Monday, June 16, 2008

The Sting, Callahan’s Investigation

Dirty Tricks Scandal at Local 157- Part Two

Since the 2005 appointment of William Callahan as the new Independent Investigator, Callahan’s firm Unitel has failed to achieve anything close to the results seen under his predecessor Walter Mack.

Through extensive evidence-gathering, during Mack’s tenure as Independent Investigator, Mack revealed widespread violations of the job-referral rules among shop stewards, business agents, and journeymen, and significant instances of job site corruption in which contractors operated “cash jobs” without detection or intervention by the District Council.

This is in stark contrast to Unitel’s tenure which ‘‘has been marked by incomplete and slow-moving investigations” and “virtually no new evidence of corruption.”

In a scathing petition , filed on September 14, 2007 by the United States attorney in Manhattan, Michael J. Garcia called for ousting Callahan as the independent investigator, saying he had done far too little to clean up the union.

Mr. Garcia asserted that Mr. Callahan had failed to pursue evidence that Mr. Mack had developed about off-the-books work, fraud against the union and organized crime involvement in construction at the Cipriani banquet hall at 200 Fifth Avenue at 23rd Street. Among the evidence given to Mr. Callahan, federal prosecutors said, were firsthand reports that two convicted felons, ''known labor racketeers,'' were at the construction site.

The United States attorney said that Mr. Callahan's follow-up report reflected no further investigation and no indication that he had interviewed witnesses or took depositions.

When Mack was hired in 2003 he was told by union officials that the big problems, the kind that sent people to prison, had long been resolved. They said, “Everything is on the up-and-up. We have the greatest anti-corruption program there ever was,” Mack recalled.

Mack however heard differently from members who called in complaints—mostly anonymously—via a telephone hotline. By the end of his first year on the job, Mack had detected multiple problems, some of them systemic to the way the union operated. Mack had found many job sites where companies had paid off union officials so that carpenters could be employed off the books, with no benefits or overtime and the union's inability or unwillingness to detect or stop it.

After Mack's termination by the union, he compiled a half-dozen memos on probes he had been forced to abandon and gave the memos to Callahan.

Instead of taking action to uncover corruption on job sites (like his predecessor) or determine how the District Council allowed it to occur—Callahan preferred to rely on “investigative plans”, which require union representatives to make a number of job site visitations scaled by a gradient developed by the union’s anti-corruption committee.

The “investigative plans” relinquishes the Independent Investigator’s responsibility, putting the responsibility for anti-corruption investigations back in the hands of the union’s anti-corruption program that Mack determined to be “nearly worthless.”

The anti-corruption committee is composed of members of the district council (Maurice Leary, Director of Operations, Scott Danielson, the out-of-work list supervisor, Mike Murphy who serves as investigator and Counsel Gary Rothman of O’Dwyer Berstein) “who do not have any formal investigative training or experience; do not have a handbook of investigative procedures or written guidelines and cannot on its own do much more than inquire into allegations of improper conduct.”

The committee is also hampered by its limited resources and a “lack of training which restricts its effectiveness.” Further, it has increasingly relied on Callahan’s office to establish and take investigative initiatives.

These “investigative plans” are the same “investigative plans” that the union used against other suspected cash contractors that proved to be singularly ineffective in uncovering years’ and millions of dollars’ worth of corruption.

Walter Mack reported, the “investigative plan” the union implemented and the one proposed by Unitel—called for frequent visits by business agents. However, shop stewards on the targeted jobs “typically . . . seemed to know in advance when a business agent was expected,” making it easy for them to conceal the frauds taking place on their job sites. The District Council’s “investigative plan” thus “had not yielded any significant results,” and Mack concluded that it was “ineffectual in its conception and its execution.”

Sources speculate that operatives close to District Council President Peter Thomassen who persuaded judge Haight to let him name Callahan to replace the highly aggressive Walter Mack supplied Callahan the information about the local 157 officials to help improve Callahan’s sagging creditability and to remove any local 157 opposition to his re-election.

An inside source said, Lawrence D'Errico the Recording Secretary/business representative for local 157 was tipped off and knew about the pending local 157 investigation.

Although D'Errico is a longtime ally of former Local 157 President Hanley, he kept silent about his knowledge of the investigation and trap being set to snare the unsuspecting local 157 officials.

D'Errico's violation of trust did not start with the local leaders, sources say D'Errico knew, supported and concealed from the local 157 membership Thomassen's secret 2001 back door deal to “bargain away the job referral rules.”

D’Errico who has strong ties to Thomassen serves as a trustee to the NYCDCC Benefit Funds which Thomassen is chairman and is one of his most ardent supporters. As chairman of the benefit funds, “Thomassen doled out perks to curry favor with supporters” sources say.

Thought-out 2007 D'Errico played by the rules, carefully updating his activity records and keeping accurate attendance records, while turning a blind eye to the activities of the local 157 officials, who were conducting business as usual.

A close source that regular played golf with D’Errico for years, thought it strange and wondered why D'Errico was spending less time on the golf course in 2007 then prior years. “He played golf all the time with the other officials then in 2007 he started to play less” this source said.

In the fall of 2007 the stage was set for the unsuspecting local 157 leaders to take the fall.

Callahan's investigation which started with the anonymous tip covered the period January 15, to October 15, 2007 and uncovered among other things detailed telephone records, forged time sheets, and other records showing that the local officials had not completed their activity sheets, had not conducted regular job site visits and were not even at work when they reported themselves as working a regular day.

On November 13, Callahan delivered his (still sealed) report to council leaders. Council leaders met on November 17 and led by Thomassen decided to have the local 157 officials fired sources say.

On Monday November 19, 2007 Local 157 leaders Hanley, Dilacio and Kennedy were given an option to resign or be fired within two days. Business representative/trustee Danny Demorato was given a pass and suspended for two-weeks and reassigned to local 608 because he was not considered a threat to Thomassen's 2008 re-election bid and pleaded with council leaders for his job saying that he will "never do it again."

On Wednesday November 21, Hanley and Kennedy came into council offices and signed resignation papers; Dilacio did not appear and was fired.

Coincidentally D’Errico was conveniently and safely far away on a hunting vacation while the scandal was unfolding in local 157. When D’Errico returned to work on Monday November 26, 2007, the Coup d'état of Local 157 that began with an anonymous telephone call was complete, D'Errico was appointed the “new leader” of local 157 and fully in Thomassen’s camp.

Rank and file members were shocked and immediately suspected foul play raising questions about Callahan’s targeted investigation of local 157 business representatives.

“This is a witch hunt against local 157”, “it’s a rail road job”, “this is all political”, said several members.

Members also questioned why only local 157's officers were scrutinized and investigated about their attendance records. Asks one disgruntled nail-driver: "Did Callahan check any other locals or the council to see where their officers are all day?" “How is it D’Errico gets promoted and the other four officials removed, D’Errico was doing the “same thing” questioned another outraged member.

Why did Callahan’s investigation “stop short and not probe the councils own failings or determine how the council allowed it to occur” an inside source said. The business agents are council employees, “where is the accountability at the district council?”

This whole investigation is a “sham and effort to distract attention from the failings of the district council.”

Insiders say there is a lot of tension lately at the District Council. There are clashes between staff loyal to EST Forde who was acquitted on June 10, of taking bribes from mobsters to allow nonunion workers on Manhattan construction sites and President Thomassen.

In the end the last laugh may be on Thomassen, one major Thomassen supporter confided a sentiment many are feeling: “If Pete continues in this manner don’t expect everyone to go along with it.”

Next Week part three: The Trusteeship, Defrauding the Membership

Series at a glance:


  1. Think about it, Callahans so called " Stumbling onto credible evidence" amounts to nothing short of more criminal behavior for reasons that as far as I know - And I do know - are two fold minus any internal moves to quash political opponents. That is what I don't know about so allow me to concentrate on the prior.-------

    First there's Callahans precise placement by the NYCDCC when haight asked for suggestions.
    A calculated move when Macks removal motions went in. The DC has to keep that charade going so what was obvious to the members but less obvious to a trained corruption investigator came out as sacrificial Lambs. This is only my opinion but despite the friction which masqueradingly exists between the delegates @ 157 & the DC they remain the same enterprise. Meaning how else could they keep their pensions when in fact massive fraud took place on their watch. Do you honestly think the DC wanted to loose these guys- They made alot of illegal money off their savy and the District Council ( Certain Individuals ) most likely enjoyed that corrupt under the table benefit. So with a show of resistance Kennedy & Dilacio made a big enough noise to divert that fact. The paper ends at the district council and correct oversight from within had the absolute power to discover such obvious corruption.

    So the whole "scandal" and by that I mean this isn't over. You can't ask me to believe these guys can keep a pension if they facilitated corruption.

    This whole thing is designed to keep Callahan in because he was challenged by the US Attorney and to pay the perps in forced retirement because if they lost that pension, I'm quite sure they'd be singing. So the DC poses itself as being proactive based on a scam to hide the truth ( What is the Anti Corruptiopn Committee ). If it weren't 157 it'd be elsewhere in the locals. Hanley, Kennedy. Dilacio had a good run just like their predeccesors but being they actually belived in their own imortality they tripped themselves up when the members weren't going to be quiet any longer.

    Believe me this is far from over.

  2. Lawrence is a rat... He knew and was a major part of what was going on at the local. For him to have survived, it is because he cooperated to save himself. Also D'Errico has some major connections, if you know what i mean.

  3. When addressing 157.
    There exists every reason to conclude that the path this District Council has taken by only naming three or four bad guys is one in which they're calling me stupid. 157 25th st. is a shoe box.

    If in fact the only evidence which exists ( that we've been privy to ), which by the way most likeley came from Members & Mack, states what it does, I must in plain english understand everone there knew. Of all these people right down to the window personel, - Whoever wasn't working for the DC's anti corruption committee OR the US Attorney OR the NYDOI OR NLRB, - should be cleaned out to ensure the sanctity of what was sought in 1994. The US Gov't settled and that was the first mistake, Putting Callahan in was #500.

    Being Lawrence was someone a bit more important than window personel, and confusingly remains so he's got to be singing in some shape or form. But where's the Hanley Kennedy Dilacio indictments ?

    If as I claim in my previous post the District Council cooked this whole thing up then Lawrence sings only to the District Council because he's protected by this Callahan thing,- maybe he did know but at least he stayed at work. Remember the District Council needs him in place to continue the corruption legacy. If in the fact, - for the past 14 years, operating in that antiquated container of an office - I at least can't believe the membership isn't opposing any vestige.

  4. The anti-corruption committee is composed of members of the district council (Maurice Leary, Director of Operations, Scott Danielson, the out-of-work list supervisor, Mike Murphy who serves as investigator and Counsel Gary Rothman of O’Dwyer Berstein) “who do not have any formal investigative training or experience; do not have a handbook of investigative procedures or written guidelines and cannot on its own do much more than inquire into allegations of improper conduct.”


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