US v. District Council

• Decision Date: 20 November 1991
• Docket Number: No. 90 Civ. 5722 (CSH).,90 Civ. 5722 (CSH).
• Parties: UNITED STATES of America, Plaintiff, v. DISTRICT COUNCIL OF NEW YORK CITY AND VICINITY OF the UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, Frederick W. Devine, President, John R. Abbatemarco, First Vice President, George J. Albert, Second Vice President, Robert J. Cavanaugh, Secretary-Treasurer, Paschal McGuinness, former President, Irving Zeidman, former First Vice President, Francis J.P. McHale, former Secretary-Treasurer, Anthony Salerno, a/k/a "Fat Tony", Vincent DiNapoli, Louis DiNapoli, Peter DeFeo, Alexander Morelli, a/k/a "Black Alex", Liborio Bellomo, a/k/a "Barney", Defendants.
• Court: U.S. District Court — Southern District of New York

778 F. Supp. 738

UNITED STATES of America, Plaintiff, v. DISTRICT COUNCIL OF NEW YORK CITY AND VICINITY OF the UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, Frederick W. Devine, President, John R. Abbatemarco, First Vice President, George J. Albert, Second Vice President, Robert J. Cavanaugh, Secretary-Treasurer, Paschal McGuinness, former President, Irving Zeidman, former First Vice President, Francis J.P. McHale, former Secretary-Treasurer, Anthony Salerno, a/k/a "Fat Tony", Vincent DiNapoli, Louis DiNapoli, Peter DeFeo, Alexander Morelli, a/k/a "Black Alex", Liborio Bellomo, a/k/a "Barney", Defendants.

No. 90 Civ. 5722 (CSH).

United States District Court, S.D. New York.

November 20, 1991.

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Morvillo, Abramowitz, Grand, Iason & Silberberg, P.C. (Robert G. Morvillo, Robert J. Anello, Joel M. Cohen, Sherrie F. Nachman, Thomas A. Arena (not yet admitted), of counsel), Manning, Raab, Dealy & Sturm, New York City (James J.P. Manning, William J. Dealy, John J. Leo, Mark A. Wines, Ronald A. Goldman, of counsel), for defendant Dist. Council of New York City and Vicinity.

Thomas Fitzpatrick, New York City, for defendants Irving Zeidman, Frederick W. Devine, and Francis J.P. McHale.

Dominic F. Amorosa, New York City, for defendant Paschal McGuiness.

Henry Putzel, III, New York City, for defendant Robert Cavanaugh.

Roger S. Hayes, Acting U.S. Atty., S.D. New York, New York City (Marla Alhadeff, Thomas A. Zaccaro, Gideon A. Schor, Asst. U.S. Attys., Martin C. Aronchick, Sp. Asst. U.S. Atty., of counsel), for plaintiff U.S.

MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge:

In this action the government invokes the civil RICO statute, 18 U.S.C. ? 1964, to obtain injunctive relief against a labor organization, certain of its present and former officers, and other individuals.

The case is before the Court on certain defendants' motion to dismiss the Supplemental Complaint. For the reasons set forth below, the motion is hereby denied.

BACKGROUND

The District Council of New York City and Vicinity of the United Brotherhood of Carpenters and Joiners of America ("District Council") is a labor organization that represents about 22 local unions in the construction trade industry in New York City and its vicinity. The District Council negotiates collective bargaining agreements, implements and maintains those agreements, handles labor disputes, grievances and arbitrations on behalf of local unions and coordinates labor relations matters with other unions. Supp. Complaint ? 6; Affidavit of Robert G. Morvillo Dated November 12, 1990 ("Morvillo Aff.") ? 3. The District Council's affiliated local unions ("Local Unions") have voting rights and elect delegates to the District Council based on the number of members in the local. Even when a local member is elected to the District Council, he is paid by the local union.

The District Council oversees a number of trust funds: the New York City District Council of Carpenters Welfare Fund, the New York City District Council of Carpenters Pension Fund, the New York City District Council of Carpenters Vacation Fund, the New York City District Council of Carpenters Annuity Fund, the New York City District Council of Carpenters Apprenticeship, Journeyman Retraining, Educational and Industry Fund, the New York City District Council of Carpenters Supplemental Fund and the Retirement and Pension Plan for Officers and Employees of the New York City District Council of Carpenters and Related Organizations ("District Council Benefit Funds"). Supp. Complaint ? 8.

The District Council's officers, Frederick W. Devine, John R. Abbatemarco, George J. Albert and Robert J. Cavanaugh, and former officers Paschal McGuiness, Irving Zeidman, and Francis J.P. McHale (the "Officer Defendants") who are defendants in their individual and official capacities, are drawn from the local unions.¹ Defendant Devine, who is now President and who was a Vice President of the District Council since approximately 1986, is also President of Carpenters Local 1456. Defendant Abbatemarco, who is First Vice President of the District Council, is also Vice President and Delegate of Carpenters Local 257. Defendant Albert, who is Second Vice President of the District Council, is also Financial Secretary and Treasurer of Carpenters Local 348. Defendant Cavanaugh, Secretary-Treasurer of the District Council, is also the Delegate of Carpenters Local 740.

Defendant McGuinness, who is also the President of Carpenters Local 608, was the President of the District Council from 1984 to 1991. Defendant Zeidman, who was a Vice President of the District Council from approximately 1985 to 1991, is also the President of Carpenters Local 2155. Defendant McHale, who was the Secretary-Treasurer of the District Council from approximately 1983 to 1991, is also the "Business Agent Emeritus" of Carpenters Local 2287. Until about 1987, he had been the Business Agent of Local 2287. Supp. Complaint ? 9.

The Supplemental Complaint alleges that defendants Anthony Salerno, Vincent DiNapoli, Louis DiNapoli, Peter DeFeo, Alexander Morelli and Liborio Bellomo (the "Individual Defendants") hold or have held positions in the Genovese Organized Crime Family, a criminal organization affiliated with La Cosa Nostra, or "Mafia," or "Our Thing." Supp. Complaint ?? 11-17.

The government alleges that the District Council has supervisory powers on all matters relating to the local unions. The District Council enters into collective bargaining agreements with employers in the New York City area and the District Council holds and controls the District Council Benefit Funds. The Supplemental Complaint alleges that "the officers of the District Council are entrusted with, and have ultimate power over, the fundamental contractual and statutory rights of the union members." Supp. Complaint ? 18.

The plaintiff's Racketeer Influenced and Corrupt Organization ("RICO") claim rests on the allegation that the officers of the District Council have abused their power by taking bribes from employers, converting the collective bargaining agreements into tools of extortion and working with organized crime figures who have profited at the expense of the membership. The government alleges that

by such affirmative misconduct and by their deliberate refusal to exercise their supervisory powers, the officers of the District Council have fostered a regime of corruption, extortion and intimidation at all levels of the union throughout New York City. This regime, as stated below, rests on a pattern of racketeering activity in violation of RICO. Supp. Complaint ? 19.

The government alleges that the District Council, its constituent Local Unions and the District Council Benefit Funds (the "District Council Enterprise") constitute an enterprise under Title 18 U.S.C. ? 1961(4), which has been engaged in, and activities of which have affected, interstate commerce. Supp. Complaint ? 20.

The government's First Claim for Relief, based upon 18 U.S.C. ? 1962(b), alleges that from the 1960s to the present,

defendants Anthony Salerno, Vincent DiNapoli, Peter DeFeo, Alexander Morelli and Liborio Bellomo, together with and aided and abetted by defendants Paschal McGuinness, Irving Zeidman, Frederick W. Devine, Francis J.P. McHale, George J. Albert and others have unlawfully willfully and knowingly acquired and maintained, directly and indirectly, an interest in and control of the District Council Enterprise, which has engaged in and the activities of which have affected interstate commerce, through a pattern of racketeering activity as set forth below, in violation of Title 18, United States Code 1962(b) and 2. Supp. Complaint ? 21.

The charge of aiding and abetting is based on the allegation that

each of the current and former District Council officer defendants has aided and abetted each of the racketeering acts set forth below which occurred during his tenure as a District Council officer by, at a minimum, refusing to take any action to redress that racketeering act. The District Council officer defendants have the authority and obligation, both under the applicable union constitution and bylaws and under federal labor law, to investigate and discipline union corruption. Supp. Complaint ? 22.

The Supplemental Complaint goes on to allege predicate racketeering acts by the present and past officers of the District Council, paragraphs 23-43, and predicate racketeering acts by officers of the Local Unions, paragraphs 44-76.

The Supplemental Complaint describes additional predicate acts in connection with the government's allegation that it was a further part of the pattern of racketeering activity to delay and affect interstate commerce by extortion, in violation of Title 18 U.S.C. ? 1951, by obtaining and attempting to obtain property: (a) in the form of the right of union members to free speech and representation rights of union members as guaranteed by Title 29 U.S.C. ? 411; (b) in the form of the right of union members to loyal and responsible representation by union officers as guaranteed by Title 29 U.S.C. ? 501(a); and (c) in the form of the right of union members to loyal and responsible representation by the trustees of the District Council Benefit Funds as guaranteed by Title 29 U.S.C. ?? 1104, 1106. The defendants allegedly carried out this extortion by using actual and threatened force, including fear of physical and economic harm in violation of Title 18 U.S.C. ? 1951. The Supplemental Complaint lists acts of violence or threats of violence and economic harm or threats of economic harm. Supp. Complaint ? 77(a)-(h).

The government's Second Claim for Relief alleges that the officer defendants and the individual defendants have conspired to violate Title 18 U.S.C. ? 1962(b) in violation of Title 18 U.S.C. ? 1962(d). The government realleges all of the previous racketeering acts in...