NOTICE
June 9, 2008 To: The Officers and Members of Local 714, Chicago, Illinois On August 30, 2007, the Independent Review Board ("IRB") recommended to me that Local 714 be placed in Trusteeship. IRB cited three areas of concern: 1. That the Local's Principal Officer, Robert A. Hogan, and its President, James M. Hogan, had jeopardized the Local's interests by hiring Robert Riley as the Local's Business Agent and Director of Organizing and then failing to monitor, investigate or take appropriate action regarding Riley's regular violations of the Consent Decree by having knowing contact with William T. Hogan, Jr., a person who has been permanently barred from the Union by IRB. 2. That the Local Union had also failed to perform its duties as bargaining agent at the five companies at which substantial amounts of bargaining unit work were being performed by temporary or other workers who were not covered by the applicable collective bargaining agreements in circumstances which suggested corrupt dealings with these companies. 3. That the Local, despite having previously been placed in trusteeship over allegations of favoritism and nepotism in the referral of members for trade show and movie jobs, continued to administer its referral system for movie jobs in a manner that benefitted friends and relatives of the Robert Hogan and James Hogan. In lieu of imposing an immediate trusteeship, on September 20, 2007, I appointed a personal representative to Local 714 under Article VI, Section 1 (0 of the International Constitution. I also scheduled a hearing to determine whether a trusteeship over this Local was warranted, originally for January 29, 2008, which was adjourned several times. In the meantime, IRB has proceeded to hear related charges against Robert A. Hogan, after rejecting as "inadequate" a decision by the IBT to suspend Hogan from office for a period of six months, beginning effective on December 13, 2007. A decision from IRB on these charges is anticipated soon. My personal representative has worked for the past 9 months with the Local's current officers to address the concerns identified by IRB. Purported procedures have been developed to address improper contact by officers and employees of the Local with barred individuals, and steps have been taken purportedly to address the enforcement of contractual jurisdiction in the metal scrap industry. Additionally, with the apparent agreement of Local 714's Executive Board, jurisdiction over movie and trade show work in Chicago was transferred, effective May 1, 2008, from Local 714 to Local 727, an action that was designed to eliminate the perception that job referrals in these industries are calculated to benefit friends and relatives of certain Local 714 officers. Nonetheless, during the past several weeks it has become apparent that additional and immediate steps must be undertaken to protect the interests of members and the integrity of Local 714. Specifically, I have received credible reports that: 1. The officers of Local 714 have failed and refused to cooperate with my Personal Representative, officials of Local 727 and representatives of the IBT in connection with the transfer of movie and trade show jurisdiction to Local 727. This lack of cooperation has included refusing to turn over movie and trade show grievance files (or delaying doing so), attempting to undermine the transfer of jurisdiction with respect to affected members, providing incomplete or inaccurate information concerning the identity of stewards, failing to turn over pertinent contractual documents (or delaying doing so), refusing to provide address or Social Security information concerning affected members (or delaying doing so), and providing incomplete or outdated information concerning the movie and trade show referral practices. 2. The officers of Local 714 have also sought to hold hostage certain assets of the Local 714 health fund which were contributed on behalf of movie and trade show participants who have been or will be 3. The officers of Local 714 have also failed and refused to transfer the assets of the Local 714 vacation fund, despite the fact that this fund exists for the sole benefit of the transferred trade show and movie members. 4. Despite the six month suspension from office of Local 714's principal officer, Robert Hogan, the Local's officers have inexplicably continued to send written communications to employers reflecting that Hogan remains the Local's principal officer. 5. Although the officers of Local 714 have reported to me that they have taken a number of steps to ensure that the Local's officers, members and staff will not knowingly associate with persons who have been barred from the Union, it appears that these assurances are illusory. In this regard, it does not appear that the Local's officers have followed through with announced efforts to monitor cell phone calls by officers and employees with barred persons and, more importantly, it appears that the Local's officers have turned a blind eye to knowing contact between Business Agent Frank Zebell and Robert Hogan which occurred, in part, during business hours and during the period when Hogan was suspended from office and prohibited from participating in the internal affairs of Local 714. It was not until months after this contact came to light that the Local provided Zebell with a proverbial slap on the wrist by issuing him a "written warning." 6. Other circumstances have also occurred from which it may be inferred that the officers or employees of Local 714, directly or indirectly, have engaged in knowing contact with Robert Hogan and/or William Hogan or tolerated prohibited contacts by associates or subordinates. These include: a. The unexplained presence of the Local's former attorney, Marvin Sacks, at the Local's offices, despite the fact that Sacks no longer does legal work for the Local or has any other apparent reason to be at the Local. In this regard, Sacks has admitted being in regular contact with William Hogan. b. The sudden appearance of William Hogan as the representative of an employer proposing to enter into an agreement with Local 727. c. The rescheduling of a meeting of the Local 714 Executive Board to June 16, 2008, the day after Robert Hogan's suspension from office expires. 7. A majority of the officers of Local 714 has failed to keep all members of the Local's Executive Board informed about the Local's business. 8. The Local's Bookkeeper has failed to cooperate with my personal representative regarding efforts to update and monitor financial practices in the Local. Based on the foregoing credible reports, it has become apparent to me that the appointment of a Personal Representative has been insufficient to resolve the problems identified at Local 714 by the IRB, as well as other problems that have since come to light, and that unless action is taken immediately the Local and the Local's membership, including former members who have been transferred to Local 727, are in danger of suffering irreparable harm in the form of impaired or eliminated health benefits. Additionally, unless action is taken immediately, continued knowing contact between the officers, employees and members of Local 714, as well as the members who were transferred to Local 727, and persons who have been barred from participation in the Union seems likely to continue. Accordingly, I have determined that an immediate trusteeship of Local 714 is necessary for the purpose of correcting corruption or financial malpractice and otherwise carrying out legitimate objects of the Local Union. I am therefore imposing an emergency trusteeship over the affairs of Local 714, effective on June 11, 2008. I have appointed Terry Hancock to serve as temporary Trustee, and Brian Rainville, Becky Strzechowski and Thomas W. Stiede to serve as temporary Assistant Trustees. Pursuant to Article VI, Section 5 of the International Constitution, the members of Local 714 will soon be receiving notice of a hearing to determine whether the temporary trusteeship should be extended or dissolved. Separate notice of the hearing shall be posted by the temporary trustee and any member of the Local will have the opportunity to address the hearing panel or submit written comments. A copy of this notice shall be posted immediately in the Local Union headquarters and in such places as will ensure that the members of Local 714 will be informed of the imposition of this emergency trusteeship. Fraternally yours, James P. Hoffa
transferring to the Local 727 health fund. In this regard, the Local 714 officers have sought to cause the Local 714 health fund to retain at least half of the assets of the Local 714 health fund, rather than transferring them to the Local 727 fund, leaving the Local 714 health fund with at least $7 million in assets for the 43 remaining participants, many of whom are officers or employees of Local 714. The Local 714 officers have failed to provide Local 727 with copies of the trust and related documents pertaining to the Local 714 health fund, and have stated that they intend to cause the Local 714 health fund to retain reserves disproportionate to the remaining participants so that the fund can be used as a tool to organize employers with high health and welfare costs and to relieve the Local Union of the cost burden of making health and welfare contributions on behalf of its officers and staff. Although the officers have claimed that the allocation of assets between the Local 714 and 727 funds will be based on an analysis performed by the Local 714's actuary, the analysis provided thereafter does not support the allocation proposed. In addition, Local 714's officers have breached and/or threatened to breach their fiduciary duty to the transferred movie and trade show members in violation of the Fiduciary Code of Ethics set forth in Article II, Section 2 of the IBT Constitution by endangering health coverage for these members, citing provisions of the health and welfare plan, a copy of which they have failed and refused to provide to Local 727.
General President