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:

• Week one: The Set-Up, Union Politics
• Week two: The Sting, Callahan’s Investigation
• Week three: The Trusteeship, Defrauding the Membership
• Week four: The Cover Up, What Did D’Errico Know and When Did He Know It