Report of the Civil Prosecution Committee of the New York State Bar Association Commercial and Federal Litigation Section 1994

• Publications and Presentations.

The Independent Private Sector Inspector General

Introduction

1. This report represents the development of the Independent Private Sector Inspector General (“IPSIG”) concept by a Working Group comprised of representatives of law firms, investigative organizations and public agencies with experience in the implementation of the concept and related fields1. The IPSIG concept was described by the New York State Organized Crime Task Force in its 1989 Report on Corruption and Racketeering in the New York City Construction Industry, and has since been applied in several cases, described in Attachment A. This report develops and defines the IPSIG concept in considerably broader terms.

Primary Definition

2. An IPSIG is an independent, private sector firm with legal, auditing, investigative, and loss prevention skills, employed by an organization (voluntarily or by compulsory process) to ensure compliance with relevant law and regulations and to deter, prevent, uncover and report unethical and illegal conduct by, within and against the organization.

3. Where the culture of the organization is primarily legitimate or amenable to reform, the IPSIG may, in addition to the prevention and control of illegal or unethical conduct, be a major participant with management in enhancing the economy, efficiency and effectiveness of the organization. Where the culture is primarily illegitimate and hostile to change, the IPSIG’s role may be essentially adversarial, limited to instituting internal controls and monitoring organizational activities.

The IPSIG concept

4. In its Construction Industry Report, OCTF envisaged that IPSIGs (termed Certified Investigative Auditing Firms (“CIAFs”))2 would be compulsorily hired by general or prime contractors on public construction projects in excess of $5 million, with a minimum of 2% of the project cost dedicated to funding the CIAF. The role of the CIAF was primarily to scrutinize the revenues and expenditures of the contractors to expose payment of bribes and to design and monitor programs and strategies to deter and detect corruption. OCTF cited as precedents (inter alia) requirements under SEC regulations that public corporations disclose certain financial information and hire certified public accountants to undertake periodic audits, and laws relating to the monitoring of casino gambling and hazardous waste disposal.3 The concept described by OCTF has since been adopted in several cases. These are briefly described in Attachment A.

5. Despite the genesis of the IPSIG concept in the reduction and control of pre-existing corruption and fraud within organizations, IPSIGs in fact have much broader application, both to organizations seeking to correct corrupt and fraudulent conduct and those seeking to prevent it. As the second paragraph of the definition set forth above indicates, the role, functions and objectives of IPSIGs will have different emphases according to the predominant culture of the host organization. This cultural variance is best explained by reference to a continuum: at one end, an organization (such as a union which has been placed in trusteeship under federal or State racketeering laws) which operates within an almost totally corrupt milieu, at the other a legitimate and stable organization which seeks to stay that way. At this end of the continuum, IPSIGs provide corporations with a model and vehicle for compliance with the Federal Organizational Sentencing Guidelines issued in November 1991.4

6. The IPSIG concept builds upon existing models for the control and reform of organizations by external entities, such as court-appointed trustees, auditors and independent counsel. The IPSIG has precedent, for example, in the appointment of monitors to oversee the activities of corrupt unions under federal racketeering laws5 and in the use of special investigative counsel by the SEC as part of a consent decree. 6 What the IPSIG brings to bear upon organizational issues is its unique expertise, which combines legal, investigative, auditing and loss prevention skills in a complementary and mutually supportive interrelationship.

7. Unlike receivers and some court-appointed trustees, IPSIGs do not perform a managerial function; rather they support and/or monitor the activities of the organization’s management. In this way, an IPSIG installed by or in conjunction with a court-appointed trustee under federal or State racketeering laws would enhance the efficiency of this mechanism for the reform of corrupt organizations. This proposed structure is further explored in Attachment B.

Roles, functions and objectives

8. An IPSIG may be imposed involuntarily on an organization (by the court, a regulatory or other government agency, a trustee, etc.) or the organization may elect, of its own volition, to hire an IPSIG. There are various motives which might lead an organization to adopt an IPSIG, including:

  • compliance with the Federal Sentencing Guidelines;
  • a desire to protect and promote the organization’s reputation for integrity and fair-dealing;
  • a desire to reform the organization and re-establish its credibility in the marketplace after a criminal or civil investigation and/or criminal or regulatory proceedings;
  • a desire to minimize the intrusiveness of government regulation;
  • a desire to cut costs and improve efficiencies by controlling fraudulent or unethical practices amongst its employees, prompted, perhaps, by a suspicion that such practices are occurring.

9. Even when voluntarily hired by an organization, the IPSIG remains independent in every sense. It is autonomous and self-sufficient (although interactive with the organization) and unconstrained by organizational biases. Without detached and objective judgement, the IPSIG will lack credibility, and may prove not only ineffective but counterproductive by providing the organization with no more than a facade of legitimacy.

10. To ensure the IPSIG’s integrity and credibility as an independent agent, it must be free to report violations of the law as appropriate (see paragraph 15), without the authorization of the host organization. Organizations may, of course, choose to engage units without reporting independence to perform functions similar to an IPSIG. Such an entity, however, would not be an IPSIG with its attendant guarantees of adherence to professional standards, particularized skills and official certification. (See further, paragraphs 13-16 below.)

11. Usually, an imposed IPSIG will be installed in a host organization with a primarily criminal (or previous criminal) culture, and an IPSIG which is hired voluntarily will serve the needs of a host organization with a primarily legitimate culture. As sub-paragraph 8.c. above suggests, however, an organization which has been the subject of criminal or regulatory proceedings (or the threat thereof) may have compelling reasons to hire an IPSIG of its own volition; alternatively, a prosecutor might base his or her decision not to prosecute in part on the organization’s hiring of an IPSIG.

12. Depending upon where it stands on the legitimacy/illegitimacy continuum described above, the organizations’s needs will vary, and the IPSIG may perform one or more of the following roles:

a. Monitoring and investigating the activities of the organization to detect illegal and unethical conduct and to report possible violations of the law to relevant law enforcement authorities.7

The IPSIG acts essentially as a “cop”, performing a reactive role by detecting violations and reporting them to the appropriate authorities.

b. Designing and supervising the implementation of programs and procedures to prevent violations of the law and related unethical conduct, including:

i. preventing fraud and other illegalities by, against and within the organization;

ii. ensuring that laws, rules and regulations relevant to the business of the organization are complied with.

This represents the proactive functions that are contemplated by the federal Sentencing Guidelines, and describes a “compliance officer” role, both to protect the organization against fraud from within its ranks and to prevent it from committing violations through its employees. This role might include all or some of the following: financial audit; internal security (i.e., detection and prevention of fraud within and against the corporation by its employees); compliance with laws and regulations relevant to the business of the organization (e.g., environmental laws and regulations, anti-trust laws, nuclear safety laws and regulations, securities laws and regulations); and prevention of fraud by the organization against others through its employees.

c. Designing and implementing programs to raise and maintain ethical standards within the organization.

This comprehends the role of “facilitator” in the process of organizational cultural change.

d. Assisting in the design and implementation of policies and procedures to enhance the economy, efficiency and effectiveness of the organization.8

The role of “efficiency expert” will in many cases, although clearly not all, arise automatically as a consequence of functions associated with the elimination of fraudulent and corrupt behavior. This role nonetheless exists independently of the IPSIG’s other functions, and parallels the statutory goals assigned the federal Inspectors-General: “to promote economy, efficiency and effectiveness in the administration of [government departmental] operations” and “to prevent and detect fraud and abuse in such programs and operations.” Promoting efficiencies also includes supporting the commercial viabilities and potentials of the organization, and the IPSIG should be aware that the implementation of countermeasures to fraud and abuse should not inhibit or frustrate the organization in the conduct of its business and profit-making ventures.

What is required of an IPSIG in order to properly define it as such?

Skills

13. As noted in the introduction, what distinguishes the IPSIG from existing models for organizational control and reform is the integration of functions (discussed in the preceding paragraphs), the combination of skills required for the performance of those functions and the interdependency of those skills. The four skills are:

      a. Legal (to identify illegalities and regulatory violations and to provide legal advice and counsel to the IPSIG)
      b. Investigative
      c. Audit (both compliance and financial)
      d. Loss Prevention (defined as the design and implementation of cost-effective countermeasures to illegalities, waste and abuse.)

 

14. The IPSIG’s tasks are to monitor, investigate and analyze the business and operations of the host organization, to determine where fraud and other illegalities (including violations of relevant law and regulations), waste and abuse are occurring or likely to occur, to report violations of law and regulations in conformity with appropriate standards (see paragraph 15), to devise internal controls to counteract problems thus identified and to monitor the implementation of those solutions. The relationship between the four skill areas is symbiotic. In other words, the investigative and auditing functions generate information for the purpose of legal and loss prevention analysis, which identifies violations of law and regulations and formulates strategies and procedures to prevent future illegalities, abuse and inefficiencies. The implementation of these strategies and procedures are then monitored by the investigators and auditors. The key element is continuing interaction and dialog among the fourgroups.

Standards

15. In order to qualify as an IPSIG, a firm must possess all four skills and an ability to apply the methodologies associated with loss prevention.9 In addition, the firm must comply with appropriate standards of conduct, including ethical and procedural standards. These will include standards relating to reporting requirements, fees, confidentiality, access to reports, privilege, conflicts of interest, indemnification and qualification as an IPSIG, and procedures for such matters as RFPs, engagement letters and form of reports.

Certification

16. In order to ensure that high professional and ethical standards are maintained, IPSIGs are required to be certified and licensed by a regulatory, administrative or law enforcement agency relevant to the organization’s area of business.10 In OCTF’s Construction Industry Report, the relevant agency is the New York City Department of Investigation.11 In the cases described in Attachment A (other than two involving court orders), the certifying agencies were OCTF, the Department of Environmental Conservation and the School Construction Authority (through its Inspector-General). The IPSIG is required to provide reports to the certifying agency (or other agency nominated by the certifying agency) on a predetermined basis.

Conclusion and Recommendation

17. The IPSIG offers a comprehensive and adaptable mechanism for the prevention and control of illegal or unethical conduct by, within and against an organization. It is applicable to a broad continuum of business organizations from the primarily legitimate to the essentially corrupt.

18. At the fundamentally corrupt end of the continuum, IPSIGs, through scrutiny of business operations and exposure of illegalities, permit the prompt detection of offenses as well as providing information and intelligence to assist law enforcement in the design of long-term anti-corruption strategies, all at little or no direct cost to the taxpayer.

19. Further along the continuum, the installation of an IPSIG allows corporations which might otherwise have had no choice but to dissolve to remain in business and assists them in the process of acquiring or regaining legitimacy. Companies with dubious histories can be awarded public contracts (often at considerable savings to the government), in circumstances in which they would otherwise have been disqualified. Companies with damaged reputations as a result of scrutiny by criminal or regulatory authorities can re-restablish their credibility in the marketplace. IPSIGs represent good business as well as effective law enforcement.

20. At the other end of the continuum, for legitimate mainstream businesses, the unique combination of skills and the focus in the exercise of those skills on loss prevention analysis provide industry with a model and vehicle for compliance with the deterrence and detection imperatives of the federal Sentencing Guidelines. Indeed, the philosophy which guides IPSIGs, although preceding the Guidelines, is entirely consistent with them: organizations have a positive responsibility to prevent crime within their ranks, not merely to detect and report it.

21. The Commercial and Federal Litigation Section of the New York State Bar Assocation endorses the IPSIG concept and recommends that it be implemented in the manner described in this report.

ATTACHMENT A

APPLICATION OF THE CIAF CONCEPT DESCRIBED BY OCTF IN 1989

22. In U.S. v. Salerno, S.D.N.Y., March 26, 1990, the court ordered one of the defendants, who was convicted of racketeering, to forfeit his interests in a number of concrete companies and authorized their sale to certain purchasers identified in the order. At the same time, the court appointed a Monitor to “oversee the activities of [the purchasers and their companies] … to audit [their] financial affairs and business operations … at all times [having] full and free access to the books and records of the [companies] and their affiliates.” The cost of the Monitorship was to be borne by the purchasers. The government was given authority to veto certain actions of the purchasers, including the appointment of company officers and the disposal of company assets.12

23. On July 25, 1990, OCTF entered into an agreement with a Wall Street proxy solicitation firm whose principal had pled guilty to charges relating to the overbilling of clients for non-existent services and tax evasion. Under the terms of the agreement, the firm agreed to pay $1 million in restitution and to hire a CIAF “for the purpose of assuring that its business practices remain free of the kinds of criminal activities which were the subject of the conviction of its former President.” The CIAF was also responsible for supervising the restitution process.

24. On October 3, 1990, OCTF, the Department of Environmental Conservation (“DEC”) and the New York State Department of Taxation and Finance entered into an agreement with a company which operated a landfill whereby the company agreed, as a condition of the resolution of criminal and civil charges against it, to hire a CIAF (at its own expense) to ensure the company’s future compliance with environment laws and regulations and to prevent fraud, tax law violations and any other form of criminal activity. The company and its principal also agreed to plead guilty to one count of offering a false instrument for filing (Penal Law § 175.35) and to pay close to $4 million in forfeitures and penalties.

25. In June, 1991, the New York City School Construction Authority (“SCA”) entered into an Agreement with a Long Island construction firm which was about to be awarded a $32 million building contract by the SCA. The SCA desired to accept the company’s bid for the contract which was $2 million less than the next bidder, but learned that the company was the subject of an ongoing criminal investigation into alleged offenses occurring several years before and while the company was under a previous ownership. As a condition of the award of the contract, the company agreed to adopt a strict Code of Business Ethics, to design and implement a Corruption Prevention Program and to retain (at its own expense) a CIAF to assist in the design and implementation of, and to monitor and enforce the company’s compliance with these Programs.13

26. Although not described as a CIAF, the Special Master appointed in April, 1992, to oversee the sale of trucking companies owned by two members of the Gambino crime family, performs similar functions. Thomas Gambino, his brother, Joseph, two co-defendants and four trucking companies under their control pled guilty in February 1992 to charges that they ran a mob-connected cartel that controlled trucking in New York City’s garment industry. The defendants, as part of their plea agreement with the New York County District Attorney’s Office, agreed to pay $12 million as a fine and compensation to victims, and to subject their activities to the control and scrutiny of a court-appointed Special Master. In addition, the Gambino brothers agreed to sell or liquidate their trucking companies within a year, and cease forever their involvement in the garment center trucking industry.

ATTACHMENT B

A PROPOSED STRUCTURE FOR IMPROVING THE EFFECTIVENESS OF COURT-APPOINTED TRUSTEESHIPS

27. As noted in the Introduction, the IPSIG’s primary function is monitoring/investigative/reporting/loss prevention rather than managerial. IPSIGs do not replace the management of the organization and do not administer its daily affairs; rather, they support and/or monitor the activities of the management.

28. Trustees appointed under federal and state racketeering laws, depending upon the terms of the court order of appointment, have performed both managerial and monitoring functions, or monitoring functions alone. For example, the trustees of Teamsters Locals 560, 814 and 295, and LIUNA Local 6A were installed both to run the union and to eliminate corruption within the union and its benefit plans.14 The orders placing Teamsters Locals 6A and 30/30B and the International Brotherhood of Teamsters in trusteeship, on the other hand, allowed some or all of the existing leadership to remain in place, with the trustees assigned powers to oversee the operations of the union, review, approve and veto its decisions, investigate corruption and illegality and discipline and dismiss officers and members.

29. Once the difference between the managerial and monitoring roles is recognized, the means by which IPSIGs can complement the work of trustees becomes clear and compelling. In circumstances warranting the removal of the existing leadership, a court seeking an equitable remedy under RICO or a corresponding State enactment would appoint two entities:

  • A receiver/trustee to run the union or corporation as its President, at the same salary as the previous President.15
  • A IPSIG to deter, prevent, uncover and report illegal activity within the union or corporation, to ensure that relevant laws and regulations are complied with and to develop loss preventive programs. The IPSIG would be funded by a percentage of the union’s existing income, to be determined by the court.16

30. In those cases in which the circumstances did not warrant removal of the union leadership, an IPSIG alone could be installed.

31. Union trustees who have been invested by the court with comprehensive powers and authority have run unions on a day to day basis, representing members’ interests, standing on picket lines and supervising collective bargaining. They have established democratic systems and held elections. They have designed and implemented procedures to make the business of the union more efficient. They have, in addition, investigated and exposed illegalities and reported them to the authorities. Distinguishing between the roles of manager and monitor/investigator, properly defining them and placing them in different hands eases the conflict that a trustee inevitably faces between the role of the leader/manager and the role of the cop. The trustee would be free to do his or her job, i.e., to represent the interests of the members or to pursue the interests of the corporation, without being directly responsible for the investigation and exposure of illegalities. The trustee may still have ultimate responsibility to report violations for the purpose of prosecution, but he or she would be distanced from the day to day policing of the union’s or corporation’s activities.

32. The proposed structure also has the virtue of resolving the conflict which necessarily arises from the trustee’s role as both the agent of endeavor and the agent of control. The manager’s job is to run the business and to get things done; the monitor’s (inter alia) is to ensure that the proper procedures are followed and that relevant laws and regulations are complied with. There is a creative tension between these two objectives which ought to be maintained, lest the business become mired in bureaucracy on the one hand or fall into unethical or illegal practices in the interests of getting the job done on the other.

33. Ultimately, as the affairs of the corporation or union acquired legitimacy, direct control of its daily business should not be necessary, and the trustee could retire. The IPSIG would remain in place to monitor the transition to new management and ensure that the corporation or union did not resume its old ways. The IPSIG may well remain indefinitely, for example because it was desired by the new management as indispensable to the efficiency, reputation and integrity of the corporation.

End Notes

  1. The Working Group consists of representatives of the law firms of Getnick & Getnick LLP and Stier, Anderson and Malone, the investigative firms of Decisions Strategies, Inc., the Fairfax Group Ltd., Investigative Group, Inc., Katz Associates, Inc. and Kroll Associates, Inc., and the following public agencies: the New York State Organized Crime Task Force and the School Construction Authority’s Inspector General’s Office.The principal authors of this report are Lesley Skillen, Ron Goldstock, Barry DeFoe and Wilda Hess, working in conjunction with the New York State Bar Association Commercial and Federal Litigation Section Civil Prosecution Committee chaired by Neil V. Getnick.
  2. In that Report the concept was described as a “private inspector general, hired by general or prime contractors on large public construction projects to insure compliance with relevant law and regulations … and to deter, prevent, uncover and expose unethical or illegal conduct.” (p. 139)
  3. at pp. 167-168.
  4. The Federal Guidelines for the Sentencing of Organization became law on November 1, 1991. Although they relate to sentencing, the Department of Justice has indicated that its policy is to take into account compliance with the Guidelines in the decision to prosecute. They provide for the sentencing of organizations to be determined by three factors:

    (a) the steps taken by the organization prior to the offense to ensure that it has an “effective program to prevent and detect violations of the law”; (b) whether high level personnel either participated in, condoned or were wilfully ignorant of the criminal activity; (c) whether the organization reported the offense it detected promptly, fully cooperated in the investigation and accepted responsibility for its criminal conduct.

    The “effectiveness” of the “program to prevent and detect violations of the law” is determined by the extent to which it conforms to certain standards which are also set forth in the Guidelines. These include monitoring of compliance through auditing and reporting systems and taking steps to prevent future violations by modifying its prevention and detection systems. The Guidelines further provide that the larger an organization, the more formal its standards and procedures should be.

    The practical effect of the Guidelines should be to compel every responsible corporation to review its existing compliance program and determine whether it conforms with the Guidelines.

    The Guidelines represent a radical departure from the way in which the criminal law has hitherto dealt with corporations and other business entities by shifting principal responsibility for crime control from the State to the corporation and placing a positive duty on the corporation to keep its corner of the universe clean. While the traditional approach to compliance seeks to protect the corporation from internal fraud by focusing on detection and on distancing the corporation from the offending employee, the sentencing guidelines make the corporation responsible for the prevention of fraud, as well as its detection and reporting. The corporation, far from being able to dissociate itself from a defaulting officer, is held responsible for his or her actions where it has failed to implement adequate procedures to prevent the violation in the first place.

  5. Not all RICO “trusteeships” have involved the removal of the union leadership. Some have left the leadership intact and appointed monitors with roughly similar powers to the IPSIG to oversee the union’s activities: Local 6A and District Council of Cement and Concrete Workers, Laborers’ International Union of North America trusteeship, March 19, 1987; Roofers Local 30/30B decreeship, May 23, 1988; International Brotherhood of Teamsters trusteeship, March 14, 1989.
  6. In re LTV Securities Litigation, 89 F.R.D. 595 (N.D. Tex. 1981), the court discussed the appointment of a Special Officer as part of a consent order between the SEC and LTV. The court described the role of Special Officer as “to investigate questionable accounting and auditing practices to determine how they can be brought into compliance with SEC standards, and to investigate the conduct of the corporation and to advise whether legal action should be taken for material misconduct found … Special investigative counsel are an increasingly common element of SEC consent decrees.”
  7. In the performance of this function, the IPSIG would have such powers as the court or other authority which installed the IPSIG specifies. These might include those listed below. In IPSIGs created to date, the powers such as those set forth in paragraphs ii. through v. have been vested in the government or the court, to be exercized on the recommendation of the IPSIG, rather than directly by the IPSIG.

    1. access to all the books, records, files, accounts and correspondence of the organization;

    2. power to subpoena witnesses and documents and to take testimony formally or informally, under oath or otherwise in the discretion of the IPSIG;

    3. power to hold hearings, discipline, dismiss, remove and replace officers, employees and members of the organization;

    4. power to withhold salaries, fees and benefits from persons who have misappropriated funds from the organization;

    5. powers of review and veto with respect to certain business operations of the organization, such as a requirement that the IPSIG approve major contracts entered into by the organization;

    6. ability to receive the assistance of law enforcement authorities upon request and without charge to the IPSIG or the organization.

  8. Where an organization has existed in a fundamentally corrupt milieu, eliminating its ability to get things done via corrupt means may well result in inefficiencies by disrupting the traditional means of getting the job done. In the more usual case, an IPSIG which is over-zealous in its efforts to ensure that every paper clip and cab fare is accounted for may well be operating in a manner counterproductive to the organization’s profit making capabilities. Paradoxically, some IPSIGs have been imposed precisely because the only alternative is to put the organization out of business by prosecuting it and/or seizing its assets.
  9. Only a few existing firms have all four skills residing permanently within them. Other firms possess one or more of the skills, accessing the absent skill or skills by creating alliances with other firms for the purpose of particular projects. These networks permit IPSIG personnel to be selected on the basis of their experience or aptitude for the particular project in question, e.g., an IPSIG servicing a company concerned with environmental issues would benefit from, or even require, a member with that expertise.For purposes of certification, the distinction is made between, on the one hand, the firm that engages in the business of setting up IPSIGs, and, on the other, the IPSIG that is created to serve the needs of a particular organization. The entity to be “certified” would be the latter rather than the former. The certifying agency would be required to approve each IPSIG, rather than to certify firms which are thereby authorized to set up IPSIGs without need for further approvals.
  10. Alternatively, an IPSIG may be appointed by the court.
  11. The DOI is a mayoral agency whose role is to increase government’s accountability to the public, and whose functions include uncovering corruption and criminal activity and developing standards to prevent fraud, waste, abuse and criminal activity in government operations.
  12. The Monitor in fact uncovered evidence in the course of his Monitorship indicating that one of the purchasers was making illegal payoffs to organized crime and union officials. That individual was indicted on June 11, 1992.
  13. The SCA is about to announce a second such agreement involving a company, two of whose former officers had previously been convicted of offenses relating to bribery and bid rigging.
  14. The trustee of Local 560, for example, was “given all authority and power to act as he may, in his good judgment, see fit to administer the affairs and fulfill all of the responsibilities of Local 560, and to create and foster conditions under which reasonably free, supervised elections can be held by Local 560.” (Order of Judge Ackerman in the U.S. District Court, New Jersey, June 23, 1986.) The order appointing the Trustee of Local 295 is much more specific and equally comprehensive, empowering the trustee, inter alia, “(b) To investigate corruption and abuse within Local 295 …; (c) To conduct, administer and supervise the daily affairs of Local 295 …; (q) To refer possible violations of the law to federal or local law enforcement agencies …” (Order of Judge Nickerson, U.S. District Court, Eastern District of New York, April 29, 1992.)
  15. The salary of the President of Local 295 when it was placed in trusteeship was $133,000.
  16. Existing union trusteeships are, for the most part, funded by the union’s usual sources of income. In some cases, forfeitures and recoveries of dissipated assets are applied to fund the trusteeship. The court order appointing the Trustee of Local 295, Tom Puccio, for example, established an escrow account to receive forfeited assets, the account to be used for the sole purpose of funding the trustee and his staff (paragraphs 2(k) and 6, Order of Judge Nickerson, U.S. District Court, Eastern District of New York, April 29, 1992).The cost of the proposed structure should, if properly managed, be less than the costs presently incurred by unions in trusteeship, which can be remarkably high. In addition to salaried and full time officers such as the trustee (the Local 295 Trustee’s salary was set by the court at $250,000 per annum), the deputy trustee (if any) and their staff (in Local 295 the Deputy Trustee has hired two business agents, an office manager and a secretary), there is also a need for accountants and investigators to be hired from time to time for particular undertakings. The hourly fees commanded by accounting firms add up to considerable expense which could well be reduced if an IPSIG were installed instead. If the Trustee’s salary were limited to that of the immediate past President, the IPSIG would be the only additional cost to the union. (The Trustee’s hired staff should not be a significant additional cost since they replace previous union officers).