid paying the relatively higher IBT wages and benefits only when Local 631's dispatch lists were exhausted. If the dispatch lists were not exhausted and the contractor nevertheless used United workers (or other workers who were not dispatched by Local 631), the contractor would be in violation of the contract and the IBT would have the right to file a grievance and seek compensation from the contractor. IRB Decision at 30, 36.7 While trade show contractors like GES and Freeman had an economic interest in avoiding payment of the Red Book wages and using United's cheaper, non-union labor instead, the Red Book contract provided that any worker who performed Teamster bargaining unit work must be paid the contract wages, even if not dispatched through Local 631. IRB Decision at 9; Tr. at 64-65. Accordingly, for United (including Simon and Michael Hogan) to profit by providing its non-union labor to contractors (at rates substantially lower than those paid to IBT members under the Red Book contract), United needed a separate agreement with the IBT that would allow United workers to perform Teamster bargaining unit work at wages other than those provided under the Red Book agreement.
II. Hogan and Passo Collude to Have Local 631 Enter into a Contract with United
Simon had attempted to enter into an agreement with Local 631 that would allow United to supply its non-union labor to trade show contractors whenever Local 631's dispatch list was exhausted. IRB Decision at 10. Simon approached the leadership of Local 631 about his proposal prior to the 1998 local union election, but that administration had rejected the proposal. Id. In 1998, IBT member Tim Murphy ("Murphy") was elected Secretary-Treasurer and principal officer of Local 631. Id. Murphy hired David Breyman ("Breyman") as a dispatcher. Id.
The following year, Michael Hogan of United approached his brother, William Hogan, and requested an introduction to the new...
To continue reading
Request your trial