1 E3A9USAC 1 2 3 4 5 6 7 8 9 10 Before: 11 HON. RICHARD M. BERMAN 12 13 APPEARANCES 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300 DENNIS WALSH Review Officer ZUCKERMAN SPAEDER Attorney for District Council BY: BARBARA S. JONES SPIVAK LIPTON LLP Attorney for District Council BY: JAMES M. MURPHY HOLLAND AND KNIGHT LLP Attorney for Intervenor Building Contractors Association BY: LOREN L. FORREST, JR. PREET BHARARA United States Attorney for the Southern District of New York TARA LaMORTE Assistant United States Attorney District Judge v. DISTRICT COUNCIL, ET AL., Defendants. ------------------------------x New York, N.Y. March 10, 2014 12:06 p.m. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x UNITED STATES, Petitioner, 90 CV 5722 (RMB)

2 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (In open court) THE COURT: the agenda. It seems like there are several topics on

I had said we have some, and is this overall theme

here somehow which is puzzling to me, which I guess the way to describe it would be that the parties -- or some are seeking a substantial modification of the RO's role in this proceeding. That's one that's -- I don't know if it's surprising is the term, but I'm not quite understanding the dynamic in particular between I think the district council and the RO. So, at the

appropriate time if you want to explore that I'd be happy to hear a little bit more about that. several of the items on the agenda. First, I thought I'd ask if we could have an update on the electronic technology both in-house and outside which is called for in the seven or so collective bargaining agreements that I, over the last six months or however long it's been, approved. So, I don't know who wants to do that. But that That colors and impacts

would be useful THE COURT: You don't have, Ms. Jones, an in-house

technology person yet who can address this? MS. JONES: No, your Honor. What we have is a process We've got

to hire one which was approved by the delegate body. 70 applicants.

We've done telephone interviews -- well, we We've done telephone interviews. We have We hope

winnowed those down.

seven people at the moment we're very interested in. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

3 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 know. You might hear -- you will hear I think from me in the course of these remarks that in my opinion it's useful -- of course this is a courtroom and so the lawyers always want to be heard. But candidly in this context -- and in particular if to begin interviews next week. manager by the end of the month. THE COURT: So, that's helpful. That's useful to And the goal is to have an IT

you're asking for the court to make some sort of change over the supervisory role here, it's very valuable for me to hear from people who -- from the principals. So, you don't have one

in place now but we've heard in the past from -- particularly with respect to the benefit funds, from someone who is very knowledgeable. And I have not heard from really senior Usually

officers of the district council in these proceedings. it's counsel that speak for them.

But going forward that's

frankly what I'm hearing, to be able to assess whether the district council has to have so many lawyers speaking for them and analyzing for them or whether they can do some of that themselves and how much. MS. JONES: Well, the consultants, Segal, just gave

the district council an overview of all of the work that they've done so far and also told them how much they thought it would cost and how long it would take to improve -- to upgrade the IT at the district council. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

4 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: This is just generally speaking? The IT

at the district council?

This is not particularly related to

the compliance measures that need to be -MS. JONES: Well, I mean it's all included. Every

department went through its entire workflow which included the business rep department, starting with the out-of-work list department. And so that's all just been given to us, the notes

and the transcriptions of that, which I think are going to be very helpful, frankly, for us to get business practices and protocols completed relatively quickly. THE COURT: Is it a big deal? Does it present you

with a big tab and timeframe? MS. JONES: Apparently -- and I did not attend this. His

The district council executive staff and others attended. estimate was a million to a million-and-a-half.

And I believe

what I'm hearing is that that's largely because this is custom. It's not something you can take off the shelf. Because it's

not like there are unions, union businesses that need these unique systems. I will say this, though, your Honor. We are working

everyday to get the electronic reporting fees, not just to Watchdog, but also we've begun to try to get them directly to the funds, even before there is an upgrade, finished. Obviously we can't wait for that and we're not going to. will make things easier, but it's not going to change how SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 It

5 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 quickly we can begin to comply right now when we're doing it. We're expecting that -- and we've had a conversation with the funds' technology people, who have been terrific, Jennifer Gordon and Charlie Jackson. And Standard Data is

preparing a master file, which will actually permit us to transmit directly to the funds realtime, just as we are into Watchdog. And if that file works, then we can convert everyone And

that we have on electronic reporting right into the funds. the issue about finding discrepancies between hours reported and benefits paid will become a lot less.

So I just want to stress that we don't think that we need to wait two years in order for us to be able to continue to comply and actually excel at it. I think the electronic

reporting that's being done by the stewards now with respect to the CBAs that are -- that we have is -- has been shown to be quite excellent. And I don't think that -- and I think this is

all just going to continue. Judge, let me, if I may, just give you an update since there is more to be said about electronic reporting. We have begun last month bringing on the independent carpenters and others who are not within the ambit of our CBAs to electronic reporting. I think, as I mentioned last time, And we started with 25 existing

that's about a million hours.

jobs and now as every one of these jobs is called in they immediately go on electronic reporting. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

6 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 In addition, we finally worked out with the Javits Center, and that was Charlie Jackson, whom as I said works for us as well, who is the funds' IT person, among others. And

we're going to be able to import hours, data directly from the Javits Center another half million straight into Watchdog by the end of this month. Or at least there's a file that will be

tested and everybody's pretty confident that it's going to work. We have also, this month, begun actually -- actually last month with 20 jobs, starting to have dock builders with both dock builders -- well, all dock builders basically who do jobs that are under our jurisdiction telephone their hours in. And those are immediately also fed into Watchdog. In addition to that, in anticipation that we're going to have a lot more of the remaining -- so far not reported electronic jobs, that we'll be approaching to get them to report electronically, we're in the process of working out the details to buy 250 more tablets so that we'll be able to go ahead with our next targets for electronic reporting without having to worry about it. With respect to the contracts you just signed, Judge, the association of concrete contractors, we're going to report -- well, they went fully on electronic reporting on the 18th of February. I believe you signed it on February 3.

And we will have a full report of their electronic compliance SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

7 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in the next 30-day report which is due March 17. This is not electronic reporting but -THE COURT: So this is all helpful. It's a little

abstract for me to understand, though, where you are really. So I read the RO's report. He's not as sanguine as you are,

perhaps, about the compliance with the provisions of the CBAs and so I'm hearing both that there's been progress but also that -MS. JONES: THE COURT: MS. JONES: THE COURT: Well -Hold on. I'm sorry. But also that there could be a year or so. I'm trying to understand, to have

To me it's a little vague.

an answer to the question where are you in connection with the obligation that's contained in the CBAs today. MS. JONES: With the CBAs, your Honor, we're at And at a

99 percent compliant reporting by our shop stewards.

recent meeting with the government I believe Mr. Walsh said that he didn't have any problems with our numbers. So that's my response to that. THE COURT: MS. JONES: Okay. With respect to what the other initiatives

I'm talking about, that's our effort, where we don't have a CBA. THE COURT: Right.

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

8 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MS. JONES: THE COURT: MS. JONES: As you know. I understand. And we're not stopping there. We're also

going to begin to talk -- and I think some of this has already started -- with employers and contractors to try to get them to do the other side of the reporting with us. But in terms of

our obligations under the CBA, Judge, I think our record now, especially for the last three months, is excellent. THE COURT: Mr. Walsh, do you agree with that? Judge, I do generally agree with the ad

MR. D. WALSH: hoc progress.

As we've stated before, the district council is

doing what it can without a perfect system, electronic system. They still have the special team of district council employees who are going through data to expunge the screens that should not have popped up based on the way the system was designed. But they -- the council is taking that seriously. They are

dedicating the resources on an interim basis until there can be an electronic cure that everyone can rely on. As I mentioned

before, I think that we're stuck with that until the electronic piece is perfected. I was at the executive committee meeting when Segal presented its initial findings to the committee. THE COURT: the master plan. MR. D. WALSH: Right. And all in, there is basically So this is the plan so to speak, I guess

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

9 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 two years' worth of work, in their view, that needs to be done. They were not sanguine about the current technology being used. They describe it as bad. And there was a lot of work to do.

So, that's the reality of the timeline we're talking about for the perfection of the district council's IT system. As Judge Jones said, they have made progress in getting an IT person in and I'm very hopeful that he or she will be qualified and will be put to work in a meaningful way while we are in this period of expecting the district council to do everything possible within its means until they can perfect the IT program. And that includes things that have not been mentioned yet; but, for instance, the business reps are now all being dispatched electronically. And the understanding that I had

that I conveyed to the council is that if they put business reps into that electronic dispatch system they would not have to do time sheets for my office. And I was told that they

would not have to attend the morning briefing sessions to get their green sheets and their assignments and they would not have to come back to the council and eat away their field time in the afternoon. I'm encouraged by that.

So, the council is making progress within its current means to use technology. But we are, in very material respects

related to the court orders, stuck with this ad hoc program of having to use people to make sure that the data is correct. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

10 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 But I don't have any reason to doubt the accuracy, although it may seem somewhat complicated to follow it at times, I think it is generally accurate. And I've inquired as

to what the council does when it has a reasonable suspicion or it can show that there's a steward who has willfully decided I'm not doing this. And it continues to be my expectation that

stern measures be taken, that they be defrocked as stewards according to the procedures that the union has -- there be a hearing, an internal union hearing -- and that steward is not going to be participating in the system. The suggestion that the district council do everything in its power to get all that data to the funds was made some time ago by my office. We started off with the 20 largest jobs That has worked out to be a

on a disk or an e-mail attachment. benefit to the funds.

So I'm encouraged now that the council is having these conversations with the IT people at the benefit funds to get this data in realtime over to the benefit funds. Because,

unfortunately, they're still stuck now with this program of taking the paper steward reports, scanning them, using the character recognition software, converting those handwritten reports into numbers, and then comparing them to the hours remitted by the contractors. That process takes 60 days before

the funds can generate the discrepancy between what the district council records show and what's been remitted. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 And as

11 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 we've said in our reports, oftentimes the contractors' numbers are more reliable than the benefit -- than the district council's numbers. So I think it's imperative that the council continue to do everything it can to get that data, whether it's from the scanners or whether they have any interim method here, the dock builder stewards phoning that data in. Those are not in CBAs.

Those dock builders are not covered by any court order here. I'm encouraged by that. My view is that the district council has to move to a completely electronic system, whether there's jurisdiction of this court from a prior order on a CBA or not, but that's the direction it has to go. And that will empower the members to

use this operation Watchdog; go on, see if the time has been accurately entered, but also to cut down on this lag time between what we have now, this 60-day cycle when a contractor with bad intent can, if he or she chooses, bust out a job and run up a very large debt. do it. So that all has to continue to have -- and I'm hopeful that the IT person can jump right in and maybe do some brainstorming with Mr. Jackson and Ms. Gordon as to how they can expedite that process. well. I'm encouraged that that will work And there's two months available to

We just don't know yet. THE COURT: The Segal plan is -- what stage is it at?

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

12 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 right? It's presented to you? it or -MS. JONES: Judge, they have not -- they're expecting This Council hasn't accepted it or agreed to

to present this on March 28 with the specs for a vendor.

plan was to give us, an idea of what they've done and their approximate amounts of money and time that it would take and, as I said, it was last week. I would like -THE COURT: Is that a public plan? Is that something

I could take a look at? MS. JONES: provide it to you. THE COURT: MS. JONES: THE COURT: It would be useful. Absolutely. It has to be accepted by the council, I'm sure that council would be happy to

There is no contract? MS. JONES: No. That's right. The specs would -- a

proposal would have to be made after the executive committee agreed on something to the delegate body and then they would have to approve it. Can't do it without it. We did approach the

Judge, just a couple of things.

funds a while ago with respect to trying to figure out ways for the direct feed to occur. THE COURT: MS. JONES: Right. And quite -- in fact, we went and asked

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

13 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 on? are. What about this latest CBA proposed for me to sign off Who wants to address that? MR. MURPHY: THE COURT: James M. Murphy. Is that another me too agreement, them about the 20 top jobs, for instance. And quite reasonably

they told us, months ago, that they were in the business right now and very busy getting their own new IT system up and running. And that was the reason why nothing was done even

sooner than it's being done now. The other thing I'd like to mention is that the special team, the ad hoc approach that we're taking on electronic reporting, it -- the closed box which is now available electronically to stewards, appears to be working. We have many fewer telephone calls that need to be made, which means that the data is actually now much more accurate than it was because we're now not seeing open jobs -- I mean, I'm sorry, seeing closed jobs listed as open on our reports. So

our manpower commitment or personpower commitment on that has already decreased. My only point is that we are achieving excellent compliance with electronic reporting. And with the non-CBA

contracts we're pushing ahead and I think we have made some success. THE COURT: I'm ready to move to another topic if you

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

14 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mr. Murphy? MR. MURPHY: Me too -THE COURT: MR. MURPHY: How about the no part? No. In that it's a specialty, a trade, Yes and no.

the trade show industry, so that the type of work is different than what I'll call outside construction industry; whether it's a new building, or it was called build-out or retrofitting of existing structures. displays come in. It's a trade show where the equipment They

They have to be very quickly put up.

have to -- if any repair has to be done with them, that's done. They have to be maintained during the trade show; say it's in the Javits Center, one of the major hotels, any place else. And then the displays have to be taken out -- taken down, put back into their transport boxes and then removed from the premises. So that's the no part. The yes part is that the electronic reporting, the full mobility, and the anti corruption compliance procedures are identical to those in the other, what I'll call the outside construction collective bargaining agreements. THE COURT: They didn't seem to me to be identical.

The electronic reporting obligation did not seem to be identical to the other -MR. MURPHY: THE COURT: No? No. In this sense. In all the other

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

15 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 agreements, the full mobility was conditioned, specifically conditioned, upon the implementation of this electronic reporting. It doesn't seem to be the case in this agreement. Why isn't it? You

And that's really the big question I have.

might want to compare the language from one of the other agreements. MR. MURPHY: I'm looking, your Honor, on page eight at

article six, Section 8(a) and 8(b) where the same penalty for noncompliance is -- their having to -- an arbitrator be able to penalize them by abolishing -THE COURT: I don't have it in front of me. If you

take a look, you can take a couple of minutes, I'm sure you can find it. But it strikes me that in the other agreements that

the full mobility was conditioned upon the implementation. That's not the way it reads to me anyway. Maybe I misread it.

It was a direct sort of quid pro quo, which is the way I -- and the basis for which I approved the other agreements. And that language -- who negotiated it? the language is different. MR. MURPHY: It was a committee at the district Somebody must know why

council, vice-president Michael Cavanaugh led -THE COURT: MR. MURPHY: is different. So you don't think it's any different? I don't think in any material respects it

It has really a Draconian penalty if there isn't

the electronic reporting or there's any kinding cheating that's SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

16 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 going on, that they would then go to a 50/50 ratio where 50 percent of their -THE COURT: I understand.

Are you familiar with what I'm talking about or not? MR. MURPHY: THE COURT: I'm sorry, but I'm not. You can take a minute, if you have another It looked

one with you, and just compare those two provisions. to me like somebody -- not somebody. different. monitoring. The language is

There is full mobility and there is electronic But the bridge between the two is written

differently, as I read it, than it was in the other agreements. MR. MURPHY: section that I -THE COURT: Let's not debate it. Take a look at it As I see it, again, in the article and

and see -- Mr. Walsh, are you familiar with that? MR. D. WALSH: Judge, the question that I had posed to

Mr. Murphy a couple of weeks ago about that contract is whether the compliance addendum was different, because I think it is. And it seems to me that the agreement between the parties needs to be crystal clear that if there's any ambiguity, it could potentially be exploited by contractors. But the principles

have to be in place; that the stewards are going to use the electronic system; that an e-mail is going to be generated, it's going to be sent to each one of these contractors, and they can either accept or reject the time; and there is a SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

17 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 court? THE COURT: Sure. mechanism in place at the council now as to how to deal with those situations where the time is rejected. And that's as

simple as can be, to make sure that that process is delineated and followed. THE COURT: We could put this -- I don't want to go Just take a look at the issue, both

too much back and forth.

raised by Mr. Walsh and the one raised by me in the basic contract itself and see if you can perceive any difference. Maybe I'm misreading it. MR. MURPHY: Can I follow up with a response to the

So I'm going to hold off on signing off on that CBA until we get these issues, a little more clarity. So the other issues seem to be related. Talking about

modifying the procedures by which in one instance -- or several instances by which the RO implements his oversight of the workings of the district council. There's also a question here And it's these

about the RO's term and extending the term.

that I didn't really -- this is what caused the question I raised at the beginning. What's the issue here? from the government. brought this case. RO? What's the bigger picture here? And as to that, I wouldn't mind hearing This is your case, after all, right? You

So are you proposing that we terminate the

Are you proposing that his term expire, that there be no SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

18 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 RO, that the district council has made such progress in leaps and bounds, etc., that there is no more need for oversight? By the way, I'm not going to make these decisions just based on this. Because I think that the letter submissions are But that's not the way we're going -If you're talking about some

interesting and helpful.

I propose to run this railroad.

fundamental changes in the nature of the oversight, then that has to be done in a fundamental way as by, for example, petition or an application made by the government and saying, you know, doing this piecemeal is -- I don't think is appropriate. MS. LaMORTE: Absolutely, your Honor. We were not asking at

Just so the court is clear.

least for any extension of the RO's term absent an agreement of the parties or full briefing and motion by the RO. wanted to make that clear. THE COURT: So you're not asking for any RO So I just

supervision after June? MS. LaMORTE: No. Your Honor, I anticipate that the

parties will be negotiating for an extension of the RO's term. I'm hopeful that the parties can come to an agreement. If we

do come to an agreement, any such, I guess, additional stip and order would is have to be presented to the delegate party for approval. If the delegate body failed to approve, at that

point I would imagine that the review officer intends to make SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

19 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 an application to the court for an extension of his term, and the government would support that. But we're not there yet. I

think parties should be given an opportunity to negotiate and see if they can come to an agreement on that. So the RO's term is set to expire, I believe, sometime in June, if that's correct. And what we're -- what's currently

on the table for discussion is an proximate six-month extension, maybe a little longer, just to bring us through the next election cycle. The district council, as I think the court has heard over the course of the past several conferences, has made progress. And we believe they are genuinely committed to

making progress. THE COURT: Certainly that's been said. But I don't

understand what it means. then you're there.

So progress means you're here and

So I gather that there's some progress with The

electronic monitoring but that's the tail, not the dog. dog here, which gave rise to this whole process, was this pervasive corruption with this union. And this is a very

unusual proceeding that we have here with an RO, with the court, etc. So I don't know what it means to say there's That's the problem that I

progress, you know, and whatever.

have with the submissions that you've all made or some have made recently as to where things are going. It's also part of the problem I don't quite understand SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

20 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 what it means to losen some of the oversight to see if -- I don't know, makes little sense to me to be honest with you. So

we either have a problem and we need the oversight or we don't have a problem and we don't need the oversight. fundamental issue. And that is a

I can imagine there's pros and cons or And that has to be done in a more

arguments on both sides. substantial manner. MS. LaMORTE:

And, again, progress from what? As the Court is aware, what prompted the

most recent stipulation order was endemic corruption in the district council, including at the top layers. THE COURT: MS. LaMORTE: I'm fully aware of that. That's how we got here today. I will

let the RO speak to, more in depth and more detail about corruption in the union. But the RO's mission, as the

government saw it, was to institute procedures in place at the district council that would be larger than any one individual person, that would be larger than the EST, larger than the governing body. So that way if -- and in that way these

procedures were intended to serving as a bulwark against corruption being able to creep in at that level. When I say "progress," what I mean is that I think, based on my conversations with the district council and the RO, that we have made -- they have made progress in instituting those procedures and that the government is -- hopefully will become satisfied that these -- or defers to the RO and is SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

21 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 followed. satisfied that these procedures will operate, in fact, to prevent corruption from encroaching in. guarantee that. Now we don't see it as a black-and-white issue. Well We certainly can't

if they made progress, then we don't need oversight anymore. In this case and in others the government has seen that there's been progress made. The RO or the equivalent, in these other And all of a sudden we have corruption

cases, have gone away. again.

And that has happened in this union as well. So that's why even though we have seen, we do believe

that there's progress that's been made.

We don't believe that

it's appropriate to terminate the RO's tenure come June. We believe that a system whereby we have -- the RO sort of reduces his powers a little bit, let's allow the district council to prove that it can operate without the constant oversight of the RO. However, the RO retains the

ability to investigate, retains the ability to access district council documents and witnesses, etc., to make sure that a problem -- to make sure that we are, in fact, correct in our assessment that progress has been made and that this progress is enough to at least help ensure corruption from creeping back into the union. So in other cases this is the model that we have And that I think has been successful. And that is a

model whereby we continue to extend the review officer or the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

22 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that -THE COURT: Nobody got indicted? time? MS. JONES: Well the progress that's been made is from. equivalent position's tenure while at the same time reducing his power. We've done that in other cases and that's the model

that the government purports to follow here. THE COURT: MS. JONES: Anybody else want to be heard? Judge, there hasn't been any pervasive

corruption in this union for some time. THE COURT: Well I don't know where you're starting

I just remember that Judge Marrero sentenced all these That isn't all that long ago.

people in around September 2010.

And they were -- including the top official of the union that was already under a -- call this a trusteeship or whatever it's called. So it's not even a situation that the government has

just mentioned where people walked away and it came back in. It happened while people were looking. that means. What is the progress that has been made since that So I don't know what

Frankly I don't give out a gold star for that, right? You're not supposed to get indicted. MS. JONES: The progress that's been made is that we The IG's Office, compliance

now have institutional controls.

officer, and our operations director, director of operations SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

23 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 who does the internal controls for the union. If I could take us back just a bit. I think every

party here today believes that Mr. Walsh's suggestion that prior notices that have been required for the last three-and-a-half years should be relaxed and that we should do away with the veto power is an indication that not only that we are governing ourselves in a lawful manner right now but also that there shouldn't be any fear of, going forward, that we can continue this. THE COURT: It's curious just on that issue there does But what is it -- what's the

seem to be some agreement. problem?

I mean I guess notice, I can understand having to -MS. JONES: THE COURT: MS. JONES: THE COURT: I'm sorry? What's the problem? You mean with prior notices? No, no, no. The substantive issue is the I don't

veto, the notices or mechanism on the way to the veto. frankly understand the problem with the veto.

I certainly

don't understand the suggestion that you change the burden of proof. than I. I certainly don't understand -- you would know better You were on the bench before I was, Ms. Jones. In

your whole tenure how many times have you imposed as a judge civil contempt? cumbersome. I never do. And never have. And it's very

Very difficult.

So you're just transferring all

of this activity and resources from maybe the RO to the court. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

24 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 It's not a workable mechanism, I don't think. different view. MS. JONES: Judge, well, number one, and I think Maybe you have a

Mr. Walsh agrees, we doubt there will be any, or few if any. But leaving that aside. THE COURT: MS. JONES: Yes. Even with the veto, the person being Your Honor held

vetoed had the opportunity to come in here. hearings. THE COURT: MS. JONES: THE COURT: And should. Exactly. Absolutely.

Why would I change the burden of proof That's

from the -- I mean why would I do that, for example?

one mechanism that if nothing is -- if everything is done properly, then you have nothing to be concerned about, about the veto or the burden of proof. So I could understand that Nobody likes to

the prior notice is a little bit of a hassle.

call off necessarily and say can I do this or whatever. But the veto says, in fact, and at least in one person's opinion that something that's happened is improper. So, the way things work now, you have to come -- if somebody is vetoed or an action is vetoed that individual or that action is presented to the court and explained. So, I don't get it. significant. I don't know why that's so

Or I don't even know why that's so -- I don't SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

25 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 standard. MS. JONES: THE COURT: I realize. It's not a very different standard. That even know why it would be necessary. You're saying we're self

governing and we're doing a good job so don't worry about it, Judge, it's not going to happen. MS. JONES: Not quite, your Honor. And

The veto power impacts people to a great extent.

when you have to prove that the decision of one person, the RO, is not arbitrary or capricious, that's a very different standard and a very different feeling. THE COURT: That's the current standard. That is the

is the standard that we've been operating under. MS. JONES: THE COURT: I recognize that, your Honor. So, yeah, I get it. It's not easy. But

under a circumstance where presumably the person has some expertise and familiarity and is not acting arbitrarily, says no, you should have done X instead of Y, should have had competitive bidding instead of giving the contract to your cousin or something like that. is what I'm saying. MS. JONES: THE COURT: MS. JONES: I see. I mean I get what you're -I think the average carpenter, member of I mean I don't see the problem

the district council, would feel a lot better coming before the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

26 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 court after there was a motion for contempt and the RO having the burden of proving -- and, by clear and convincing evidence, that there was a violation of the intent of the consent decree here. That's vastly different than having -THE COURT: difference. I know it's different. I recognize the But we're

And I know why people might prefer it.

not just any people. MS. JONES: THE COURT: articulated. MS. JONES:

We're here for a particular reason. We are. That counsel for the government has

We are.

But I guess what I'm saying, and maybe part of what has to happen here, Judge, and I appreciate your mentioning it earlier, is the district council members themselves should be here and -- to present personally to you on some of these issues. The people that are now subject to veto are not the And it makes a difference not to

people from 2009 or 2010. have the veto power. THE COURT:

Anybody else? Judge, my impression is that there are

MR. D. WALSH:

employees at the district council who view the veto power as the sword of Damocles. THE COURT: I do appreciate that. But I think in their view it also

MR. D. WALSH:

increases the likelihood that there will be some form of action SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

27 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 power. taken if they do something that's inconsistent with the consent decree in the stipulation and order. I think I've been judicious in exercising the veto There's not a dime that gets spent by the district

council that doesn't get, quote unquote, approved by my office. There's not a person hired, fired, a contract signed. And I

think that, as I understand it, there's this fear of somehow innocently drawing the attention of the RO. And I personally

don't understand that because I think that the process that we've used has been well known, that's it's been fair. We've

promulgated procedures I think within the first 20 days of my tenure that there would be notice, particularly describing the conduct under review. check with counsel. that. And people always had the ability to The first elected EST chose not to do

He, in my view, decided in his own mind what he wanted

to do when Mr. Murphy at that time was spending the better part of five days a week or was always available to him, that there was a chief compliance officer that he could consult with. And

I think that there are any number of methods available to the to a prudent official at the district council to make sure that this perception of backing into a veto is addressed. Still, Judge Jones came to me and articulated her understanding of the perception of the RO being a very visible person; that they did not feel that they were autonomous; that there was frankly too much decision making being made, someone SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

28 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in my position. that perception. One can disagree with that. But she conveyed

Right down to asking if the space that my

team has on the 9th floor of the district council could be vacated so that they wouldn't even see us in their daily business. So, I continue the dialogue with the understanding conveyed to me that the district council has these fears, these desires, however we call them. But they were something that

could be addressed to accommodate what I think has to happen, which is a reaction frankly to what I observed in 1999. I had, as you know, assisted Judge Conboy, Kenneth Conboy when he was the investigations interview officer. tenure ended abruptly in 1999. His

We know from the record of the

crimes committed by Mr. Ford and others that the union went straight to hell because there was no institutional forum, there was no means of testing whether council had actually made any progress. And I think that that needs to be a major

concern that's addressed this time; that if the reforms that we've implemented are truly sustainable, if this is what the council is saying, this will present an opportunity for them to conduct their affairs under observation but without their perception that I am running their affairs and that you run the risk of drawing the ire of the RO, which I have always rejected. contexts. People have tried to articulate that in certain And I frankly had detailed discussions where I've SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

29 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 rejected that. But I am told that there is a perception on the

part of some people in that regard. THE COURT: I understand. So that is my thinking, that if the

MR. D. WALSH:

district council is in a better place, we need to find out whether it's sustainable or whether the chief compliance officer and the IG are simply going to be steamrolled by people who feel completely unfettered now that, everything from the RO team being off the 9th floor, to the perception that the veto power is Draconian, that they will be released and free to engage in innocuous slipping back, to begin with, perhaps by trying to change the bylaws, by minimizing the role of the human resources department, by altering hiring methods. have a strong reservation about this cold turkey ending. not mitigating the risk in any way through observation and testing of whether the employees at the council, and right down to the delegate body, get it; whether this has been -- and I've had other cases where the phrase, whether it's in their DNA. don't know that. I simply don't know it. And I think that I I just And

there needs to be some way of figuring out how to do that rather than just saying June 3 is the end date or some time in December. Ms. LaMorte pointed out there are other cases, the ILA case, the Mason Tenders' case, where monitors have been in place for many years with virtually nothing to do. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 I refer to

30 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it as being in sleep mode, like a computer. But if there is a

reasonable suspicion that pops up, they are there, available to investigate it objectively as a third party reporting to the parties, to the government, and to the court as to the activity in question. So I think that's a fair model for what the carpenters union faces. But I do believe that if they have this stamped

in their DNA now, that we need to do more than just simply take their word for it. THE COURT: Your proposal with regard to advanced

notice, I take it that would be severable from your other proposals, veto and burden of proof. MR. D. WALSH: THE COURT: It really -- it is severable.

Could you explain it for us? The reality of the notice provision is

MR. D. WALSH:

not that it's more symbolic at this point, because there is this perception that every expenditure, every contract gets approved by the RO. prudent people. And think the council wants to say we are

We can do this without having Mr. Walsh opine

about it; so that that would shift to basically an audit function, a testing function each month, going over the expenditures, making sure that their representation about their ability to do that is accurate. It's not a tremendous inconvenience. We get copied on

the e-mails that get sent to the district council trustees, to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

31 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the delegate body. There are meeting notices that we get. But

they are invariably copied to other people. intensive. So but it is severable, in a phrase. THE COURT:

So it's not work

I take it, Ms. Jones, you want that --

you're in agreement with that as well, right? MS. JONES: We're completely in agreement that all of

Mr. Walsh's suggestions -THE COURT: MS. JONES: by your Honor. THE COURT: MS. LaMORTE: THE COURT: And the government is as well? Yes, your Honor, absolutely. Where are you on this surprising that -What I'm just talking about -On prior notice, yes. Should be adopted

is this an ongoing discussion about the term of the RO? does that mean? You have meetings?

MS. LaMORTE:

Well, your Honor, we had an initial

meeting maybe a week or so ago; the government, the RO and the district council. meeting. It was -- like I said, a preliminary But what we plan to

We're not down to details yet.

do is start having meetings next week where maybe we can talk in more concrete detail about the extension of the RO's tenure and what that's going to look like and start, at some point soon thereafter, trying to put pen to paper to arrive at an agreement, hopefully, that can then be presented to the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

32 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 delegate body. THE COURT: So you'll let me know -- when do you think

you're going to have that or not have an agreement? MS. LaMORTE: I understand that after March 13 the

next delegate body is sometime the first or second week of April. It would be great if we could have something before

that, either having reached an agreement; or if we're an at impasse, at that point proceeding to motions. But we could --

we have talked about vaguely aiming to have something that could be presented at that April 9 meeting. If we did need a

little bit more time, a special meeting of the delegates can always be convened just for the sole purpose of looking at any agreement we may reach. MS. JONES: That timeframe is acceptable. I think one

of the issues here, and not just with you, your Honor, but also with the government is that they need to hear from the people at the council as well with respect to what they're doing and so that's -- I've already mentioned and asked the government if they'd be willing to meet with me on a much more frequent basis so they could be better informed, frankly, about what we think we're doing right now. But with respect to this, Mr. Walsh and I and Mr. Geiger have a meeting at 11:00 tomorrow. first topic of discussion. THE COURT: This will be the

After that, of course --

This being the RO's term?

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

33 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MS. JONES: This being -- yes. What we're talking

about this morning, just now. Of course, after that there has to be -- well, we expect to have at least one, if not more meetings with the government. And then the executive committee would have to

determine what it wanted to present to the delegate body. That's just the process. THE COURT: So, is it your opinion also, from what

Mr. Walsh said, and my perception as well, but you all are much closer to it than I. So a lot of this discussion is really -Is it a personality -- are

I'm trying to -- I don't know.

there personality clashes here or is it just -- is it an ego thing? Because I don't see -- I don't get the big deal, to be So I'm having trouble

honest with you, given the history.

grasping -- I understand it's real from your point of view and from the district council's point of view. But I'm not really

grasping the rationale of the -- you know, when I read all these things I don't get them from there either except it looks like maybe something that's unstated that's at work here and I can't figure it out. MS. JONES: Mr. Walsh does involve himself in almost And it seems to the

every piece of the council's business.

council that it goes way beyond compliance or corruption and certainly organized crime infiltration. examples. There are lots of

They probably are more appropriately discussed in SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

34 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 conversations with the government and Mr. Walsh and I think they need to be discussed because -THE COURT: MS. JONES: Have they? It's much more intrusive than his conduct

of this, you know, review office, is much, much more intrusive and goes way beyond, it seems to the council, what it should. THE COURT: like it to. I don't know what it should or what you'd

That's the part where I'm having the problem. But whether it

It's clear it goes beyond what you'd like.

should, it shouldn't, implies whether it's in compliance with the stipulation and order and consent decree. And if it

weren't, then I should have heard from people a long time ago. And haven't. right. I mean is it -- are you thinking he's acting in a way that's inconsistent, that's contrary to the stipulation and order or just that he's more -- hands-on would be a generous way to say it, or you say intrusive, more involved? big differences there. MS. JONES: I understand. I think that -- I think There's So I don't -- that's why I don't quite get it,

that it's well beyond what's necessary and that there is example after example of both Mr. Walsh and his investigative staff going into minute details to the point where it's almost harassment and has not that much to do, if anything, with compliance. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

35 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 says. THE COURT: MS. JONES: Well that should be discussed. And that unfortunately creates an

atmosphere that makes it very difficult for people to work together. THE COURT: should discuss. So you should -- well that certainly you

It -- hasn't. I know, Judge, you don't know about it. No, I don't. It hasn't surfaced to me. Because you read this

MS. JONES: THE COURT:

That's why I'm asking these questions.

stuff and it just doesn't make sense, unless there is something more like that, which is more of a subjective -- I would say it sounds a little more subjective, albeit real, but perceptions and people's reactions, etc. MS. JONES: Right. I get that. I'm hopeful that in our future

meetings with the government, which as I said will be more frequent, there will be objective information. THE COURT: So, give me a minute I just want to look

over my notes and see if I missed anything. MS. JONES: THE COURT: MS. JONES: Could I ask one question, Judge? Yes. I thought when we came in here -- and

Mr. Walsh I apologize if I misunderstood you -- that you agreed that you would relinquish, if the court agreed, the veto power. THE COURT: I think he was -- that's what his letter

My comments are not based on a misperception -- my SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

36 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 just now. THE COURT: MS. JONES: THE COURT: Well I don't know if he did or he didn't. Okay. It was pretty clear in the letter and so, comments are my comments. MS. JONES: I thought maybe Mr. Walsh changed his mind

yeah, I don't think -- that's not where I'm coming from. MS. JONES: THE COURT: (Pause) This is what I've put together responding to these various issues for now. done among yourselves. these matters. The oversight over the affairs of the district council, as has been eloquently stated by the government today, came about as a result of the pervasive corruption historically in the district council and that gave rise, as you all know, to the consent decree in 1994. That decree, among other things, It sounds to me like more needs to be But anyway here's my perspective on I see. So just give me a minute.

permanently enjoined all current and future officers, employees, and members of the district council and its constituent locals from engaging in any act of racketeering activity. And the consent decree also provided for the

appointment of what was then called an investigations and review officer whose powers included conducting, among other SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

37 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 things, union elections and investigating corrupt and illegal practices. The current iteration of the review officer, Mr. Walsh's position, was created and authorized in the June 3, 2010 stipulation and order signed by Judge Haight. That was

created in response to the revelation of the serious corrupt practices continued -- which continued to exist and involving certain contractors and union officers and representatives. And more specifically, the June 3, 2010 stipulation and order came about in direct response to a 2009 indictment charging various acts of racketeering against Michael Ford, then the executive secretary treasurer of the council and various other union officers and employees. Mr. Ford, as you all know,

ultimately pled guilty to violation of the Racketeering Influenced and Corrupt Practices Act and was sent to 132 months of imprisonment. So the bottomline from this history is that this is serious business and the court has, this court has certainly, and I know Judge Haight before me, approached its oversight role with the utmost care. So, we're now at a time where the parties are suggesting several things; that the RO oversteps, is too intrusive, and that oversight may have run its course. As Judge Jones mentioned a minute or so ago, this has not percolated up directly to the court. So I haven't had a

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

38 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 chance to review or examine it. But it has been clear that

something like that was going on by virtue of the submissions that have been made. My feeling is that at such time as it becomes appropriate to terminate the oversight regime over the district council, I will certainly do so. But I am reluctant to do so

on a piecemeal basis with one exception that we've discussed before, this notice exception. I don't want to undertake the

various suggestions that are contained in recent submissions from Ms. Jones dated March 6, the RO dated March 3, and the government dated March 5 at this time. in court, without prejudice. I'll also, as I said to you earlier today, want to hear directly from principals involved and, with all due respect, not just their attorneys. It's been a little bit unclear, as I say, what issues are being disputed or discussed among the parties. Today's This is all, as we say

conversation was very helpful in adding some clarity to those discussions and to my understanding of what's going on, particularly with respect to this issue of the relationship between the district council and the RO. strained. There is no doubt about that. It does seem to be And these issues do

need to be addressed certainly by you all among yourselves in the very first instance. I understand now in hindsight what Ms. Jones, who said SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

39 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it December 4 at our conference, she said that she was hired to come in to counsel the district council with respect to their obligation under the consent decree, and particularly with respect to dealing with the RO. surprising. And at the time I found that It surprised

I didn't exactly know what it meant.

me that a lawyer had to be added to the case for the purpose of allowing or facilitating conversations between the district council and the RO. But now I get it.

In any event, the approach otherwise suggested by the parties in these recent submissions for altering and/or reducing the RO's role, for introducing civil contempt, for eliminating the veto power, and for altering the burden of proof applicable to alleged district council violations, those are issues that I'm not ready to resolve at this time. again, those are without prejudice. I think that at such time as there is a pressing need for these or even more far-reaching changes, I would expect to receive a petition or an application from the government who, as I've said before, is the party that commenced this entire process. That submission would be fully supported by reasoning So I'm not interested I'd like to know And,

authorities, data, and information.

really in hearing that there's been progress.

how you measure the progress and what the benchmarks are in terms of positions filled, perhaps; in terms of violations noticed, perhaps; but it's got to be a far more concrete and SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

40 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 comment. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 sophisticated -- not sophisticated, that's pejorative, but more in-depth and supported than just our discussions here. And

then there will have to be comment from all interested parties, of course. When I receive such a submission, I'll be amenable to reviewing the matter thoroughly and rendering an appropriate ruling at that time, but not before. So, there are some to do things as follows. First, with respect to the notice, which I said was an exception, if you give me a joint proposed order, I'd be happy to resolve that issue. I don't think that is a pressing or a But I will

fundamental change in the nature of the operation.

sign off on that if the district council and the RO submit joint proposed language just on that issue alone. Mr. Murphy, you're going to look over this new collective bargaining agreement. And if you have any question

about the language we're talking about, if you call chambers and speak to Mr. Sebrow, he'll point you to the section that I have concerns about in the agreement. And further, I would appreciate if someone wrote to me and said what was the outcome of the proposals, at least when there's an agreement in principle with respect to the extension of the RO's term. That's it for me unless anybody else has any further

41 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. D. WALSH: Judge, I want the record to state

clearly that I have been unfailingly courteous throughout my tenure. I believe I've been unfailingly fair, that my direct

dealings with everyone at the district council have in my view been collegial; that if there are individuals who feel aggrieved by my conduct or anyone on my staff's, I would ask them to submit an affidavit and take that position. THE COURT: There is some issue. So my guess is -- well I don't know. My older sister, may she rest in peace, She

she was a very -- a brilliant administrator and teacher.

did have a tendency to sometimes get a little too far down, I thought, in the weeds. And people were sometimes chafed by, And that may be what

you know, her oversight and involvement. the issue is here.

But perception, right or wrong, there's

probably room for some discussion among you, the government, and Ms. Jones and maybe even that could be ameliorated. MR. D. WALSH: THE COURT: I'm saying. We have had those discussions.

I don't think we need affidavits is what

If there is a particular problem, and that has --

a decision of the RO to which somebody has complained, they have percolated up to the court, and even beyond. between. Few and far

But if there's more than that, and Ms. Jones you want

to address something that you all can't resolve yourselves, I'll be happy to take a look at it. MR. D. WALSH: I'll certainly be asking Judge Jones

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

42 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 before. for particulars then. The other thing that I want to bring to the Court's attention is that I have also had discussions with Mr. McGuire regarding the benefit funds, which is also a party to the stipulation and order. And I've had talks with Mr. McGuire and And

Mr. Neeburg who is the employer side cochair of the board.

I've sent a sum and substance confirmation to Mr. McGuire about what I envisioned with regard to the funds. And I can

certainly let him speak for himself, if the Court is interested. But there appears to be some general agreement, at

least on the employer's side, with the propositions that I've conveyed to Mr. McGuire. MR. McGUIRE: Yes, your Honor. We had a productive We have I

discussion with the review officer last week.

circulated his proposals to the employer's side trustees.

think we're close to an agreement in principle as to a somewhat reduced role for Mr. Walsh at the funds' level. As we discussed with Mr. Neeburg last week, the funds have made enormous progress, particularly in the last year when we brought in the new executive director and have in place fully formed and effective systems for making sure nothing untoward happens at the funds' office. So we now have to move

on to the union trustees to discuss this proposal. THE COURT: Just so you -- I should have mentioned it

But we talked about progress and substantial progress. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

43 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 One of the key issues that I would be interested in, in that context, is one that Mr. McGuire has just identified, the health of the funds, the size of the funds, their ability to meet current and future obligations. All of that -- that is a So that's

real verifiable marker on the road to progress. certainly helpful.

And that would be included and necessary in

any decision you might ask of me. Somebody else. MR. MURPHY: very briefly. You recall from the last conference there was some discussion of a dispute between the district council and New York Wall-Ceiling Association over the use of an international agreement, the United Brotherhood of Carpenters so-called international agreement on two-person jobs. I just Mr. Murphy. Different topic, your Honor. Just

Yes.

wanted to let the court know that we are arbitrating that dispute under the district council New York Wall-Ceiling collective bargaining agreement, using one of the contract arbitrators. for April 17. THE COURT: MR. MURPHY: THE COURT: That's binding arbitration? Yes, it is. Great. Thank you. I appreciate that. Right now the first day of hearing is scheduled

I think that's it then for today -- yes, sir. MR. W. WALSH: May I speak, Judge?

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

44 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 barn. MR. W. WALSH: At least wanted your Honor to know candy. MR. W. WALSH: It's two topics that I'll address. THE COURT: If it's an issue that we've discussed

My name is William Walsh, 28-year member. As far as the devices, taking them hours and stuff. I

know that was a big issue that Mr. Walsh would like to see that be successful, as well as the council. As being the chair for

the job steward alliance and listening to the members in the field, I get nothing but complaints from them. reasons is that a lot of guys aren't tech savvy. the machines don't work all the time. thousand dollars apiece. THE COURT: your concern? MR. W. WALSH: THE COURT: Well the upshot -One of the main Number two,

They cost over a

And we're very concerned about it.

So what is the -- what's the upshot of

They're not going away. My concern is that -- the old reports

MR. W. WALSH: that we used to do.

Mr. Walsh mentioned it today, about how

those -- how the reports were obsolete and they don't work, takes 60 days. I believe that those can be updated and if we

had stiffer penalties those reports would work. THE COURT: Mr. Walsh, I think that horse has left the

45 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: I got it. Here's the main crux of that. A lot of

MR. W. WALSH:

stewards when you made the decision in the linchpin with the full mobility back in the day. that were out of work. There were a lot of stewards I think we had And I

Were becoming stewards.

like 1400 stewards when had you looked at this picture.

was curious if you know the statistics, or someone knows how many stewards are actually getting regular certified to be out in the field, to get the statistics into these machines? Because, your Honor -THE COURT: You mean are they getting trained? Besides that, a lot are stepping up to

MR. W. WALSH: be stewards.

A lot of stewards that -- that number that you

made the decision on, were stewards because they were trying to -- they jump ahead on the out-of-work list. concern. So now it's getting busy out there. That was a big It's going to be

busy for the next five years. of heavy lifting right now. more as time goes on.

And the stewards are doing a lot And they're asked to do more and

So, it's something to think about that, All these

you know, who is going to be there to do this?

stewards that have to pay $150 for licenses and different kinds of things are not going to be stewards out there. We have to

have enough people out there to make the compliance work. THE COURT: Got it. One other topic, if I may. I did send

MR. W. WALSH:

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

46 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you correspondence you asked for me from the court last month. THE COURT: I got it. I'm hereby -- I'm here today to let you

MR. W. WALSH:

know that I am disappointed on the ruling of this court in my delegate eligibility situation. I understand the position that your Honor has taken but feel that the UBC has strong -- strong-armed and violated my rights as a union member. Although the review officer has said he's sympathetic with my plight, I feel he stopped short of and could have defaulted to the member-working-in-the-trade criteria that the OLMS and the Department of Labor have on file. If the Court

doesn't help create a reasonable criteria for this status on record, we will only be kicking the can down the road to the next election that comes in June. I'm not asking for sympathy from the review officer, and I do appreciate the letter that you sent the general president on my behalf. However, it appears that whenever

Mr. McCarron is involved in our business in New York, the review officer's soft on UBC rulings. There have been thresholds put in place in the past for elections as mentioned in the stipulation and order. Members have been vetoed, guidelines set, and circumstances that have taken priority over others. Back in February 2013 the Local 157 election, there SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

47 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 best. right. were statements made by review officer saying that, amongst other things, Gausman's decisions regarding the eligibility of Walsh and Kelty is incorrect and made upon a deficient record. It is not sufficiently documented or accompanied by sufficient process to erase the suspicion that it is politically motivated. THE COURT: Yes. I did my

So, Mr. Walsh, I've ruled in this matter. I've read everything that was submitted. Maybe I got it wrong. I have one suggestion.

Maybe I got it

I'm comfortable with the ruling. You consult with counsel and But as far as my

see what other options you have now.

involvement, I think it's an issue of jurisdiction, as you know. MR. W. WALSH: THE COURT: Right.

And it's stated in the order and I'm You may not be, but that's the end of

comfortable with that. it. MR. W. WALSH:

I'm not.

Your Honor, where does one

turn for fairness and accountability? THE COURT: Talk to your lawyer. He'll tell you.

MR. W. WALSH:

I went to the Department of Labor and

it's an active case right now and they will deal with Mr. McCarron and the elections but I felt that one could have went, just for the record, one could have went a little SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

48 E3A9USAC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 get it. further. THE COURT: I get it. You've said that many times. I

Like I said, I'm comfortable with my decision.

Thanks

very much. MR. W. WALSH: (Adjourned) Thank you, your Honor.