U.S.

Department of Justice

United States Attorney
Southern District of New York



86 Chambers Street
New York, New York 10007

August 25, 2014
By hand and ECF

The Honorable Richard M. Berman
United States District J udge
United States Courthouse
500 Pearl Street
New York, New York 10007

Re: United States v. District Council of Carpenters, 90 Civ. 5722 (RMB)

Dear J udge Berman:

The government respectfully submits this letter in response to the order of the Court dated
J uly 25, 2014, directing the government to address certain aspects of Patrick Nees and Levy
Messinettis application for review of the Review Officers decision vetoing their holding of
office. Specifically, the Court sought the governments views regarding whether the application
was still ripe for consideration, given the passage of time and intervening events, and whether
the Review Officer had authority under the J une 2010 Stipulation and Order to take the veto
actions he did.
The government joins the Review Officers letter to the Court, which concludes that the
issues are moot, and that he had the authority to issue the veto. The government adopts the
Review Officers arguments, and offers the additional views set forth below.
A. Mootness
For the reasons stated in the Review Officers letter, there is no effective relief the Court
can now grant to Mr. Nee or Mr. Messinetti: the term of office from which they were vetoed has
been completed, so they cannot be restored to the remainder of that term. Nor is there any
Hon. Richard M. Berman page 2
August 25, 2014
prospective bar, as the Review Officer explains, to their running for or holding office. Walsh
Decl. 10. Moreover, if this Court were to sign the parties proposed stipulation submitted on
May 27, 2014, the matter would be moot for an additional reason: the Court-appointed officer
under that stipulation would no longer have the veto power at issue in this dispute. See United
States v. International Brotherhood of Teamsters, 964 F.2d 180, 183 (2d Cir. 1992) (intervening
election, upon which authority of court-appointed officer terminates, renders matters moot). For
that reason, and those stated in the Review Officers letter, there is no justiciable controversy at
this time, and the applications should be dismissed as moot.
B. The Review Officers Authority
The Review Officer is also correct that he had the authority to remove Mr. Nee and Mr.
Messinetti by exercise of his veto authority. The government agrees with the Review Officers
assessment of the stipulations text and context. The government further agrees that the
motivation for the 2010 stipulation arose from the corrupt and unlawful actions of numerous
union officials and the need to rid the union of those persons who would continue that larcenous
tradition. Moreover, the government concurs that the parties course of dealings under the
stipulationin which neither party to the stipulation, the union and the government, has ever
voiced an objection to the Review Officers multiple vetoes of those already holding office,
including elected officialsdemonstrates the parties understanding that the Review Officer has
the power to remove officeholders. See United States v. Broadcast Music, Inc. (BMI), 275 F.3d
168, 175 (2d Cir. 2001) (prior course of performance and prior course of dealing may be
examined to resolve ambiguity in consent decree).
The government also notes that the negotiations between the parties leading up to the
submission of the 2010 stipulation cast light on its meaning. See BMI, 275 F.3d at 175;
Hon. Richard M. Berman page 3
August 25, 2014
Canterbury Belts Ltd. v. Lane Walker Rudkin, Ltd., 869 F.2d 34, 38 (2d Cir. 1989) (evidence
surrounding [consent decrees] negotiation and tending to explain ambiguous terms would be
admissible in evidence (quoting United States v. ITT Continental Baking Co., 420 U.S. 223,
238 n.11 (1975)).
The governments first draft of a proposed stipulation was sent to the unions counsel on
J anuary 6, 2010. (The draft is attached to the accompanying declaration as Exhibit A.)
Paragraph 5.b of that draft sets forth the Monitors oversight authority. Paragraph 5.b.iii gave
the Monitor authority to review[] all proposed appointments to District Council office or
employmentincluding appointments to the Benefit Funds (as was made clear in the
definitional paragraph 1.b)and to veto any proposed appointment if it met certain criteria
(essentially the same criteria set forth in the stipulation entered by the Court). Paragraph 5.b.iv
gave the Monitor authority to review the persons currently holding office or employment within
the District Council, including the Funds, and dismiss any person whose continued
officeholding or employment meets those same criteria. Paragraph 5.f set forth the Monitors
separate authority over the unions disciplinary process. Thus, in this first proposal, the authority
to dismiss a person already holding office was clear, despite the separate power over disciplinary
proceedings. The District Council did not object to this approach.
However, in negotiations, the government, the proposed Monitor, the union, and the
Benefit Funds agreed that the Monitors authority over the Funds should be different. Thus, the
Funds were removed from paragraph 1.bs definition, and the Monitors oversight powers were
distinguished: the power to veto was granted with respect to the District Council, but regarding
the Funds, the Monitors power was limited to providing the Funds with notice of the violation.
(See Exhibit B, draft transmitted to the union on February 22, 2010.) To avoid repeating this
Hon. Richard M. Berman page 4
August 25, 2014
lengthy separation of authorities, as well as the criteria the Monitor was to apply, in each of the
provisions of paragraph 5.b, the Monitors power to act following his review was consolidated
into paragraph 5.b.vi, which provided for the Monitors power to veto or require the District
Council to rescind its action, proposed action, or lack of action. This power applied to all the
prior provisions under which the Monitor could review certain topics, including both
proposed appointments to office (5.b.iii) and persons currently holding office (5.b.iv).
Although the paragraphs were later renumbered and combined into 5.b.i.3 in the final stipulation
entered by the Courtan amendment that further streamlined the stipulation and clarified the
distinction of authorities applicable to the union and the Fundsthe final provisions are
substantially the same as in the February version.
These alterationschanging the authority to dismiss a person holding office to the
authority to veto or require the [union] to rescind its action, proposed action, or lack of action
after reviewing officeholdersdid not affect the now-renamed Review Officers power
regarding the District Council. Torrance Decl. 5. As explained above, the changes were made
in order to implement a negotiated agreement that the Review Officers powers would be
lessened regarding the Benefit Funds as compared to the District Council; further changes in
wording were made to avoid cumbersome repetition of this bifurcated scheme. Id. Although
these amendments introduced the ambiguity identified by the court of appeals in its recent
summary order, they did not change what was clear from the beginning of the negotiations, and
never contested by the union before or after the stipulation was signed: the Review Officer has
the power under paragraph 5.b to dismiss current officeholders. Id. Indeed, if the Review Officer
lacked that power, his uncontested authority to review current officeholders would be
meaningless, for upon finding that any such officeholder was violating the law or otherwise
Hon. Richard M. Berman page 5
August 25, 2014
committing misconduct, he would have no power to do anything about it. That would be entirely
nonsensical in the context of a stipulation, entered in a RICO case brought to purge the union of
entrenched corrupt and criminal influences, proposed and negotiated on the heels of the
indictment (later resulting in convictions) on racketeering charges of numerous high-level union
officials.
Counsel for the government has reviewed the correspondence among the government, the
Funds, the union, and Dennis Walsh (as the Monitor/Review Officer-designate) regarding these
negotiations, and has found nothing to contradict the account detailed above. Torrance Decl. 5.
The only items relating to these changes are consistent with this recitation of facts: an exchange
of emails in which Mr. Walsh noted concerns that may be raised by the Funds, that a veto
authority applied to them could interfere with their fiduciary and statutory duties. Id. 6. Those
concerns led to the changes described above, ultimately accepted by the Funds and the union.
But at no point did the parties propose, or even discuss, any lessening of the power initially
proposed by the government without objection from the union: that the Review Officer would
have the authority to dismiss current officeholders. Id. 5. The course of negotiations leading up
to the J une 2010 stipulation therefore strongly suggests that the Court was correct in its prior
rulings: the Review Officer has the authority to dismiss officeholders under paragraph 5.b.
Hon. Richard M. Berman page 6
August 25, 2014
Thank you for your consideration.
Respectfully,

PREET BHARARA
United States Attorney

By: /s/ Benjamin H. Torrance
BENJ AMIN H. TORRANCE
TARA M. La MORTE
Assistant United States Attorneys
Telephone: 212.637.2703, .2746
Fax: 212.637.2702
E-mail: benjamin.torrance@usdoj.gov
tara.lamorte2@usdoj.gov
cc: Dennis Walsh
Bridget Rohde
Barbara J ones
Patrick Nee
Levy Messinetti