US v. LOCAL 560 (IBT)

• Decision Date: 28 September 1988
• Docket Number: Civ. A. No. 82-689.
• Citation: 694 F. Supp. 1158
• Parties: UNITED STATES of America, Plaintiff, v. LOCAL 560 (I.B.T.), Nominal Defendant, v. Michael SCIARRA, Joseph Sheridan, Defendants.
• Court: U.S. District Court — District of New Jersey

694 F. Supp. 1158

UNITED STATES of America, Plaintiff, v. LOCAL 560 (I.B.T.), Nominal Defendant, v. Michael SCIARRA, Joseph Sheridan, Defendants.

Civ. A. No. 82-689.

United States District Court, D. New Jersey.

September 14, 1988.

As Corrected September 28, 1988.

Reitman, Parsonnet, Maisel & Duggan by Bennett D. Zurofsky, Newark, N.J., for Nominal defendant Local 560 (I.B.T.).

Weissbard & Wiewiorka by Harvey Weissbard, and Alan L. Zegas, West Orange, N.J., for defendants Michael Sciarra and Joseph Sheridan.

Walder, Sondak, Berkeley & Brogan by Justin P. Walder, Roseland, N.J., for Teamsters For Liberty, amicus curiae.

American Civil Liberties Union of New Jersey, amicus curiae by Eric Neisser, Legal Director, Newark, N.J.

Samuel A. Alito, Jr., U.S. Atty. by Jerome L. Merin, Asst. U.S. Atty., Deputy Chief, Civil Div., Robert C. Stewart, Sp. Atty. in Charge, Leopold Laufer, Sp. Atty., U.S. Dept. of Justice, Newark, N.J., George E. Wilson, Sp. Atty., U.S. Dept. of Justice, Camden, N.J., for U.S.

OPINION

DEBEVOISE, District Judge:

I. THE PRESENT PROCEEDINGS

With the approval of Edwin H. Stier, court-appointed Trustee of Teamsters Local 560, the United States applied to modify and extend the equitable relief embodied in the original Judgment Order of this court by rejoining Michael Sciarra and Joseph Sheridan as party defendants and by enjoining them from further participation in the affairs of Local 560. The application was embodied in an order to show cause. Two preliminary hearings were held for the purpose of defining the issues and arranging for limited discovery. An evidentiary hearing was held during the week of August 15, 1988.

On March 9, 1982, the United States filed the complaint in this action pursuant to 18 U.S.C. sec. 1964 (the Racketeering Influenced and Corrupt Organizations Act ("RICO")). Asserting that Local 560 was being victimized by racketeering activity, the complaint sought injunctive relief against individual defendants Anthony Provenzano, Nunzio Provenzano, Thomas Andretta, Stephen Andretta and Gabriel Briguglio, as associates of the Provenzano Group, and against the then Local 560 Executive Board incumbents, Salvatore Provenzano, Joseph Sheridan, Josephine Provenzano, J.W. Dildine, Thomas Reynolds, Sr., Michael Sciarra and Stanley Jaronko.

Prior to trial, Anthony Provenzano, Nunzio Provenzano and Thomas Andretta entered into consent decrees barring them forever from participating in, or otherwise interfering with, the affairs of Local 560 or any other "labor organization" or "employee benefit plan." On February 8, 1984, after lengthy hearings, the Honorable Harold A. Ackerman issued an opinion, United States v. Local 560, Intern. Bro. of Teamsters, 581 F.Supp. 279 (D.N.J.1984), holding that the Provenzano Group, through racketeering activity, had dominated and exploited Local 560 for more than a quarter of a century. Judge Ackerman issued a Judgment Order on March 16, 1984, in which the court did the following: (a) enjoined Stephen Andretta and Gabriel Briguglio from having any future dealings with and from endeavoring to influence the affairs of Local 560 or any other labor organization or employee benefit plan; (b) removed from office temporarily the remaining incumbent Executive Board officials (including Sciarra and Sheridan) and (c) imposed a trusteeship upon Local 560 for such period of time as might be necessary to eliminate the racketeer influence within Local 560 and to restore democratic processes in the Union.

The Court stayed the Order pending appeal. On December 26, 1985, the Court of Appeals for the Third Circuit affirmed the judgment of the district court, 780 F.2d 267, and on May 27, 1986 the Supreme Court denied a petition for certiorari, 476 U.S. 1140, 106 S.Ct. 2247, 90 L.Ed.2d 693. On June 23, 1986, the district court lifted the stay and implemented its trusteeship. Thus there was a period of approximately two years, four and one-half months between Judge Ackerman's February 1984 opinion detailing the racketeering activity and the 1986 appointment of the trustee and ouster of the Executive Board.

At the outset of that period Sciarra and Sheridan were Executive Board members and remained in office by virtue of the stay of Judge Ackerman's order removing them. On October 29, 1984, Sciarra succeeded Salvatore Provenzano (who had been convicted of defrauding the welfare benefit fund and of receiving kickbacks) as President of Local 560. He remained in that position until superseded by the Trustee. Sheridan, who had been vice-president of Local 560, remained in that position until superseded by the Trustee. Thereafter the first trustee permitted him to remain as a business agent until approximately February of 1987.

Judge Ackerman had found that the Executive Board (which, of course, included Sciarra and Sheridan) had aided and abetted the Provenzano Group of racketeers in extorting the rights of Local 560's members. In particular the Executive Board defendants aided the Group's extortionate conduct by (i) making certain appointments and reappointments to union offices; (ii) failing to remove certain appointees from office; (iii) spending union assets for Anthony Provenzano; (iv) permitting access to Local 560's offices by known or reputed criminals; (v) being recklessly indifferent to this kind of systematic misconduct of fellow incumbent officers. On appeal from these findings the Court of Appeals stated:

"... in our view, the evidence of Local 560's history of appointments of individuals with criminal convictions to positions of responsibility within the union, not to mention the expenditure of union funds for the personal benefit of Anthony Provenzano, more than adequately support the district court's finding that the Executive Board aided the Provenzano Group in extorting the membership's rights."

780 F.2d at 284.

It is now the position of the United States that even after issuance of the 1984 opinion and on into the period of the trusteeship, the Provenzano Group continued to dominate Local 560, and that Sciarra, Sheridan and other adherents of the Provenzano Group continued to protect, perpetuate and promote this state of affairs for the benefit of and in collusion with remnants of the Provenzano Group and members of the Genovese Crime Family — all in violation of 18 U.S.C. secs. 1951, 1962(b) and (d) and 2. It is to avoid perpetuation of the conditions this lawsuit and the trusteeship were designed to eradicate that the United States asks that Sciarra and Sheridan be enjoined from further participation in the affairs of Local 560.

In major part the application relies upon facts already established during the original hearings and set forth in Judge Ackerman's opinion. In addition, the United States has offered evidence designed to establish the facts upon which it relies which occurred after the close of the original hearings. Below I shall first summarize certain of the pertinent findings of Judge Ackerman. Then I shall set forth my own findings based on the new evidence.

II. PERTINENT FINDINGS OF JUDGE ACKERMAN

An over-all characterization of Judge Ackerman's findings is set forth in two opening paragraphs of his opinion (the "1984 Opinion"):

It is not a pretty story. Beneath the relatively sterile language of a dry legal opinion is a harrowing tale of how evil men, sponsored by and part of organized criminal elements, infiltrated and ultimately captured Local 560 of the International Brotherhood of Teamsters, one of the largest local unions in the largest union in this country.

This group of gangsters, aided and abetted by their relatives and sycophants, engaged in a multifaceted orgy of criminal activity. For those that enthusiastically followed these arrogant mobsters in their morally debased activity there were material rewards. For those who accepted the side benefits of this perverted interpretation of business unionism ... there was presumably the rationalization of "I've got mine, why shouldn't he get his." For those who attempted to fight, the message was clear. Murder and other forms of intimidation would be utilized to insure silence. To get along, one had to go along, or else.

581 F.Supp. at 282.

Findings about the defendants are set forth at pages 299-303 of the 1984 Opinion. While in their totality these findings are relevant to the present application, they need only be summarized here.

Local 560 had approximately 10,000 members as of May, 1982. These members were employed by approximately 425 companies in the New Jersey-New York area.

Under its constitution seven elective officers are charged with managing the day to day affairs of Local 560, namely, a president, a vice president, a recording secretary, a secretary-treasurer and three trustees. The persons holding these offices constitute the Executive Board.

The Trucking Employees of North Jersey Welfare Fund, Inc. (the "TENJ Fund") and its Pension Account are located in Local 560's building in Union City. Two other employee benefit plan entities were merged into the TENJ Fund in May, 1977. These were formerly known as the Trucking Employees of Passaic and Bergen Counties Welfare Fund and the Trucking Employees of Passaic and Bergen Counties Pension Fund. These Funds are controlled by a governing body composed of four trustees appointed by the Local 560 Executive Board and four trustees appointed by two employer associations whose member companies have collective bargaining agreements with Local 560.

The 1984 Opinion describes in considerable detail the twelve individual defendants. Five of them were members of the Provenzano Group which, through racketeering activity, had dominated and exploited Local 560. The rest of the defendants were members of the Local 560 Executive Board which had aided and abetted the Provenzano Group in extorting the rights of Local 560's members. In particular Sheridan had been vice president of Local 560 since July, 1981. Prior to that...