LABORERS UNION SEES END TO GOVERNMENT OVERSIGHT

Final agreement eliminates threat of RICO Consent Decree,
has no provisions for further extension

Washington, D.C. -- The Laborers' International Union of North America (LIUNA) and the U.S. Department of Justice have successfully concluded negotiations for a ground-breaking closing agreement that foresees the end of the government's oversight agreement with the Union. The new agreement, approved by DOJ and the Union's General Executive Board, replaces an interim agreement that expires on January 31, 2000. It represents an historic achievement in union reform and democracy.

"This agreement is a clear acknowledgment by the government that our Union's innovative internal reforms have been effective in ridding the influence of organized crime and corruption, and in building a Union that is more open and responsive to its members," said LIUNA General President Terence M. O'Sullivan.

LIUNA's internal reform programs were adopted in 1995 and featured an internal code of ethical practices overseen by independent officers recognized for their integrity and well respected by their peers. The Union also implemented new job referral rules for its affiliates in order to eliminate abuse in the hiring halls, and approved a number of new policies to promote more democratic procedures and to eliminate the risk of corruption.

In addition, LIUNA substantially changed its constitutional procedures for electing the members of its General Executive Board and in 1996, retained an independent Elections Officer to oversee the election of Convention delegates, the Convention itself, and the first ever direct membership election for General President. In those 1996 elections, the members approved a referendum stipulating that all members of the General Executive Board will be subject to direct election by the membership beginning in 2001.

"In the five years since these reform programs were first adopted, LIUNA has made extraordinary strides in eliminating the influence of organized crime and corruption," explained LIUNA GEB Attorney Robert Luskin, who is responsible under the internal reform program for the prosecution of disciplinary actions and trusteeships.

More than 200 individuals have been removed from office, expelled from the Union, or forced to resign under pressure since 1995. Two dozen LIUNA affiliates, representing more than 68,000 members -- including locals and district councils in New York City, Buffalo, New Jersey, and Chicago -- have been placed under supervision or trusteeship. In each instance, the supervisions or trusteeships have resulted in locals and district councils that have operated honestly, fairly, and democratically.

Since 1995, as part of its original agreement with LIUNA, the government has retained the right to file a Consent Decree that would place the entire Union under the control of a federal court if its internal reforms failed to prove effective. The initial three-year agreement between LIUNA and the government was modified and extended for one year in 1998, and again in 1999.

The new, final agreement that will take effect on February 1, 2000, eliminates the threat of a RICO Consent Decree and any possibility of placing the Union into federal court receivership. Rather, the agreement commits LIUNA to continuing its existing internal reform programs without substantial change, a policy to which the General Executive Board has consistently pledged itself in any event. Should the government determine, while the agreement is in effect, that LIUNA is contemplating a material change in its reform policies, it could ask a court to determine whether the change impairs the reform effort. In the agreement, LIUNA undertakes to maintain its existing programs without change until it can be decided whether or not the modification is a material change. In addition, the agreement recognizes that these internal reform programs remain subject to reasonable budgetary constraints.

LIUNA and the government have also agreed on procedures for oversight of its 2001 election for General Executive Board. Professor Stephen Goldberg of Northwestern University will again serve as the independent Elections Officer for the 2001 elections and has agreed to a budget that is significantly less than his 1996-1997 budget.

The new agreement will expire following LIUNA's 2001 General Executive Board elections. However, LIUNA's General Executive Board has agreed to maintain and support the internal reform programs through the 2006 Convention. The delegates at that Convention may change or modify these programs so long as the Board has not solicited or supported such action. There is no provision for any extension or renewal of the final agreement.

"The unique and unprecedented success of LIUNA's internal reform programs is a testament to the dedication, commitment, and trust of our hundreds of thousands of members throughout the United States and Canada," said General President O'Sullivan. "With their support, our Union not only has survived and overcome the most serious challenge in its history, but also has organized thousands of new members. Moreover, LIUNA at the same time has continued to develop many innovative programs to improve the lives of our members and their families."

Initiatives O'Sullivan pointed to included the Union's innovative health and safety programs, job and apprenticeship training, labor-management cooperation efforts in order to develop new work opportunities, and continued commitment to organizing and the establishment of regional organizing funds. "This new, closing agreement with the government marks yet another milestone on LIUNA's path of growth, innovation, and progress," added O'Sullivan.

Founded in 1903, LIUNA represents more than 800,000 workers in construction, environmental remediation, maintenance, food service, health care, clerical, and other occupations. The Union also has members in state, local, and municipal government, and postal service.

This Agreement ("Agreement") is entered into this 18th day of January, 2000, between the Laborers' International Union of North America (hereinafter referred to as "LIUNA") and the United States of America, by and through the Assistant Attorney General for the Criminal Division, James K. Robinson, and the United States Attorney for the Northern District of Illinois, Scott R. Lassar.

WHEREAS, on February 13, 1995, following extensive negotiations, the United States and LIUNA entered into an agreement which included an agreed upon contingent consent decree, designed to ensure that LIUNA and all locals and other entities within LIUNA are rid of any corrupting influence, including the influence of organized crime;

And WHEREAS, on January 14, 1998, LIUNA, and the United States extended the agreement until January 31, 1999; and thereafter entered into a new agreement effective through January 31, 2000 (collectively, the "Predecessor Agreements");

And WHEREAS, in accordance with the foregoing Predecessor Agreements, LIUNA, with the cooperation and assistance of the United States, adopted and implemented a program of internal reforms to seek the elimination of any corrupting influence within LIUNA and its affiliates and to ensure that all members of LIUNA have the opportunity freely and democratically to participate in its affairs;

And WHEREAS, the program of internal reforms (collectively, the "Internal Reform Programs") has included the adoption and implementation by the General Executive Board of LIUNA of the LIUNA Ethics and Disciplinary Procedure, the LIUNA Ethical Practices Code, the Amended Job Referral Rules, various policies designed to ensure that union funds are not used for improper purposes and that persons appointed to responsible positions are free from any corrupting influence, and amendments to the International Union Constitution to provide for appointment of an Elections Officer to guarantee that the election of members of the General Executive Board is free, fair and democratic;

And WHEREAS, the United States and LIUNA agree that the Internal Reform Programs have been effective and have achieved substantial and significant success in eliminating corrupting influence within LIUNA and ensuring that the members of LIUNA may freely and democratically participate in its affairs;

And WHEREAS, the United States and LIUNA agree that it is desirable that such responsible and cost-effective Internal Reform Programs should remain a component of LIUNA;

And WHEREAS, the United States has given consideration for this agreement by forbearing on its right to file a civil action against LIUNA and implement the previously negotiated consent decree;

And WHEREAS, the United States and LIUNA agree that this is an enforceable agreement designed to ensure the continuation of the Internal Reform Programs;

NOW, THEREFORE, LIUNA acting by and through its General Executive Board and the United States agree as follows:

1. (a) LIUNA shall continue to support the Internal Reform Programs established for the purpose of ensuring that LIUNA is free from any corrupting influence and that individual members of LIUNA are permitted freely to participate in its affairs, and LIUNA shall take no action that will materially impair the efficacy of the Internal Reform Programs.

(b) LIUNA shall not make any material change to the established Internal Reform Programs (a "Material Change") without securing the prior approval of the United States, which shall not be withheld unreasonably. A Material Change shall, without limitation, be deemed to include any of the following:

(2) The removal without good cause of the Elections Officer, GEB Attorney, Inspector General, Independent Hearing Officer, or Appellate Officer, or, in the event of their removal, resignation or incapacity, the appointment without consent of the United States of a successor to any of the foregoing officers. Pursuant to Section 3 of the LIUNA Ethics and Disciplinary Procedure, the General Executive Board agrees to extend the term of the General Executive Board Attorney until the 2006 General Convention.

(3) The failure of LIUNA to furnish reasonable funding to the Elections Officer, the GEB Attorney, the Inspector General, the Independent Hearing Officer, or Appellate Officer sufficient for them to perform their duties as set forth in the Ethics and Disciplinary Procedure, Ethical Practices Code, and LIUNA Constitutions; such funding must take into consideration reasonable budgetary constraints and priorities so as to ensure the integrity and effectiveness of the Internal Reform Programs while also recognizing LIUNA's legitimate need to maintain other programs and services for members and affiliates and to operate in a fiscally sound and prudent manner consistent with applicable provisions of the LIUNA Constitutions and with principles of fiduciary responsibility. LIUNA may continue to discuss with such officers, as LIUNA has in the past, accommodations and modifications designed to save the union cost and expense without materially impairing the efficacy of the offices.

(4) The failure of LIUNA to fulfill its obligations or commitments set out in the LIUNA Constitutions and/or any written agreements external thereto with regard to the Elections Officer in connection with the 2001 or 2006 International Elections.

(5) The failure of LIUNA to implement or abide by final decisions of the Inspector General, the GEB Attorney, the Independent Hearing Officer, the Appellate Officer or the Elections Officer are within the scope of their authority under the LIUNA Constitution.

(c) Professor Stephen B. Goldberg shall be the Elections Officer, and Robert E. Bloch and Henry E. Murray, the Deputy Elections Officers, for the 2001 International Election. LIUNA agrees to retain an Elections Officer to run the 2006 International Election.

(d) The budget for the conduct of the 2001 International Election and certain other matters related to the 2001 International Election as well as the mechanism for the review of the decisions of the Elections Officer shall be determined by the parties prior to January 14, 2000, and the agreed terms shall become part of this agreement, binding upon the parties and the Elections Officer, Inspector General, General Executive Board Attorney, Independent Hearing Officer, and Appellate Officer.

(a) LIUNA hereby agrees to accept service of process in the Enforcement Action accomplished by certified mail, return receipt requested, upon both the GEB Attorney and the LIUNA Inspector General; and

(b) LIUNA hereby waives any challenge to venue and to personal jurisdiction over the Enforcement Action in the United States District Court for the Northern District of Illinois; and

(c) LIUNA hereby agrees that a demonstrated breach of its obligations under this Agreement shall constitute irreparable harm to the interests of the United States, that the United States has no adequate remedy at law, and that the United States is entitled to injunctive relief requiring compliance with this Agreement; and

(d) LIUNA hereby agrees that the only issue to be adjudicated in the Enforcement Litigation is, with respect to paragraph 1(a), whether it has materially complied with its obligations under paragraph 1(a) or, with respect to paragraph 1(b), whether the proposed change to the Internal Reform Programs is a Material Change within the meaning of this Agreement; and

(e) LIUNA hereby agrees to stay implementation of any disputed change pending entry of final judgment in the Enforcement Litigation, and consents to the entry of an interlocutory injunction enjoining any disputed change pending final adjudication in the Enforcement Litigation; and

2. Representatives of LIUNA shall continue through the 2006 general election to meet and confer, on a periodic basis, with representatives of the United States and to submit periodic reports of LIUNA's progress and activities at the request of the United States. LIUNA shall furnish without delay any information the United States deems necessary to the exercise of its rights under this Agreement. The government shall continue to provide lawful assistance and cooperation to representatives of LIUNA in working to achieve the goals of this Agreement and the Internal Reform Programs

3. This Agreement constitutes the whole, complete, and entire understanding of the parties with respect to all matters recited herein. This Agreement shall not be subject to alteration, modification, or amendment whatsoever except by writing, signed by both parties and approved by LIUNA's General Executive Board.

4. This Agreement shall expire on September 30, 2001, or after certification of the 2001 general election, whichever is later, except that:

(a) LIUNA's obligation to comply with the duly authorized rules, procedures, and decisions of the Elections Officer for the conduct of the 2001 and 2006 nomination/election of Convention delegates, the 2001 and 2006 General Convention, and the 2001 and 2006 nomination and election of the General Executive Board shall remain enforceable in accordance with paragraph 2 of this Agreement through such time as the Elections Officer shall certify the foregoing elections; and

(b) LIUNA shall not prior to the 2006 General Convention make any Material Change to the established Internal Reform Programs. Any such action shall remain subject to the provisions of paragraphs 1 and 2 of this Agreement.

(c) The General Executive Board agrees to support the Internal Reform Programs through the 2006 General Convention and further agrees that it shall not directly or indirectly offer, solicit, sponsor, or enact any resolution, proposal, constitutional amendment or take any other action through the 2006 General Convention which would cause or result in any material change in the aforesaid Internal Reform Programs and that would thereby materially impair the efficacy of such programs. Any such action shall remain subject to the provisions of paragraphs 1 and 2 of this Agreement.

6. This Agreement concerns contractual obligations only, and nothing herein shall limit or in any way waive or release any administrative or judicial civil claim, demand or cause of action, whatsoever, or any criminal matter or case, of the United States or its agencies. Moreover, this Agreement is limited to the United States Department of Justice and cannot bind any other federal agency or any state or local prosecuting, administrative or regulatory authority, except as expressly set forth in this Agreement.

7. This Agreement is between LIUNA and the United States only. It is not intended, does not, and may not be relied on by any person or entity not a party hereto to create any rights, substantive or procedural, enforceable at law.

LABORERS' INTERNATIONAL UNION THE UNITED STATES OF AMERICA

OF NORTH AMERICA

This Supplemental Election Agreement is entered into this 18th day of January, 2000, between the Laborers' International Union of North America (hereinafter referred to as "LIUNA") and the United States of America, by and through the Assistant Attorney General for the Criminal Division, James K. Robinson, and the United States Attorney for the Northern District of Illinois, Scott R. Lassar.

This document memorializes the agreement between the United States and LIUNA with respect to the union's international elections and supplements the Agreement between the United States and LIUNA (attached hereto) and is enforceable thereunder. As in any negotiation, these agreements are the product of the give and take of compromise and both sides have the expectation that the letter and spirit of the agreements will be respected in their entirety in deference to the delicate and difficult process which produced these agreements.

Elections Officer. Professor Stephen Goldberg will serve as Elections Officer for the 2001 LIUNA International Election. His deputies will be Robert Bloch and Henry Murray.

Budget. LIUNA will adequately fund the Elections Officer so as to ensure a free, fair, and democratic election. LIUNA has approved a budget in the amount of $3.8 million to fund the Election Officer operations for the 2001 International Election. There shall be available an additional sum of up to $600,000, which may be expended only if the Elections Officer certifies that such further expenditures are necessary to ensure that the election is free and fair. If the Elections Officer determines that an emergency exists that will force him to exceed $4.4 million, he will immediately inform both LIUNA and the Department of Justice of the need and justification for additional funding. LIUNA will consider any such request in light of its duty to hold free and fair elections and its duty to act in a fiscally responsible fashion. If the Department of Justice determines that LIUNA has acted unreasonably in denying such a request, LIUNA agrees that the Department can seek judicial review of LIUNA's actions under the settlement Agreement.

Mail Balloting. The General Executive Board shall, acting pursuant to its authority under Article II, Section 2(e) of the International Union Constitution, amend Article VII, Section 5 of the International Union Constitution to provide in relevant part as follows:

The Elections Officer shall have authority to determine the method of election of the General President, the General Secretary-Treasurer, Vice Presidents at Large, and District Vice Presidents, provided that the method of election in a particular local shall be the same for all officers. Members of all Local Unions shall be entitled to vote for candidates for the offices of General President, General Secretary-Treasurer, and Vice Presidents at Large. Only members from Local Unions within an Electoral District shall be entitled to vote for candidates for the office of District Vice President from their respective District, as set forth in Article VIII, Section 2(a-ix) of the International Union Constitution. The election will be held at a time set by the Elections Officer, but no less than 60 days and nor more than 80 days following the close of the regular Convention. The candidate receiving the highest number of votes cast shall be considered elected. In the event that there is no contest for any particular office, the Secretary of the Convention may declare the candidate to be elected upon motion made and adopted to do so.

Ballot Threshold Requirements. The General Executive Board shall, acting pursuant to its authority under Article II, Section 2(e) of the International Union Constitution, amend Article VII, Section 4 of the International Union Constitution to read as follows:

Section 4. In order to stand for election, a candidate must be nominated by duly elected delegates by secret ballot at the Convention. In order to be nominated for the office of General President, General Secretary-Treasurer, or Vice President at Large, a candidate must secure the votes of at least ten percent of all delegates eligible to vote. In order to be nominated for the office of District Vice President, a candidate must secure the votes of at least ten percent of all delegates eligible to vote from the Electoral District served by such Vice President. Any delegate may place in nomination the name of any member in good standing for the offices of General President, General Secretary-Treasurer, Vice President at Large, and District Vice President otherwise meeting the qualifications for office specified in Article VI, Section 4 of the International Union Constitution.

Nomination and Election of Delegates at the Same Meeting. The General Executive Board shall, acting pursuant to its authority under Article II, Section 2(e) of the International Union Constitution, amend the International Union Constitution by deleting Article V, Section 9(e) and by amending Article V, Section 9(c) to read as follows:

A Local Union shall not conduct nomination and election of delegates to the Convention at the same meeting. No less than 14 days prior to said nominations meeting, notice thereof shall be mailed by the Secretary-Treasurer to each good-standing member of the Local Union at his last-known address, and such notice shall list the number of delegate positions to be filled and the time and place of such meeting. Notice shall also be sent to the Elections Officer, who must receive said notice no less than seven days before the meeting. If, following the close of nominations and prior to the election, it is discovered that one or more of the nominees is disqualified to run, that person shall be disqualified. Further nominations to fill the position of the disqualified member shall be accepted, if, but only if the disqualification brings the number of nominees below the number of delegates allocated to the Local Union. If, at said nomination meeting candidates for the position of delegate are unopposed, the nominees shall be declared duly elected.

Absentee Voting. LIUNA has agreed that the General President shall issue a variance from the provisions of Article V, Section 9(f) of the International Union Constitution in order to allow absentee voting for the election of delegates.

Working at the Calling. The LIUNA General Counsel has agreed to provide additional guidance on this qualification for office by July 1, 2000.

Declaration Date for Candidacy. The General President shall issue a variance from the provisions of Article VII, Section 2 of the International Union Constitution to allow candidates to declare their candidacy no later than fifteen (15) days before the start of the Convention.

GEB/Regional Manager. The General Executive Board shall, acting pursuant to its authority under Article II, Section 2(e) of the International Union Constitution, amend the relevant provisions of Article VI, Section 7 of the International Union Constitution to read as follows:

. . . the annual salary of each Vice President shall be $25,000, provided that if the Vice President's total compensation from LIUNA and its affiliated or subordinate bodies is less than $57,000, LIUNA will pay the Vice President an additional amount to bring the Vice President's total annual compensation from LIUNA and its affiliated or subordinate bodies to $57,500.

Adjudication of Election Protests. The General President shall issue a variance from the provisions of Article V, Section 6 of the International Union Constitution to require that all protests in connection with the 2001 nominations and elections of Convention delegates or the General Executive Board shall be within the jurisdiction of the Elections Officer, rather than the General Secretary-Treasurer or the Credentials Committee.

Appellate Review of Elections Officer Decisions. The General Executive Board shall, acting pursuant to its authority under Article II, Section 2(e) of the International Union Constitution amend Article VII, Section 9 of the International Union Constitution to read as follows:

Section 9. The Appellate Officer shall have authority to review and pass upon any decision of the Elections Officer in accordance with procedures established by the Appellate Officer, who shall affirm the decision of the Elections Officer unless it is determined that the Elections Officer acted contrary to the terms of the International Union Constitution, the Uniform Local Union Constitution, the Uniform District Council Constitution, governing law, or any agreement between the United States and LIUNA with respect to international elections; or with respect to the exercise of his authority in accordance with Section 8(c) above, it is determined that the Elections Officer abused his discretion.

Rule-Making Authority. The parties agree that the Elections Officer's authority to promulgate election rules pursuant to Article VII, Section 8(b) of the LIUNA International Union Constitution includes the authority to issue rules similar to those utilized in 1996, and/or to those suggested in Appendix "A" to the Elections Officer's report of February 11, 1997. The Elections Officer's rule-making authority may not be used to alter any of the agreements that the parties have reached or to amend the terms of the LIUNA Constitutions.

Elections Officer in 2006. LIUNA agrees that an independent Elections Officer will conduct the 2006 International Election and will not be appointed without the agreement of the United States.

Rights of Third Parties. This supplemental agreement between the United States and LIUNA is not intended to, does not, and may not be relied on by any person or entity not a party hereto to create any rights, substantive or procedural, enforceable at law.