+ All Categories
Home > Documents > 7.18.13 U.S. v. D.C.

7.18.13 U.S. v. D.C.

Date post: 03-Apr-2018
Category:
Upload: latisha-walker
View: 217 times
Download: 0 times
Share this document with a friend

of 23

Transcript
  • 7/28/2019 7.18.13 U.S. v. D.C.

    1/23

    1

    D7IHUSAC

    1 UNITED STATES DISTRICT COURT

    1 SOUTHERN DISTRICT OF NEW YORK

    2 ------------------------------x

    2

    3 UNITED STATES OF AMERICA, New York, N.Y.

    3

    4 v. 90 Civ. 5722 (RMB)

    4

    5 DISTRICT COUNCIL, et al.,

    5

    6 Defendants.

    6

    7 ------------------------------x

    7

    8

    8 July 18, 2013

    9 10:45 a.m.

    9

    1010 Before:

    11

    11 HON. RICHARD M. BERMAN,

    12

    12 District Judge

    13

    13

    14 APPEARANCES

    14

    15 PREET BHARARA

    15 United States Attorney for the

    16 Southern District of New York

    16 BY: BEN TORRANCE

    17 Assistant United States Attorney

    17

    18 PETRILLO KLEIN & BOXER, LLP

    18 Attorneys for Petitioner Michael Bilello

    19 BY: GUY PETRILLO

    19 DAN GOLDMAN

    20

    20 FITZMAURICE & WALSH, LLP

    21 Attorneys for Review Officer

    21 BY: DENNIS WALSH

    22 and

    22 MINTZ LEVIN

    23 BY: BRIDGET ROHDE

    2425

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    2/23

    2

    D7IHUSAC

    1 (In open court)

    2 THE COURT: So the purpose of today's proceeding is to

    3 have a brief oral argument, I believe counsel requested, with

    4 respect to this matter involving Mr. Michael Bilello. So I am

    5 happy to hear briefly from each side. You don't really need to

    6 repeat a lot of what is in your briefs. I have the briefs, or

    7 your written submissions. But if you want to touch on some

    8 high points, that is fine.

    9 MR. PETRILLO: Understood. Thank you, Judge. Guy

    10 Petrillo and Dan Goldman for petitioner Michael Bilello.

    11 Keeping in mind your instruction, Judge, I thought I

    12 would start out simply by trying to bring some perspective to

    13 specification five underlying the veto. As the court will

    14 remember, the allegation in that specification is of a false

    15 statement made on March 22, 2013. We have set forth in our

    16 papers -- I know you will read them or have read them -- that

    17 the evidentiary basis to establish a false statement is

    18 deficient. We have also set forth in our papers that there was

    19 no motive established by any of the allegations for the20 so-called false statement. I am not going to repeat all of

    21 that, but I think what I should do is try to put into focus

    22 what that allegation amounts to.

    23 On March 22, Mr. Bilello received an unexpected

    24 telephone call from a suspended union member who had been asked

    25 to work for the Javits Center and was told a tale of woe by

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    3/23

    3

    D7IHUSAC

    1 this suspended member -- out of work for a year, behind in my

    2 dues, I'm borrowing from my annuity plan but they have cut the

    3 check today. I won't get it until Monday, but I am going to

    4 pay all of my back dues.

    5 THE COURT: This was a Friday.

    6 MR. PETRILLO: On a Friday.

    7 THE COURT: This statement was made a Friday.

    8 MR. PETRILLO: On a Friday. It was in the morning.

    9 That call was brief. Then this suspended member says, may I

    10 hand the phone to the business rep, who is standing here.

    11 Mr. Bilello says, OK, and he speaks for, let's call it a minute

    12 at most to that business rep. It is the content of that

    13 discussion which has given rise to this specification. I want

    14 to put that aside the content of that and I will come back to

    15 it.

    16 The decision that Mr. Bilello authorized in that phone

    17 call, and there is no dispute about this, was to go ahead and

    18 let the suspended member work as he was requested to do by

    19 Javits and pay on Monday. As we have set forth in the brief,20 that was the appropriate decision. That was the human

    21 decision. That was the lawful decision. The law doesn't allow

    22 closed shops. The law doesn't allow the fiduciary duty of a

    23 union to be ignored vis-a-vis its members.

    24 Members who are behind in their dues are entitled to

    25 notice of the precise amounts by which they are behind and a

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    4/23

    4

    D7IHUSAC

    1 reasonable opportunity to come current. That is black letter

    2 law. I am not a labor lawyer, and it doesn't seem to be even

    3 remotely in dispute from what I have seen under the Taylor law

    4 or under the NLRA, neither of which is addressed by the RO

    5 except in the most cursory and inapposite way.

    6 So the decision is correct. The business rep, because

    7 he's been told -- he acted in good faith -- he has been told to

    8 apply this policy at Javits not to let anybody work unless they

    9 are up to date, reports the conversation, as he should have.

    10 That leads the RO to ask questions. The business

    11 representative, concerned that he has taken this instruction

    12 from Mr. Bilello --

    13 THE COURT: Right. This is after the call.

    14 MR. PETRILLO: After the fact, after the call.

    15 THE COURT: The same day.

    16 MR. PETRILLO: The same day.

    17 -- almost immediately reports up the chain on his end

    18 to his business rep supervisor. Mr. Bilello is informed of

    19 that. This is all in the papers. Mr. Bilello says, fine, run20 it up the chain, as is appropriate for a mature and experienced

    21 executive to say.

    22 THE COURT: OK.

    23 MR. PETRILLO: That sets in motion an investigation,

    24 which takes place on that day and includes an interview of

    25 Mr. Bilello by the RO and the RO's investigators.

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    5/23

    5

    D7IHUSAC

    1 THE COURT: The same Friday.

    2 MR. PETRILLO: The same Friday. On that very same day

    3 Mr. Bilello provides a statement in which, according to the

    4 RO -- this is using the facts presented by the RO -- he says it

    5 was within my authority to authorize the suspended member to

    6 work. I made the decision. And on top of that, because it

    7 goes to motive, before this interview Mr. Bilello has walked

    8 over to a vice president, an executive officer at the District

    9 Council, Mr. Cavanaugh, and he asked him what is our policy on

    10 these matters and he's told the policy is to encourage work,

    11 not to prevent members from working but to allow them to pay

    12 dues in a reasonable way.

    13 What the RO finds to be an issue is that in the course

    14 of that interview Mr. Bilello says, I understood the business

    15 rep to be saying in our very brief, one-minute call or less,

    16 which the interview report says Mr. Bilello described as a

    17 conversation he only basically remembers, I understood him to

    18 be saying, boss, should we do what we have done for some

    19 others.20 THE COURT: Right.

    21 MR. PETRILLO: It is that phrase or that content which

    22 is focused on.

    23 So the perspective I want to bring to this is the

    24 following. If you agree with me that the decision made was

    25 correct, if it was lawful -- and it was -- and appropriate and

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    6/23

    6

    D7IHUSAC

    1 reasonable, which being investigated at that time is the

    2 precise microconsiderations that Mr. Bilello had in his mind

    3 when he made a proper decision. That is the level of --

    4 THE COURT: I get it.

    5 MR. PETRILLO: Secondly, immediately before

    6 interviewing Mr. Bilello the question on the table is, what was

    7 your authority to make that decision. And he maintains, my

    8 client, in that interview, I have the authority as the

    9 executive treasurer/secretary and I made the decision. He is

    10 not distancing himself from the decision and he is not worried

    11 that he made the wrong decision. He's already had it confirmed

    12 by Mr. Cavanaugh. And notably, he remembers that previously he

    13 was put in the position where he had to authorize a settlement

    14 in a case that very much presented the same or similar facts

    15 and where a member had claimed he had been barred from working

    16 without being given notice and an opportunity to pay his dues.

    17 THE COURT: And when was that?

    18 MR. PETRILLO: The precise date of it, almost a year

    19 to the date earlier.20 So what I am suggesting is that if the RO walking into

    21 that interview had been properly informed as to the law and had

    22 been properly aware of the fiduciary duty and responsibility as

    23 set forth in the law, I want you to try to imagine whether he

    24 would have focused on one of these microdetails that took place

    25 in less than a minute and determined that on that basis he

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    7/23

    7

    D7IHUSAC

    1 would veto an executive elected by the delegate body who had

    2 made the right decision. I submit to you that is 99.5 to .5

    3 that he would not have. We all know what would have happened.

    4 THE COURT: Right.

    5 MR. PETRILLO: Secondly, no investigative purpose to

    6 the so-called contradictory statement.

    7 THE COURT: So we are now only talking about spec 5.

    8 MR. PETRILLO: That is all I am doing.

    9 THE COURT: You want that to sort of inform the

    10 decision with respect to the other four specifications as well,

    11 or what?

    12 MR. PETRILLO: I will spend one minute on the other

    13 four.

    14 THE COURT: I would like to move it along. I get it.

    15 MR. PETRILLO: You get it.

    16 THE COURT: I have read the papers. I know the

    17 issues.

    18 MR. PETRILLO: May I just say one last thing on it?

    19 THE COURT: Sure.20 MR. PETRILLO: One of the key aspects of review under

    21 the Administrative Procedure Act is proportionality, and I

    22 would submit to the court that the decision to remove an

    23 elected EST based on this extraordinarily microdiscrepancy,

    24 alleged discrepancy, is so far outside of the scale of

    25 disproportionality as to be arbitrary and capricious.

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    8/23

    8

    D7IHUSAC

    1 On the issue of whether he was properly interfering,

    2 as it is claimed in specification four, in the Javits Center

    3 episode -- specification two; thank you, Mr. Goldman -- he

    4 wasn't improperly interfering. He was properly ensuring that

    5 the law be followed and that reason be applied to a situation

    6 that was presented on March 22nd. That specification is

    7 totally contrary to law and I ask the court to, if you have any

    8 doubt about the law, call the outside counsel to the District

    9 Council and to have him present to you, and I don't know what

    10 he would say but I don't see any ambiguity in the law.

    11 The other three specifications, two about the bylaws.

    12 It is alleged that Mr. Bilello did not read the minutes in full

    13 to the executive body of the District Council of the benefit

    14 funds. As we say in our papers, and I don't think it is

    15 disputed, he did summarize what he thought were the salient

    16 developments at those trustee's meetings to his executive

    17 committee. He didn't realize that under the bylaws he was

    18 supposed to in more detail review the minutes.

    19 Suffice it to say, nobody caught that issue until --20 and even after a full-blown, chief compliance officer, IG

    21 review of compliance with the bylaws, the issue was still not

    22 caught. It is what I would call a procedural flaw. As soon as

    23 it was pointed out, it was corrected. It caused no prejudice

    24 whatsoever. To veto on that basis is to require that the

    25 elected officials not be men but super men, make no mistakes.

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    9/23

    9

    D7IHUSAC

    1 The section of the bylaws that is used as a basis for

    2 veto in addition to that relates to the allocation of rate

    3 increases under union agreements and there, very similarly, not

    4 only does nobody notice it -- and what is the "it," that the

    5 two executive officers are allocating the rate increases to the

    6 benefit fund, to the welfare fund -- not only does nobody

    7 notice that that historical practice has now been superseded by

    8 a new bylaw provision which requires the delegate body to

    9 approve such allocations, but in June of 2012 the RO, in his

    10 fourth interim report, explains to the executive officers how

    11 they should go about allocating those rate increases. So he is

    12 not on it either. We are not blaming him. This is a very big,

    13 complicated organization. Mistakes happen.

    14 As soon as the mistake is pointed out, the delegate

    15 body needs to review these allocations, it is put before the

    16 delegate body, and they support it overwhelmingly nun pro tunc.

    17 No prejudice. Again, Mr. Bilello admits he is not superman.

    18 He is doing the best he can every day.

    19 Lastly, the cross-training program. I am going to20 spend literally a minute on it. The order very wisely

    21 incorporated a provision for mediating disputes between the RO

    22 and the District Council about priorities. Section 5(h), and

    23 this is on -- give me one moment -- on page 15 of our brief,

    24 says that with respect to any recommendations the review

    25 officer makes under this paragraph, and indeed this

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    10/23

    10

    D7IHUSAC

    1 cross-training program, the details of which I won't burden you

    2 with at the moment -- they are all in the papers -- falls

    3 within this 5(h). Type of recommendation. If he makes such a

    4 recommendation and the District Council does not consent to

    5 implementation of the review officer's recommendation as

    6 required by the prior sentence, the review officer may petition

    7 the court to require the District Council to implement the

    8 changes the review officer deems appropriate and the government

    9 and the District Council will be given notice and an

    10 opportunity to be heard regarding such petition.

    11 The circumstances here are the RO believes it to be a

    12 high priority that a cross-training program of business reps be

    13 undertaken. Putting aside any policy differences that may

    14 exist as to whether that is a good idea or a bad idea, the EC,

    15 executive committee, under Mr. Bilello begins to implement just

    16 that program. In the view of the RO, they are not doing it

    17 wholeheartedly and they are not doing it fast enough and they

    18 are not really showing commitment to the program that the RO

    19 wants. We dispute those facts, but that is to the side for the20 moment.

    21 There is a procedure here when there is a dispute over

    22 priorities and it wasn't followed. Our client is entitled at

    23 least to the protections of the order. The response to that is

    24 it doesn't matter. We can veto based on our power to veto.

    25 The order has to be interpreted according to its terms. We

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    11/23

    11

    D7IHUSAC

    1 can't write out of it terms that we decide, on the RO's side,

    2 not to follow somewhat arbitrarily. So with all respect to the

    3 RO and his position, I don't see any logical or reasonable

    4 basis to uphold that specification given that these procedural

    5 protections were not provided.

    6 THE COURT: So what is your and Mr. Bilello's take on

    7 all of this? So you start with specification number five,

    8 which some might say would be the least significant

    9 specification, so to speak, if you were to grade these things

    10 and work backwards to I think what may be more significant, but

    11 whatever. People could argue about that. So what is

    12 Mr. Bilello and your take. Is he being persecuted? The RO, is

    13 he just being irrational, is he being arbitrary, and why do you

    14 think that is all happening? Do you think the RO expects, you

    15 said your client to be superman? Is this a superman case?

    16 What is going on here?

    17 MR. PETRILLO: Judge, I understand the question. I

    18 would like to present my personal views. I don't know if it is

    19 appropriate.20 THE COURT: It is not personal views. We are here in

    21 court.

    22 MR. PETRILLO: OK.

    23 THE COURT: Is there a just conclusion that he wants

    24 superman and that is not legal, that is arbitrary and

    25 capricious? Is that the point?

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    12/23

    12

    D7IHUSAC

    1 MR. PETRILLO: No, it is not the point. I think what

    2 comes out of specifications, which respectfully have absolutely

    3 no merit in this matter to me, is they are clearly an agenda to

    4 remove Mr. Bilello. There is no question about that. I am not

    5 quite clear on why someone who has worked so vigorously against

    6 the mob, for union democracy and for members' interests day

    7 after day, sometimes 12 and 15 hours a day is somehow an enemy

    8 of the RO or the government. It makes no sense to me. I'm

    9 thinking it is a personality conflict or maybe something that

    10 just got blown out of proportion as a result of human frailty.

    11 I don't know.

    12 To tell you the truth, because we are here in court

    13 and because these specifications are so obviously deficient, it

    14 almost doesn't matter to me because the important thing is that

    15 Mr. Bilello understands that if returned to office there will

    16 be no grudges, there will be no payback, there will be

    17 professional, mature, business-like attention to the issues of

    18 the union that matter, just as he has been paying that kind of

    19 attention throughout his career. So I would implore the court20 to take a close look at this. Something has gone off the

    21 tracks.

    22 THE COURT: OK.

    23 MR. WALSH: May it please the court, my name is Dennis

    24 Walsh. I am the review officer in this matter. I have

    25 listened closely to the arguments of able counsel. I think

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    13/23

    13

    D7IHUSAC

    1 what we have is a finely engineered but rather overwrought post

    2 hoc explanation for Mr. Bilello's very uncareful and reckless

    3 behavior.

    4 On March 22, 2013, he asserted authority that he did

    5 not have, having taken a phone call of a former member of the

    6 carpenters' union who had not paid his local union dues in

    7 almost one year. He prevailed upon Mr. Bilello with a story

    8 about wanting to pay those dues with money he was about to

    9 receive the following week.

    10 Mr. Bilello put the business agent who was on site at

    11 the Javits Center on the telephone and became not the EST of

    12 the carpenters' union but the boss of the carpenters' union.

    13 He told a business agent, attempting to do his job, attempting

    14 to enforce the policy of the District Council, which had been

    15 in place since at least 2001 when the operative collective

    16 bargaining agreement was first put in place, that this fellow

    17 was OK to work.

    18 Mr. Mucaria, the business agent, immediately upon his

    19 return to the District Council was so unnerved by the edict20 from Mr. Bilello that he reported it to his supervisors. To

    21 me, it reflected that the compliance initiatives that have been

    22 implemented at the District Council have taken hold, that a

    23 business agent was so unnerved by this single inexplicable

    24 intervention of the executive secretary/treasurer that he felt

    25 he needed to make an immediate record of it.

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    14/23

    14

    D7IHUSAC

    1 The investigation that my staff did was meticulous.

    2 We interviewed the business agent, his supervisors, the

    3 director of operations, Mr. Bilello, Mr. Blackwood, who was the

    4 man at the Javits Center who called Mr. Bilello, and the

    5 steward and the assistant steward, Diadado and Litterer, at the

    6 Javits Center.

    7 We have the facts. We presented the facts in

    8 meticulous detail, that it was Mr. Bilello's idea to let

    9 Blackwood work, not for any high-minded notion about the Taylor

    10 law or his duty of fair representation, of which I am well

    11 aware and have been for many years, but because he was the boss

    12 of the union and he wanted to intervene on Blackwood's behalf.

    13 It unnerved the business rep. It was at odds with the

    14 compliance initiatives which had been implemented at the

    15 Council, and it was antithetic to the goal of the stipulation

    16 and order, which is to eradicate -- not to tolerate, not to

    17 coddle, not to rationalize -- to eradicate corruption and

    18 racketeering from the affairs of the union.

    19 When Mr. Bilello was interviewed by me and my staff,20 he immediately attempted to shift blame, thinking there was

    21 something dangerous about to happen to him, to Mucaria. I

    22 asked him: Are you saying it is Mucaria's idea, and he backed

    23 off. But the words had left his mouth.

    24 He repeated that story in a sworn declaration that I

    25 requested of him on April 26th, when we had a conference with

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    15/23

    15

    D7IHUSAC

    1 Mr. Bilello and Mr. Petrillo. I believe that that affidavit is

    2 false. I believe the record shows that that affidavit is

    3 false. I believe the statement that he made to me on the

    4 afternoon of March 22nd is false. He did not cooperate with my

    5 investigation by making that statement.

    6 He was served with a notice of possible action on

    7 March 26, 2013. It spelled out in the standard detail that we

    8 provided in every one of these situations what his rights were

    9 to participate in making the record, asking him to submit

    10 documents, any statements of fact, any memoranda of law. He

    11 did not do it. That was his choice.

    12 THE COURT: I get it.

    13 MR. WALSH: The record was closed by April 29th. He

    14 is now asking the court to completely upend the law that is

    15 applied in matters like this, the procedural law, and the law

    16 of this case by conducting de novo a minitrial here in the

    17 district court.

    18 His affidavit, his 12-page affidavit, is not properly

    19 before the court. Whatever strategic reasoning Mr. Bilello and20 counsel may have applied in deciding not to supplement the

    21 record is not of concern to anyone standing or sitting here

    22 today.

    23 THE COURT: How about the other specifications? By

    24 the way, do you ascribe any priority or order to them, some

    25 more serious than others?

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    16/23

    16

    D7IHUSAC

    1 MR. WALSH: I think, without hesitation, that the

    2 notion that a member of this union and the top fiduciary of

    3 this union can willfully lie in an investigation conducted by

    4 an appointee of the district court is appalling. I assign

    5 great significance to that specification.

    6 When Mr. Petrillo says Mr. Bilello is not superman, it

    7 is revealed he is not even a careful man. One of the questions

    8 which we asked all of the candidates for EST was whether they

    9 were familiar with the bylaws that had been implemented in

    10 August of 2011 and there were people who I did not approve to

    11 run for office because they could not say that they were

    12 familiar with those bylaws.

    13 In Section 21, the question of the allocation of those

    14 payments to the welfare fund, what Mr. Petrillo talks about in

    15 that interim report was my strong recommendation that the

    16 welfare fund needed money, that the costs were excessive and

    17 any bit of income was a good thing. The document that

    18 Mr. Bilello, Mr. Cavanaugh signed and submitted to the benefit

    19 funds in June of 2012 was never submitted to me for review. I20 could indeed have made the argument that they failed to follow

    21 the stipulation and order by giving me prior notice, and the

    22 entire framework of the stipulation and order is based, with

    23 respect to the District Council, on the giving of prior notice.

    24 There are too many moving parts.

    25 I was not given notice of that unilateral application

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    17/23

    17

    D7IHUSAC

    1 of asserted authority by Mr. Bilello. If I had been given

    2 notice of it, perhaps the outcome would have been different.

    3 But as we pointed out in the papers, I am not counsel to the

    4 District Council, I am not an advisor, and I am certainly not

    5 there to tell them to watch out for every pothole that they may

    6 be about to drive over in their daily affairs.

    7 The fact is that over $900,000 was allotted to the

    8 welfare fund, which was not money that the welfare fund had to

    9 give back should the nun pro tunc vote have gone the other way.

    10 And if the delegates had decided they wanted that money as

    11 income, the chances are they would not have gotten it back.

    12 There was no obligation for the welfare fund to return that

    13 money.

    14 With respect to the reading of the minutes of the

    15 funds, it is easy to characterize that as a minor matter, but

    16 it is not a minor matter. The executive committee of the

    17 District Council needs to be informed about the affairs of the

    18 benefit funds because this union is in a struggle. The

    19 District Council is out front trying to organize non-union20 companies, trying to organize non-union workers. They need to

    21 be apprised of the urgent problems confronting the benefit

    22 funds, as this court knows and as we have discussed on many

    23 occasions the problems confronting the benefits funds.

    24 I attended many of those executive committee meetings

    25 where it was apparently much more important that correspondents

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    18/23

    18

    D7IHUSAC

    1 from the Boy Scouts and various district councils and local

    2 unions seeking to fill tables at dinner dances be read to those

    3 trustees, to those executive committee members, and I think the

    4 priorities were all wrong in that regard.

    5 It is easy to characterize each one of these

    6 specifications in a certain way. The reality is that the

    7 careful EST, the careful fiduciary consults with counsel. The

    8 general counsel for the District Council has an office right

    9 next to the EST. He is available basically five days a week

    10 and certainly 24 hours a day by telephone. If Mr. Bilello had

    11 been inclined to consult him, perhaps we would not be here

    12 today.

    13 THE COURT: Hold on a second. I see counsel for the

    14 government is here. Did you have a point of view?

    15 MR. TORRANCE: No, your Honor. We really have nothing

    16 to add except our support for the Review Officer. The only one

    17 minor point I might make, the court suggested that

    18 specification five might be considered the least important. We

    19 would respectfully disagree with that. The core purpose of the20 stipulation and order of 2010 is to place the

    21 corruption-plagued union under effective review by a

    22 court-appointed officer. If that court-appointed officer can't

    23 count on truthful statements in all its investigations, we take

    24 that extremely seriously. Thank you, your Honor.

    25 THE COURT: You get the last word.

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    19/23

    19

    D7IHUSAC

    1 MR. PETRILLO: Very briefly. There is reference to a

    2 policy at the Javits. It hasn't been produced. Even their

    3 affiant says the so-called policy has only been in force for

    4 the last six months. If that is the policy, it is not in

    5 accordance with law. And after this episode on March 22nd,

    6 since we are going outside the record here as many of the

    7 comments just made did, Mr. Bilello instructed counsel to put

    8 together a program so the business representatives would act in

    9 accordance with law. So the idea that he didn't see the

    10 significance of this on March 22nd is completely belied by his

    11 immediate reference to counsel of the entire issue so that

    12 counsel could train --

    13 THE COURT: I don't think he is saying he didn't see

    14 the significance of it. I think counsel is saying it was quite

    15 significant and he made the determination.

    16 MR. PETRILLO: And he made the proper determination.

    17 THE COURT: You said that before.

    18 MR. PETRILLO: OK. Secondly, extensive interviews,

    19 but didn't interview the one person who Mr. Bilello relied on20 as an executive officer to tell him what the policy was.

    21 Mr. Cavanaugh. Why is that interview missing from this

    22 extensive -- it is missing for a reason.

    23 THE COURT: What is the reason it is missing?

    24 MR. PETRILLO: Because it would support Mr. Bilello.

    25 THE COURT: You think it was purposely omitted?

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    20/23

    20

    D7IHUSAC

    1 MR. PETRILLO: Correct. That is the hallmark of

    2 arbitrary and capricious decision making.

    3 Specification 21, just to quote the RO on what he

    4 said. This has to do with the allocation of rate increases.

    5 It is on page 10 of our brief. There is no question from the

    6 content of this extensive quote that his understanding was the

    7 same as Mr. Bilello's, that the executives officers would

    8 determine where the allocation should be made. And quite apart

    9 from that, the delegate body agrees and voted in favor of --

    10 THE COURT: After the fact.

    11 MR. PETRILLO: They did, but they had been consulting

    12 with delegates as they made their decision. There is really no

    13 dispute that the welfare funds are underfunded and need more

    14 money. He made a mistake. It is clear he made a mistake. He

    15 is acknowledging the mistake, and then he corrected it.

    16 THE COURT: That is the point. He did something

    17 incorrect.

    18 MR. PETRILLO: With no intention.

    19 THE COURT: What do you mean with no intention? He20 purposely did what he did.

    21 MR. PETRILLO: He didn't intend to violate any

    22 provision of any bylaw.

    23 THE COURT: He didn't know of any bylaw provision that

    24 he might be violating.

    25 MR. PETRILLO: Correct, because the practice for years

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    21/23

    21

    D7IHUSAC

    1 had been to do it the way --

    2 THE COURT: Wait.

    3 MR. PETRILLO: We stipulated that he did not know that

    4 he was violating that bylaw, number one, and, number two --

    5 THE COURT: No, you are stipulating I think that he

    6 didn't know what the bylaws said.

    7 MR. PETRILLO: He knows what some of them said.

    8 THE COURT: It is not a trick question. You can't

    9 phrase it the way you want to phrase it if it is not accurate.

    10 MR. PETRILLO: I think the accuracy is he knew a bunch

    11 of the bylaw provisions but not all of them.

    12 THE COURT: He didn't know this one.

    13 MR. PETRILLO: Correct. We are stipulating. I agree.

    14 I would ask the court, lastly, to look at the highly

    15 detailed reports of what was said that are set forth in our

    16 brief. I think the notion of reaching the conclusion that

    17 anyone said anything false on this record is a wild stretch and

    18 I think given your experience over the years that will be clear

    19 to you.20 THE COURT: OK. I got it.

    21 MR. PETRILLO: Thank you.

    22 MR. WALSH: Judge, I just want to remind everyone that

    23 Michael Cavanaugh, who is certainly not in a position of

    24 authority on what the District Council's policy is, did in fact

    25 write a letter, which we appended as Exhibit 14 to our last

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    22/23

    22

    D7IHUSAC

    1 report, where he set forth the policy that I have asserted was

    2 in place at the Javits Center. The idea that there is some

    3 sort of malicious agenda going on here I find objectionable and

    4 personally insulting.

    5 THE COURT: Counsel, I have heard enough. I have a

    6 full record here. Your oral argument is very helpful and I

    7 think I can make a decision.

    8 Thanks very much.

    9 MR. PETRILLO: Thank you.

    10 THE COURT: I will get to it as soon as I can.

    11 (Adjourned)

    12

    13

    14

    15

    16

    17

    18

    1920

    21

    22

    23

    24

    25

    SOUTHERN DISTRICT REPORTERS, P.C.

    (212) 805-0300

  • 7/28/2019 7.18.13 U.S. v. D.C.

    23/23


Recommended