U.S. v. D.C. Transcript of 11.19.14 Conference

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
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UNITED STATES OF AMERICA,
Plaintiff,
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v.
DISTRICT COUNCIL, et al.,
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90 CV 5722
Defendants.
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New York, N.Y.
November 19, 2014
11:00 a.m.
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Before:
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HON. RICHARD M. BERMAN,

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District Judge
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APPEARANCES
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PREET BHARARA
United States Attorney for the
Southern District of New York
BENJAMIN TORRANCE
Assistant United States Attorney
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REVIEW OFFICERS:
BY: DENNIS WALSH
BRIDGET ROHDE
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ZUCKERMAN SPAEDER, LLP

Attorneys for District Council
BY: BARBARA JONES
THERESA LEE
SPIVAK LIPTON, LLP
Attorneys for District Council
BY: JAMES M. MURPHY
KAUFF McGUIRE and MARGOLIS, LLP
Attorneys for Benefit Funds
BY: RAYMOND McGuire
SOUTHERN DISTRICT REPORTERS, P.C.
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(Case called; in open court)
THE COURT:
I originally thought it was a good idea to
meet the staff as it were.
I didn't realize at the time how
big the staff was.
I would do -- I have gotten your helpful agenda in terms of
talking to people -- is use your agenda.
Mr. Geiger, we'll start with you.
questions.
some gist or point that each of you wishes to make, do that
They are certainly welcome.
So, for example,
I have a couple of
I have read everybody's affidavit.
I am happy to hear it.
What I thought
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first.
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Mr. Geiger, who is the executive secretary treasurer of the
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District Council.
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Nice to meet you.
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MR. GEIGER:
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THE COURT:
Just that.
If there is
So how about
I think we met before.
Yes, your Honor.

So I note from your affidavit that you are
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a long-time member of the council and/or local union and now
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are in the position of executive secretary treasurer.
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a full-time position as I understand it; right?
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MR. GEIGER:
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THE COURT:
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That is
That is correct.
So you go first and then I have a couple
of questions after you.

MR. GEIGER:
First of all, I would like to thank you
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for having us here today to meet you and speak before you.
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think the District Council is in a much better place than it
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was four to five years ago.
I believe we've demonstrated that

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over the last couple years with the help of the RO and his
staff.
this day and age and we plan on continuing that and building
off what we have learned over the last two years.
honor to be here in front of you today.
most of the staff of the District Council here, the heads of
all departments, managers and directors here.
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We exemplified the way the council should be run and
THE COURT:
It is an
As you see here I have
I am not entirely clear of the setup.
are the top of the pyramid in terms of staff.
You
Below you or who
reports to you?
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MR. GEIGER:
Basically I have the director of
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operations underneath me, Matt Walker, who is here as well who
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will be speaking before you.
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managers.
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assistants.
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as Steve McGuinness who is the president of the District
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Council.
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Then you have your regional
I also an assistant to the EST -- I have two

Mike Cavna who is also the vice-president as well
They all fall underneath me.

THE COURT:
Those are a matter of elected positions or
appointments?
MR. GEIGER:
As far as being an assistant to the EST,
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those are appointed by myself.
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a duly elected office.
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Council and executive committee as well.
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THE COURT:
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MR. GEIGER:
President and vice-president is
They are offices of the District
They are full-time positions?

Assistant to the EST is a full-time

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position.
The position of president and vice-president --
THE COURT:
MR. GEIGER:
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Those are part-time.
They run the
meetings, delegate meetings of the District Council.

THE COURT:
So you have elections coming up in
December?
MR. GEIGER:
THE COURT:
MR. GEIGER:
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Those are part-time?
That's right.
Those are for what positions, yours?
For the EST, president, vice-president,
three trustees, warden and conductor.
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THE COURT:
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MR. GEIGER:
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THE COURT:
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MR. GEIGER:
Their terms?
For a three-year term.
Everybody is for a three-year term?
That's correct.
I took over in
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February 2014.
I took over for the last year of Mike Bolo, who
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had been vetoed.
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Fortunately this December I will be running unopposed.
I fulfilled the last year of his term.
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THE COURT:
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MR. GEIGER:
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unopposed.
That was going to be my next question.

Myself and the vice-president is running
We do have an election for the president spot.
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THE COURT:
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MR. GEIGER:
Who is unopposed.
Myself and Mike Cavna, who is the
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vice-president of District Council, and the trustees and
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conductor are running unopposed.
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president position.
We have an election for the

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THE COURT:
MR. GEIGER:
There are more than one candidate?

Just the president -- current president
Steve McGuinness and an individual 926 Local out of Brooklyn,
Sal Saglafarri.
THE COURT:
MR. GEIGER:
THE COURT:
MR. GEIGER:
THE COURT:
The voting, how does that happen?

Through a mail-in ballot.
It is all paper ballot?
Is it all paper ballot through the mail.
Has the mail-in date --
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MR. GEIGER:
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I believe next week.
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will be calculated the third week of December.
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THE COURT:
Everything has been set.
Ballots go out
They have to be in by mid-December.
All right.
They
I was going to wish you good
luck but...
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MR. GEIGER:
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THE COURT:
Thank you.
So you said that you've seen this some
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changes over the last four years.
I am sure you are referring
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to the period of the Ford presidency, which was somewhat
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disastrous in terms of criminal indictments, etc.
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rehash but it has always struck me and I never really
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understood how -- if you have an opinion about this and you may
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not -- that was able to happen even under the supervision of
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the trusteeship so to speak?
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over the union and it still happened.
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that able to occur?
So not to
We had people in place looking

How in your opinion was

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MR. GEIGER:
Well, it was more less like an inner
circle, the past regime.
They didn't have the robust internal
controls that they have today.
office back then.
have been implemented over the last couple years that were
never in place under the old regime.
place and all the internal controls and having a director of
operations, which by the way I want to mention he was a formal
major of the State Police of New Jersey.
We didn't have a robust IG's
There are a lot of various departments that
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THE COURT:
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MR. GEIGER:
With the safeguards in
I noticed that.
I think we are in a much better position
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with the safeguards in place today than we were four or five
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years ago under the old regime.
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THE COURT:
place?
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MR. GEIGER:
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THE COURT:
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You think there is greater transparency in
Absolutely.
So if there was something to go on, it
would be more easily uncovered?
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MR. GEIGER:
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THE COURT:
Yes.
Easily uncovered.
Why do you anticipate based on your
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experience with Mr. Walsh, whose term ends in December, what do
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you anticipate your relationship would be with Mr. McGorty, who
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takes over so to speak.
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MR. GEIGER:
Pretty much the same relationship that I
currently have with the review officer Dennis Walsh.

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I would
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like to continue the relationship with Glen McGorty as the
incoming monitor.
of his staff.
that have taken place over the past week or upcoming things and
preparing for certain situations.
open dialogue in our open meetings.
We have weekly meetings with the RO and some
We have open dialogue.
THE COURT:
We talk about things
We have good, constructive,
I am aware also that you have on your
staff a general counsel, a person who is called general
counsel.
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MR. GEIGER:
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THE COURT:
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MR. GEIGER:
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THE COURT:
Yes.
That is a full-time job?
Full-time, yes.
So how does that person fit in with your
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relationships with outside counsel and also with the monitor or
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the RO?
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MR. GEIGER:
That would be Mr. James Murphy.
He is an
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essential part the District Council as well sitting on various
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meeting of compliance.
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other week with the CCO, Josh Leicht, as well as RG, and the
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assistant EST and Mr. Murphy sits on them as well.
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lot of planning and policy-making going on at these meetings.
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THE COURT:
We also have compliance meetings every
There is a
My last question is what needs still to
occur or what are your objectives, goals for your next term?
MR. GEIGER:
create more manhours.
Some of the main objective goals is to

Outside of the past practices and the

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past corruption, we need to sustain our compliance measures and
also in order to do that have a robust department and council
staff we need to create more hours.
run by the amount of manhours that come in with the assessments
paid by the membership.
Without those manhours, we would be doomed.
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THE COURT:
The council is generally
That is exactly what runs the council.
You are essentially talking about the
health of the industry?

MR. GEIGER:
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THE COURT:
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MR. GEIGER:
The health, the market share.

And how is that?
Every day seems to be an ongoing struggle
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with the nonunion sector.
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able to sustain what we actually have, that piece of the market
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share, and create new and innovative ways to gain more of that
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market share.
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robust organizing department.
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McWilliams, who is doing a fine job with his staff and are
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going out each and every other day talking to the nonunion
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sector, talking to the contractors and various associations to
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create a partnership to see how we can go about gaining more of
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the market share.
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We have to keep chipping away to be
Every day is a constant struggle.
THE COURT:
We have a
We have our director here.
Ed
Your share of the market has gone up gone
down historically.
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MR. GEIGER:
It has gone down.
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steadily each and every year.
It has been decreasing
There were certain structures

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that were stronger with the prevailing wage.
market and the residential area, we are losing more and more of
those every day.
THE COURT:
MR. GEIGER:
THE COURT:
MR. GEIGER:
Nonunion, yes.
Those are my questions.
If you have any
I am here to answer any questions you
have now or later.
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THE COURT:
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MR. GEIGER:
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THE COURT:
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MR. WALKER:
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THE COURT:
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council since 2011?
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MR. WALKER:
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THE COURT:
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It is nonunion.
for me, I am happy to answer any.
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But the private
Thank you very much.

Thank you for having me.
Matt Walker.
Good morning, your Honor.
Good morning.
So you've been with the
That's correct.
March 2011.
Just tell us briefly what did you do
before that.
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MR. WALKER:
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Jersey State Police.
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major.
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Turnpike and Garden State Parkway.
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officer, which was the number two supervisor in charge of 2,000
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enlisted members of the New Jersey State Police.
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Prior to that I was a member of the New

Upon my retirement I achieved the rank of
I was a troop commander in charge of the New Jersey
THE COURT:
I was also the executive
Mr. Walker, tell me your role where it

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fits in vis-a-vis Mr. Geiger.
director of operations.
is that correct?
MR. WALKER:
For example, I am are also
Sounds like chief operating officer;
Pretty much, your Honor.
I am there to
assist and conduct day-to-day operations of the union.
Most --
all but two entities also fall under the supervision of
director of operations and then the the Inspector General's
Office and organizing departments.
oversight from my office.
Every other department has
I am there to assist the EST in his
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day-to-day operations.
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union and the fact that I am in there is to make sure
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compliance and that we follow the rules and regulations.
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think the very important thing over the last four years that
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I've seen is a culture change.
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force people to follow the rules, but I have actually seen the
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culture of the individuals working at the council and
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individuals that would like to work at the council through
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interview process, I have noticed there is a culture change and
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people do want to do the right thing and they are not simply
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doing it because they have to.
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to sustain what we want to do moving forward.
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THE COURT:
And I think most importantly for the
And I
We have the rules and you can
I think that is very important
In terms of the management of the council,
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do you get applications over the transom or do you look for
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people when you need them or how?
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MR. WALKER:
One of the changes that have been

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implemented since 2010 when the review officer was there is a
personnel policy.
people, how we discipline people and how we would fire them.
There is a very stringent interview process.
director of human resources that none of these things existed
prior.
functions is to make sure that process is followed and it is
proper.
they would go through an application process and eventually an
It very thoroughly details how we hire
We follow that process to the T and that is one of my
The membership would apply with the resume and then
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interview process.
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the executive committee.
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Ultimately the process is approved by the
THE COURT:
Did you mention one of the two principal
functions that reports to you is organizing?
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MR. WALKER:
They are the only two that don't, your
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Honor.
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the Inspector General.
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There is a
Organizing in the area of standard component and also
THE COURT:
I was also curious you discussed in your
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affidavit there had been a fleet of cars.
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that they were luxury cars, what kind of fleet of cars does the
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District Council have?
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MR. WALKER:
Apart from the fact
When I got there it was kind of a patch
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meal but I would say high-end luxury vehicles.
The amount of
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the leases were pretty startling to me.
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that we had a standard fleet obviously in the state police and
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I was familiar what those leases costs.
I came from a place
So that is when we

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changed from the cars that we had to a standard fleet of
Chevies, Chevrolets and Ford vehicles and we maintain that to
this this day.
other things there was no standardization of the parking for
the facility.
we prepaid for that now and it saves the council 40 percent of
what they were paying in the past.
It cost the cut significantly.
Within the six months we had that finalized and
THE COURT:
MR. WALKER:
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One of the
THE COURT:
How many union cars are there?

Approximately 60.
Is it is a perk or because people need
to --
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MR. WALKER:
It's both.
I wouldn't say distributed
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perk.
The hours of the District Council sometimes is 5:30 in
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the morning until 9:00 or 10:00 at night.
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to come and go and to respond to everything, I consider that
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not really a perk but a necessity.
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agents within the organizers, Inspector General's Office of
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investigations.
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is for sure.
To ask these people
Also, we have business
There is a need for vehicles at council that
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THE COURT:
What is your view of what needs to occur
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yet at the District Council?
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improvements need to be made at District Council?
What kind of changes or
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MR. WALKER:
I think it is certainly an easy thing to
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say would be sustainability.
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Specifically I feel that our new IT program is going to bring a
I think that is an obvious one.

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tremendous amount of assistance to the Council and to the
membership.
efficient but it is going to make the efficiencies of each
department that much greater.
number one project that we have going on now is to get that up
and running and I think we're well on our way to that happening
with a new IT manager and two members of the staff in-house at
this point implementing the changes from the vendor that we
hired.
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I think it is going to not only be more cost
I think that is probably the
It is up and running and they are already testing
certain portions of that.

Another very important component that I think we are
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implementing is the communications department to keep the
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membership notified.
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and within a few months I have seen a tremendous upgrade the in
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communications between in-house and all the membership.
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have implemented a new process now for mass robocalls and
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e-mails, text messaging, social media, the website.
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is the only thing holding us back there.
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IT program up and running, it will be enhanced more.
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communications director we have is very efficient and really
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into the union and the betterment of the union.
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her in charge, we're really going to be in good shape.
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THE COURT:
We hired a new communications director
We
And time
When we get this new
Up and running means what?
The new
I think with
Where is it in
terms of up and running?

MR. WALKER:
With communications the website is live,

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which has been for a while now.
She posts all the news on there.
Facebook, Twitter accounts that are being used every day.
put up things like rallies, picket duties up there and news of
the Council.
is we have hired a vendor that provides us with mass robocalls,
e-mails and texts messaging so we can get the messages out to
the members when important things come in.
working very well.
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It's pretty much day to day.

Also we have a social media.
The other entity that we have up and running now
THE COURT:
That seems to be
The positions you described as District
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Council, what is the entire staff of the District Council?
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many people does District Council employ?
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MR. WALKER:
North of 100.
So 120.
out-of-work lists, personnel, business agents, organizers.
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Soup to nuts.
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workers.
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Since then a lot of them have become permanent.
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dwindling that down to have a permanent workforce.
We did have a large percentage of temporary
That was the avenue that we had to bring workers in.
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THE COURT:
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MR. WALKER:
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How
That includes
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We
We're
Would you say it is 125 or less or more?

Yes.
It is about 120, but it goes up and
down, your Honor.

THE COURT:
I think that's really all I had in mind
unless you had something further I should know about.

MR. WALKER:
The one thing I would like to let you
know, your Honor, is over the last few years we had democratic
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election and we had an EST and the officers elected.
A lot of
things have happened since that time.
happy to be working with the people I am.
that they have there overcoming the obstacles.
to the industry, I am not here to negotiate a contract and
teach you hot to put drywall up in a building.
have seen is a turnaround in these individuals and their
dedication.
work with every day and it has been impressive to me.
I am really proud and

I see the dedication
As someone new
But what I
I was shocked at the dedication that they come to

They
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have gotten all the contracts signed.
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They are increasing manhours as we speak.
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measures, there is really not much resistance to any of the
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measures.
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will be bad.
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don't fight the things that I ask them to do or things that I
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remind them of.
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They are moving along.

The compliance
They actually take part in what will be good, what

They have certainly accepted me in my role and
So I just would like to say I think we're definitely
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going in the right direction.
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curveballs thrown at us, an arbitration with the NWA, which is
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tremendous, a whole new electronic reporting process with
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millions of dollars of devices and training shop stewards and
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that seems to be working.
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overcome and I don't see any reason any future obstacles cant
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be overcome.
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THE COURT:
We had a couple devastating
A lot of obstacles are being
So the election is largely uncontested as

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it were?
MR. WALKER:
THE COURT:
With the exception of one position.

Is that a good thing or a bad thing?
Does
that mean people are happy with the slate or is it bad because
there is apathy and people don't want to run?
MR. WALKER:
I think it is a good thing.
I think they
are happy with the slate.
opportunity to put up any opposition to the slate.
that they are happy and they see that the Council is moving
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They have had more than enough

I think
forward.
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THE COURT:
What kind of enthusiasm or participation
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do you get from members for programs that you're implementing
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and also for the officers of the District Council?
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MR. WALKER:
I think the programs that I spoke about
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in communications is increasing every day.
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out to volunteering and to be involved in the text messages and
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notification.
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way to go.
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officer of the union the full-time reps and the membership they
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want to work together and get more participation from the
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membership.
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on.
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The word is getting
It is not what we want it to be.
That is another plus.
It has a long
I know from speaking to the
That is one thing that I think everybody agrees
THE COURT:
I know others will speak, but do you have
any role with the benefit fund at all?

MR. WALKER:
No.

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THE COURT:
MR. WALKER:
THE COURT:
MR. DANIELSON:
THE COURT:
MR. DANIELSON:
THE COURT:
Thank you very much, Mr. Walker.

Thank you.
Scott Danielson, Inspector General.
Good morning, your Honor.
How are you?

Good.
So you've been at the Council for how
long?
MR. DANIELSON:
I've been a member of Local 257 in
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1981.
So I've been a member of the Carpenters Union.
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third generation carpenter.
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carpenters.
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of Carpenters Local at 257.
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taken over by the international.
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the District Council at that point.
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We went through mergers of various locals.
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Convoy was the review officer at that point.
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the out-of-work list to the District Council for I think 11
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locals at that point.
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out-of-work centralized work list.
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Convoy left in 2000.
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our own.
My father and grandfather are also
In 1995 I became the elected financial secretary

In 1996 the District Council was
I was recruited to work up at
I was pulled out of local.
That is when Judge
He centralized
I became in 1997 the supervisor of that

At that point then Judge
We had an election.
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THE COURT:
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MR. DANIELSON:
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I am a
Then we were back on
When did Walter Mack come in?

I will get to that.
Eventually the
District Council had their own anticorruption committee.

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It
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was run by an in-house security company, Barry Security.
that point then Walter Mack was appointed by the Court, Judge
Haight, as an independent investigator.
and at that point I worked along with Walter Mack because of my
law enforcement background.
investigations.
committee and at one point then his tenure ended and Bill
Callahan from Unitel was appointed as and II.
from that point and we've continued the program as it was.
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At
Walter Mack came on
I assisted him in his
We continued to built up an anticorruption
He took over
At that point we unfortunately had the indictments of
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the District Council personnel, business agents, members of the
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benefit fund trustees, also the trustees of the union.
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that point the RO is brought in.
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first.
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trustee and then through I guess negotiating with the U.S.
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Attorney's Office Dennis Walsh was appointed review officer.
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At that point we started a mini program of our own under Frank
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Spencer investigating certain jobs at the end of Mr. Callahan's
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tenure.
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Dennis Walsh and the International and have held that position
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to this day.
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And at
Well, International came in
In 2009 UBC by Frank Spencer came in as the union
At that point I was named the Inspector General under
THE COURT:
So how did it work?
Your investigations,
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how do they get triggered and then what do you do with the
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results of your investigation?
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MR. DANIELSON:
Well, we have an 855-UBC tips hotline.

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Any member can call or e-mail and we'll take that complaint and
then we investigate it.
including myself and including staff.
utilized retired carpenters as inspectors.
They work in groups of five.
week.
individuals.
check between 500 and 700 one- and two-person jobs per month.
That is their main focus.

steward.
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out.
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Also as you are aware I

I have 20 of those.
I put out five inspectors every
As reports to the Court reflect, we check those
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I have a 11 full-time personnel,
They focus on one- or two-person jobs.
They do check jobs with a shop
I have my inspectors.
And we also do compliance.

THE COURT:
They
Investigators, they that go

We monitor.
The investigator goes out because they are
sent out?
MR. DANIELSON:
Well, they go out for two reasons.
15
Sent out on a complaint.
16
Pat Kennedy will dispatch our investigators to a site.
17
in our daily activity we do compliance business.
18
generated by myself with Pat or the investigator based on
19
activity and the out-of-work list.
20
list and we will send our investigators to go spot checks for
21
compliance.
22
compliance check if we are in a building and see other
23
contractors, we'll make those checks also.
24
25
We also
That is
We monitor the out-of-work
Also when we're investigating a complaint or
THE COURT:
Interview?
Myself or my Deputy Inspector General
When you investigate, what do you do?
Interviews?
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MR. DANIELSON:
They will do interviews, field
interviews.
send out summons to the member to come down do District Council
after working hours and we bring them in an interview room and
we have a process.
and we use those to where they can file grievance against
companies or for us to file an investigation for internal
charges.
9
10
11
We also have informal interview process where we
We take sworn statements in that process
THE COURT:
with you?
If you take the next step, who does that
Does Mr. Walsh or will it be Mr. McGorty?
MR. DANIELSON:
It is a two-prong process.
We do a
12
lot of stuff internally.
I have worked with Dennis Walsh.
13
Anything that arises to the occasion of high-level corruption
14
or organized crime, I always made the referral to Dennis.
15
some cases Dennis did it on his own and sometimes we did some
16
together to a point.
17
charges, I or my staff filed union charges and put it through
18
our own system --
Right now if there is any internal union
19
THE COURT:
20
MR. DANIELSON:
What is that system?

The trial committee.
We have three
21
attorneys that are chairs in that process and the actual
22
jurors, if you will, are carpenters.
23
under UBC constitution or the District Council bylaws.
24
25
THE COURT:
In
So I can file charges
If you do, you send a notice of what the
charges are, or is that what you do or somebody else does?

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MR. DANIELSON:
We will do an accusatory statement
similar to a criminal charge.
We give it to the -- actually
Mack Walker oversees the trial process.
It gets formalized.
It gets numbered and a letter gets out.
We do a first reading.
If you can put it in a criminal way, it is an indictment.
The
member comes in.
He
can plead guilty to them at that point.
on a calendar for trial and we go under the UBC constitution
for the trial process.
It is a process.
10
THE COURT:
11
MR. DANIELSON:
12
that they can bring an attorney.
13
Dennis Walsh files the charges.
14
THE COURT:
He hears the charges.
If not, he will be put
Can he bring a lawyer?

No.
Only if the RO has that provision

An attorney can come in if
So if he, Dennis Walsh -- I am familiar
15
with that -- interviews somebody that person can come to that
16
process with an attorney?
17
MR. DANIELSON:
18
THE COURT:
19
MR. DANIELSON:
20
THE COURT:
21
MR. DANIELSON:
22
THE COURT:
23
MR. DANIELSON:
Correct.
But not in -No.
Then the trial committee makes a ruling.

Yes.
For example?
For example, they basically come out
24
with fines or letters of reprimand.
25
comes out of that.
That is basically what

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THE COURT:
Do people go along with their decision?
MR. DANIELSON:
can get expelled from the union.
THE COURT:
MR. DANIELSON:
THE COURT:
MR. DANIELSON:
THE COURT:
MR. DANIELSON:
There is an appeal process.
They also
They could?
Yes.
By the trial committee?

Yes.
And what happens if they want to appeal?

They can appeal to the UBC and then
10
there is a process under the UBC constitution.
11
first vice-president of the UBC.
12
they want to take it to the next level, it goes to the next
13
general convention.
14
THE COURT:
15
MR. DANIELSON:
16
THE COURT:
17
THE COURT:
23
Not very often.
decisions of the trial committee, that's it?
19
22
If
Is it fair to say that most of the
MR. DANIELSON:
21
They make a decision.
Does that happen very often?
18
20
It goes to the
Yes.
Are most of the decisions in the nature of
a fine or a reprimand?
MR. DANIELSON:
Yes.
We do have the extreme cases
though for expulsion.

THE COURT:
So it sounds to me from what you said that
24
you have a pretty robust staff.
25
investigations?
Are there lots of

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MR. DANIELSON:
There is a fair amount of complaints.
We also clear shop stewards.
THE COURT:
MR. DANIELSON:
What might be a typical complaint?

A job is not called in.
We will get a
confidential caller saying, I know somebody is working 395
Hudson Street on the 12th floor and it is three carpenters
working and it doesn't have a shop steward.
technique they use, we'll find out.
would file a grievance against the contractor for violating the
Depending on the
And say that is true, we
10
CEA and then a hearing for that process.
11
membership can and brought up on charges through the UBC
12
constitution or the District Council bylaws.
13
use the grievance procedure.
14
THE COURT:
15
That is -- the
Contractors will
So that would happen -- this is a naive
question -- because the contractor wants to pay less or why?
16
MR. DANIELSON:
There could be many reasons.
They
17
could want to pay under scale or they just want to use their
18
personnel and they don't want a shop steward.
19
over two persons, both CBAs, and you have to have a shop
20
steward.
21
22
THE COURT:
And the CBA is
Is that a quality control function or not
really?
23
MR. DANIELSON:
Not really.
There are carpenters and
24
there are better carpenters, but it is a collective bargaining
25
issue.
It is non-debatable.
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THE COURT:
there.
Got it.
Then you have a lot of experience
How do you think things are going?

MR. DANIELSON:
I think things are going good.
The
problem -- not a problem.
Prior to before the new bylaws were
written there was really no rule or rhyme how the processes
worked.
personnel policy and we have the bylaws and now it is a lot
about process.
that is what we're working off of.
By that I mean you heard Mr. Walker speak about the
Everybody understands these are the rules and

It is a culture change not
10
only to the membership but District Council employees.
11
Everything has checks and balances.
12
Officer Josh Leicht.
13
There is a whole process how to do your weekly time sheets.
14
The whole process that was done prior to that, there was no
15
process taking days off.
16
now they are all -- there are all checks and balances and there
17
has been no resistence from any employee at District Council.
18
This gives me powers to investigate personnel, which is a good
19
thing.
20
staff know who to report to and even the membership.
21
You have compliance
I am the deputy compliance officer.
There was no drug testing.
There is checks and balances.
So right
If there is a problem,
I know you asked the question to Mr. Walker, How did
22
this happen.
Well, I interviewed hundreds, probably thousands
23
of carpenters over the years through Walter Mack, Bill Callahan
24
and Dennis Walsh's tenure.
25
people said there was so much corruption because they first of
Going back prior to Dennis Walsh,

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all didn't trust anyone and they didn't know who to call.
with the implementation of Operation Watchdog, members can
check his or her hours from the privacy of their own home and
it gives them two options what they can go.
crew size and hours of all brothers and sisters on the work
staff.
a button and send an e-mail to the IG's office and they will
investigate.
could call the review officer.
10
11
Now
They can check the
And if they do see something, right away they can push
Or you have the 855-UBC tips hotline or they

It gives options so members
don't have any excuses.

Years ago people said they used to call the local
12
unions and call nonunion jobs in or CBA violations and they
13
were never checked and they just lay there.
14
the reasons why prior to an indictment there was three to five
15
business agents that were part of the indictment.
16
nightmare.
17
District Council.
18
there was corrupt individuals running the organization, write
19
it up in a complaint.
20
have an IG.
21
compliance officer.
22
when there is a problem and there are people responsible to do
23
that job.
24
supposed to do and what I am supposed to look for.
25
a compliance officer that reviews all the processes on a
That is probably
It was a
Also, we had trustees for the benefit fund and

So if members, feel and they always thought
So now you have a system in place.
You have director of operations.
You
You have a
You have a direct roadmap of what to do
I have a job now that is detailed of what I am

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2
3
4
regular basis.
THE COURT:
Do you think that has given rise to, A,
more formalized complaints and more confidence?

MR. DANIELSON:
Yes.
People thanked us when we first
came on the job.
Our goal is the same day as the next day.
also had the investigators working late tours.
Saturdays.
Saturdays and Sundays.
getting someone to come check it out.
We work
We work nighttime, late afternoons into the night,
10
THE COURT:
11
MR. DANIELSON:
So when a member calls up, they are
Great.
Where do you see this all going?
I see it going good.
I welcome Glen
12
McGorty coming on.
I look forward to working with him.
13
think we need the constants what Dennis has left us with.
14
need to keep that in place and move forward.
15
some increase in staff, which I will hopefully next year work
16
with the EST to accomplish that.
17
support staff to get involved with more forensic activity and
18
getting involved with the back room investigations.
19
him and I spoke to Mat Walker and hopefully we can check the
20
budget and work toward that goal.
21
THE COURT:
22
MR. DANIELSON:
23
THE COURT:
24
MR. LEICHT:
25
THE COURT:
We
I did ask for
I feel I need some more
I spoke to
Thank you so much.

Thank you, sir.
Josh Leicht.
Yes.
Is it Leicht?
Good morning month, Judge.
Good morning.
How are you?

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MR. LEICHT:
I am good.
I am Josh Leicht, Chief
Compliance Officer for District Council.
I have been in the
position since it was created by the new bylaws in 2011.
Although, I began I think late 2010 it was.
history, I am an attorney.
for 10, 12 years.
organized crime task force.
construction industry strike force both in racketeering and
corruption in the construction industry.
As far as my
I was a prosecutor with the state
When I was with New York, it was in the
10
THE COURT:
11
MR. LEICHT:
I was appointed to the
When was that?

1988 to 1996 I believe.
I joined the
12
School Construction Authority Inspector General's Office where
13
I was counsel for criminal matters.
14
stint and then I went into --
15
THE COURT:
16
MR. LEICHT:
17
THE COURT:
18
'96 to '98?
Roughly.
The School Construction Authority was that
Howard Wilson?
19
MR. LEICHT:
It was Howard Wilson at the time.
20
worked with the IG's Office.
21
Pope.
22
That was about a two-year
THE COURT:
It was Toby Thatcher and Peter
Josh, how do you relate to these different
23
positions of IG, general council, compliance officer?
24
that's you.
25
Is there overlap?
MR. LEICHT:
Well,
I am not quite understanding.
Absolutely.
I don't see -- good business

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and good compliance are the same things.
closely -- particularly closely with the IG's Office.
an everyday basis with the director of operations, with the
EST, with the various department leads to the extent we need to
interact.
that way to work.
7
8
So I work very
But on
But it is a broad based thing and it needs to be
THE COURT:
Do you meet on a regular basis all of you?
Is there a weekly or a --
MR. LEICHT:
Joe Geiger has instituted a biweekly
10
compliance meeting where I believe as Matt described as Joe and
11
the other elected officer, the director of operations, the IG,
12
myself and again counsel.
13
staff meeting where people can get together and find out what
14
is happening.
15
THE COURT:
16
MR. LEICHT:
Joe has also implemented a biweekly
Is that a broader group?

Yes.
That is department leads.
We also
17
established a compliance committee that meets on a quarterly
18
basis.
19
representative.
20
We talk about any incidents that happened in the past few
21
months, any training issues, and just generally discuss what
22
needs to be done and how things are going with respect to
23
compliance in the organization.
24
25
That is comprised of EST or his designated

That is also comprised of department leads.
THE COURT:
You get tips of noncompliance, or do you
do your own proactive evaluations and investigations?

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MR. LEICHT:
I put together audit plans and for the
major policies, bylaws, personnel policy, accounting manual.
have done reviews of some of the other policies to see how they
are working.
me.
think it should be.
THE COURT:
MR. LEICHT:
Sometimes people lodge complaints directory with
Frankly, more often it is with the IG's Office, which I
Yes.
I work very closely and I think what
really makes my position I think able to function well is that
10
I work very closely with the IG's Office.
11
compliance officer.
12
work.
13
14
15
THE COURT:
Scott is the chief
That is really what helps make it all
How do you relate during the tenure of
Mr. Walsh and going forward with Mr. McGorty?

MR. LEICHT:
It has been an interesting process for me
16
because I have mostly served as an independent monitor.
I am
17
now inside an organization that learned a lot now -- well,
18
without going on about that, I worked closely with Dennis.
19
has great insight on the organization, not only from his term
20
as the RO but from his experience prior.
21
very closely with Mr. McGorty going forward.
22
important for me and the organization.
23
things that need to be done and I think he will be helpful in
24
how we get it done.
25
THE COURT:
He
I envision working
I think it is
I think there are
What are the big-ticket items that need be

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2
done in your opinion?

MR. LEICHT:
In my view, look, we're all talking about
sustainability and we have worked under the current bylaws and
so the other rules and procedures we put in place for four
years give and take now.
compliance to have a sustainable compliance program, that the
rules make sense, that they are workable and that they adapt
appropriately to the business to allow the business to
function.
I think it is very important for
Effectively it could also of course adapt.
In
10
addition to continuing to embed the compliance message, to get
11
it down to the stewards and members and build up what people
12
have been discussing as a culture of compliance and convince
13
people that it is real, I think we need to now look at the
14
rules as we've been operating under them and make sure they are
15
still fit for our purpose.
16
to evaluate it and see what needs to be changed and then go
17
through the process to change it.
18
to be critical in helping us do that.
19
20
21
THE COURT:
Great.
To the extent they are not, we need
I think Mr. McGorty is going
I don't have any further questions
unless you have something further you want to share with me.
MR. LEICHT:
The only thing I would add is that when I
22
left being a prosecutor, my view of the Carpenters Union was
23
probably the most -- one of the most corrupt, if not the,
24
organizations in the New York labor market.
25
about it much until I rejoined as the chief compliance officer.
I didn't think

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And I have to tell you I was surprised at how dedicated the
officers and the employers of the District Council are.
very pleased to be working with them and I think we're all
committed to doing the right thing and making sure the union
fulfills its purpose and everything it does is for the members
and organization.
deeply committed today.
THE COURT:
Is it Ryk?
That is the mantra.
10
MR. TIERNEY:
11
MR. WALSH:
I am
I believe everybody is
Ryk Tierney.
Your Honor, from Raymond McGuire, counsel
12
to the fund, Mr. Tierney and Ms. Block have put together a few
13
documents, which they will be referring to.
14
the bench and hand it up.
15
16
17
THE COURT:
If I can approach
Mr. Tierney, this is in addition to your
statement that your declaration that you sent?

MR. TIERNEY:
Yes, your Honor.
It includes a copy of
18
our current organizational chart, the compliance ethics policy,
19
and communications, the new newsletter that we sent out on a
20
quarterly basis to communicate to the participants of the fund.
21
22
23
THE COURT:
So your communications -- you have a sort
of parallel to the District Council or your own communications?

MR. TIERNEY:
We have our own communications
24
coordinator and he is responsible for the quarter newsletters
25
that go out, the revamped website, our Facebook page, and all
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the required communications that we have under regulations to
get out to the participants of the fund.
3
4
THE COURT:
Great.
So you came on board in 2013.
What is your background before then.
MR. TIERNEY:
Sure.
For the past 20 years I have been
involved in labor management relations.
I started out of the
service as a union president at Chemical Workers 217 in
Baltimore.
third-party administrator where I got my benefits
Coming out of that position I went to work for a
10
administration background.
11
representative in collective bargaining.
12
with that company before starting here in April 2013.
13
18 months.
14
15
THE COURT:
MR. TIERNEY:
So I spent 12 years
So about
As an executive director of the fund, what
does that mean exactly?
16
There I was the management
You don't invest the money?

No, absolutely not.
My job is to make
17
sure that the decisions made by the board of trustees are
18
implemented at the benefit fund office.
19
plan administrators responsible for deciding what provisions
20
the plan will be implementing.
21
my job is to take it back to the benefit fund office and
22
implement that strategy going forward.
23
THE COURT:
The trustees are the
Change things like that.
It is
Who is responsible to make sure all the
24
money that is supposed to be coming into the fund actually does
25
come in?
I am not talking about investments.

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MR. TIERNEY:
THE COURT:
MR. TIERNEY:
Contributions.
Right.
So our organizational chart has been
restructured into two main components.
and how we take it to the plan participants with regard to
their benefits.
The other major component services and that --
THE COURT:
MR. TIERNEY:
restructured.
One is member services
Go back a couple sentences.

So the organization has been
There are two main components.
Members services
10
is required to help the participants with their benefits and
11
the employer services, which handle the contributions that are
12
coming into their funds, the audits of those contributions to
13
make sure that the dollars are coming in and where it is
14
supposed to be.
15
to give you an example of how the board of trustees, the review
16
officer, the District Council and the benefit fund office work
17
together to improve that process.
18
December 1st with a new shop steward variance reporting
19
project.
20
benefit fund side and also on the District Council's side with
21
shop steward reporting to actually pare down the period of time
22
when we discover discrepancy from two and a half months to
23
three weeks.
24
of the board of trustees to work with review officer and
25
working together with the District Council to make that happen.
So I think this will be a perfect time for me
We're going live on
This allows us through the use of technology on the
I think that is a shining example of the action

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I think that is a key competent.
whether there are any major variations between what has been
reported on the job and what has been contributed to the fund.
THE COURT:
We'll know within three weeks
So your concern is that adequate
contributions or ones that match the work that has actually
been done are received?
MR. TIERNEY:
THE COURT:
MR. TIERNEY:
Correct.
How do you do that?
Through a combination of endeavors.
Of
10
course first is the employers' make contributions to the fund,
11
and the majority are through electronic system none as I Will
12
Remit.
13
make sure that those hours coming in are correct.
14
program will compare them to the election shop steward that
15
comes over from the District Council as well.
16
methodology in there that was more manual and that is the
17
process that took us two and a half months.
18
to reduce it to three weeks.
19
payroll audit procedures as well.
20
each contractor of the fund has a payroll audit conducted to
21
make sure the contributions that they are making to the fund
22
match what they are required to make under the collective
23
bargaining agreement.
24
afforded the opportunity to correct it and if not then legal
25
action may be taken upon them to recover as well.
There is a review process in the benefit fund office to

This new
There is old
We were now able
The plan also has in place

On every two-year basis,
If there are any discrepancies, they are

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2
THE COURT:
Hypothetically one might think that the
contractor might underpay as it were?
MR. TIERNEY:
THE COURT:
So how do you exactly determine whether it
is an underpayment?
I guess when the contribution comes in, it
is based on the number of hours worked?
MR. TIERNEY:
THE COURT:
Right.
Correct.
How do you determine whether that number
is too small compared to numbers that actual were worked?
10
MR. TIERNEY:
So under the old process, as I pointed
11
out it was a manual.
12
There would be hours.
13
come in.
We would get the old paper reports from the District
14
Council.
They will be converted under OCR to numbers that we
15
could read and we would make a comparison.
16
process and it took two and a half months later until we get
17
there.
18
computer system in the benefit fund, get the information from
19
the District Council electronically and make that comparison in
20
a very quick period of time.
21
Contractor ABC submitted contributions on 100 hours but the
22
shop steward revealed the men and women worked 120 and we'll
23
know that right away and address that issue before it builds
24
up.
25
We get the report in a computer system.

We know they are the hours that have
It wasn't the best
Now we're able to get that information into the
THE COURT:
We'll know within three weeks if
That is my question:
How often does that

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happen?
MR. TIERNEY:
THE COURT:
MR. TIERNEY:
THE COURT:
MR. TIERNEY:
On a weekly basis.
That the numbers are -That they are off?
That they don't match.
Well, it does happen.
Sometimes just
through clerical error it happens, but in other cases that does
take place.
time.
I wouldn't say it is a high percentage of the
The systems are in there will not let that happen even
10
on a more stringent basis especially now not to let it build.
11
In the past we had a two-and-a-half-month turnaround period and
12
if the employer was doing that over time, by the time we
13
realized it two and a half months later, the amount due could
14
be significant.
15
will allow us to catch the issue and correct it very quickly,
16
but also not let the amounts that are due to the funds build up
17
over time.
18
19
20
Now catching that within the first three weeks
THE COURT:
Historically was that a significant
problem?
MR. TIERNEY:
I think it is a continued problem.
Yes,
21
absolutely.
22
We're implementing that on December 1st and we'll constantly
23
looking at other ways we can take advantage of technology to
24
get even better.
25
I think the new process helps to improve that.
THE COURT:
So you also said in your declaration that

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you have now systems in place.
talking about December 1st?
MR. TIERNEY:
Are these the systems you are
This is an offshoot of those systems.
Prior to my taking the position in April of 2013, the benefit
fund had made the decision to move from the old benefits
processing software, the company called Standard Data
Corporation into what I would consider one of the top three
software vendors in the country, a company called ISSI.
Implementation had begun before I started.
But since I've
10
started, we actually went live with that on February of 2014.
11
So that represents huge improvements in the efficiency of
12
system, our ability to get data and our ability to take more
13
action as a result of that.
14
made before I got there and we're still working through the
15
system but implementation is in place.
16
THE COURT:
That's was a fantastic decision
I don't know if it is just my recollection
17
or if you actually used the terminology in your declaration but
18
is a goal of yours to detect if there is fraud of some sort
19
going on?
20
MR. TIERNEY:
Absolutely.
And that shop steward
21
variance report is one of the ways to pick that up.
22
Compliance Officer Julie Block is going to come after me, your
23
Honor, and as part of her presentation will talk to you about
24
the additional internal controls that we have put in place to
25
prevent any opportunity to take place against the fund.

(212) 805-0300
Chief
38
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1
2
THE COURT:
I do not have no further questions of you
unless you have something you want to add.
MR. TIERNEY:
I don't.
I have plenty of statistics.
I would like you to know the funds are doing extremely well.
As EST Geiger pointed out, hours are up.
battle for the DC to keep that market share.
doing well.
to as about 13 months of reserve.
that we have if we stopped receiving contributions today, we
10
It is a constant
The funds are
The welfare fund is in a position of what we refer

Meaning the amount of money
can keep paying benefits.
11
THE COURT:
12
MR. TIERNEY:
That has increased fairly substantially?

Yes.
And the trustees in the past few
13
months have taken joint action to reinstate the dental benefits
14
that were previously eliminated.
15
premium by 50 percent and they are continued discussions about
16
the potential restoration and other changes to the welfare
17
plan.
They reduced the retiree
I think that is all fantastic.
18
THE COURT:
19
MR. TIERNEY:
The returns on the fund has improved?

The welfare fund of course is a capital
20
preservation investment strategy.
So I think even with that we
21
returned six and a half percent last year.
22
a long-term investment strategy.
23
is in the teens so it was excellent this last quarter.
24
not on a calendar year plan.
25
first quarter of our plan of course wasn't the best few months
The pension fund is
Last year the overall return
We're on a July 1 plan.

(212) 805-0300
We're
So the
39
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1
for the market, but still it is in the green zone under Pension
Protection Act.
valuation.
4
5
funds.
You could just run through each of the
Give me a headline for each of the funds.

MR. TIERNEY:
Absolutely.
So with the pension fund as
of June 30th, 2014, your Honor --
8
9
So things are in a very good place there as well.
THE COURT:
6
7
It is 91.2 percent funded under that
THE COURT:
I never remember roughly how much is in
that?
10
MR. TIERNEY:
2.59 billion in assets in the pension
11
fund.
Our investment return for the last four years is 15.08
12
percent.
13
Just by way of example we issued 13,500 pension payments on a
14
monthly basis totally $15 million to pension payments to
15
carpenters.
We were in the green zone 92.1 percent funded.
16
THE COURT:
17
MR. TIERNEY:
You have how many retirees?

The overall number of retirees receiving
18
benefits is at 13,500.
19
surviving spouses as well.
20
That includes the retirees and
The annuity fund which is managed through Prudential
21
is self-directed individuals buying contribution accounts.
22
That fund is approaching $2 billion in assets.
23
fund as I mentioned as of June 30th is a $275.9 million in
24
assets.
25
result the trustees have been able to reinstate some of the
That represents 13 months of reserve.

(212) 805-0300
The welfare
As I noted as a
40
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1
benefits that were lost.
to its ownership of the building has about 13.9 million in
assets available as well.
expenses for all four funds combined is running at
6.54 percent.
be somewhere between eight and ten percent.
well from that perspective.
THE COURT:
MR. TIERNEY:
10
The apprenticeship fund in addition
Overall the fund administrative
The industry standard tell us that number should

We are doing very
What size staff do you have?

In the benefit fund office we have a
staff of 87.
11
THE COURT:
87.
12
MR. TIERNEY:
In labor technical college there is
13
about 20 administrative staff and 11 full-time instructors and
14
a category of part-time instructors as well.
15
THE COURT:
You are the executive staff?
16
MR. TIERNEY:
Correct.
When I came in, I reorganized
17
the organization.
I created what we refer to as the executive
18
leadership team.
19
each of the individual departments.
20
steers the organization based on a direction of the board of
21
trustees.
22
is the same group and all the managers within the organization.
23
And then we have staff.
24
the organization -- staff, management, and executive director
25
level.
That is made up of me and the directors of

That is the group that
The next level is called the leadership team.
That
So we only have three levels within

(212) 805-0300
41
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1
THE COURT:
I am sure I should know this, but I don't.
Are the funds housed in the same location where District
Council is?
4
5
MR. TIERNEY:
Yes. 395 Hudson.
The District Council
has one half of the ninth floor and we occupy the other half.
THE COURT:
MR. TIERNEY:
THE COURT:
Julie Block is next.
MS. BLOCK:
Good afternoon, your Honor.
10
THE COURT:
Good afternoon.
11
MS. BLOCK:
Good.
12
THE COURT:
Good.
13
So if you can tell us, Ms. Block, as Chief Compliance
Yes, sir.
How are you?
How are you?
14
Officer before we get to what that means briefly what your
15
background is
16
MS. BLOCK:
I became Chief Compliance Officer for the
17
benefit fund in January of 2013.
I began my career as a
18
prosecutor in the Kings County District Attorney's Office where
19
I remained for 10 years.
20
Giuliani and Bloomberg where I served as the executive director
21
for the Mayor's commission to combat corruption.
22
civilian entity that monitors Internal Affairs Bureau and
23
oversees the NYPD anticorruption faculty and policies.
24
that I became associated commissioner at the New York City
25
Department of Investigation where I served as the Inspector
I then went to work for Mayors

(212) 805-0300
That is the
After
42
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1
General of about five different city agencies and I also had
approximately four inspector generals who reported to me.
left city work in 2009 and formed my own law firm with a
partner where we specialized in compliance and integrity
monitoring.
Now, the chief compliance officer's function over at
the benefit fund, the primary one is to investigate allegations
of misconduct, ethical violations and also to serve as the main
conduit for employees or members to report allegations of
10
misconduct.
I am also responsible for conducting
11
organizational risk assessments and audits to make sure that we
12
have and maintain robust internal controls and I also do
13
training for employees benefits on compliance matters.
14
THE COURT:
So what would misconduct be in your world?
15
MS. BLOCK:
It would range.
It could range from a
16
violation of our internal policies and our employee handbook or
17
it could be a violation of planned documents or the way we're
18
administering the funds.
19
THE COURT:
Give me a like.
20
MS. BLOCK:
We have had allegations of an employee
21
misusing computer resources.
22
an employee thought that a member of the funds was stealing
23
money or selling social security numbers for identity theft.
24
It could run the gamut.
25
THE COURT:
That would be a minor one.
Or if
Tell me what you do on a daily basis.

(212) 805-0300
43
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1
2
MS. BLOCK:
I do a variety of things.
If I can
highlight some of the accomplishments of this past year.
THE COURT:
Sure.
MS. BLOCK:
Since I have gotten there, we have taken a
very methodical --
THE COURT:
Are you full time?
MS. BLOCK:
I am there two days a week.
I am not an
employee of the benefit fund.
I am independent monitor or
compliance officer, which I think is very important so that
10
employees feel secure in reporting information to me without
11
any fear of retribution or negative repercussions on their job.
12
THE COURT:
You still have your law firm?
13
MS. BLOCK:
I still have my law firm.
14
THE COURT:
And you do other work?
15
MS. BLOCK:
I do.
16
When I came in I did a very methodical review,
17
historical review of the benefit fund and what has gone on and
18
I did that by reviewing historical documents, reading the RO's
19
reports and sitting down and speaking with the employees.
20
Through that I identified areas that have been problematic in
21
the past and first took a look at those to make sure that we
22
have adequate internal controls on them.
23
enhanced, I worked on enhancing them.
24
audited on a quarterly basis.
25
these reviews in conjunction with Ryk Tierney, Executive
If items need to be
They are typically
Then I turn my -- as I was doing

(212) 805-0300
44
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1
Director, we determined that there was a need to standardize
procedures across the organization.
call the standard operating procedure or SOP project.
of that project was to standardized all the procedures in the
agency to promote consistency and cross-training.
with the accounting department and worked very closely with the
comptroller and auditing department to develop standard
operating procedures or key financial functions such as
remittances, procurements, expenditures and expenses.
So we embarked on what we
The goal
We started
And we
10
then moved onto the entire benefit fund.
11
all the departments have developed SOPs for all their critical
12
functions.
13
anticipate they will all be finalized and implemented by the
14
end of the year.
15
going to go in and be auditing them on a regular basis.
16
drafted individual department audits and we're going to go in
17
and test and continuously make sure that they are strong
18
internal controls and that they work.
19
Over the past year
We're in the final process of reviewing them.
Once that is done, next year's goal is we're
THE COURT:
people are doing at District Council?
21
one another, or are you more self-contained?

MS. BLOCK:
I have
In your work is there overlap of what
20
22
We
Do you all interact with
A little bit of both.
I am self-contained
23
but I do interact with the union in terms of meetings, benefit
24
fund meetings.
25
transparent relationship with Josh and Scott.
There is a very nice, I think, healthy

Of course my

(212) 805-0300
45
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1
role in compliance function wouldn't work without the support
of both the union and management trustees.
report that there is that support.
compliance function at other places where there is not support
and I think we all understand that it will not work without
that.
7
8
9
10
THE COURT:
questions of you.
I am very happy to
I have been in an IG or
So I think I don't have any further

I have read your declaration.
Is there anything else that you want to share with me?

MS. BLOCK:
I just wanted to mention that when I first
11
came into the benefit fund, the RO was gracious enough to allow
12
me to sit in on his employee interview project.
13
what I heard was an organization that it had a lot of turmoil
14
over the past few years with personnel changes and allegations
15
against top executive, morale was low, and I think employees to
16
a large extent had checked out.
17
I did an employee survey in the spring of this year and there
18
has been a sea change.
19
committed to the funds due to some policy changes.
20
internally post jobs.
21
advancement within the fund.
22
training environment where we are continuously giving training
23
to the employees and one thing that I think is particularly
24
significant is that Ryk Tierney is a certified benefits
25
specialist and he is able to teach a program that comes out of
What I saw and
I am very happy to report that
Morale is up.
People are especially

We now
There is a lot of room for personal

The trustees have committed to a

(212) 805-0300
46
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1
the Wharton School of Business and the trustees authorized him
to teach it to all the employees of the benefit fund and I
believe we have 36 people, including myself, who are now
pursuing a degree from the Wharton School of Business.
that is a phenomenal accomplishment and has changed our
employees from being mere employees to stakeholders in the
business.
THE COURT:
Anybody we missed, Ms. Jones?
I think
10
MS. JONES:
No, your Honor.
11
MR. WALSH:
I think that pretty much does it for the
THE COURT:
For me that has been very helpful.
12
13
fund.
The
14
combination of these declarations and today's session has been
15
really very helpful to me.
16
place quite a professional organization and it sounds like
17
things are going well.
18
to do when he comes on board.
19
It does appear that you put in
Poor Mr. McGorty will not have anything
So unless there is anybody who wants to add anything
20
to that phase of today's proceeding, the only other issue, and
21
you may have others, Mr. Walsh's letter recently indicating
22
that pointing out of course that he remains in place until
23
December 31st and so that we couldn't easily change the rules
24
of the road before that time period elapses.
25
fix to that?
Is there an easy
That is to say to approve a new document that is

(212) 805-0300
47
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1
effective January 1st?
Mr. Walsh's problem?
MS. JONES:
Does it work that way to solve
Do you know what I mean?

I do know what you are talking about, your
Honor.
In both the May 27th proposed stip and this one had the
same language in it and it was always the intent of the
government and District Council that the new stipulation would
take effect the day it was signed.
Mr. Walsh did bring this up with us and at least not for the
May 1 but for this one and at least from the standpoint of the
That was for both.
10
District Council we don't think there is any problems with
11
having the new stipulation take effect.
12
THE COURT:
Immediately?
13
MS. JONES:
Immediately.
14
MR. WALSH:
I really only have two questions, Judge, I
15
think can deal with this.
They're questions that I've talked
16
with Judge Jones about, but I still don't have an answer.
17
respect to giving findings to the executive committee action
18
hopefully by the executive committee upon the record built by
19
the independent monitor or proposed by the review monitor, will
20
the IO or IM be able to get an immediate answer or a prompt
21
answer to the question of whether some veto or some policy
22
should be stricken or will he have to wait for the next regular
23
meeting of the executive committee?
24
executive committee have to take it under advisement?
25
Court knows there is a trigger for further events based on the
With
How much time will the

(212) 805-0300
As the
48
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1
action or refusal to act on the part of the executive
committee.
that regard I think it will go a long way.
So if Judge Jones could perhaps enlighten us in
MS. JONES:
Your Honor, I have not spoken to
Mr. Geiger or the Council about those details.
you can correct me if I am wrong, Joe -- that the executive
committee can be called in if this were to occurr and there was
a need for the IM to present something to them and it wouldn't
have to wait.
10
11
12
13
14
I am certain --
I think that can be done.
MR. GEIGER:
We can certainly call a meeting for the
executive committee for the sole purpose.

THE COURT:
presented?
What would happen before if something were
Do you need to call a special meeting before?
MS. JONES:
Well, there is a monthly meeting of the
15
executive committee that occurs before the delegate body and
16
usually there is not a need, I don't believe, for the most part
17
to call them in more than on a monthly basis to discuss that.
18
I am saying if this were to arise where the IM needed to
19
present his determination that there can be a meeting called
20
expeditiously and we can set a time period in which the
21
executive committee has to get an answer or give an answer.
22
don't think that should take more than a few days.
23
24
25
THE COURT:
Is there a November meeting and December
meeting that will happen in the normal course anyway?

MR. GEIGER:
Well, we just had our November meeting.

(212) 805-0300
49
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1
THE COURT:
MR. GEIGER:
You had it?

Last week.
Every second Wednesday of the
month is the delegate meeting, which is on a Wednesday and
prior to that either in Monday.
executive committee meeting for any specially called meetings
whenever needed.
THE COURT:
happen in December?
MR. GEIGER:
10
THE COURT:
11
MR. GEIGER:
12
THE COURT:
13
MR. GEIGER:
14
executive committee.
15
days after.
Prior to that there is
So if nothing else, the next one would
December.
On or about what date?
Second Wednesday of the month.
I see.
It would be the Monday before the
Delegate meeting takes place a couple
16
THE COURT:
Would that be adequate for your purposes?
17
MR. WALSH:
If as Judge Jones has said if necessary if
18
the RO or IM requested a special meeting that could be very
19
easily set up I assume within four or five business days.
20
after make the presentation we can get a decision within three
21
business days, I think that will be sufficient to address any
22
concerns about delay if any person thought that could be used
23
that way.
24
MS. JONES:
I am sorry.
I missed the last part.
25
THE COURT:
He was saying if there were a special

(212) 805-0300
If
50
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1
meeting needed and if one were held, would he get a response
within three days from the date that whatever he had to present
to the special committee?
MS. JONES:
I think that can be done.
MR. GEIGER:
MR. WALSH:
I also have a question about whether with respect to a
That's absolutely fair.

That will be helpable.
RO or IM matter that relates to a local union, must the
executive committee member from that local union recuse himself
10
from consideration of that matter, or is he absolute obliged to
11
be an advocate for the local in that situation?
12
an answer to that
13
14
15
MS. JONES:
I don't have
We had begun talking about this and
decided that that member should recuse.

MR. WALSH:
The last question I have is I understand
16
that the agreement does not grant the expressed right to the RO
17
or IM to attend meetings of the benefit funds.
18
board meeting which we had been planning on attending on the
19
20th and I would like --
20
THE COURT:
Of November?
21
MR. WALSH:
Yes.
This week.
There is a
I would like some
22
clarity as to whether the RO is authorized to attend that
23
meeting and if not whether an invitation could be extended for
24
that final board meeting, meetings which we always attended
25
going back too 2010.

(212) 805-0300
51
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1
2
3
4
5
MS. JONES:
All I can say that is no different than
the proposed May stipulation, but I can't speak for the funds.
MR. GEIGER:
The RO attending the board meeting with a
new stip in order.

MR. McGUIRE:
Under the current stipulation order the
review officer has the authority and he has exercised it to
attend our meeting with his counsel as well as subcommittee
meetings.
stipulation order was that the independent monitor would not
One of the adjustments we made in the new
10
have the authority to come to our meetings but would have full
11
access to all our documents, minutes, and anything else he
12
thought was appropriate for him to review.
13
14
THE COURT:
invitation to the November meeting.
15
MR. McGUIRE:
16
THE COURT:
17
MR. McGUIRE:
18
MR. WALSH:
19
20
He is asking if he is going to get an
Certainly.
Mr. McGorty --
I think Mr. Walsh.

Oh, that is not a problem absolutely.
Thank you, Judge.
Those were the only
questions I had.
THE COURT:
I think I have all I need.
The
21
submissions you have made look good to me, including the
22
hypotheticals.
23
should be able to get you a sign-off.
Everything works.
In the next couple days I
24
MS. JONES:
Thank you, Judge.
25
THE COURT:
Anything else that you want to raise?

(212) 805-0300
52
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1
2
Great.
Thank you everybody.
Good to see you all.
MS. JONES:
Your Honor, the District Council had a
couple of books as well, which we're just going to present to
you.
to look at.
7
8
A folder and a book and they have materials you may want
THE COURT:
We'll make them court exhibits to the
transcript.
MS. JONES:
Thank you.
10
THE COURT:
Nice to see you.
11
MS. JONES:
Nice to see you.
12
o0o
13
14
15
16
17
18
19
20
21
22
23
24
25
(212) 805-0300

U.S. v. D.C. Transcript of 11.19.14 Conference

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U.S. v. D.C. Transcript of 11.19.14 Conference

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1

UNITED STATES DISTRICT COURT

UNITED STATES OF AMERICA,

HON. RICHARD M. BERMAN,

ZUCKERMAN SPAEDER, LLP

(Case called; in open court)

I originally thought it was a good idea to

meet the staff as it were.

I didn't realize at the time how

big the staff was.

I would do -- I have gotten your helpful agenda in terms of

talking to people -- is use your agenda.

Mr. Geiger, we'll start with you.

some gist or point that each of you wishes to make, do that

They are certainly welcome.

So, for example,

I have read everybody's affidavit.

I am happy to hear it.

Mr. Geiger, who is the executive secretary treasurer of the

Nice to meet you.

I think we met before.

Yes, your Honor.

a long-time member of the council and/or local union and now

are in the position of executive secretary treasurer.

a full-time position as I understand it; right?

of questions after you.

First of all, I would like to thank you

think the District Council is in a much better place than it

was four to five years ago.

I believe we've demonstrated that

SOUTHERN DISTRICT REPORTERS, P.C.

off what we have learned over the last two years.

honor to be here in front of you today.

most of the staff of the District Council here, the heads of

all departments, managers and directors here.

We exemplified the way the council should be run and

As you see here I have

I am not entirely clear of the setup.

are the top of the pyramid in terms of staff.

Below you or who

Basically I have the director of

operations underneath me, Matt Walker, who is here as well who

will be speaking before you.

as Steve McGuinness who is the president of the District

Then you have your regional

I also an assistant to the EST -- I have two

They all fall underneath me.

Those are a matter of elected positions or

As far as being an assistant to the EST,

those are appointed by myself.

a duly elected office.

Council and executive committee as well.

President and vice-president is

They are offices of the District

They are full-time positions?

SOUTHERN DISTRICT REPORTERS, P.C.

The position of president and vice-president --

Those are part-time.

They run the

meetings, delegate meetings of the District Council.

So you have elections coming up in

Those are part-time?

three trustees, warden and conductor.

I took over for the last year of Mike Bolo, who