Opinion ID: 772930
Heading Depth: 2
Heading Rank: 1

Heading: Carey's and Hamilton's Appeals from the District Court's First Decision.

Text: 39 1. Was the IRB's decision, that Carey breached his fiduciary duty, arbitrary or capricious or unsupported by substantial evidence? 40 Carey, as the General President of the IBT, and Hamilton, as the Director of the Government Affairs Department, had fiduciary obligations to IBT members in handling the union's money. See Morrissey v. Curran, 650 F.2d 1267, 1274-75 (2d Cir. 1981); United States v. Boffa, 688 F.2d 919, 930 31 (3d Cir. 1982) (We believe that the LMRDA established, as a matter of federal law, union members' right to the honest and faithful services of union officials.), cert denied, 465 U.S. 1066 (1984). Union officials occupy positions of trust in relation to such organization and its members as a group and [i]t is [] the duty of each such person... to refrain from dealing with such organizations as an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interests of such organization, and to account to the organization for any profit received by him in whatever capacity in connection with transactions conducted by him or under his direction on behalf of the organization. 29 U.S.C. § 501(a). 41 Although the majority of the IRB did not find that Carey actually knew of the illegal contribution scheme, the IRB held that the information before Carey did impose on [him] a fiduciary duty to inquire further about any relation or tie between [his] own campaign fundraising and the IBT's payment to an advocacy group like Citizen Action. 6 42 Carey's arguments to this court are similar to those addressed in the district court's thorough and well-reasoned opinion. See Carey & Hamilton Discipline, 22 F. Supp. 2d at 139-45. Carey contends that the IRB's finding that he specifically approved the contributions at issue was unsupported by the evidence. 7 Such an error is crucial, Carey urges, because if he did not approve the political contributions involved in the illegal fundraising scheme, then he had no duty to inquire into those contributions and the IRB's decision would be without a basis in the law. Specifically, Carey asserts that the only evidence that he gave such approval, given that the IRB declined to rely on an affidavit provided by Monie Simpkins (Simpkins), Carey's personal secretary, was the unreliable and false testimony of Jere Nash. Nash testified before the IRB that, after learning from Hamilton that Carey initially rejected the proposed contribution to Citizen Action, Nash had a telephone conversation with Carey. In that conversation Nash allegedly told Carey that the contribution to Citizen Action will help Martin Davis in the fund raising that he is doing for our campaign. According to Nash's testimony, Carey replied, [w]ell, hell, no one ever told me about it. Nash further testified I said, 'Does that mean that this is okay?' And he said, 'Yes, that is fine.' Following his conversation with Carey, Nash testified he spoke with Simpkins and advised her that the IBT would be making contributions to certain political organizations and, in return, the Carey campaign would be receiving contributions from certain individuals. Nash asked her to call him if either she or Carey had any questions about the IBT's contributions. 43 Carey devotes a substantial portion of his brief challenging the IRB's conclusion that Nash informed Carey about the contribution to Citizen Action. Carey points to Nash's phone records and the IBT's phone records in an attempt to establish that the telephone call Nash described could not have taken place. The IRB rejected these arguments. Carey further argues against crediting Nash's testimony because Nash testified that the conversation with Carey concerning the Citizen Action contribution occurred on October 16 or 17, 1996. Carey asserts that this date is impossible because Hamilton's memo to Carey requesting approval of the Citizen Action donation was dated October 21. However, we note that Citizen Action's letter to Hamilton requesting funds is dated October 14, and Carey could have been aware of the request before Hamilton's memo arrived. The district court spent several pages of its opinion to consider and reject Carey's argument that there was insufficient evidence that Carey approved the political contributions. The district court impressively marshaled the evidence; we agree with its discussion and adopt the following portions of that opinion. 44 Contrary to Carey's suggestion, Nash testified that when he called Simpkins and asked her to find Carey for him, he did not know whether she got [Carey] on the phone that minute or whether [Carey] called back. Carey's arguments regarding Nash's phone records, even if correct, hardly establish that a call did not take place as Nash described in his testimony. Nash testified that he was unsure whether Simpkins was able to connect him to Carey immediately or whether Carey returned Nash's phone call. 45