This action follows a February 21, 2007, interim report from International Auditor Richard L. Huntington (finding that the Local is experiencing serious financial difficulties which threaten its future viability), my appointment of Brother William Hamilton on February 27, 2007, as my Personal Representative to the Local, Brother Hamilton's reports to me (confirming Brother Huntington's concerns and conclusion that the Local is in dire financial straights), and a report prepared on May 31, 2007, by The '\¥hall Group (which conducted a forensic examination of the Local's books and records).

Among other issues that have been brought to my attention in connection with the reports of Brothers Huntington and Hamilton and by The Whall Group, which have convinced me that this Trusteeship is necessary, are the following:

1.                  The Local recorded, as of the end of 2006 liabilities of $414,127.00 and cash reserves of only $8,200.00. Currently, the Local has cash reserves of only $6,515. An annual shortfall (the difference between annual expenses and annual revenues) for the Local is estimated to be $31,000.00. This is without taking into consideration additional problems set forth below.

2.                  The Local has no financial policies or constraints to control spending or handle excessive debt, which includes a loan balance on the building it currently occupies that, according to the Local's accountant, possibly exceeds the actual value of the property.

3.                  The 'Local's Secretary- Treasurer appears to be uninvolved in administering the Local, leaving the Local's principal officer as the sole person responsible for the Local's finances.

4.                  There is serious question about the true value of the Local's building as well as concerns that the Local has inflated it for reporting purposes. Although the building was acquired in 1997 for approximately $250,000, the Local reports the value of the property on its 2006 LM-2 as $850,000. There is no documentation supporting this clearly inflated valuation. The Local's accountant has stated that he doubts the property is even worth the current mortgage balance of approximately $310,000. A 2003 appraisal lists the property as valued at $550,000. The Local's 2006 property tax bill sets a net taxable value at $380,400.

5.                  Furthermore, in April of 2006, the Local entered into what appears to be a questionable and possibly fraudulent "agreement" to sell its building for $800,000. This agreement was not authorized or approved by the membership. It lists a $10,000 down payment that was never in fact paid. The purported purchaser is owned or controlled by an individual who reportedly was recently (later in 2006) charged with money laundering for an area street gang. In addition to possibly being used to support the inflated valuation of the property on the Local's financial reports, this sham sales "agreement" appears to have been created to justify an inflated value for the property for purposes of a future condemnation by the Township in connection with an industrial redevelopment project.

6.                  The Local regularly sets aside bills rather than paying them when due, because it's monthly revenue is insufficient to pay its expenses.

7 .. The Local has no written cost sharing agreements with its Health and Welfare, Severance and Social and Legal and Scholarship Funds. There are no agreements allocating expenses among these Funds. Despite this, it appears that rent exceeding market rates has been charged to the Funds since 2004. At least $125,000.00 was overcharged to the Funds in rent during this period alone. All of this has occurred against a backdrop of at least three formal advisories by the IBT to all Locals and Joint Councils, in 2000, 2003 and 2006, about the need for written and independently verified cost sharing agreements between Locals and Benefit Funds sharing expenses.

8.                  The overcharging of the Funds by the Local appears to have contributed to significant questions about the future solvency of the Funds, in particular the Health and Welfare Fund. Throughout this recent time frame, the Local and the Funds shared accountants and legal counsel, and made no provision for independent professionals to review transactions between the Local and the Funds.

9.                  The Local has, in spite of the foregoing, demonstrated a pattern of irresponsible spending, including expenditures of approximately $500 per month for "Robo Calls," expenditures for auto leases and car allowances when the Local also owns several vehicles that are unused.

          1 O.      In light of the fact that the Local continues to spend more per month

than it receives, and substantial reasons to question the stated value of its principal asset, and in the absence of any evidence that the actions of the Local's Principal Officer are being approved by the membership or overseen by other members of the Executive Board, it is likely that the Local's dire financial circumstances, as well as those of the Local's Benefit Funds, will, unless addressed immediately, significantly worsen in the immediate future.

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Accordingly, I have concluded that there is a basis for placing Local 331 in trusteeship, and that the circumstances warrant imposing the trusteeship on an emergency basis. Effective immediately, I have appointed Brother Tony Frasco to serve as the International Union's temporary Trustee, and Brother Marcus King to serve as temporary Assistant Trustee, pursuant to Article VI, Section 5 of the International Constitution. In accordance with that provision, there will be a hearing scheduled .. to consider whether the trusteeship should be continued or dissolved. You will have the opportunity to express your views on this question, as well as on any other issues involving the Local.

I urge all of you to cooperate fully with Brothers Frasco and King.

Fraternally yours,

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