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12 N.J.A.R. 718

Local 54, In the Matter of the Hotel and Restaurant Employees and Bartenders International Union
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Citation: 12 N.J.A.R. 718
Decision Date: 1982
Synopsis: The Division of Gaming Enforcement filed a report with the Casino Control Commission alleging that three officials of Local 54 should be disqualified under section 86 of the Casino Control Act, N.J.S.A. 5:12-1 et seq. The Division also recommended that the Commission impose sanctions against the union under section 93. A hearing was conducted by the Commission. Based on the evidence presented at the hearing, the Commission concluded that two union officers, Frank Gerace and Frank Materio, were associated with a member of an organized crime cartel, Nicodemo Scarfo, and that the relationship was inimical to the policies of the Casino Control Act. Although there was no evidence that Gerace and Materio had committed improprieties in the conduct of union affairs, the Commission concluded that the number of personal and business contacts between Scarfo, Gerace and Materio made the relationship inimical. Both union officers were deemed disqualified under section 86(f). Another union employee, Karlos LaSane, was found disqualified under section 86(c) because of a Federal conviction for extortion. The Commission ordered that Gerace, Materio and LaSane be removed as officers, agents or principal employees of Local 54. If the disqualified individuals were not removed, Local 54 would be prohibited from collecting dues from casino employees. In a separate opinion, Commissioner Jacobson said that Gerace and Materio should not be disqualified. Since there was no evidence of any actual influence or impropriety related to the contacts with the Scarfo cartel, there was no proof of inimicality. Gerace and Materio were being disqualified because of guilt by association and the possibility that there would be impropriety in the future. In addition, Commissioner Jacobson said disqualification was too harsh a penalty for Mr. LaSane's single conviction in 1973. In a related opinion, the Commission addressed the question of what remedies were available under section 93. Two remedies are mentioned in 93(b): cessation of dues collection and cessation of administration of pension and welfare funds. The Commission concluded that it had discretion to apply the remedies singly or jointly, depending on the facts and circumstances of a given case. In this case, the cessation of dues collection alone was sufficient to effect the removal of disqualified persons.
Statute(s) Cited: 5:12-67 5:12-86c 5:12-86f 5:12-93(a) 5:12-93(b) 
Citation Tracker affirmed -203 N.J. Super. 297 (App. Div. 1985) [Updated through 1991]