the final report of the review officer revision

8/10/2019 The Final Report of the Review Officer Revision

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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA,

P l a i n t i f f ,

- a g a i n s t -

DISTRICT COUNCIL OF NEW YORK CITYAND ICINITY OF THE UNITEDBROTHERHOOD OF CARPENTERS ANDJOINERS OF AMERICA, t a l .

X

D e f e n d a n t s .

90 i v. 5722 (RMB)

THE INAL REPORT OF THE REVIEW OFFICER

D e n n i s M. a l s hR e v i e w O f f i c e r

T h e Law f f i c e of e n n i s M. a l s h415 M a d i s o n Av e n u e , 11 t h F l o o rNew York, New York 10017646.553.1357d w a l s h @ d e n n i s m w a l s h . c o m


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1 . Shop Steward V a r i a n c eR e p o r t i n g 3 8

2 . C o l l e c t i o nof e l i n q u e n tC o n t r i b u t i o n s 41

3 . S p e c i a l F u n d s i t i g a t i o n a n d r b i t r a t i o n s 42

J . 395 H u d s o n : The Renova t ion r o j e c t 43

K. The Hollow Meta l F u n d 44

CONCLUSION 45

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L a b o r o keep l i v e i n your r e a s t t h a t l i t t l espa rk of e l e s t i a l i r e c a l l e d c o n s c i e n c e .

G e o rg e Washington

This i s my i n t h a n d f i n a l r e p o r t a s R e v i e w O f f i c e r . I t d i s c u s s e s c e r t a i n i m p o r t a n t

a s p e c t s of my e n u r e over t h e l a s t s e v e n m o n t h s and , a s c o n t e m p l a t e db y t h e te rms of h e

S t i p u l a t i o n a n d Order n t e r e d i n t h i s m a t t e r on N o v e m b e r 1 9 , 2014 s e e docket n u m b e r 1 5 9 5 ) , t

i n c l u d e smy s se s smen t of 1) h e p r o g r e s s of h e D i s t r i c t C o u n c i l ' s reform, 2) h e s u s t a i n a b i l i t y

of h e reforms h a t h a v e b e e n i m p l e m e n t e d a n d 3 ) my e c o m m e n d a t i o n s going o r w a r d .

I . THE DISTRICT COUNCIL

A . T h e rog res s of R e f o r m a t t he i s t r i c t Counci l

The Supplementa l RICO Complaint i l e d i n t h i s c a s e i n 1991 i s a t t a c h e d h e r e t oa s E x h i b i t

1 . I t i s a n s t o n i s h i n gc a t a l o g u eof i o l e n c e a n d g r a f t . I t i s a n p p r o p r i a t e s t a r t i n g p o i n t t o c h a r t

t h e p r o g r e s s of e f o r m .

Consider h e d a y n 1976 w h e n a u s i n e s s a g e n t of o c a l un ion of h e D i s t r i c t C o u n c i l

looked up f rom h e p a p e r son i s desk a n d w i t h h i s l a s t b r e a t h s a w h e b a r r e l of g u n i r e b u l l e t s

t h a t r i p p e d h i s b o d y a p a r t . His m i s t a k e had b e e n t o oppose t h e h e a d of h e D i s t r i c t C o u n c i l ,a

c o n f e d e r a t eof h e G e n o v e s e a m i l y . R e f l e c ton t h e d a y i n 1978 w h e n a l o c a l union p r e s i d e n t

w a s a s s a s s i n a t e d f or h i s d i s s i d e n t a c t i o n s ; o r t h e d a y i n 1982 w h e n t h e h e a d of h e D i s t r i c t

Council w e n t miss ing because a powerful m e m b e r of h e G e n o v e s e a m i l y s u s p e c t e d t h a t he

w a s going o b e t r a y t h e i r c r i m i n a lc o n s p i r a c ya n d c o o p e r a t e w i t h t h e governmen t . C o n s i d e rt h e

s t a r k b r u t a l i t y o f a p r o f e s s i o n a l s e r v i c ep r ov i d e r t o t h e B e n e f i tF u n d s b e i n g t o l d i n t h e c o f f e e

shop a t t h e Waldor f a s a n c e p i c k w a s p l a c e d t o h i s e a r - t h a t he had b e t t e r pay a p i e c e of i s

e a r n i n g s f rom t h e B e n e f i t F u n d s t o t h e G e n o v e s e f a m i l y . Consider t h e former s t a m p s

i n v e s t i g a t i o n s t e a m a t t h e F u n d s ( r e s p o n s i b l e f o r c o l l e c t i n g d e l i n q u e n t c o n t r i b u t i o n s f rom

c o n t r a c t o r s ) w h o w e r e n o t h i n g m o r e t h a n a s s o c i a t e s of L a C o s a Nostra s e l l i n g p r o t e c t i o n


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packages o c o n t r a c t o r s( a n d w h o were e v e a l e da n d n c a r c e r a t e d ) . Consider h e former heads of

t h e D i s t r i c t Council w h o m e t d i r e c t l y w i t h capos i n t h e G e n o v e s e a n d C o l o m b o f a m i l i e s a n d

took t h e i r i n s t r u c t i o n s f rom t hem. Consider t h e c o u n t l e s s b e a t i n g s , k n i f i n g s ,t h r e a t s , t h e f t s ,

p a y o f f s ,r i o t o u s union m e e t i n g s ,a r r e s t s a n d r a u d sf rom h e 1970s through 2009 h a t e n a b l e dt h e

G e n o v e s e a m i l y( somet imes n c o n c e r t w i t ho t h e r f a m i l i e s )t o c o n t r o l t h e D i s t r i c t Council a n d

h e l p e d L a C o s a Nostra o c o n t r o l t h e c o n s t r u c t i o ni n d u s t r y ) . T h e n o n s i d e r t h e D i s t r i c t Council

t o d a y .

S i n c e my i r s tr e p o r t w a s i l e d i n D e c e m b e r 2010, h e D i s t r i c t C o u n c i la n d e n e f i t F u n d s

h a v e b e e n s t e a d i l y t r a n s f o r m e di n t o i n s t i t u t i o n s t h a t c o u l d only h a v e b e e n imag ined w h e n wa s

a p p o i n t e di n June of h a t y e a r . My i r s tr e p o r t r e v e a l e d e v e n m o r e o r r u p t i o n , b u t p u b l i s h e dt h e

b l u e p r i n t t h a t I f e l t c o u l d b e used t o c o n s t r u c t a compliant a n d p r o d u c t i v e C o u n c i la n d Funds .

The t r a n s f o r m a t i o nt h a t has followed has b e e n a c h i e v e d through s t r u g g l e , p e r s u a s i o n a n d t h e

d e d i c a t i o nof i g h t - t h i n k i n gm e n a n d w o m e n . E v e n m o r e e l i c i t o u s o b s e r v a t i o n scan b e r e l a t e d

about h e p r o g r e s s of h e F u n d s . I / As l l w h o have o l l o w e dt h i s saga k n o w, e w B y l a w s w i t h

u n p r e c e d e n t e dp r o v i s i o n swere r a f t e d f o r t h e Council a n d n e w o l i c i e s a n d o f f i c e s were r e a t e d

a n d o t h e r s r e f i n e d ( r a n g i n g f rom HR, o IT t o Compliance) o r t h e Council a n d t h e Funds .

F u r t h e r , f rom 2010 t o n o w, h e c a s t of p l a y e r s on b o t h s t a g e s has seen m a n y c h a n g e s . Se e

E x h i b i t 2 . Though h e r e a r e m a n y e m p l o y e d a t t h e Council a n d F u n d s w h o n s p i r e c o n f i d e n c e ,

t h e r e a r e a s l i g h t f ew, p a r t i c u l a r l y a t t h e C o u n c i l , w h o s t i l l d o n o t . That p r o p o s i t i o n w i l l b e

d i s c u s s e d ,i n f r a .

My i g h t p r e v i o u s r e p o r t s have c a t a l o g u e d i n d e t a i l t h e p r o g r e s s of reform a n d a l s o

sought t o i l l u s t r a t e h o w t h e D i s t r i c t Council a n d t h e B e n e f i t F u n d s m u s t c o n t i n u a l l y r e f i n e

reform measures h a t h a v e r e a t l y s t r e n g t h e n e deach n s t i t u t i o n . That r o c e s s has b r o a d l yt a k e n

I/ The e n e f i t F u n d s r e di s c u s s e d i n d e t a i l i n P a r t I I of h i s r e p o r t .

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h o l d a t t h e F u n d s ( wh e r e t h e employer t r u s t e e s of h e board have b e e n a n d c o n t i n u e t o b e a

s a l u t a r y p r e s e n c e a n d t h e E x e c u t i v e D i r e c t o r has s e t a n e w s t a n d a r d f o r e x c e l l e n c e i n

performance on a a t i o n a l s c a l e ) . The Council has n k e y u n c t i o n se x h i b i t e d a d h e r e n c et o t h i s

method, u t s t i l lf a c e s p o l i t i c a l c h a l l e n g e sa n d o u t d a t e dv i e w s h a t t e n d t o i n h i b i t a d h e r e n c et o a

m e t h o d of imp lemen t ing i n s t i t u t i o n a l i m p r o v e m e n t s o b j e c t i v e l y , based on r i g o r o u s s e l f -

examinat ion a n d c r i t i c a l t h i n k i n g . The Council a l s o has a t l e a s t o n e v i t a l o f f i c e , t h a t of h e

I n s p e c t o r G e n e r a l , h a t m u s t b e improved e f o r e i t i s ready o r s e l f- m o n i t o r i n g .

S t i l lg r e a t c r e d i t m u s t b e g i v e n w h e n r e a t c r e d i t i s d u e . Obviously, o t h i n s t i t u t i o n s a r e

l i g h t y e a r s r e m o v e d f r o m t h e h o r r o r s c a t a l o g u e di n t h e gove rnmen t ' s 1991 RICO o m p l a i n t ,

i n d i c t m e n t s ,m e d i a coverage a n d h e r e p o r t s f i l e d i n t h i s m a t t e r s i n c e 1994 b y h e I n v e s t i g a t i o n s

a n d R e v i e w O f f i c e r , Independen t n v e s t i g a t o r sa n d my f f i c e . Both h e D i s t r i c t C o u n c i la n d h e

B e n e f i t F u n d s r e s t r i c t l yl a w a b i d i n ga n d forward t h i n k i n g(with t h e F u n d s e a d i n g t h e w a y n

t h i s r e g a r d )a n d though h e p r o c e s sof e m o v i n g noncompliant r u n s u i t a b l ep e r s o n n e l ( i n c l u d i n g

s e r v i c e p r o v i d e r s ) a n d s u b s t i t u t i n g t h e m w i t h o t h e r s w i t h a p p r o p r i a t e c r e d e n t i a l s ,z e a l a n d k i l l

has a k e ns o m e i m e , t i s l a r g e l y c o m p l e t e .

B. T h e u s t a i n a b i l i t y of R e f o r m s

The reforms implemented a t t h e D i s t r i c t Council c o d i f i e d i n w e l l- t a i l o r e d Bylaws, ut -

of- Wo r k L i s t Rules a n d v a r i o u s p o l i c i e s a n d p r o c e d u r e s- have b e e n n p l a c e f o r o v e r t h r e e y e a r s

a n d h a v e s e r v e d t h e Council w e l l . D i s c u s s i n g t h e s u s t a i n a b i l i t y of t h e s e reforms must

n e c e s s a r i l yb e o m p l i c a t e db y o n s i d e r a t i o nof o s s i b l e f u t u r e e v e n t sa n d d e n t i f i c a t i o nof i s k s .

Many h i n g s can h a p p e n b e y o n d t h e c o n t r o l of h e D i s t r i c t Council n r e s p o n s et o which

i t m u s t o n t i n u et o r e a c t a p p r o p r i a t e l y . Though b e l i e v e t h a t r a c k e t e e r s w h o have x p l o i t e d t h e

c o n s t r u c t i o n i n d u s t r ya n d w h o h i s t o r i c a l l y r e a p e d i l l i c i tp r o f i t s - t h r o u g h c o n t r o l of u n i o n s ,

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c o n t r a c t o r s , a n d s u p p l i e s of e y m a t e r i a l s such s c o n c r e t e - have a d a p t e d t h e i r b u s i n e s s models

a n d h av e o c u s e don x p l o i t a t i o n of on-union workers a n d c o e r c i o nof o n t r a c t o r s( r e c o g n i z i n g

t h e reforms w i t h i n t h e Council a n d h a t t h e y h a v e n o t b e e n a b l e i n t h e l a s t f o u r y e a r s t o c o r r u p t

i t s a g e n t s t h r o u g h c o e r c i o n o r b r i b e r y ) , t h e Council m a y have o f a c e a r e t u r n b y o p p o r t u n i s t i c

r a c k e t e e r s t o t h e o l d b u s i n e s s m o d e l r e q u i r i n g t h e c o r r u p t i o n of Council a g e n t s t o s u c c e e d ) .

W h a t n d e e d w i l l b e t h e r e a c t i o n of a t o p f i d u c i a r y a t t h e Council o r t h e F u n d s o a h r e a t of

v i o l e n c e ? I fa u s i n e s s r e p r e s e n t a t i v ea c c e p t e da r i b e t o h e l p a a c k e t e e r c h e a t t h e Union , wha t

c o u l d he c t u a l l y d o w i t h o u t b e i n gd e t e c t e d t o a s s i s t a p l a n t o c o m m i t r a u d ? I f a shop s t e w a r d

l e a r n e d t h a t a m e m b e r of h e U n i o n had a no-show ob o r w a s x t o r t i n g a o n t r a c t o r , would he o r

she r e p o r t such s u s p i c i o n s and , f he o r she d i d , what would t h e C o u n c i l ' s I n s p e c t o r G e n e r a l

d o?

I n my iew, h e r a c k e t e e r w h o a t t e m p t s t o g a i n advan tage t h r o u g h p o s i t i v e o r n e g a t i v e

i nducement of i s t r i c t Council o r B e n e f i tF u n d s f f i c i a l s w i l l b e r e v e a l e d a s a o o l , a s o n e w h o

has o t s t u d i e d a n d w h o h u s d o e s not c o m p r e h e n d h e n e c e s s a r i l y r edundan t a f e g u a r d si n p l a c e

a t t h e Council a n d t h e F u n d s . I n t h e c l a s s i c f i e l d scheme , a o n t r a c t o r pays o f f a shop s t e w a r d

( a n d u s u a l l y a b u s i n e s sr e p r e s e n t a t i v e ) t o b e a l l o w e d t o k e e p l l o r s o m e p o r t i o n of a r p e n t e r s '

work a t a s i t e o f f of h e books o r p a i d a t a r a t e l e s s t h a n r e q u i r e d b y t h e c o l l e c t i v e b a r g a i n i n g

agreement . The s a m e n e f a r i o u s g o a l i n p a s t y e a r s has a l s o b e e n a c h i e v e d t h r o u g hc o e r c i o n .

S a f e g u a r d si m p l e m e n t e d a t t h e Council r e a t l y i n c r e a s e t h e r i s k of uch s c h e m e s b e i n g d e t e c t e d

( t h r o u g h e l e c t r o n i c r e p o r t i n g of man-hours b y s t e w a r d s a n d of d a i l y rounds b y b u s i n e s s

r e p r e s e n t a t i v e s , a s w e l l a s t h r o u g h m e m b e r o v e r s i g h t v i a O p e r a t i o n Watchdog) . I t h a s a l s o

h i s t o r i c a l l y b e e n p o s s i b l e f o r c o n t r a c t o r s t o d e f r a u d t h e F u n d s b y n o t r e m i t t i n g p a y m e n t f o r

f r i n g e b e n e f i t s( and , n former a y s , a c i n g a a w s u i tt h a t l e a d o n l y t o a n n e n f o r c e a b l ej u d g m e n t

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a f t e r a s s e t s were s e c r e t e d o r d i s s i p a t e d ) . I n t h e a b s e n c e of methods t o promptly d e t e c t such

d e l i n q u e n c i e s ,d e b t s c a n grow n t o t h e hundreds of housands of o l l a r s i n a a t t e r of e w h o r t

w e e k s d e p e n d i n g on h e s i z e of o b ) . A s a r e s u l t of programs now e i n g used b y h e F u n d s

such a s t h e Shop Steward V a r i a n c eR e p o r t i n gprogram t h a t i d e n t i f i e s d i s pa r i t i e s b e t w e e n t ime

logged b y t h e U n i o n a n d t ime r e p o r t e d b y employers, h u s r e v e a l i n g c o n t r a c t o r d e b t s w i t h i n

t h r e e w e e k s of work b e i n g performed, a t h e r t h a n t h e t wo - p l u s m o n t h s f o r m e r l y i n v o l v e d ,s e e

i n f r a a s w e l l a s t i m e l ya n d a g g r e s s i v ec o l l e c t i o n e f f o r t s - such s c h e m e s w i l l a l s o b e d i f f i c u l t i f

n o t i m p o s s i b l et o a c c o m p l i s h .

There a r e a l s o dange rous i n t e r n a l r i s k s t h a t , i f unchecked, w i l l e r o d e t h e c o m p l i a n t

b u s i n e s sp r a c t i c e s of h e D i s t r i c t Council a n d h e B e n e f i tFunds , o r example : i ) h e t e r m i n a t i o n

o r replacement of ompliant a n d e f f e c t i v e employees w i t h c r o n i e s a n d p a t s i e s w h o w i l l y i e l d t o

t h e w i l l of t h e r s ; ( i i ) w i l l f u l a n d i n a p p r o p r i a t e t i n k e r i n gw i t h t h e Bylaws, O u t- o f-Work L i s t

Rules a n d p o l i c i e s i n p l a c e a t t h e C o u n c i l ; i i i ) f a i l i n g t o c o n t i n u et o develop a n d use e c h n o l o g y

i n e v e r y a s p e c t of o p e r a t i o n s ;( i v ) f a i l i n g t o a d e q u a t e l yf u n d a n d s t a f f key f u n c t i o n s a t t h e

Council such a s Compliance , h e IG's o f f i c e , Account ing a n d t h e Audi t C o m m i t t e e and , t t h e

B e n e f i t F u n d s , such a s t h e E x e c u t i v eD i r e c t o r ' s o f f i c e a n d k e y e x e c u t i v e s( a n d f a i l i n g t o pa y

marke t - b a s e d s a l a r i e s t o a l l p e r s o n n e la n d m e r i t bonuses t o t o p a c h i e v e r s ) ;( v ) e p l a c i n g a b l e ,

h o n e s t a n d c o n f l i c t- f r e e c o u n s e l a n d a c c o u n t a n t s( a n d o t h e r s e r v i c e p r o v i d e r s ) w i t h u n s u i t a b l e

p e r s o n s a n d f i r m s s e l e c t e d f o r s u b j e c t i v e r e a s o n s ;( v i ) f a i l i n g t o d e v e l o p , p u b l i s h a n d f o l l o w

c l e a r a n d complete s t a n d a r d o p e ra t i n gp r o c e d u r e sf o r a l l f u n c t i o n sb a s e d on b e s t p r a c t i c e s ;( v i i )

f a i l i n g t o s u p p o r t a n d e n h a n c e democracy h r o u g hi n f o r m a t i v e ,s a f e a n d w e l l- r u n m e e t i n g s( and

u s i n g modem u d i o - v i s u a la i d s ) a n d f a i l i n g t o f u l l y a n d t i m e l y d i s s e m i n a t ea l l i n f o r m a t i o na n d

n e w s t o d e l e g a t e s a n d m e m b e r s w h o have a r i g h t t o k n o w such t h i n g s ; ( v i i i ) f a i l i n g t o work

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c l o s e l y w i t h l aw en fo rcemen t o a d d r e s s s u s p e c t e dc o r r u p t i o n ;(ix) a i l i n g t o i n c l u d e a p p r o p r i a t e

economic s o l u t i o n s t o marke t s h a r e c h a l l e n g e s b a s e d on f a i r compromise a t t h e c o l l e c t i v e

b a r g a i n i n gt a b l e a n d i n n e g o t i a t i n gw i t h non-union employers ; x ) a i l i n g t o a p p r o p r i a t e l yi n v e s t

t h e c o n s i d e r a b l e a s s e t s of h e D i s t r i c t Council i n e x c e s s of $50 m i l l i o n ) i n keeping b u s i n e s s

sys t ems a n d p r a c t i c e s m o d e r n a n d compliant a n d h e Council d e q u a t e l ys t a f f e d ; a n d x i ) a i l i n g

t o a lways be b l e t o j u s t i f y a l l b u s i n e s sa n d i d u c i a r y d e c i s i o n s b a s e d on l e a r f a c t s a n d o b j e c t i v e

r e a s o n i n gc o n s i s t e n t w i t h b e s t p r a c t i c e s a n d h e n e e d s a n d i g h t s of h e membersh ip .

C. R e c o m m e n d a t i o n s

B y l a w s a n d o l i c i e s

There a r e o b v i o u s l y s o m e u p d a t e s t h a t n e e d t o b e m a d e t o t h e Bylaws. Outda ted

r e f e r e n c e s t o t h e R e v i e w O f f i c e r , t h e former r i a l C o m m i t t e e a n d t s r u l e s a n d o t h e r p r ov i s i o n s

t h a t have b e e n s u p e r s e d e db y R e v i e w O f f i c e r a c t i o n , c o u r t o r d e r s o r t h e a d o p t i o n of formal

r ecommenda t ions comprise h e b u l k of o n s i d e r a t i o n s i nt h i s c a t e g o r y .

M a t e r i a lchanges o t h e B y l a w s a n d p o l i c i e s a n d p r o c e d u r e sr e q u i r e d b y h e B y l a w s r e

a n o t h e rm a t t e r . They m u s t b e o n s i d e r e d , c o n s t r u c t e da n d adopted w i t h g r e a t c a r e a n d p r e c i s i o n .

A s such p r o p o s a l s a r i s e , each proposed c h a n g e m u s t b e u b j e c t e d t o s t r i c ts c r u t i n y t o i n s u r e t h a t

t h e proposed c h a n g e i ) comports w i t h t h e s t r i c t u r e s a n d g o a l s of p p l i c a b l e law, h e Consen t

D e c r e e a n d S t i p u l a t i o n a n d Order ; ( i i ) m a t e r i a l l y improves t h e b u s i n e s s o p e r a t i o n s a n d

governance of h e D i s t r i c t C o u n c i l ; i i i ) c l e a r l y b e n e f i t s t h e o r g a n i z a t i o na n d t s m e m b e r s ; i v ) s

c l e a r l y w r i t t e n and unambiguous ; v ) s t h e p r o d u c t of h e p r o c e s s c o n t e m p l a t e db y h e U n i t e d

Brotherhood of a r p e n t e r s a n d o i n e r s o f m e r i c a U B C ) o n s t i t u t i o n a n d h e S t i p u l a t i o na n d

O r d e r ;a n d v i ) s approved n w r i t i n g b y h e Independen t Monitor IM ) n d h e U n i t e dS t a t e s

A t t o r n e y ' sO f f i c e( U SA O ) . F u r t h e r , t h e p r o c e s s of e e k i n ga n y change h o u l d i n c l u d e a w e l l-

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s u p p o r t e dsubmiss ion b y h e Council o t h e IM n d USAO, e l i n e a t i n g w h y h e p r o p o s e dchange

i s c o n s i s t e n t w i t h t h e f o r e g o i n gc o n s i d e r a t i o n sa n d a r t i c u l a t i n g w h y h e p r o v i s i o n t o b e e p l a c e d

i s n o o n g e rs u i t a b l e .

O ut-o f -Work i s t Rules

I d o n o t b e l i e v e t h a t a n y m a t e r i a l change o t h e O u t-o f - Wo r k L i s t Rules ( OWL ules )

i s n e c e s s a r y . S k i l l s h a v e b e e n p e r i o d i c a l l y a d d e d ; h e y w i l l c o n t i n u et o b e . Pragmat ic o l u t i o n s

t o c e r t a i n i n d u s t r y- g e n e r a t e d problems h a t m a y r i s e (such a s w e e k e n d work performed i n t h e

f l o o r c o v e r i n gi n d u s t r y t h a t common e n s e i n d i c a t e d s h o u l d b e covered b y a e p a r a t eOWL) a y

a r i s e a n d r e q u i r e s i m i l a r r e a s o n a b l ea n d ben ign s o l u t i o n s . A n y proposed change t o t h e t h r e e-

d i s p a t c h r u l e , which has b e e n h i g h l y e f f e c t i v e i n e l i m i n a t i n gs k i l l p u f f i n g a n d t h e p r e m a t u r e

q u i t t i n g of o b s , s h o u l d b e r e j e c t e d . A n y t t e m p t t o r e t u r n t o t h e s o - c a l l e d 25 -day r u l e would

b e p o l i t i c a l l y m o t i v a t e da n d would e x t e n s i v e l yd a m a g e h e U n i o n a n d t h e i n d u s t r y t h r o u g h t h e

r e t u r n of n a d e q u a t e l yq u a l i f i e d p e r s o n st o j o b s .

D i s t r i c t Council n s p e c t o r G e n e r a l

T h e O f f i c e of t h e D i s t r i c t Council I n s p e c t o r Genera l i s s u b j e c t t o I n v e s t i g a t i v e

G u i d e l i n e s adopted i n D e c e m b e r 2011. They r e a t t a c h e d a s E x h i b i t3 n d r e d i s c u s s e d i n f r a .

The G u i d e l i n e sa r e m e t i c u l o u s l yd e t a i l e d a n d b a s e d on e s t p r a c t i c e s f o r such o f f i c e s . B a s e d on

d i s c u s s i o n s w i t h t h e I n s p e c t o r Genera l ( IG ) and h i s s t a f f , r ev i ew of h i s r e p o r t s a n d o t h e r

i n f o r m a t i o n ,t h e G u i d e l i n e s a p p e a r , a t b e s t , t o b e l o o s e l y and rand omly a p p l i e d . The Chief

Compl iance O f f i c e r( CCO ) h o u l d - a t l e a s t a n n u a l l y- perform a n i n - d e p t h a u d i t of h e IG's

o f f i c e t o a s s e s s adherence t o t h e G u i d e l i n e s . To i n s u r e s o m e a p p r o p r i a t e measure of

a c c o u n t a b i l i t y , t h e CCO h o u l d r e p o r t h i s f i n d i n g s i n t h i s r e g a r d t o t h e E x e c u t i v eCommi t t ee .

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D o c u m e n t e d , s e r i a l f a i l u r e t o m a t e r i a l l y a d h e r e t o t h e G u i d e l i n e s would p r e s e n t r e a s o n a b l e

grounds o r d i s m i s s a lof h e IG .

F u r t h e r , i n o r d e r t o i n s u r e t h a t t h e u s e of depa r tmen t a s s e t s i n s e n s i t i v e m a t t e r s i s

a p p r o p r i a t e a n d w e l l - c on s i d e r e d , t h eIG h o u l d c o n f i d e n t i a l l yr e p o r t t o t h e CCO i s i n t e n t i o n t o

use c e r t a i n i n v e s t i g a t i v e m e t h o d s ( e . g . , s u r v e i l l a n c e , l o c a t i o n m o n i t o r i n g )w h e n i n v e s t i g a t i n g

e l e c t e d U n i o n o f f i c i a l s a n d a r t i c u l a t e t h e b a s i s f o r a r e a s o n a b l es u s p i c i o n of l l i c i tconduct a n d

h o w h e i n v e s t i g a t i v em e t h o d w i l l g a i n r e l e v a n t e v i d e n c e ) . The CCO h o u l d d i s c u s s w i t h t h e IG

a n y p e r c e i v e dd e f i c i e n c yi n t h e p l a n a n d , f n e c e s s a r y ,inform h e IG n w r i t i n gof n y o n c e r n .

A d d i t i o n a la n d p e c i a l i s t Personnel ; x e c u t i v e C o n t i n u i t y

The D i s t r i c t Council i s i n n o w a y ove r - s t a f f e d . The Council c o u l d e a s i l y a d d s u i t a b l y

s k i l l e d a n d e d u c a t e d p r o f e s s i o n a l s t o i t s s t a f f t o b o l s t e r t h e Compl iance Depar tmen t , h e IG's

o f f i c e , t h e a c c o u n t i n gd e p a r t m e n t ,t h e D i r e c t o rof p e r a t i o n s ' o f f i c e , t h e b u s i n e s sr e p r e s e n t a t i v e

c e n t e r s , a n d t h e a s s e t- d e f i c i e n t Audi t C o m m i t t e e (which s h o u l d b e developed w i t h p r o p e r

a t t e n t i o n a n d i n a n c i n gi n t o a r u e i n t e r n a l a u d i t u n i t ) .

M u l t i p l e f u n c t i o n s a n d d e p a r t m e n t sf a c e c o n t i n u i t y r i s k s ; i f c e r t a i n depar tment heads

were t o l e a v e D i s t r i c t Council e m p l o y m e n t o r b e c o m e u n a v a i l a b l e ,t h e i n t e g r i t y of C o u n c i l

o p e r a t i o n s would be i m p e r i l e d . A n y depa r tmen t h a t d e p e n d s on t h e s e r v i c e of o n e p a r t i c u l a r

p e r s o n t o conduct t s b u s i n e s sp r e s e n t s a n a s i l y a v o i d a b l er i s k t o Council o p e r a t i o n s . This i s k

c a n b e a d d r e s s e d only t h r o u g h a c o n c e r t e d e f f o r t t o c r e a t e depu ty p o s i t i o n s f i l l e d b y h i g h l y

q u a l i f i e d p e r s o n s .

100% l e c t r o n i c Time Ent ry

Wi t h shop t e w a r d se n t e r i n g t h e i r t ime l e c t r o n i c a l l y , t b e c a m e n n e c e s s a r yt o u s e p a p e r

s t e w a r d r e p o r t s . N o n e t h e l e s s ,h e p r a c t i c e l i n g e r e d , a n d w a s o t o f f i c i a l l y e n d e d u n t i l D e c e m b e r

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1 s t . A l l t i m e , p a r t i c u l a r l y t ime o r work i n t h e t r a d e s h o w n d u s t r y a n d e s p e c i a l l y a t t h e J a v i t s

C e n t e r ,s h o u l d b e e p o r t e d e l e c t r o n i c a l l y b y h e e n d of h e f i r s tq u a r t e r of 015. The p r o s p e c t of

t h e D i s t r i c t Council b e i n g g i v e ne l e c t r o n i c t ime r e c o r d s b y h e J a v i t s C e n t e rhas b e e n d i s c u s s e d

f o r s o m e t w o y e a r s n o w a n d t h e Council n e e d s t o i n s i s t t h a t a t r i c ti m p l e m e n t a t i o nd a t e b e

g i v e n .

U s i n g Technology o Improve f f i c i e n c y , A c c o u n t a b i l i t ya n d Compliance

The S t i p u l a t i o n a n d Order e x p r e s s l y r e c o g n i z e s t h e impor tance of t h e I n f o r m a t i o n

Technology upgrade p r o j e c t u n d e r w a y t t h e D i s t r i c t Council a n d h e n e e d of h e IM o p a y l o s e

a t t e n t i o n t o a n d r e p o r t on t h e p r o j e c t ' s p r o g r e s s . I n t h e m e a n t i m e , p a r t i c u l a r l y n o w t h a t t h e

Council has a n IT D e p a r t m e n t w i t h t h r e e employees , very f f o r t s h o u l d b e m a d e o use x i s t i n g

c a p a b i l i t i e s (such a s w a s d o n e b y t h e b u s i n e s s r e p r e s e n t a t i v e depar tment) o m a x i m i z e use of

t e c h n o l o g yi n d a i l y b u s i n e s s . For n s t a n c e ,t h e IG's o f f i c e s t i l lr e l i e s on p a p e r f i l e s (kept n t h e

e x c l u s i v e c u s t o d yof h e IG h i m s e l f )t o t r a c k a n d conduct t s b u s i n e s s , b u t s h o u l d b e m a k i n g

eve ry e f f o r t t o m a n a g e c a s e s e l e c t r o n i c a l l y , f rom t h e open ing of m a t t e r , t h r o u g h i n v e s t i g a t i o n

a n d r e p o r t i n g t o c l o s e o u t , t h e r e b y growing a s e a r ch a b l e d a t a b a s e( a n i m p o r t a n t i n v e s t i g a t i v e

t o o l ) a n d e a l i z i n g e f f i c i e n t use of ime a n d p a c e .

I n o t e t h a t t h e a c c o u n t i n gdepa r tmen t unde r h e l e a d e r s h i pof t s c h i e f , Judy M o n t r e u i l(a

v a l u a b l e D i s t r i c t Council employee) , s d i l i g e n t l y working t o upgrade t h e C o u n c i la c c o u n t i n g

sys t em a n d s c l o s e t o s e l e c t i n g a vendor o a c h i e v et h i s g o a l .

E s t a b l i s h i n g( a n d e f i n i n g )L i a i s o n P r o t o c o l sw i t h t h e B e n e f i tF u n d s

With h e h i s t o r y of l a t a n t a n d w i l l f u l i n t e r f e r e n c ei n t h e a f f a i r s of h e B e n e f i tF u n d s b y

c e r t a i n p a s t l e a d e r s of h e D i s t r i c t C o u n c i l , t i s i m p e r a t i v et h a t formal p r o t o c o l s b e o l l o w e di n

every s i t u a t i o n where communica t ion b e t w e e n t h e Council a n d t h e F u n d s i s n e c e s s a r y o r

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a p p r o p r i a t e . R a n g i n g f r o m a m e m b e r a l l r e c e i v e d b y h e Council h a t s h o u l d h a v e b e e n p l a c e d

t o t h e F u n d s w h e n h e Council e c e s s a r i l y r e f e r s t h e m e m b e r o t h e F u n d s , p p r o p r i a t e l yn o t i n g

t h e m e m b e r ' s n a m e a n d t h e n a t u r e of h e i n q u i r y a n d l a t e r f o l l o w s up w i t h t h e F u n d s o i n s u r e

t h a t t h e m e m b e r ' s i n q u i r y has b e e n answered) , t o r e g u l a r meet ings b e t w e e n p e r s o n s f rom

d e p a r t m e n t sa t t h e Council a n d h e F u n d s w i t h common b j e c t i v e s , s t a n d a r d i z e dcommunica t ion

w i l l b e n e f i t each o r g a n i z a t i o n . I s s u e s t h a t t h e C o u n c i l ' sE x e c u t i v eS e c r e t a r y- T r e a s u r e r( EST )

m a y wish t o a d d r e s s w i t h t h e F u n d s ' E x e c u t i v e D i r e c t o r should b e a d d r e s s e d a s a m a t t e r of

r e c o r d , o r e x a m p l e , y emai l o p i e d t o t h e employe r o - c h a i r of h e F u n d s ' B oa r d of r u s t e e s o r

b y s c h e d u l e dc a l l s o r meet ings h a t i n c l u d e t h e employer c o - c h a i r . I h a v e a l s o encouraged t h e

r e s p e c t i v e c o - c h a i r s of h e B o a r d of r u s t e e s (Joseph Geige r a n d D a v i d M e b e rg ) o h a v e e g u l a r

meet ings o d i s c u s s a n y r o p o s i t i o n s o r i s s u e s t h a t m a y r i s e .

Communica t ion a n d Transparency

The i s t r i c t Council a n d B e n e f i tF u n d s w e b i t e s h a v e r e c e n t l y m a d e x c e l l e n t p r o g r e s s

i n c r e a t i n g a n d r e f i n i n g u s e f u l w e b i t e s . T h e i d u c i a r i e s of o t h o r g a n i z a t i o n sm u s t n s u r e t h a t

w e b i t e s a n d o t h e r m e t h o d s of i m e l ya n d d e t a i l e d communicat ion a r e c o n t i n u a l l ya s s e s s e d a n d

r e f i n e d t o b e s t s e r v e t h e m e m b e r s . I h a v e e x h o r t e d t h e Council f o r y e a r s t o o b t a i n emai l

a d d r e s s e s f r o m each m e m b e r w h o has o n e ( a n d one would t h i n k t h a t m o s t d o ) n o r d e r t o

c o n t i n u a l l ya n d e f f i c i e n t l y inform t h e m e m b e r s of n e w s a n d o t h e r m a t t e r s . Every e f f o r t s h o u l d

b e m a d e o p e r f e c t t h a t p r o c e s s i n 2015.

The i s t r i c t Council Audi t Commi t t ee

The Audi t Commi t t ee , s p r o v i d e d f o r i n S e c t i o n5(B)(17) f h e D i s t r i c t Council Bylaws

( s e e E x h i b i t4 ) , p l a y s a n m p o r t a n tr o l e , a t l e a s t i n t h e o r y , i n i n s u r i n g t h a t t h e Council d h e r e s t o

compliant b u s i n e s s p r a c t i c e s . I n p r a c t i c e , i t has s u f f e r e d f rom t h e i n s u f f i c i e n t i n t e re s t of a

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s u c c e s s i o nof t s d e l e g a t e m e m b e r s s e l e c t e d b y h e d e l e g a t e body), a n d has b e e n o o d e p e n d e n t

u p o n h e s u g g e s t i o n sof my f f i c e a s t o h o w o a c h i e v e i t s r e q u i r e d o b j e c t i v e s . The commi t t ee

s h o u l d n e v e r w o n d e r abou t w h a t t n e e d s o b e do ing a n d h o w t s h o u l d b e doing t . I t s h o u l d

focus on o n t i n u o u s l yr e v i e w i n gt h e b u s i n e s sp r a c t i c e s a n d i n a n c e sof h e Council a n d e p o r t i n g

i t s f i n d i n g s t o t h e d e l e g a t e b o d y. T h e commi t t ee would b e n e f i t f r o m t h e a d d i t i o n of a

p r o f e s s i o n a l w i t h a u d i t t r a i n i n g a n d e x p e r i e n c e w h o c o u l d m a t e r i a l l y a s s i s t i t i n a c c o m p l i s h i n g

i n t e r n a l a u d i t f u n c t i o n s i n a p r o f e s s i o n a l m a n n e r ( a n d w h o c o u l d a l s o a s s i s t t h e CCO, h i e f

a c c o u n t a n ta n d I G ) . T h e commi t t ee c o u l d d r a f t r i g o r o u s a u d i t t e s t s w i t h t h e a s s i s t a n c e of uch a

p e r s o n a n d t h e o u t s i d e CPA w h o a d v i s e s t h e commi t t ee b u t w h o m a y n o t b e s u f f i c i e n t l y

c o m p e n s a t e d o p r o v i d e m o r e n - d e p t h a s s i s t a n c e ,u s e t h e a u d i t t e s t s i n r e v i e w i n gk e y u n c t i o n s ,

i s s u e d r a f t f i n d i n g s , i n c o r p o r a t e t h e r e s p o n s e sof h e f u n c t i o n sa n d h e n i s s u e f i n a l r e p o r t s t o t h e

d e l e g a t ebody.

The Gr ievance D e p a r t m e n t

A s h a v e p r e v i o u s l yd i s c u s s e d ,s e e S e c o n d n t e r i m Report t 50-51, h e D i s t r i c t Council

has m a d e p r o g r e s s i n improving a n d r e f i n i n g t h e work of h e g r i e v a n c e d e p a r t m e n t ,which

r e c e i v e s , d o c k e t s a n d p u r s u e s c l a i m s b y l o c a l union m e m b e r s , u s i n e s s r e p r e s e n t a t i v e sa n d t h e

IG's o f f i c e a g a i n s t employers f o r v i o l a t i o n s of c o l l e c t i v e b a r g a i n i n g a g r e e m e n t s . S i n c et h e

b e g i n n i n gof 2014, h e g r i e v a n c edepar tment has c o l l e c t e d $ 8 5 4 , 7 2 7 . 2 1i n s a t i s f a c t i o n of h e s e

m a t t e r s , a s r e f l e c t e d i n r e c o r d s s u p p l i e d t o me y t h e D i s t r i c t C o u n c i l . H o w e v e r, t a n y t i m e ,

t h e r e m a y b e s m a n y s 2,000 pend ing m a t t e r s a n d h e backlog p r e v e n t s t h e i r t i m e l y p u r s u i t a n d

d i s p o s i t i o n . I m p o r t a n t l y ,s o m e g r i e v a n c e sa r e n o t a d e q u a t e l yd o c u m e n t e d f o r i n s t a n c e , w i t h a

s w o r n a n d d e t a i l e d s t a t e m e n tof a c t s s u b m i t t e db y t h e p e r s o n f i l i n g t h e g r i e v a n c e i d e n t i f y i n g

w i t n e s s e s , s u p p o r t i n g documenta t ion a n d o t h e r evidence) a n d t h e depa r tmen t m u s t p e r f o r m

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a d d i t i o n a l work o a s s e s s a n d p u r s u ea a t t e r . I n my iew, h e duty of a i r r e p r e s e n t a t i o nof t s

m e m b e r s r e q u i r e s t h e Council t o i n s u r e t h a t t h e depa r tmen t has t h e r e s o u r c e s a n d p e r s o n n e l

n e c e s s a r yt o p r o c e s s a n d p u r s u e(or d e c l i n e b a s e d on a c k of e r i t ) each g r i e v a n c ei n a e a l o u s

a n d i m e l ym a n n e r.

The Imba lance n t h e Composition of ocal Unions

There s a n imba lance n t h e c o m p o s i t i o nof h e D i s t r i c t C o u n c i l ' s l o c a l u n i o n s( a n d h u s

t h e d e l e g a t e b o d y ) h a t p r e s e n t s a i s k t o d e m o c r a t i cgove rnance of h e C o u n c i l . F u r t h e r , w i t h

c e n t r a l i z a t i o n of b u s i n e s s , c o l l e c t i v e b a r g a i n i n g a n d r e p r e s e n t a t i v e f u n c t i o n s a t t h e C o u n c i l ,

abysmal ly low t u r n o u t a t mee t ings of e n e r a l c o n s t r u c t i o n l o c a l s a n d a h i g h d e g r e e of m e m b e r

a p a t h y , t h e o r i g i n a l g e o g r a p h i cr a t i o n a l e f o r g e n e r a l c o n s t r u c t i o nl o c a l s s h o u l d b e r e c o n s i d e r e d

b y h e D i s t r i c t C o u n c i l ' s p a r e n t o r g a n i z a t i o n ,t h e UBC, s t h e r a t i o n a l e n o o n g e r a p p e a r s w e l l-

s u i t e d t o b e s t s e r v i n g t h e membersh ip ' s n t e r e s t s .

Consider t h e f o l l o w i n g m e m b e r s h i p r a t i o s of e n e r a l c o n s t r u c t i o nl o c a l s . ( C a l c u l a t i o n s

a r e b a s e d on 20,000 m e m b e r s a n d t h e p e r c e n t a g eof i s t r i c t Council m e m b e r s a n d s e a t s i n t h e

Council e l e g a t e b o d y r e a l s o shown):

Local 20 3%): 6 0 0Local 45 8%): 1,600Local 157 46%): 9,200Local 9 2 6 8%): 1 , 6 0 0

Category o t a l : 13,000

Thus, ocal 157 o n s t i t u t e s a p p r o x i m a t e l y71% f h e c a t e g o r y .

T h e m e m b e r s h i p a t i o s of p e c i a l t y l o c a l s a r e a s f o l l o w s :

Local 740 2%): 400Local 1556 14%): 2,800Local 2287 5%): 1 , 0 0 0Local 2790 14%): 2,800

Category o t a l : 7,000

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A e u t r a l , b u s i n e s sm o d e l- b a s e d methodology c o u l d b e u t i l i z e d t o a p p r o pr i a t e l y b a l a n c e

t h e g e n e r a l c o n s t r u c t i o nl o c a l u n i o n s ;c o n s i d e r a t i o ns h o u l d b e g i v e n t o c r e a t i n g t w o n e w e n e r a l

c o n s t r u c t i o n l o c a l s , o n e o r i n t e r i o r sys t ems a n d o n e o r c o n c r e t e t h a t t o g e t h e r would have s a n

i n i t i a lt a r g e t a p p r o x i m a t e l y4,000 o 5,000 m e m b e r s . No e m b e r would b e e a s s i g n e df rom a n y

c u r r e n t l o c a l union a n d r a n s f e r would b e n t i r e l y v o l u n t a r y . A educed d u e s t r u c t u r e c o u l d b e

i m p l e m e n t e d a n d a modern , m o r e e n l i g h t e n e d approach t o l o c a l union meet ings c o u l d b e

implemented w i t h o n e of h e p r i n c i p a l r e a s o n s t o a t t e n d such m e e t i n g sb e i n g t h a t fu lsome

i n f o r m a t i o nabout where a m e m b e r migh t i n d work would b e d i s s e m i n a t e da n d d i s c u s s e d . I f

t h e r e w e r e a u f f i c i e n t n u m b e r of r a n s f e r s , t h e UBC o u l d t h e n c o n s i d e r t h e m e r i t s of e t a i n i n g

o r d i s s o l v i n ga n y a r t i c u l a r g e n e r a l c o n s t ru c t i o nl o c a l u n i o n .

D . O t h e r Notab le M a t t e r s

1 . I n v e s t i g a t i o n sof e r s o n s o f n t e r e s t

Though t h e gove rnance a n d a d m i n i s t r a t i o nof h e D i s t r i c t C o u n c i l ,e i g h t a f f i l i a t e d l o c a l

unions a n d h e B e n e f i tF u n d s s f r e e of h e i n f l u e n c eof r g a n i z e dc r i m i n a lg r o u p s , n v e s t i g a t i o n s

conducted b y my f f i c e i n v o l v i n gs u r v e i l l a n c e ,informant n f o r m a t i o na n d o t h e r methods e v e a l

t h a t t h e r e a r e t w o s u s p e c t e d m e m b e r s of t h e G e n o v e s e f a m i l y w h o h a v e b e e n a n d remain

e m p l o y e d b y i g n a t o r y c o n t r a c t o r s . N e i t h e r has v e r h a d a n y p o s i t i o n of u t h o r i t y o r a g e n c y n

t h e U n i o n . Both have w h a t o n e migh t c h a r i t a b l y c a l l l i g h t du ty o b s , b u t w h a t o t h e r s might

c a l l nonproduct ive obs w i t h t h e i r employers, whom s u s p e c t a r e n o t f r e e a c t o r s i n t h e m a t t e r

of h e i r r e s p e c t i v e e m p l o y m e n t . My f f i c e has deposed b o t h m e n , w h o each a p p a r e n t l y l i e d

under o a t h , b a s e d on h e i n v e s t i g a t i v e r e c o r d compiled b y my t a f f . O n e of h e m e n w h o h a s

p r e v i o u s l y b e e n a r r e s t e d a n d w h o i s s u s p e c t e d of u n n i n ga gambl ing o p e r a t i o n a m o n g o t h e r

v e n t u r e s- t e s t i f i e d t h a t he w a s e n g a g e d a t t h e H u d s o n Yards i t e t o m a k e p lan a b l e s . A h i r d

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m a n , w h o s a r e p u t e d a s s o c i a t e of h e C o l o m b o f a m i l y( a n d who, a m o n g o t h e r t h i n g s , b u r i e d

v i c t i m s of h e i n famous C o l o m b o a m i l y war) b t a i n e d e m p l o y m e n t t H u d s o n Yards w i t h i n a

m o n t h o f i s r e l e a s e f r o m f e d e r a l p r i s o n f o r r a c k e t e e r i n g c o n s p i r a c yi n May 014. He t o p p e d

working a t t h e s i t e a f t e r he r e c e i v e d a n o t i c e of e p o s i t i o n , which w a s a k e n o n D e c e m b e r 2,

2014, nd n which he w a s l t e r n a t e l y i n c r e d i b l ea n d v a s i v e .

My f f i c e a l s o r e c e n t l y took t h e d e p o s i t i o n of a m a n b e l i e v e d t o b e a s o l d i e r i n t h e

G e n o v e s e a m i l y ,w h o w a s e s p o n s i b l e f o r r e p r e s e n t i n gt h e f a m i l yi n c e r t a i n of t s i n t e r e s t s i n t h e

c o n s t r u c t i o na n d r a d e s h o w n d u s t r ya n d w h o w a s u s p e c t e dof t t e m p t i n gt o e x e r c i s e i n f l u e n c e

over m e m b e r s of h e c a r p e n t e r s ' u n i o n ,i n c l u d i n ga l o n g - t i m eshop s t e w a r d i n t h e t r a d e s h o w

i n d u s t r y . He nvoked h e F i f t h A m e n d m e n t n r e s p o n s et o v i r t u a l l y a l l q u e s t i o n sp o s e d . He s a

former m e m b e r of h e U n i o n .

P a r t i c u l a r s r e g a r d i n g t h e f o r e g o i n g p e r s o n s , a s w e l l a s m e m b e r s of a n o t h e r c r i m i n a l

group ( f o r m e r l y r e f e r r e d t o a s T h e W e s t i e s ) s u s p e c t e d of p a s s i n g p u r p o s e f u lm e s s a g e s t o

U n i o n m e m b e r s , a v e b e e n h a r e d w i t ht h e IM s p a r t of h e t r a n s i t i o n p r o c e s s .

2. Cont inu ing n v e s t i g a t i o nInvolving H u d s o n Ya r d s

I n a d d i t i o n t o t h e c i r c u m s t a n c e s s u r r o u n d i n gt h e h i r i n g of h e a b o v e -ment ioned a s s o c i a t e

of t h e C o l o m b o f a m i l y , a n d t h e p r e v i o u s l y r e p o r t e d s i t u a t i o n where t h e 50/50 h i r i n g r a t i o

r e q u i r e d b y t h e Independen t A g r e e m e n t b e t w e e n t h e D i s t r i c t Council a n d a o n t r a c t o r w a s o t

e n f o r c e d - a t a m i n i m u m - t h r o u g h t h e g r o s s n e g l i g e n c eof U n i o n r e p r e s e n t a t i v e s( s e e E i g h t h

I n t e r i m Report t 5 - 8 ) , my f f i c e i n v e s t i g a t e da n o t h e rs i t u a t i o n i n v o l v i n g t h eH u d s o n Yards i t e .

This i n v o l v e dt h e h i r i n g f o r a l i g h t duty j ob of a n i n e x p e r i e n c e dm e m b e r w h o s t h e son of a

former u s i n e s s m a n a g e r of n e of h e g e n e r a lc o n s t r u c t i o nl o c a l s( a n d a ormer i s t r i c t C o u n c i l

t r u s t e e ) . D e p o s i t i o n sof wo of h e c o n t r a c t o r ' s employees e l i e v e d t o b e n v o l v e di n h i r i n g a n d

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e x e c u t i v ed e c i s i o n-mak ing a t t h e s i t e were a k e n i n D e c e m b e r. T h e i r r e c a l l of e r t a i n d e t a i l s of

i s s u e s of n t e r e s t w a s o t of a r t i c u l a r a s s i s t a n c e t o t h e i n v e s t i g a t i o n .

3 . I n v e s t i g a t i o nof i s t r i c t Council Execu t ive C o m m i t t e e Member

I n v e s t i g a t i o n has r e v e a l e d t h a t a m e m b e r of h e D i s t r i c t Council E x e c u t i v eCommi t t ee

has v i o l a t e d t h e T a f t- H a r t l e y L a w, 9 U.S.C. 186 a ) n d b ) , a n d h e D i s t r i c t Council Steward

E t h i c s P o l i c y . On u l t i p l e o c c a s i o n si n 2014, ohn D a l y of ocal 157 w a s f f h i s j ob o r Rega l

U.S .A . C o n s t r u c t i o n , I n c . , w h i l e s i m u l t a n e o u s l yr e c e i v i n g p a y f rom Regal ( somet imes a t

o v e r t i m e r a t e s ) a n d s t i p e n d s f rom t h e D i s t r i c t Council f o r engag ing i n E x e c u t i v eCommi t t ee

b u s i n e s s . On e c e m b e r 23, 014, s e r v e d h i m a n d h e D i s t r i c t Council w i t h t h e n o t i c e r e q u i r e d

p u r s u a n tt o S e c t i o n5 . b . i i i(1 ) f h e S t i p u l a t i o na n d Order e l a t i n g t o a c t i o n a b l e v i o l a t i o n sof h e

Consen t D e c r e e a n d t h e S t i p u l a t i o n a n d O r d e r ,a n d asked t h a t h e b e immedia te ly r e m o v e d f rom

t h e E x e c u t i v eCo m mi t t e e a n d t h a t h i s s t a t u s a s s t e w a r d b e s t r i p p e d . The N o t i c e of c t i o n a n d

s u p p o r t i n gd e c l a r a t i o ni s a t t a c h e d a s E x h i b i t5 .

4. Loca l U n i o n s

The e s p e c t i v e o f f i c e r s a n d o f f i c e s t a f f s competently h a n d l e t h e b u s i n e s sr e s p o n s i b i l i t i e s

of h e e i g h t l o c a l u n i o n s a f f i l i a t e d w i t h t h e D i s t r i c t C o u n c i l . The i n a n c e s of each a r e sound,

though h e r e s e r v e s of ach r e q u i t e v a r i e d( r a n g i n gf rom t w o o 25 o n t h s ) .

The fundamen ta l problems o f m o s t o c a l u n i o n sr e m a i n unchanged : ( 1) me m b e r s d o o t

a t t e n d l o c a l union mee t ings i n m a n y a s e s , f i n d i n g n o r e a s o n t o t r a v e l s i g n i f i c a n t d i s t a n c e s a n d

i n c u r e x p e n s e s o a t t e n d mee t ings where o t h i n g of mport s l e a r n e d , d i s c u s s e do r accomplished

a n d o c a l union d e l e g a t e s t o t h e D i s t r i c t Council r e n o t e v e n r e q u i r e d t o b e n a t t e n d a n c e ) ;a n d

(2) t h e r t h a n t o c o l l e c t d u e s f rom m e m b e r s (which a r e i n s i g n i f i c a n t p a r t t r a n s f e r r e d t o t h e

Council a n d UBC n t h e fo rm of e r c a p i t a t a x e s ) , t h e r a i s o n d ' e t r e f o r l o c a l u n i o n s i s e n t i r e l y

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20/50

6 . I n v e s t i g a t i v eGuidel ine s or the I G ' s f f i c e

O n e of t h e p u r p o s e s of t h e IG o f f i c e ' s I n v e s t i g a t i v e G u i d e l i n e s , memoria l ized i n

D e c e m b e r 2011, s t o e n s u r e [ t h a t i n v e s t i g a t i o n s ]a r e conducted c o m p e t e n t l y ,c o n s i s t e n t l y , a n d

i n compliance w i t h a l l a p p l i c a b l elaws, e g u l a t i o n sa n d [ ] i g h e t h i c a l s t a n d a r d s . . . . E x h i b i t3 t

1 . U n f o r t u n a t e l y , t h eIG's o f f i c e does n o t u n i f o r m l y f o l l o wt h e G u i d e l i n e sa n d t h u s f a i l s t o

o p e r a t e a s i n t e n d e d o r a s e f f e c t i v e l y a n d e f f i c i e n t l y a s p o s s i b l e . Below s a d i s c u s s i o n of h e

a r e a s where h e IG's f f i c e i s f a l l i n g s h o r t .

A s a e n e r a l m a t t e r ,t h e G u i d e l i n e sa s s u m e h a t t h e IG's o f f i c e i s o r g a n i z e dr o u g h l ya s a

pyramid . The IG i s a t t h e t o p of h e pyramid, w i t h t h e deputy IG below h i m a n d t h e n t h e

i n v e s t i g a t o r s a n d s t a f f be low t h e deputy IG. U n d e r t h e G u i d e l i n e s , t h ei n v e s t i g a t o r s a r e t o b e

a s s i g n e dc a s e s t o work, a e a d i n v e s t i g a t o r i s t o b e e s p o n s i b l ef o r each c a s e a n d h e IG a n d t h e

deputy IG r e t o m a n a g e h e c a s e s .

F r o m d i s c u s s i o n s w i t h t h e IG a n d m e m b e r s of h i s o f f i c e , a n d b a s e d on my f f i c e ' s

e x p e r i e n c e w i t ht h e IG's o f f i c e , t h e IG's o f f i c e does n o t h a n d l e c a s e s i n t h i s m a n n e r. M o s t

t i m e s , t h e IG a n d t h e deputy IG r e t h e o n e s w h o conduct n v e s t i g a t i o n s ,w i t h l i t t l eo r n o n p u t

f rom i n v e s t i g a t o r s . I n d e e d , i n v e s t i g a t o r s a r e t y p i c a l l y n o t a s s i g n e d c a s e s a n d a s k e d t o work

t h e m ; r a t h e r , t h e y a r e a s s i g n e d t a s k s t o perform b y t h e IG a n d t h e deputy IG, w i t h s c a n t

e x p l a n a t i o na s t o w h y n y a r t i c u l a r t a s k n e e d s o b e completed.

O n e r e s u l t of h i s approach i s t h a t i m p o r t a n ti n v e s t i g a t i v e p r o t o c o l s t h a t t h e G u i d e l i n e s

r e q u i r e a r e n o t b e i n g f o l l o w e d .Some a s k s t h a t a r e n o t r e g u l a r l y performed r e :

r e p a r i n g n o t e s p r o p o s i n gt h a t formal n v e s t i g a t i o n sb e c o m m e n c e d G u i d e l i n eS e c t i o n4 . 2 . 1 ) ;

Deve lop ing n v e s t i g a t i v ework p l a n s( S e c t i o n4 . 3 . 1 ) ; a n d Complet ing n v e s t i g a t i o n sw i t h i n6 0 a y s S e c t i o n4 . 3 . 2 ) .

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Following h e s e p r o t o c o l s would e s u l t i n m o r e f f e c t i v e i n v e s t i g a t i o n sa n d m o r e f f i c i e n t u s e of

i n v e s t i g a t i v er e s o u r c e s . There s n o e a s o n a b l eb a s i s f o r n o t f o l l o w i n gt h e s e p r o t o c o l s .

The G u i d e l i n e sa l s o r e q u i r e t h e IG's o f f i c e t o m a i n t a i na n e f f e c t i v e c a s e m a n a g e m e n t

sys t em f o r t h e purposes of r e c o r d i n g a l l e g a t i o n s a n d c o m p l a i n t sr e c e i v e d a n d t r a c k i n g t h e i r

h a n d l i n g a n d r e s o l u t i o n . G u i d e l i n e s S e c t i o n 3 . B a s e d u p o n i n t e r v i e w s w i t h t h e IG a n d

m e m b e r s of i s o f f i c e , t h e c a s e m a n a g e m e n t s y s t e m i s not s t r i c t l y f o l l o w e d . While t h e IG's

o f f i c e does m a i n t a i na a s e f i l esys t em, a sed on my i s c u s s i o n s w i t h t h e IG, h e r e i s n o e g u l a r

r ev i ew of h e f i l e s t o d e t e r m i n et h e s t a t u s of n v e s t i g a t i o n sa n d w h a t c t i o n t o t a k e i n a a r t i c u l a r

i n v e s t i g a t i o n . Moreover, t h e IG's o f f i c e does n o t s t r i c t l y a d h e r e t o t h e r e q u i r e m e n tof

d e s i g n a t i n g c a s e s i n o n e of t h r e e c a t e g o r i e s - open , c l o s e d a n d c l o s e d e x c e p t i o n a l . Se e

G u i d e l i n e sS e c t i o n4 . 3 . 2 . M e m b e r s of h e IG's o f f i c e h a v e d v i s e d t h a t t h e y d o o t k n o w of n y

o p e n a s e s hav ing b e e n l o s e d .

S e c t i o n F i v e of h e G u i d e l i n e sr e q u i r e s t h a t a n i n v e s t i g a t i v e c a s e f i l eb e m a i n t a i n e df o r

each i n v e s t i g a t i o n ,i n c l u d i n g a n i n v e s t i g a t i v e p l a n , chronology of e v e n t s , c o p i e s of r e p o r t s ,

p h o t o s ,c o r r e s p o n d e n c e ,e l e c t r o n i c e v i d e n c e , i s t sof h y s i c a l e v i d e n c e , c a s ec l o s i n g m e m o r a n d a ,

UBC h a r g e s , g r i e v a n c e s , a u d i t r e p o r t s a n d a n y o t h e r i n f o r m a t i o n . While t h e IG's o f f i c e

m a i n t a i n s c a s ef i l e st h e f i l e s a r e i n c o m p l e t e .

On c c a s i o n , t h e IG's o f f i c e has performed p h y s i c a l s u r v e i l l a n c e . S e c t i o n S i x of h e

G u i d e l i n e sr e q u i r e s t h a t t h e IG approve a u r v e i l l a n c ep l a n s u b m i t t e db y i s i n v e s t i g a t o r s p ri o r t o

s u r v e i l l a n c eb e i n gc o n d u c t e d . The l a n s h o u l d c o n s i d e r t h ef o l l o w i n g :

The u b j e c t of h e s u r v e i l l a n c e The n e e d o r t h e s u r v e i l l a n c e The u r v e i l l a n c et e c h n i q u e st o be employees T h e h u m a n a n d o t h e r r e s o u r c e s r e q u i r e df o r t h e s u r v e i l l a n c e The ime p e r i o d d u r i n g which h e s u r v e i l l a n c ew i l l b e conducted Whether h e r e a r e a n y e s s i n t r u s i v e t e c h n i q u e sa v a i l a b l e

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We a v e n o t seen a n y w r i t t e n s u r v e i l l a n c e p l a n s a n d h a v e found t h a t t h e IG's o f f i c e does n o t

c o n s i d e r t h e s e a r e a s , b u t i n s t e a d performs s u r v e i l l a n c e a t t h e s o l e d i s c r e t i o n of h e IG. Q u i t e

s i m p l y , h i s i s u n a c c e p t a b l ea n d t m a k e s h e s u r v e i l l a n c ep r o c e s s r i p e f o r a b u s e .

T h e G u i d e l i n e sa l s o r e q u i r e t h e l e a d i n v e s t i g a t o r a s s i g n e d t o a c a s e t o p r e p a r e a f i n a l

r e p o r t a t t h e e n d of n i n v e s t i g a t i o n . See G u i d e l i n e sS e c t i o n 8 . As o t e d , m a n y c a s e s r ema in

o p e n a r too long a n d r e n e v e rc l o s e d . I f a a s e were o b e l o s e d , however, h e r e i s n o o n e w i t h

t h e r e s p o n s i b i l i t y of w r i t i n g t h e f i n a l r e p o r t , a s t h e IG d o e s n o t a s s i g n a n y o n e a s l e a d

i n v e s t i g a t o r .

I f t h e D i s t r i c t Council s t o e v e r s e l f- m o n i t o r , t m u s t i r s thave a n f f e c t i v e , e f f i c i e n t a n d

t r a n s p a r e n tIG's f f i c e , which s a b o v e t h i c a l r e p r o a c h . The i r s ts t e p i n t h a t d i r e c t i o n i s f o r t h e

IG's f f i c e t o a d h e r e t o t h e G u i d e l i n e st h a t h a v e l r e a d y b e e n deve loped a n d o r m a l i z e d .

7 . T h e l e c t i o n for i s t r i c t Council Pres iden t

T h e 2014 D i s t r i c t Council e l e c t i o n ( f o r EST, P r e s i d e n t , Vice - P r e s i d e n t , Wa r d e n ,

Conduc to r and h r e e T r u s t e e s )y i e l d e d o n l y o n e o n t e s t , t h a t f o r t h e o f f i c e of r e s i d e n t ( i n which

Local 9 2 6 P r e s i d e n t S a l v a t o r eT a g l i a f e r r o u n s u c c e s s f u l l yc h a l l e n g e d t h e incumbent , Stephen

M c I n n i s ) . A l lo t h e r s w e r e n c o n t e s t e d . M r. e i g e r , M r. cInnis , Michael C a v a n a u g h a n d h e i r

f e l l o w s l a t e m e m b e r s ) w i l l t a k e t h e o a t h f o r t h e i r n e x t t e rms a s EST, r e s i d e n t a n d Vice -

P r e s i d e n t ,r e s p e c t i v e l y ,o n a n u a r y 14, 2015. T h e e r t i f i e d r e s u l t s , s p e c i a l c a m p a i g n e d i t i o n of

The C a r p e n t e r ,c a n d i d a t e e s s a y s a n d c a mp a i g n l i t e r a t u r e , a n d my e c i s i o n s i n two e l e c t i o n

p r o t e s t s f i l e d b y M r. a g l i a f e r r o under h e Council l e c t i o n r u l e s , a r e a t t a c h e d a s E x h i b i t6 .

8. Dockbu i lde r St e w a r d A p p oi n t m e n t s

Though I h a v e g e n e r a l l y b e e n s a t i s f i e d w i t h t h e p r o c e s s used b y h e D i s t r i c t C o u n c i lt o

a p p o i n td o c k b u i l d e r ,t i m b e r m e n a n d m i l l w r i g h ts t e w a r d s( g e n e r a l l y v i a a u s i n e s s r e p r e s e n t a t i v e

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v i s i t i n g t h e job s i t e i n q u e s t i o n a s c l o s e t o t h e s t a r t d a t e of a j ob a s p o s s i b l e ) , I h a v e t o o

f r e q u e n t l y s c r u t i n i z e d t h e appo in tmen t fo rms a n d b e e n d i s a p p o i n t e dt h a t r e p r e s e n t a t i v e shave

t a k e n l o n g e r t h a no n e w e e k o m a k e such a p p o i n t m e n t s ,m o s t f t e n i n t h e d o c k b u i l d e rc a t e g o r y

( a n d have had o d i r e c t q u e s t i o n st o s u p e r v i s o r st o e x p l a i n such i t u a t i o n s ) . I t s e e m s o me h a t

i f t h e r e p r e s e n t a t i v e r e s p o n s i b l e f o r t h e s i t e canno t m a k e t h e t r i p i n a t i m e l y m a n n e r, h i s

s u p e r v i s o r s h o u l d b e s o informed a n d a n o t h e r r e p r e s e n t a t i v eimmedia te ly d i s p a t c h e dt o t h e s i t e

t o m a k e h e a p p o i n t m e n t .

9. T h e r i a l C o m m i t t e e

T h e c u r r e n t i n c a r n a t i o n of t h e D i s t r i c t Council T r i a l C o m m i t t e e i s e x t r e m e l y c o s t

e f f i c i e n t , w i t h a v e r a g e monthly c o s t s i n t h e r ange of $4,000 t o $6,000. I h a v e n o t r e c e i v e d

c o m p l a i n t sf rom a n y o n e about t s f a i r n e s s . I would u g g e s t ,however, h a t t h e Council work w i t h

t h e IM n d r i a l C o m m i t t e e C h a i r p e r s o n st o e x a m i n e a n d implement w a y s o d e c r e a s e t h e l e n g t h

of t ime b e t w e e n t h e f i l i n g of s o m e c h a r g e s a n d t h e i r d i s p o s i t i o n , which I h a v e on o c c a s i o n

observed c a n b e m a n y months .

10. J o ur n e y m e n a n d OWL t a t i s t i c s

The o l l o w i n gsummar izes e c e n t membersh ip , OWL n d d i s p a t c h t r e n d s :

J o u r n e y m e n n good t a n d i n gon 1 1 / 3 0 / 1 4 : 1 1 , 3 7 1J o u r n e y m e n n good t a n d i n gon / 3 0 / 1 4 : 1 3 , 4 1 1Decrease n j ou rneymen: 2,040Reduct ion i n c e 1 2 / 3 / 1 0 : 3,923

M e m b e r s n a r r e a r s : 1 , 7 8 0

N u m b e r s of e r s o n s on h e OWL n 1 2 / 1 8 / 1 4 :

Local 157 4,466Local 2287 282Local 1556 c a f f o l d i n g 17 5Local 1556 Dockbuilders 3 48Local 740 15 7

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Local 2790T o t a l

D i s p a t c hS t a t i s t i c s :

845,512 c o m p a r e d o 5,500 s of 12/2010)

October 2014 A p r i l 2014 October 2013A p p r e n t i c e s 248 283 320Requests 0 3 19Shapes 354 3 8 9 3 07D e n i e d Reques t s 0 0 10Pure i s p a t c h e s 1 , 1 4 5 1,004 1 , 0 7 5T o t a l s 1 , 7 0 7 1,679 1 , 7 3 1

The October 2014 i s p a t c h f i g u r e s i n c l u d es o m e 40 r a d e s h o w i s p a t c h e s .

T o t a l a c t i v i t y f rom u l y 2014 h r o u g hSep tember 2014 o l l o w s :

J u l y 2014 2,028Augus t 2014 2,000Sep tember 2014 1 , 7 0 6

11. P r o v i s i o n a lM e m b e r s

On e c e m b e r 1 0 , 2014, h e d e l e g a t e b o d y approved a marke t e c o v e r ya m e n d m e n t o t h e

c o l l e c t i v e b a r g a i n i n ga g r e e m e n t w i t h t h e C e m e n t e a g u e h a t e s t a b l i s h e da p r o v i s i o n a lr a t e f o r

w a g e s a n d b e n e f i t s t o t a l i n g s o m e $57 e r hour l e s s t h a n 2 / 3 of h e s t a n d a r d package ) o r work

c u r r e n t l y performed on c e r t a i n h o s pi t a l i t y a n d r e s i d e n t i a l s i t e s ( d e f i n e d b y o c a t i o n a n d s i z e ) b y

non-union c o n t r a c t o r s w h o p a y n f e r i o r w a g e s o t h e i r workers m a n y of whom r e i m m i g r a n t s ) .

Every such p r o v i s i o n a l m e m b e r w i l l h a v e t o b e matched b y a journey p e r s o n a t t h e f u l l r a t e .

P r o v i s i o n a l m e m b e r s w i l l j o i n l o c a l u n i o n s , a n d r e c e i v e h e a l t h coverage a n d p r o p o r t i o n a l

p e n s i o nc r e d i t s ; t h e y w i l l p a y s t a n d a r d d u e s a n d a s s e s s m e n t s ; b u t t h e yw i l l h a v e o waive h e i r

r i g h t t o s i g n OWLs h a t r e f e r journey p e r s o n st o work a n d b e e s t r i c t e d t o a r o v i s i o n a l c a t e g o r y

OWL.

The D i s t r i c t Council w i l l n e e d t o t a k e c a r e t h a t t h e p r o p e r r a t i o of ourney p e r s o n s t o

p r o v i s i o n a lm e m b e r s s s t r i c t l ye n f o r c e d .

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i n s u p p o r t a b l e .E l e c t i o n s d o o s t m o n e y, ut h a t i s p a r t of h e i n e s c a p a b l ep r i c e oft h e democracy r e q u i r e d b y t h e Consen t Decree . E v e n f t h i s were n o t t h e c a s e ,t h e r e i s n o w a y o k n o w w h e n o r i n d e e d whether a n y subsequent vacancy i n t h ed e l e g a t eb o d y e l a t i n g t o t h e p a r t i c u l a r l o c a l union might c c u r .

P l e a s e l e t me k n o w w i t h i n t h e nex t 3 0 d a y s whether t h e f o r e g o i n gr ecommenda t ion has b e e n adopted o r r e j e c t e d .

13. Te r m i n a t i o n o f i l l O'F lahe r ty a n d Ti m Thatcher

I t w a s g r e e d a t t h e b e g i n n i n gof my e n u r e a s R e v i e w O f f i c e r t h a t , r a t h e r t h a n h a v i n gt o

p a y t w o of my n v e s t i g a t o r s a s p r i v a t e c o n s u l t a n t s ,t h e y would b e employees of h e D i s t r i c t

Council IG's o f f i c e a s s i g n e d t o my f f i c e f o r e x c l u s i v e a n d c o n f i d e n t i a l u s e . This s a v e d t h e

D i s t r i c t C o u n c i lc o n s i d e r a b l em o n e y over h e i n v e s t i g a t o r s ' m o r e h a n f o u r y e a r s of mpeccable

s e r v i c e . We l l u n d e r s t o o dt h a t t h e D i s t r i c t Council r e s e r v e d t h e r i g h t t o e n d t h e i n v e s t i g a t o r s '

e m p l o y m e n t t t h e e n d of my e n u r e . Though I had hoped t h a t t h e U n i o n w ou l d r e c o g n i z et h e

b e n e f i t of keep ing t w o such t a l e n t e d , d e d i c a t e d a n d e x p e r i e n c e dm e n on s t a f f a f t e r I completed

my e n u r e , on D e c e m b e r 17, 2014, h e y w e r e s e r v e d w i t h n o t i c e s of e r m i n a t i o n( e f f e c t i v e

D e c e m b e r 31, 2014). I t i s a s h a m e , i n c e r e t a i n i n g t h e m would h a v e b e e n so e a s y t o d o a n d

would h a v e i g n i f i c a n t l yi m p r o v e d h e c a l i b e r of h e IG's f f i c e .

To i l l a n d Ti m : am e e p l y g r a t e f u l f o r your i n g u l a r c o n t r i b u t i o n sa n d your d e d i c a t i o n

t o t r u t h a n d d u t y . You r e g o o d a n d h o n o r a b l em e n .

I I . THE BENEFIT FUNDS

A. O v e r v i e w

P u r s u a n tt o t h e S t i p u l a t i o na n d Order a t e d June 3, 2010, w a s n t r u s t e d w i t h review a n d

o v e r s i g h tof o t only h e D i s t r i c t C o u n c i l , b u ti t s T a f t- H a r t l e y f r i n g e b e n e f i tf u n d s , . e . p e n s i o n ,

a n n u i t y , w e l f a r e(or h e a l t h b e n e f i t s )a n d t r a i n i n g f u n d s . I t w a s h e f i r s tt ime h e B e n e f i tF u n d s

h a d b e e n n c l u d e dw i t h i n t h e scope of m o n i t o r ' s d u t i e s , b u t i t w a s p r u d e n tt o d o o , g i v e n t h e

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o p p o r t u n i t yt h e y p r e s e n t f o r c o r r u p t i o n a s ev idenced b y t h e Sep tember 2009 n d i c t m e n tof h e

C o u n c i l ' st h e n EST, ichael Forde , w h o w a s l s o a r u s t e e of h e F u n d s .

My n i t i a lu n d e r t a k i n g sw i t h r e s p e c t t o t h e B e n e f i tF u n d s n c l u d e di n t e r v i e w i n gF u n d s '

employees a n d o b s e r v i n gh o w h e F u n d s o p e r a t e d . W h a t found w a s a n o r g a n i z a t i o nt h a t wa s

r i p e f o r i m p r o v e m e n t . P o w e r w a s c e n t r a l i z e d i n t h e l o n g - t i m e E x e c u t i v e D i r e c t o r , o u t s i d e

c o l l e c t i o n s c o u n s e l a n d a f e w F u n d s ' s t a f f m e m b e r s w h o were c l o s e t o t hem. There w a s a

s p r a w l i n ga d m i n i s t r a t i v es t a f f w i t h i l l - d e f i n e d d u t i e s a n d r e s p o n s i b i l i t i e s . Basic p o l i c i e s a n d

p r o c e d u r e s were l a c k i n g . E n t e r i n gp a y m e n t p l a n s w i t h employers w h o were b e h i n d i n t h e i r

b e n e f i t s c o n t r i b u t i o n ss e e m e d t o b e a n e n d i n a n d of t s e l f w i t h l i t t l er e g a r d t o c o l l e c t a b i l i t y .

S e e , e . g . F i r s t I n t e r i m Report t 46-52.

A t h a t t i m e , I r e p o r t e d t h a t t h e B e n e f i t F u n d s had t o m a k e t h e f o l l o w i n gfundamen ta l

o r g a n i z a t i o n a lchanges , o s e r v e a s h e d g e s g a i n s t c o r r u p t i o n :

A Human esources m a n a g e r h o u l d b e i r e d , t h r o u g ha o m p e t i t i v e p r oc e s s ; A t a n d a r d p r o t o c o l s h o u l d b e developed f o r a d v e r t i s i n g j ob o p p o r t u n i t i e s ,

c o n d u c t i n gi n t e r v i e w sa n d e v a l u a t i n gp o t e n t i a l employees ;

A e w r g a n i z a t i o n a ls t r u c t u r e s h o u l d b e d e v e l o p e d ,combin ing u n c t i o n st h a tl o g i c a l l y belong o g e t h e ri n a i n g l e depa r tmen t i t h a n p p r o p r i a t e m a n a g e r ; No n e h o u l d b e a m a n a g e r r s u p e r v i s o r o f m o r e h a n o n e e p a r t m e n t ; There should b e a w r i t t e n d o c u m e n t i s t i n g s p e c i f i c p o s i t i o n s , t h e b a s i c d u t i e s

a n d r e s p o n s i b i l i t i e s i n v o l v e d a n d t h e pay, which s h o u l d b e c o mm e n s u r a t ew i t h t h e n a t u r e a n d volume of work d o n e ;

Per fo rmance v a l u a t i o n sof l l employees b y h e m a n a g e r a n d s u p e r v i s o r w h oa c t u a l l y s u p e r v i s e s t h a t e m p l o y e e s h o u l d b e d o n e on a y e a r l y b a s i s w i t h aw r i t t e n r e c o r d ;

B a s i c p o l i c i e s , i n c l u d i n ga n t i- d i s c r i m i n a t i o na n d s e x u a l h a r a s s m e n t , s h o u l db ef o r m a l l yr o l l e d o u t a n d r a i n i n g g i v e n ;

T r a i n i n gon l l p o l i c i e s s h o u l d b e conducted on a e a r l y b a s i s ; A Compl iance c h i e f should b e h i r e d a n d t h e a g r e e d t o Compliance program

d e v e l o p e d .

I d . a t 52.

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I n t h e l a s t f o u r a n d a h a l f y e a r s , t h e B e n e f i t F u n d s h a v e accomplished t h e s e i n i t i a l

o b j e c t i v e s a n d m u c h more . The F u n d s b e g a n m a k i n g p r o g r e s s f o l l o w i n gt h e i n s t a l l a t i o n of h e

f i r s tn e w E x e c u t i v eD i r e c t o r i n m a n y y e a r s , i n J u l y 2011. See T h i r d I n t e r i m Report t 2 8 - 2 9 .

The F u n d s r ev i ewed a n d t a r t e d t o develop a n o r g a n i z a t i o n a ls t r u c t u r e c e n t r a l i z i n gk e y u n c t i o n s

i n s e n i o r s t a f f a n d o t h e r w i s e s t r e a m l i n i n go p e r a t i o n s . Some of h e m o r e g l a r i n g d e f i c i e n c i e s ,

such a s t h e l a c k of i s c r i m i n a t i o na n d harassment r a i n i n g , were immedia te ly a d d r e s s e d . Th e

F u n d s i r s t- e v e r HR i r e c t o r w a s i r e d i n t h e second h a l f of 011. T h e head of HR a s changed

t w i c e s i n c e t h e r o l e w a s n i t i a l l ye s t a b l i s h e d . The r o l e of CCO w a s u l t i m a t e l y f i l l e d b y a n

o u t s i d e compliance p r o f e s s i o n a l . The r o c e s s has b e e n a e a l t h y one, e s u l t i n g i n what p p e a r t o

b e s o l i d a n d s u s t a i n a b l eprograms. The ongoing work of h e c u r r e n t HR i r e c t o r a n d CCO r e

d i s c u s s e di n m o r e e t a i l below.

A t t h e o u t s e t , I a l s o urged t w o reforms t o s t r e n g t h e n t h e c o l l e c t i o n of b e n e f i t s

c o n t r i b u t i o n s :(1) s i n g o b j e c t i v e c r i t e r i a t o h i r e a b l e a n d e f f i c i e n t c o l l e c t i o n s c o u n s e l ;a n d (2)

work ing w i t h t h e D i s t r i c t Council o a c q u i r e a n d u t i l i z e a v a i l a b l e hardware a n d t e c h n o l o g yt o

c a p t u r e t ime worked each d a y t j ob s i t e s e l e c t r o n i c a l l y , s o h a t t h e d a t a c a n b e e n t each d a y o

t h e D i s t r i c t C o u n c i l , t h eF u n d s , h e employers a n d t h e i r p a y r o l l d e p a r t m e n t so r p a y r o l l s e r v i c e

p r ov i d e r s ( o b v i a t i n g d i s p u t e sa n d m u c h of h e c o l l e c t i o n s i n f r a s t r u c t u r e which i s c u m b e r s o m e

e x p e n s i v ea n d u l n e r a b l et o f r a u d ) . I d . a t 6 - 7 .

A s t o t h e f i r s tof h e s e r e f o r m s , i n May 2011, h e B e n e f i t F u n d s r e t a i n e d V i r g i n i a

A m b i n d e r t o s e r v e a s c o l l e c t i o n s c o u n s e lt h r o u g h a c o m p e t i t i v ep r o c e s s a n d t h e y h a v e g r e a t l y

e n h a n c e d o l l e c t i o n s through h e p o l i c y a n d p r o c e du r e s t h e yh a v e p e a r- h e a d e da n d h e i r d i l i g e n t

work i t i g a t i n g a n d a r b i t r a t i n g c o l l e c t i o n s m a t t e r s . A s o t h e second of h e s e r e f o r m s ,t h e r e h a s

b e e n a m u l t i- f a c e t e d approach, n v o l v i n gb o t h t h e D i s t r i c t Council a n d t h e F u n d s a n d u t i l i z i n g

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t e c h n o l o g yn o t o n l y f o r e l e c t r o n i c r e p o r t i n g a t job s i t e s but o m o r e q u i c k l y i d e n t i f y d e l i n q u e n t

c o n t r i b u t i o n ss o t h a t t h e y c a n b e a c t e d on b e f o r e t h e y grow t o o s t e e p o r t o o s t a l e . This o o i s

d i s c u s s e di n g r e a t e r d e t a i l below.

G u i d e d b y t h e B oa r d o f r u s t e e s , t h e c u r r e n t E x e c u t i v eD i r e c t o r a n d h i s h a r d - w o r k i n g

s t a f f a r e e x p a n d i n g u p o n t h e s e c o r e i m p r o v e m e n t s o c r e a t e a i r s t - r a t e o r g a n i z a t i o n . Below I

d i s c u s s t h e e v o l u t i o nof h e B e n e f i tF u n d s , i s c u s s i n g a d d i t i o n a l p r o g r e s s t h a t has b e e n m a d e n

t h e l a s t s i x months , h e s u s t a i n a b i l i t yof eforms a n d h e r i s k of r o s i o n .

B. Organ iza t iona l Rest ructur ing

I n my n i t i a li n t e r i m r e p o r t s , I wrote of h e s p r a w l i n g ,s o m e t i m e s v e r l a p p i n g ,d i s j o i n t e d

a n d u l t i m a t e l yi n e f f i c i e n t o r g a n i z a t i o n a ls t r u c t u r e a t t h e B e n e f i tF u n d s ' f f i c e . See F i r s t I n t e r i m

Report t 48-50; e e a l s o S e c o n d n t e r i m Report t 20 .

The B e n e f i t F u n d s b e g a n f o c u s i n g a t t e n t i o n on t h e o r g a n i z a t i o n a l s t r u c t u r e of i t s

a d m i n i s t r a t i v eo f f i c e u p o n h e a r r i v a l of n e w E x e c u t i v eD i r e c t o r i n J u l y 2011. Within h a t f i r s t

y e a r , t h e F u n d s t r i m m e d d o w n a b l o a t e d o r g a n i z a t i o nt h a t w a s t a f f e d i n p a r t w i t h f r i e n d s a n d

r e l a t i v e s of ormer s e n i o r s t a f f a n d o u t s i d e c o l l e c t i o n s c o u n s e l ,i n t h e p r o c e s s a c h i e v i n gq u a l i t y

a n d f f i c i e n c i e s a s w e l l a s . . . s a v i n g s . Fourth n t e r i mReport t 53 .

T h e c u r r e n t Execut ive D i r e c t o r , Ry k T i e r n e y ,has r e s t r u c t u r e d t h e B e n e f i t F u n d s ' f f i c e

s i n c e b e g i n n i n gh i s t e n u r e o n p r i l 29, 013. He as r e a t e d a h r e e- t i e r e d s t r u c t u r e of x e c u t i v e

l e a d e r s h i p , m a n a g e m e n t a n d s t a f f , d e d i c a t e d t o t h e c o r e f u n c t i o n s of c o l l e c t i n g b e n e f i t

c o n t r i b u t i o n s f rom employe r s a n d e n s u r i n g r e c e i p t of b e n e f i t s b y m e m b e r s a n d t h e i r

b e n e f i c i a r i e s . The s t r u c t u r e a l s o i n c l u d e s t h e c r i t i c a l s u p p o r t f u n c t i o n s of Accounting,

I n f o r m a t i o nTechnology, Human e s o u r c e s ,a n d Compliance .

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M r. i e r n e y has u i l t a t r o n g l e a d e r s h i pt e a m a n d a c i l i t a t e d s t a f f deve lopmen t , h r o u g h

a u l t u r e of r a i n i n g a n d communica t ion . Learn ing whether about h e n u t s a n d b o l t s of e n e f i t s

a d m i n i s t r a t i o n o r computer s k i l l s - i s encouraged a n d e m b r a c e d . Meet ings f a c i l i t a t e

communica t ion . C o l l a b o r a t i o na p p e a r s t o h a v e t a k e n h o l d a s a r o u t i n e p r a c t i c e . The F u n d s '

o f f i c e i s n o l o n g e r d y s f u n c t i o n a l ,b u t c a p a b l eof a r r y i n g o u t i m p r o v e m e n t s a n d b u i l d i n g upon

t hem.

There i s o n e r a i n i n g program of which I would l i k e t o t a k e p a r t i c u l a r n o t e . This F a l l ,

w i t h t h e a p p r o v a la n d u l l s u p p o r tof h e t r u s t e e s , M r. i e r n e y b e g a n p r o v i d i n gCEBS r a i n i n g t o

i n t e r e s t e d s t a f f . (CEBS t a n d s f o r C e r t i f i e d E m p l o y e e B e n e f i t s S p e c i a l i s t ) . T h i r t y - s i x s t a f f

m e m b e r s r e p a r t i c i p a t i n g i n t h e t r a i n i n g program, which has e i g h t c o u r s e s a n d w i l l s p a n t h r e e

y e a r s . S t a f f m e m b e r s t t e n d t r a i n i n g s e s s i o n s on Tuesday v e n i n g sf rom 5:00 p .m. o 8:00 p.m.

T h e y m u s t l s o c o m m i t t ime t o s t u d y i n g a n d t a k e e x a m i n a t i o n st o b e c e r t i f i e d . The e n d r e s u l t

w i l l b e a m o r e d e e p l y knowledgeable s t a f f . E s p e c i a l l y l a u d a b l ei s t h e s t a f f ' s i n t e r e s t a n d

d e d i c a t i o n t o t h e program.

W h a t has b e e n c r e a t e d b o t h i n t e rms of h e B e n e f i tF u n d s ' r g a n i z a t i o n a ls t r u c t u r e a n d

t h e l e a d e r s h i p t e a m s deve loped o run F u n d s ' p e r a t i o n s m a k e s e n s e and works w e l l i n p r a c t i c e ,

which b o d e s w e l l f o r t h e s u s t a i n a b i l i t yof e f o r m .

D . Human esources

A s o t e d , t h e B e n e f i t F u n d s d i d n o t h a v e a Human Resources componen t , e t a l o n e a n

HR i r e c t o r o r p e r s o n n e lp o l i c i e s a n d p r o c e d u r e s ,w h e n b e g a n my e n u r e a s R e v i e w O f f i c e r .

The i r s tHR i r e c t o r w a s h i r e d i n 2011 a n d t h e r e has b e e n a n i n t e r i m d i r e c t o r a n d t w o o t h e r

d i r e c t o r s s i n c e t h e n . The u r r e n t HR i r e c t o r c a m e on board n F a l l 2014 nd , y l l a c c o u n t s ,i s

performing w e l l .

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T h e B e n e f i t F u n d s h a v e m a d e s i g n i f i c a n t a d v a n c e s i n d e v e l o p i n g p o l i c i e s a n d

p r o c e d u r e s ;h i r i n g , f i r i n g a n d promot ing s t a f f ; c o n d u c t i n gperformance e v a l u a t i o n s ;p r o v i d i n g

t r a i n i n g ; a n d f o s t e r i n g a n o v e r a l l h e a l t h y work environment . Moreover, t h e F u n d s have

c o n t i n u a l l y f o c u s e d a t t e n t i o n on h o w t h i s c o m p o n e n t i s p e r f o r m i n g a n d what changes o r

r e f i n e m e n t sa r e m e r i t e d ,a n d h e y h a v e i m p l e me n t e d h e s e improvemen t s .

The E m p l o y e e H a n d b o o k s a noteworthy e x a m p l e . P r i o r t o A p r i l 26, 2012, h e r e w a s n o

such hand book . That d a t e , t h e t r u s t e e s approved a comprehens ive h a n d b o o k developed b y

F u n d s ' s t a f f w i t h t h e a s s i s t a n c e of o u t s i d e c o u n s e l f rom K a u f f M c G u i r e a r g o l i s LLP

( KMM ). T h e F u n d s p r o v i d e d t h e h a n d b o o k t o a l l e m p lo y e e s a n d p r o v i d e d comprehensive

t r a i n i n g . Now, e v e r a l m o n t h s i n a d v a n c e of t h e o r i g i n a l e m p l o y e e handbook 's t h r e e - y e a r

a n n i v e r s a r y ,F u n d s ' t a f f a r e r e v i e w i n ga n d u p d a t i n gt h e hand book, which h e y e x p e c t t o p r e s e n t

t o t h e t r u s t e e s f o r a p p r o v a l i n J a n u a r y2015. T h e y have u n d e r t a k e nt h i s p r o j e c t b e c a u s e t h e y

b e l i e v e i t i s a e s t p r a c t i c e , n o t because of n y prompt ing b y m e .

L a t e r i n 2012, h e I n t e r i m E x e c u t i v ea n d HR i r e c t o r s developed a n HR l a n , i n c l u d i n ga

s t a n d a r d job d e s c r i p t i o n t e m p l a t e c o v e r i n gp u r p o s e , e s s e n t i a l job f u n c t i o n s , a d d i t i o n a l j ob

f u n c t i o n s ,e d u c a t i o na n d e x p e r i e n c e , a s w e l l a s o t h e r s k i l l s , f o r each of h e F u n d s ' ob p o s i t i o n s ,

a n d a o r r e s p o n d i n gm a n a g e m e n t e m p l a t e ,w i t h t h e g o a l of a i r l y a n d c o n s i s t e n t l y h a n d l i n gt h e

review p r o c e s s . T h e i n t e r i m d i r e c t o r s a l s o worked on a complementa ry s a l a r y band , which

b e c a m e mired n d i s c u s s i o n sa m o n g h e t r u s t e e s . See i f t h I n t e r i m Report t 2 9 - 3 0 . J u s t p r i o r t o

M r. i e r n e y ' s a r r i v a l i n l a t e A p r i l 2013, h e t r u s t e e s a u t h o r i z e d t h e I n t e r i mE x e c u t i v ea n d HR

D i r e c t o r s t o p r o c e e d w i t h c o n d u c t i n gperformance e v a l u a t i o n sa n d award ing modes t , and f a i r l y

uniform, a l a r y i n c r e a s e s . See i x t h I n t e r i m Report t 2 5 - 2 6 .

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I n S p r i n g 2014, h e B e n e f i t F u n d s w e n t t h r o u g h i t s f i r s tperformance e v a l u a t i o n a n d

compensa t ion c y c l e d u r i n g M r. T i e r n e y ' s t e n u r e . See Eighth I n t e r i m Report a t 2 2 - 2 3 . A s

d i s c u s s e d t h e r e i n , t h e F u n d s r e g u l a r i z e d t h e p r o c e s s s o t h a t performance e v a l u a t i o n s were

completed on a s c h e d u l e d e s i g n e d t o f a c i l i t a t e annual s a l a r y i n c r e a s e s i n A p r i l . H o w e v e r, h e

t r u s t e e s ' d i s c u s s i o n s about r a i s e s a n d bonuses a g a i n dragged on . I n l a t e M a y, h e t r u s t e e s

approved a n n c r e m e n t a lr a i s e , b u t d i d n o t approve h e bonuses M r. i e r n e y sought o award . I n

my r e p o r t , I n o t e d t h e l i n g e r i n g r e s e n t m e n t on t h e p a r t of t h e D i s t r i c t C o u n c i l t o t h e

compensa t ion of e r t a i n B e n e f i t F u n d s ' e m p l o y e e s a n d e x p r e s s e d my hope t h a t w e had s e e n

t h e l a s t v e s t i g e of h i s r e s e n t m e n tg i v e n t h e d a m a g e t c o u l d cause t o M r. i e r n e y ' s a b i l i t y t o

h i r e a n d e t a i n q u a l i f i e d p e r s o n n e la n d h u s b e s t - s e r v et h e m e m b e r s . I d .

A t h e N o v e m b e r 4, 2014 A d m i n i s t r a t i v eC o m m i t t e e m e e t i n g ,t h e d i s c u s s i o n r e g a r d i n g

award ing h o l i d a y bonuses t o B e n e f i t F u n d s ' employees w a s not p a r t i c u l a r l y e n c o u r a g i n g .

E x e c u t i v e D i r e c t o r T i e r n e y r e q u e s t e d a u t h o r i z a t i o n t o a w a r d h o l i d a y bonuses t o s t a f f , a n d

d i r e c t o r s . The i s t r i c t Council r u s t e e s opposed t h e r e q u e s t , e x p r e s s i n g t h es e n t i m e n tt h a t t h e i r

U n i o n m e m b e r s d o o t g e t b o n u s e s .

T h e d i s c u s s i o n r e g a r d i n g award ing bonuses c o n t i n u e d i n t o D e c e m b e r. The D i s t r i c t

Council t r u s t e e s e x p r e s s e d w i l l i n g n e s s t o g i v e $500 bonuses t o s t a f f m e m b e r s , u t r ema ined

opposed t o award ing a n y bonuses o m a n a g e r s a n d d i r e c t o r s . T h e employe r r u s t e e s a s k e d t h e

Council t r u s t e e s t o r e c on s i d e r , n o t i n g a m o n g o t h e r t h i n g s t h a t t h e F u n d s h a d performed w e l l

f i n a n c i a l l y , t h e d i r e c t o r s , m a n a g e r s a n d s t a f f m e m b e r s had s h o w n d e d i c a t i o n a n d p r o v i d e d a

b e t t e r l e v e l of e r v i c e t o m e m b e r s , n d m a n y of h e employees were p a r t i c i p a t i n g i n t h e CEBS

program on t h e i r own i m e . The employer t r u s t e e s s t a t e d t h a t i n t h e i r p r o f e s s i o n a lj u d g m e n t ,

t h e U n i o n p r o p o s a l t o s imply a w a r d $500 t o each s t a f f m e m b e r ( e x c l u d i n g m a n a g e r s a n d

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d i r e c t o r s ) i s s h o r t s i g h t e d a s i t d o e s not reward t h e h i g h e s t p e r f o r m i n gm e m b e r s of h e B e n e f i t

F u n d O f f i c e . This s n o t t h e s i g n a l we w a n t o s e n d t h e m . E x h i b i t 7 . I v i e w h e p o i n t a s w e l l

s t a t e d a n d u p p o r t e d .

T h e B e n e f i t F u n d s a r e now p r e p a r i n g f o r t h e n e x t performance e v a l u a t i o n a n d

compensa t ion c y c l e . T h e HR l a n i s a l s o b e i n g r e v i s e d . By e a r - e n d ,m a n a g e r s r e t o complete

j ob d e s c r i p t i o n s f o r a l l of h e i r s t a f f . R e n e w e d a t t e n t i o n t o t h e s a l a r y b a n d w i l l f o l l o w . I

u n d e r s t a n df r o m F u n d s ' t a f f t h a t performance v a l u a t i o n sw i l l b e conducted a r l y nex t e a r a n d

t h a t compensa t ion i s s u e s w i l l l i k e l y b e f r a m e d f o r t h e t r u s t e e s b y March . I n my view, h e

t r u s t e e s s h o u l d develop a p o l i c y f ramework f f o r d i n g t h e E x e c u t i v eD i r e c t o r a n d HR i s c r e t i o n

t o a w a r d s a l a r y i n c r e a s e s ,i n c l u d i n gbonuses , i t h i n a c e r t a i n b u d g e t . A n n u a l s a l a r y i n c r e a s e s

a r e a n o p p o r t u n i t yt o e n h a n c e performance a n d b o o s t m o r a l e ,i f p r o p e r l y m a n a g e d . The r u s t e e s

s h o u l d n o t m i c r o m a n a g e h e p r o c e s s i n a n n p r e d i c t a b l ef a s h i o n .

E . C o m p l i a n c e

O n e of my e a r l i e s t formal r e c o m m e n d a t i o n s t o t h e B e n e f i t s F u n d s w a s t o h i r e a

compliance o f f i c e r a n d develop a compliance a n d e t h i c s program i n accordance w i t h C h a p t e r8

of h e U.S . e n t e n c i n gG u i d e l i n e s . See F i r s t I n t e r i m Report t 6 , 53. I n i t i a l l y , t h e F u n d s m a d e

n o s e r i o u s p r o g r e s s t owards implemen t ing a t r u e compliance program. E v e n t u a l l y ,i n A p r i l

2012, h e F u n d s ' n i t i a lCompliance a n d E t h i c s Program ( CEP ) a s i n a l i z e d a n d approved b y

t h e Board of r u s t e e s a n d F u n d s ' mployees were s s i g n e dcompliance o l e s , t h e HR i r e c t o r a s

Chief Compl iance O f f i c e r a n d h e B e n e f i t s D i r e c t o ra s D e p u t y Chief Compliance o f f i c e r . When

t h e E x e c u t i v eD i r e c t o r a n d HR i r e c t o r were d i s m i s s e d l a t e r t h a t y e a r , however, h e B e n e f i t s

D i r e c t o r b e c a m e n t e r i m E x e c u t i v eD i r e c t o r a n d t w a s o t p o s s i b l e f o r h e r t o a c t e f f e c t i v e l y a s

Chief Compl iance f f i c e r . See F i f t h I n t e r i m Report t 27.

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T h e B e n e f i tF u n d s r u s t e e s c a m e o b e l i e v e t h a t t h e i r n e e d s would b e b e s t- s e r v e d b y a n

o u t s i d e compliance p r o f e s s i o n a l . I n J a n u a r y 2013, t h e y r e t a i n e d J u l i e Block a s Chief

Compliance O f f i c e r . See i x t h I n t e r i m Repor t t 24. M s . lock s on i t e a t t h e F u n d s two d a y s

a w e e k a n d o t h e r w i s e a v a i l a b l e b y p h on e a n d emai l o t h e F u n d s ' r u s t e e s , l e a d e r s h i p a n d t a f f .

She r e g u l a r l y works w i t h t h e E x e c u t i v eD i r e c t o r a n d she r e p o r t s t o t h e t r u s t e e s a t t h e i r Board

m e e t i n g s . She has a i r e c t r e p o r t i n g l i n e t o t h e t r u s t e e s a n d m a y communica te w i t h t h e m t o t h e r

t i m e s i f she s e e s f i t . M s . lock has l s o d i r e c t l y a d d r e s s e dt h e Court on a n u m b e r of c c a s i o n s ,

i n c l u d i n gm o s t e c e n t l y a t t h e N o v e m b e r o n f e r e n c e .

I n h e r t w o y e a r s a s CCO, i t h t h e s u p p o r t of h e t r u s t e e s a n d h e E x e c u t i v eD i r e c t o r , M s .

Block has developed a o b u s tcompl iance program h a t i s w e l l- i n t e g r a t e d i n t o F u n d s ' p e r a t i o n s .

the final report of the review officer revision

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