Labor racketeering is an important example of American exceptionalism. No other country has a history of significant organized crime infiltration of its labor movement and no other country has an organized crime syndicate whose power base is the labor movement. The inter-relationship over most of the 20^th century of organized crime and organized labor has political, social and economic consequences that have hardly begun to be explored. This book is a beginning.

This book is not an expose. There are no secrets here revealed. From the early 20^th century, labor racketeering has been an important source of organized crime’s power, prestige and wealth. By “labor racketeering,” I mean the exploitation of unions and union power by organized crime. By “labor racketeers,” I mean Cosa Nostra[*] bosses who wield influence over union office holders and treasuries, Cosa Nostra capos, soldiers and associates who hold union offices, and union officials who are closely allied to, and do the bidding for organized crime members. Labor racketeers treat unions as cash cows which generate money via legal salaries and perks and by embezzlement, extortion, bribes and fraud. They regularly exploit union power by establishing and enforcing employer cartels that fix prices, allocate contracts and suppress competition. For these services they extract payoffs (“dues”) from employer associations. Moreover, it is just a short step to taking full or partial ownership in one or more of the firms that comprise the cartel.

In their exploitation of unions, labor racketeers commit numerous criminal offenses, e.g. extortion of employers by threatening unlawful strikes, work stoppages, picketing, and sabotage (labor peace extortion); soliciting and receiving bribes (labor bribery) from employers in exchange for advantageous contract terms and for allowing the employer to ignore the terms of a collective bargaining agreement (“sweetheart deal”); thefts and embezzlements from the union and its pension and welfare funds; murder, assault and battery, arson and other violent crimes against rank and file “dissidents” and uncooperative employers; and anti-trust violations by means of price fixing, contract allocations and preventing competitors from entering a market.1

Despite the fact that labor racketeering in general and specific cases of labor racketeering have been steadily exposed over much of the twentieth century by Congressional and other hearings, investigative journalists and criminal and civil racketeering cases, labor racketeering has not attracted much interest from university-based scholars. Students of crime, law and society, American history and even American labor history have pretty much ignored this seamy side of labor unions.

While there is a large subfield in criminology devoted to corporate crime, there is no corresponding subfield of union crime. Even though Edwin Sutherland invented the field of white collar crime, Sutherland’s and Cressey’s best-selling general criminology text does not even mention labor corruption or labor racketeering. Even organized crime scholars, of whom there are very few, fail to recognize that the Mafia’s unique political and economic position in American society derives from its base in the labor movement.

Academic labor lawyers do not view labor racketeering as part of their bailiwick. Their courses give short shrift to the 1957 – 1959 U.S. Senate (McClellan Committee) labor racketeering hearings, the most extensive congressional investigation in U.S. history. [†] Most law students finish their labor law course unaware that the 1959 Landrum-Griffin Act was passed to remedy the labor racketeering problems exposed by the McClellan Committee. Students of employment rights and benefits are unaware that ERISA (Employee Retirement Insurance Security Act) was in part a legislative response to revelations of organized crime’s infiltration and misuse of union pension and welfare funds.

No labor law casebook mentions United States v. International Brotherhood of Teamsters, perhaps the most ambitious organizational reform case in American history. The Department of Justice filed its civil racketeering complaint in the IBT International case in 1988. The case was settled in 1989, but the remedial phase of the litigation, i.e. the enforcement of the settlement, continues to this day (early 2005) with no end in sight.2 [‡]

While there has been much academic writing about the decline of the American labor movement since approximately 1960, I don’t know any scholarly article or book that even suggests that the corrosive impact of labor racketeers on union organizing and administration might have undermined the labor movement’s attractiveness and strength. Rather than attributing labor’s decline to internal factors like bad tactical decisions and the mechanization of the workplace or to external factors like globalization or governmental policy, the analysis in this book offers organized crime penetration and exploitation as both an external and internal contributor to organized labor’s dwindling power.

With just one or two exceptions, labor historians have not sought to document and explain how organized crime elements took over union locals, joint councils and whole international unions, looted their pension and welfare funds, sold out union members’ interests and made a mockery of union democracy.[§] There is certainly no work by a labor historian documenting and analyzing the government’s efforts to punish and prevent labor racketeering.

Perhaps scholars of American labor wear ideological blinders. I have encountered a number of people who believe that there is something anti-labor about focusing on labor racketeering.[**] It is also true of course, that scholarly tastes change. For some years now it has not been fashionable for scholars interested in American labor to carry out case studies of unions. Rather they have turned their attention to the social and economic history of workers and the working class.

Despite the dearth of scholarship on the subject of labor racketeering, I am hardly writing on a blank slate. I owe a debt to many journalists and a small number of scholars who have created a small but strong edifice of labor racketeering studies that this book seeks to build on. One of the best scholars of labor racketeering was one of the first, Chicago sociologist John Landesco. In his classic Organized Crime in Chicago3 (prepared as part of the massive 1929 Illinois crime survey), Landesco provided a great deal of description and commentary on labor racketeering before the emergence of LCN. Landesco recognized the importance of labor racketeering to organized crime. He described the connection between labor racketeering and what he called “industrial racketeering.” According to Landesco, gangsters parlayed their control of unions into control over businesses and whole industries.

In ‘racketeering,’ the gunman and the ex-convict have seized control of business associations and have organized mushroom labor unions and have maintained or raised price and wage standards by violence, and have exploited these organizations for personal profit. ... The gunman and gangster are, at the present time, actually in control of the destinies of over ninety necessary economic activities. Al Capone, overlord of organized crime in the Chicago region, now a stockholder in a business enterprise, insures it ‘the best protection in the world.’4

Landesco identified twenty-three racketeer-controlled trades including window cleaning, machinery moving, paper stock, cleaning and dyeing, laundries, candy jobbers, dental laboratories, ash and rubbish hauling, grocery and delicatessen stores, garage owners, physicians, drug stores, milk dealers, glazers, photographers, florists, bootblacks, restaurants, shoe repairers, fish and poultry, butchers, bakers, and window shade men.5 He observed that, in some “cut-throat industries,” gangsters provided businessmen important assistance by organizing and enforcing profitable employer cartels that fixed prices, allocated contracts and generally stifled competition. Racketeers used the union’s monopoly over labor to force businesses to join employer associations. The employers paid “dues” that were passed along to the crime bosses. In exchange they obtained protection from business competitors and from union problems. They also obtained relief from enforcement of collective bargaining agreements and sometimes immunity from union organizing in the first place. Landesco’s insight about the functional role that labor racketeers played in curbing competition in “cut throat industries” presaged the more systemic analysis of law professors G. Robert Blakey and Ronald Goldstock in the 1970’s,6 economist Peter Reuter in the 1980’s,7 and the New York State Organized Crime Task Force (led by Goldstock) in the 1990s.

Harold Seidman’s Labor Czars: A History of Labor Racketeering (1938) appeared a decade after Landesco’s book. Seidman, a journalist who later became an academic, chronicled the careers of late 19^th and early 20^th gangster-type labor czars, like Joey Fay (Chicago) and Robert Brindell (New York). Brindell dominated and plundered the NYC building trades for years, frequently enlisting gangsters to intimidate and extort employers and workers. Brindell and Fay treated union members’ rights like commodities which, in exchange for bribes, they sold to employers. Seidman’s book clearly showed that: labor racketeering preceded the dominance of Italian-American organized crime; gangsters gained control of union locals at a time when law enforcement was weak or corrupt or both. Like Landesco, Seidman argued that (usually small) employers were willing and even preferred to deal with gangsters than with politically and socially radical labor officials.

In 1931, Louis Adamic, a Chicago-based journalist, novelist and political activist, published Dyanmite: The Story of Class Violence in America. He devoted several chapters to racketeering. He provided examples of how labor unions recruited gangsters (even ‘dynamiters’) to help them fend off employer repression. Adamic, who was a contemporary of Al Capone’s in Chicago, saw that once they had their foot in the union door, organized crime groups often sought to take over. He wrote:

We need not be shocked when we realize how close the relationship is between organized labor and organized crime. Nor need we be shocked by the thought that organized labor was a vital factor in the early history of modern racketeering, that, indeed, organized labor, perhaps more than any other economic group, started the professional criminals whose names now shriek in the headlines on their amazing careers. One should bear in mind that gangsterism was a vital factor early in the American class struggle, first on the capitalist side and then on the side of labor; and that its history is inextricably found up with the history of organized labor.8

In January 1940, conservative journalist Westbrook Pegler (Chicago Daily News and the Washington Post) exposed the connection of organized crime figures, especially Arthur Flegenheimer (“Dutch Schultz”) to George Scalise, president of the Building Services Employees International Union (BSEIU).9 Early in his career, Scalise moved from union to union. He used his connections with Dutch Schultz to obtain a Teamsters charter for a union of parking garage workers.10 David Witwer, an historian writing many decades later explained:

Scalise, and others of his type, went into the labor movement to make money; they came from outside the ranks of the workers in the industry, with whom they did not really identify. Nor did they depend upon those workers to organize the union through mass picketing and long strikes. Instead, they used selective acts of violence committed by a few individuals, probably with links to organized crime. Free from having to depend on a mobilized, united membership, the Union’s leadership could safely ignore the members’ needs, or sacrifice them to the interests of the employers. As a result, as unskilled workers scattered across a wide area and laboring in small shops, garage employees, and others caught in similar situations, had little knowledge of their union, and often no say in its affairs.11

Later, with the backing of Chicago’s organized crime syndicate, Scalise took over a Chicago BSEIU local.12 Then via a rigged election, Al Capone assured Scalise’s selection as BSEIU eastern vice president. Eventually, Scalise became the BSEIU’s international president.13

After World War II, investigative journalists continued to outperform university based scholars in documenting and analyzing labor racketeering. In 1949, New York Sun reporter, Malcolm Johnson, wrote a Pulitzer-Prize-winning series of articles on “gangsterism” in the International Longshoremen’s Association. A year later he published Crime on the Labor Front, a book that provided a wealth of detail about labor racketeering in the International Longshoreman’s Association, the Building Services Employees, the Waiters Union, the Cafeteria Workers Union, the International Alliance of Theatrical and Stage Employees, the International Brotherhood of Teamsters and several construction unions. Johnson explained how mobsters infiltrated and took over unions and then used their union power to establish employer cartels.

[A] gangster can break into a union by threats and violence or he can ‘fix’ an election so that one of his stooges becomes a key official. Once in power, he can bribe his opposition into cooperation, or he can sew them in sacks and drop them into the river. As for carrying away the loot, almost every gangster resorts to the same tried-and-true rackets to swindle the members and coerce the company.14

Johnson provided many examples of how labor racketeers violate the rights and subvert the interests of union members in order to line their own pockets and the pockets of their organized crime partners. However, he insisted that employers were not just the labor racketeers’ victims but, in many cases, their co-conspirators: “In permitting themselves to become extortion victims they [the employers] nearly always were seeking some advantage for themselves, usually at the expense of the workers.”15 Johnson’s articles and book later provided the basis for Budd Schulberg’s screen play for On the Waterfront.

In 1951, Daniel Bell (then a journalist, later a renowned Harvard sociologist) published his classic article, “Last of the Business Rackets”[††] in Fortune Magazine. Bell provided a rich description and trenchant analysis, incorporating geographical, economic, political, ethnic and other sociological variables to account for rampant and virulent racketeering on the New York City docks. In part, Bell attributed waterfront corruption and racketeering to New York City’s geo-economic character. New York City was the nation’s most important port. Yet, there were no railroad connections to the docks; everything had to be loaded onto and unloaded from trucks. New York City’s narrow streets ensured constant bottlenecks and long queues of truckers trying to pick up or set down ship cargo. Because delay was so expensive to shippers, racketeers could manipulate the loading and unloading process to extort and/or solicit bribes.

The abundance of casual laborers in the port suited both the union bosses and the shippers. The union bosses controlled the longshoremen through their power to hire and blacklist. Men who cooperated with the racketeers were rewarded with work. Those who complained were blacklisted.16 The racketeers also controlled all sorts of rackets that flourished on the docks, including thievery and usury.

Except for Father John M. Corridan, the heroic “waterfront priest”, the abused and exploited workers had no place to turn for assistance. Joseph Ryan, the ILA’s boss for decades, was closely allied to William J. McCormick, a business mogul, czar of the port, and one of the silent powers in New York’s Democratic Party politics. Ryan delivered votes to local politicians; in exchange the politicians turned a deaf ear to reformers’ demands for improving conditions on the docks. Would-be reformers found themselves pitted against an alliance of shippers and their own union.

Bell’s sophisticated analysis explains: why labor unions exerted so much power over workers and exercised so much leverage against shippers; why control over the longshoremen’s union was so attractive to professional criminals; how a corrupt relationship between business and labor enriched the labor racketeers at the expense of the workers, and; how politicians and law enforcement were neutralized.17 Ethnic politics were also important. Ryan and most of the longshoremen were Irish. However, Italian-American gangsters like Albert Anastasia and his brother, Anthony Anastasio, controlled some ILA locals and eventually took the union away from Ryan. In 1954, the brutal exploitation of ordinary ILA members was brilliantly dramatized in On the Waterfront (based on Budd Schulberg’s screenplay and produced by Elia Kazan. The movie, which starred Marlon Brando, Eva Marie Saint, Karl Malden, Lee J. Cobb, and Rod Steiger, was a spectacular success and generated public and political sentiment for reforming the situation on the docks.

Despite at least a half century of journalistic exposés of labor racketeering, no mainstream labor historian addressed the subject until 1958, when Professor Phillip Taft (Brown University) published a small (60 page) monograph on corruption and racketeering in the labor movement based on three lectures delivered at Cornell University.18 Despite the title, Taft was not familiar with organized crime’s role in the labor movement or, if he was, he chose not to write about it. Instead, he offered some vague bromides. For example, he attributed union corruption to “the avaricious creed of the larger society.” He observed that: “Racketeering in labor unions appears to flow from a general slackness in American society, an emphasis upon material gain, and practices prevalent in many areas of the business community.”19 Many labor scholars who followed Taft defended or opposed “business unionism” as the non-ideological basis for the American labor movement without ever noting that, in some unions, so-called business unionism was essentially organized crime exploitation.

In 1959, Sidney Lens, a left-wing peace and labor activist, socialist, director of CIO Local 329, occasional political candidate, and driving force in American radical politics from the 1930s to the 1960s,[‡‡] published The Crisis of American Labor, a remarkable book that seems to have been almost completely ignored over the next half century. (Lens, like many left wing intellectuals, got his start as a labor organizer, but when, on political grounds, was drummed out of the movement or prevented from rising within the movement, gravitated into journalism or academia.) Drawing on his personal experience, Lens documented and analyzed the methods by which organized crime figures gained a foothold in the labor movement. Although he didn’t cite Louis Adamic, his conclusions echo Adamic’s:

[Once the employers took to hiring thugs as strike breakers,] the unions … took to hiring their own muscle men, men like “Big Jack” Zelig, “Joe the Greaser” Rosensweig, “Dopey Bennie” Fein. ... [By] 1920 the gangsters had learned that it was possible to pursue the racket further. The men who came to dinner decided to stay on. They muscled themselves into a few local unions as partners. The next stage in labor racketeering was a broader effort not only to take over key local unions but international unions as well. In New York, the gambler Arnold Rothstein not only supplied thugs to the furriers and garment unions but bribed police not to molest pickets. His successors… Louis “Lepke” Buchalter and “Charlie the Gurrah” Shapiro built this business into a fortune.20

Although Lens was a labor activist, not a criminologist, he fully grasped the importance of labor racketeering for the empowerment of organized crime. “Labor racketeering is not only a source of income for the syndicate but a means of rounding out its empire; it is a not-too-hidden persuader, an integral part of a criminal trust that stretches across many fields.” 21

A decade passed before the appearance of a new book on U.S. labor racketeering, but it was worth the wait. UCLA historian John Hutchinson’s 1972 book, The Imperfect Union: A History of Corruption in American Trade Unions,22 was the first professional history of U.S. labor corruption and racketeering. Drawing heavily on the U.S. Senate’s 1957 - 1959 McClellan Committee hearings, it covered the period from the early twentieth century up to 1960. Hutchinson presented descriptive chapters on the “building trades,” ”the racketeers” and “the intervention of Congress.” However, like Philip Taft, Hutchinson did not distinguish ordinary corruption from Cosa Nostra labor racketeering.[§§] In other words, despite the McClellan Committee’s revelations, he did not identify organized crime penetration of and influence over union locals, regional unions and some important international unions as a special socio-political problem. However, he did unearth such a wealth of information about the influence of criminal elements in the labor movement that any subsequent study has to begin with his book.

The next important building block in the creation of scholarly corpus on American labor racketeering was the 1990 New York State Organized Crime Task Force (OCTF)’s Final Report on Corruption & Racketeering in the NYC Construction Industry, published by New York University Press.23 (I served as principal draftsman of this report.) Utilizing informants, grand juries, cooperating witnesses, union dissidents and “brain storming sessions” with various industry participants, the OCTF documented the persistence and pervasiveness of organized crime racketeering in NYC’s construction unions from the early 20th century through the late 1980s. Among other things, the report explained how the organized crime families converted their control over construction unions into a large revenue stream.

Expanding on an analysis first developed by G. Robert Blakey, Ronald Goldstock, and Gerard Bradley24, the OCTF investigation further developed the concepts of racketeering susceptibility and racketeering potential. The former referred to the strategic importance of a union for an entire industry, while the latter referred to the potential revenue or other advantages that could be pulled out of a union or from exploiting the union’s power. The OCTF Report hypothesized that labor racketeers target, or at least are successful in unions where both racketeering susceptibility and racketeering potential are high. The OCTF Report also made clear that, in the past, successful criminal prosecutions made little, if any, impact on LCN’s influence over labor unions because other LCN members and associates simply assumed the authority and responsibilities of their incarcerated comrades. The report offered a number of recommendations, ranging new criminal laws to a construction-industry-specific regulatory agency to a new institute for union democracy.

There are many authors whose work does not focus on labor racketeering but tangentially touches on the subject. For example, Stephen Fox’s Blood and Power (1989), a book about the history of organized crime, devotes a chapter to “gangsters, unions and employers”; Virgil Peterson’s The Mob (1983) includes chapters on “The Rise of Jimmy Hoffa” and on “The New York State Waterfront hearings,”25 and; Howard Abadinsky’s text Organized Crime, has a chapter on labor racketeering. Professor Abadinsky points out that: “Although labor-related business racketeering can be conducted by anyone, the history of the labor movement shows that the most substantial corruption of unions is conducted by organized crime”26 and that “Labor and business racketeering distinguish traditional organized crime from other forms, making traditional OC more influential than the others.”27 Gus Russo’s recently published history of Chicago organized crime, The Outfit: The Role of Chicago’s Underworld in the Shaping of Modern America, provides extremely useful information and insights about the Capone gang’s labor racketeering activities in the 1920’s and 1930’s.28 Peter Reuter’s, Racketeering in Legitimate Industries (1987), provides important insight on organized crime’s penchant for and methods of creating employer cartels.29 Reuter explained how Cosa Nostra used Teamsters Local 813 to establish and police a cartel in the NYC’s commercial waste hauling industry.

As for biographies, while we do not yet have a biography of an organized crime figure who specialized in labor racketeering, like Johnny Dioguardi, Anthony Scotto, or Tony Provenzano, there are various biographies of criminals, labor leaders and law enforcement officials that shed light on labor racketeering. Among these are: John Kobler’s biography of Chicago organized crime boss, Al Capone; Peter Maas’s biography of NYC’s Gambino Crime Family underboss Sammy “the Bull” Gravano; James Neff’s biography of Teamsters General President Jackie Presser (who was both an ally of Cosa Nostra and an FBI informant!); Mary Stolberg’s biography of NYC prosecutor (later governor and republican presidential candidate) Thomas E. Dewey, and; several biographies of Teamsters President Jimmy Hoffa.30

The Teamsters Union has drawn far more journalistic and scholarly attention than any other U.S. union.31 Two recent books on the Teamsters are among the best: historian David Witwer’s Corruption and Reform in the Teamsters Union (2003) and Stier, Anderson & Malone’s The Teamsters: Perception and Reality (2002). The latter was produced in 2002 at the behest of the Teamsters in order to persuade the U.S. Department of Justice that the Teamsters were ready, willing and able to police their own union without the need for the external monitor (Independent Review Board) that has been in place since 1989.

Although academic scholarship on labor racketeering is thin, there is an enormous amount of information to be mined from congressional hearings and reports and, more recently, from court decisions and the reports of court-appointed trustees. Throughout this book, I draw on the work of the Senate Select Committee on Improper Activities in the Labor or Management Field (the McClellan Committee) and on a number of hearings and reports by the U.S. Senate Subcommittee on Investigations. Two hearings: 1) Federal Government’s Use of Trusteeships under the RICO Statute (April 4, 6, & 12, 1989); and 2) Federal Government’s Use of the RICO Statute and other Efforts Against Organized Crime (August 1, 1990) are especially valuable because they are devoted to the propriety and usefulness of civil RICO union trusteeships in combating labor racketeering. The 1986 President’s Commission on Organized Crime’s volume, The Edge: Organized Crime, Business and Labor Unions is a very important resource because it synthesizes so many congressional reports as well as adding new material.32 Admittedly, these governmental sources reflect a certain perspective (e.g. labor racketeering is a serious problem), but they surface a great many facts and, in the case of the hearings, provide a forum for law enforcement officials, union leaders and union democracy proponents to express their views on the problem and its remediation.

With only a few exceptions, the protests of rank and file union members to oust racketeers from their unions have gone undocumented. The most important exception is the tiny but dogged Association for Union Democracy’s (AUD) whose newsletters, Union Democracy in Action (1959-1972) and The Union Democracy Review (1972 – present), provide terrific information and commentary about the struggles for justice of "dissidents" and rank-and-filer insurgents.33

So far we have been surveying what has been written about the history and dynamics of labor racketeering, the subject matter of the first six chapters of this book. But what of academic work and journalism on governmental, judicial, and labor responses to labor racketeering? Here scholarship is really thin. Remarkably, although the U.S. Department of Justice’s litigative efforts over the last 20 years to purge organized crime from the labor movement constitutes one of the most ambitious efforts at court-ordered and supervised organizational reform in our history,[***] there has been very little academic legal scholarship on the subject. There are no books and only a few law review articles.

In 1980, building on their work at the Cornell Institute of Organized Crime, Professors G. Robert Blakey and Ronald Goldstock published “On the Waterfront: RICO and Labor Racketeering,”34 advocating use of the federal civil racketeering statute (RICO) to attack labor racketeering. In addition to its draconian criminal provisions, RICO (Racketeer Influenced and Corrupt Organizations Act of 1970) provided the federal courts with authority to use injunctions and other “equitable remedies” to prevent racketeering. Blakey and Goldstock argued that “control of syndicate crime and labor racketeering will not be achieved by standard law enforcement practices,” and that “RICO provides the flexibility required to implement a comprehensive strategy in the labor racketeering area. To the extent that it is used appropriately and with discretion, it offers significant potential to affect what is clearly a national problem.”35 This book shows the prescience of their prediction, but also the extraordinary challenge of successfully purging organized crime and reforming the governance and administration of these heretofore “captive” labor organizations.

From the standpoint of the union democracy movement, Professor Michael Goldberg (Widener Law School) published the most important law review article on the subject in the Duke Law Review in 1989. Unfortunately, the article was published just a bit too soon to take account of the government’s path-breaking civil RICO suit against the International Brotherhood of Teamsters’ general executive board and the Mafia’s “commission” of organized crime bosses.36 Goldberg was able to draw on the complaints and settlements (and in one case the trial transcript) in three suits against union locals. However, his main goal was normative; to argue that civil RICO suits and resulting court-ordered or court-supervised trusteeships are justified because they are the only way of liberating racketeer-ridden unions. In this conclusion, he was joined by Herman Benson, the founder and driving force of the Association for Union Democracy, a shoe-string non-governmental organization that has fought valiantly since 1969 to protect the rights of union members against labor racketeers.

My own (with student co-authors Christopher Panarella and Jay Worthington III) 1994 book Busting the Mob: United States v. Cosa Nostra, sought to document and analyze the U.S. Department of Justice’s all-out attack on organized crime triggered by the murder of Jimmy Hoffa in 1975. Toward that end, one section of that book consists of five chapters, each presenting a case study of an important 1980s organized crime case. One chapter is devoted to U.S. Department of Justice’s (federal Newark, NJ Organized Crime Strike Force) 1982 civil RICO suit against Teamsters Local 560 and another chapter to DOJ’s (southern district of New York, headed by U.S. Attorney Rudy Giuliani) 1989 suit against the International Teamsters Union. My co-authors and I drew on the formal legal complaints, the trial and decree (in the case of Local 560), the consent decree (in the case of the IBT International) and a plethora of court opinions and trustee reports. Nevertheless, at the time we wrote that book, the remedial phases of both cases were in their early days. At that time, it was certainly unclear how long the remedial phase of either case would last or whether, ultimately either trusteeship would be successful. A decade has passed; the Local 560 trusteeship has been declared successful and terminated, but the Independent Review Board, established by the consent decree to investigate and adjudicate corruption and racketeering cases in the International Teamsters Union, continues with no end in sight.

As the 1990s progressed, a nascent law review literature began to grow around the question of whether it was justifiable and desirable for the government to seek to reform mobbed-up unions through court-appointed and supervised trusteeships established by civil RICO suits. Critics of the DOJ/FBI offensive against labor racketeering pointed to the unsavory history of governmental and judicial interventions in labor disputes. The critics emphasized that even well-intentioned government initiatives threatened the labor movement’s independence. On the other side Professor Michael Goldberg and University of Pennsylvania Law Professor, Clyde Summers, the nation’s leading legal scholar of union democracy, argued that while RICO-triggered union trusteeships carry certain dangers, there is no other way to purge organized crime from racketeer-ridden unions.

In the 2000s, my students and I published two case studies of union trusteeships and one overview of the entire DOJ effort to purge organized crime from the labor movement. The first case study focused on the IBT Local 560 case which, was terminated in 1999, after DOJ and the court were persuaded that the trustee’s 12 years of remedial efforts had successfully purged organized crime, mounted fair elections, and established a viable union democracy.37 The second case study focused on a regional union, the NYC District Council of Carpenters, which was comprised of some twenty-two union locals in the NYC area.38 That trusteeship began in 1994 and was terminated in 1999, the judge declaring success and folding the trusteeship’s tent. However, upon closer inspection, and in light of events that occurred after the trusteeship ended, that trusteeship cannot be considered a success. Finally, in a 2004 article, two law students and I attempted to bring together what is known about all 20 civil RICO-generated-union trusteeships that have existed up to 2005.39

These 20 civil RICO union suits and resulting trusteeships constitute an extraordinarily important chapter in both American labor history and American law enforcement history. They inform our understanding of why the U.S. labor movement evolved the way it did and what its possible future might look like. They also inform our understanding of the potential and limits of organized crime control, and particularly of purging organized crime from organizations that have long been dominated through both intimidation and patronage. Moreover, a close look at these lawsuits and trusteeships ought to interest students of law and society who study the capacity of courts to reform corrupted or unconstitutional organizations and institutions.

Introduction

The public must not be allowed to believe that organized labor is represented by those few unions in which union delegates have become criminals, or criminals have been made into union delegates. Unless they are purged, labor unions which have been thus taken over by criminals will, just as certainly as night follows day, wreck the cause of organized labor in this country and set back its progress many years. The officers of these unions are all too frequently the willing tools of professional criminals who direct their activities and keep them in office by means of force and fear.

--Special NYC Prosecutor Thomas E. Dewey, July 30, 1935 radio address, quoted in Dewey’s autobiography, Twenty against the Underworld.

We thought we knew a few things about trade union corruption, but we didn’t know the half of it, one-tenth of it, or the one-hundredth of it. We didn’t know, for instance, that we had unions where a criminal record was almost a prerequisite to holding office under the national union....

--AFL-CIO President George Meany reacting to the McClellan Committee hearings, as reported by the New York Times on November 2, 1957.

Labor racketeering, the exploitation of unions and union power by organized crime, has been an unpleasant fact of life in the United States since the late 19th century. The racketeers’ basic modus operandi includes: looting union treasuries and pension funds by theft, fraud, and bloated salaries; selling out union members’ rights and interests in exchange for employers’ bribes and kickbacks; exploiting union power to extort employers, and; conspiring with employers to operate employer cartels that allocate contracts and set prices. Labor racketeering provides the organized crime families a bridge into the worlds of business and politics and a seat at the table of the local power structure in most major American cities. In many big cities, for much of the early and mid 20^th century, corrupt politicians provided the labor racketeers protection from law enforcement in exchange for campaign contributions, campaign workers, votes, manipulation of elections and corrupt opportunities for personal enrichment.1

Until the 1980s, Congress led the effort at calling attention to labor racketeering as a national problem. It created some special labor racketeering offenses and chided the federal law enforcement agencies and the U.S. Department of Labor for failing to make labor racketeering a priority. Not until the mid-1970s, after the death of long-time FBI Director J. Edgar Hoover, did federal law enforcement make organized crime control a priority. When Teamsters leader Jimmy Hoffa disappeared in 1975, apparently the victim of an organized crime assassination, the FBI made an attack on labor racketeering a priority in its campaign against organized crime. By contrast, the U.S. Department of Labor, and the organized labor movement, essentially ignored complaints by rank and file “dissidents” about intimidation, fraud, mistreatment, and plunder of their unions.

In the 1980s the FBI, Department of Justice, and Department of Labor launched investigations, criminal prosecutions and civil racketeering lawsuits against racketeer-ridden union locals, regional councils, and even national/international unions. (International unions have locals in Canada as well as the United States.) This campaign produced hundreds of prosecutions and at least 20 cases of “captive” labor unions being placed under court-monitored trusteeships. Some of those trusteeships have been brought to conclusion, having achieved varying degrees of success but, as of early 2005, most of them remain works in progress

The purpose of this chapter is to preview the analysis presented in the rest of the book. Chapters 2-4 provide background on the nature and extent of the problem. Beyond that, these three chapters seek to establish two fundamental points: first, that labor racketeering has been a central and defining activity of the Cosa Nostra organized crime families; second, that labor racketeering has been a major and defining characteristic of the U.S. labor movement throughout the twentieth century. More specifically, Chapter 2 documents and explains the extent of LCN exploitation of labor unions and how that exploitation turned organized crime figures into economic and political power brokers. Chapters 3 and 4 document and explain the nature and extent of labor racketeering in the labor movement as a whole circa 1980 (Chapter 3) and in New York City in the post World War II period (Chapter 4).

Chapters 5-7 deal with the response to labor racketeering by organized labor (Chapter 5), by rank and file union members (Chapter 6) and by local, state and federal law enforcement agencies (Chapter 7). In Chapter 5, we will see that the AFL-CIO (American Federation of Labor – Congress of Industrial Organizations), the U.S. umbrella labor federation, took some halting steps against labor racketeering in the 1950s, during and after the U.S. Senate’s McClellan Committee Hearings. However, since then, the AFL-CIO has more or less ignored the problem, fearing that an attack on labor racketeering would divide and weaken the labor movement. In Chapter 6, we will see that although labor racketeers used intimidation, violence and economic power to thoroughly repress workers and rank and file union members, reformers, often called “dissidents,” have courageously challenged this domination via protests, election challenges, and litigation; sadly, these struggles almost always failed, frequently costing the reformers their economic livelihood, physical security and sometimes even their lives. In Chapter 7, we will see that, for most of the twentieth century, local law enforcement was either too corrupt or too weak to take on organized crime although, to be sure, there were some important exceptions. Federal law enforcement, though potentially better suited to attack organized crime remained aloof from organized crime control. When federal law enforcement finally took action, the labor racketeers suffered major defeats and momentum passed into the hands of reformers.

Utilizing in-depth case studies, chapters 8-13 begin the monumental task of documenting and analyzing the federal government’s attack on labor racketeering. The attack began in 1982 with the filing of the first civil RICO (Racketeering and Corrupt Organizations Act) lawsuit against the racketeer-ridden Teamsters Local 560 and continues to the present (early 2005). Chapter 8 explains the way the RICO law works in labor racketeering cases and provides an overview of twenty years of complex anti-labor-racketeering investigations and litigation. Chapter 9 provides a case study of the Teamsters Local 560 case, a remarkable success story. After twelve years of effort by the Department of Justice, Department of Labor, a federal district court judge, a court-appointed trustee and members of Local 560, the mobsters were purged and a reform regime was voted into office in a fair and competitive election. The same cannot be said of the NYC District Council of Carpenters (Chapter 10) which, though subject to vigorous criminal and civil litigation and despite the best efforts of a savvy court-appointed trustee, has not been successfully liberated although there have been clear improvements in union governance and organization. In Chapter 11, we take a look at the implementation of the RICO-spawned remediation of the four international unions which, for decades, have been identified as the most influenced by organized crime. Because of the immense size (geographically and in membership) of these unions, it is difficult for analysts to draw firm conclusions as to the successes and failures of reform, but we will identify some of the most important features of the government’s, courts’, and internal unions’ reform efforts. Then, in Chapter 12, we will step back and draw some conclusions about the successes and failures of more than 20 years of anti-labor-racketeering initiatives and suggest possible strategies of remediation. The concluding chapter will attempt to place the entire experience of 20^th century American labor racketeering and remediation in larger conceptual and theoretical perspective.

Having previewed the book as a whole, we now turn to introducing the “characters” in this complex century-long labor racketeering story.

Cosa Nostra

The Italian-American crime families that evolved into Cosa Nostra did not invent labor racketeering, but organized crime in the United States has always been ethnically based. Before the dominance of the Italian-American organized crime groups, there were powerful and important Jewish and Irish organized crime groups. Members of these groups were the earliest labor racketeers and established the basic patterns and strategies of labor racketeering.2

The Italian-American organized crime groups became extraordinarily powerful during the period of National Alcohol prohibition (1920-1933). By the 1940s, the modern organization of these organized crime “families” had been achieved.[†††] There were 24 such crime families operating in 20 cities with five families co-existing in New York City. These families were all organized along the following lines: The boss, assisted by an under-boss and a consiglieri (counselor), who was chosen by the “capos” as a kind of ombudsmen to whom they could bring problems that arose with other capos or even complaints about the boss. The “made members” or “soldiers” who have gone through an initiation ritual and have sworn fealty to Cosa Nostra are organized into “crews,” each led by a “capo” or captain. Moreover, each crew includes “associates” who work with the capo and soldiers, but who are not themselves “made members.” Scholars disagree as to whether the 24 families were “ruled” or “coordinated” by a “commission” of large family bosses. My view is that there is little evidence of the existence of a Mafia commission that ruled in any meaningful sense of the word. No doubt crime family bosses met from time to time, and in different configurations, to “adjudicate” or negotiate inter-family disputes and discuss matters of mutual concern. The famous 1957 mass meeting at Apalachin, New York is an example of a convention-type get-together; 22 of the 58 bosses arrested at Apalachin listed their occupation as labor official or labor consultant.3 From time to time there may have been a group (committee) of bosses who met as a kind of court, as occasions arose, to settle inter-family disputes. But there was never anything like an on-going national government of organized crime families that made “law” or issued and enforced policy. The families have always operated autonomously.

The Unions

The history of the American labor movement can be traced back to the eighteenth century.4 Certainly, with the growth and industrialization of the U.S. economy, nascent labor unions were common by the late nineteenth century. Indeed, that period was marked by some extraordinarily bloody clashes between labor organizers and businesses determined to prevent their workers from being represented by unions. Most often the police and the courts sided with the employers. Many union organizers were prosecuted in state courts for conspiracy and other offenses.5 Many courts issued injunctions ordering union leaders and members to cease and desist from strikes and other disruptions of business.[‡‡‡] This era of violence brought gangsters into labor/management conflicts on both sides and thus laid the ground for more permanent infiltration of the union movement. Intervention by the police, prosecutors and courts on the side of business, created a legacy of suspicion in the labor movement about government involvement in “solving” labor problems.

The 1935 Wagner Act6 recognized the right of (private sector) workers to bargain collectively with their employers. The Act established a National Labor Relations Board to administer a complex web of regulations governing union jurisdiction, recognition or election of the union which would serve as a given group of workers’ exclusive bargaining agent, and the duties of both management and labor in negotiating in good faith with one another. Union membership soared, increasing from 3.8 million members in 1935 to 12.6 million members in 1945.7

By 1947, some elements of the citizenry and Congress had come to believe that organized labor had become too powerful. Over President Truman’s veto and fierce opposition from the labor movement, Congress passed the famous Taft-Hartley Act8, which aimed to cut back labor’s power by prohibiting secondary boycotts, allowing the President to temporarily halt certain strikes, prohibiting political contributions by unions, and prohibiting the closed shop. The Act also included a provision outlawing labor bribery; it became a crime for an employer to give anything of value to a labor official and for a labor official to accept anything of value from an employer.

Labor unions were organized at the local, regional and national/international level. National unions themselves organized or granted charters to individuals to organize local chapters of their union among workers in a particular bargaining unit. Locals typically included workers employed by a number of different businesses, usually but not always in the same industry. Thus, a local’s membership could vary from the low hundreds to more than ten thousand. The locals’ officers bargained with each of their members’ employers to achieve collective bargaining agreements that governed the terms and conditions of employment. Beginning in the 1940s, the locals’ officers regularly bargained for employer contributions to worker pension and welfare funds. By the 1950s and 1960s some of these funds held immense deposits, thereby posing an irresistible target for organized crime.9

Some national unions provided in their constitutions for the establishment of regional councils that were comprised of all the local unions in that council’s geographical area. The officers of these councils were chosen by the leaders of the union locals which comprised the council. The powers of these councils differed, but in many cases they engaged in collective bargaining with the various locals’ members’ employers. They also provided a level of insulation for the officers who were accountable to the locals’ representatives, not to the rank and file.

Labor racketeering

The penetration of labor unions by professional criminals dates back to the late 19^th century.10 Not all unions were equally susceptible to being taken over by organized crime elements. The most susceptible were unions whose members worked for numerous small employers in geographically dispersed locations. Such workers were unable to organize themselves to oppose gangsterism. Working alone or in small groups, they could be easily intimidated and subdued. Therefore, it is not surprising to find that some of the first unions to be captured by organized crime were made up of restaurant workers, coach and truck drivers, and construction workers. Unions were also susceptible to take over where, as in construction and longshoring (loading and unloading seaborne cargo), work was seasonal or sporadic and employers relied on union hiring halls to send them the labor that they needed. Where union officials could silence opposition and reward supporters by denying or awarding jobs, racketeering susceptibility was very high. The craft unions, those with the highest susceptibility to racketeering, were mostly affiliated with the American Federation of Labor.

The racketeering susceptibility of unions comprised of factory workers was much lower. Factory workers were organized much later than “craft” workers, in part because the large employers could resist more effectively. When the factory workers were organized, it was along the lines of the whole plant, i.e. in industrial unions. These tended to be very large unions whose members worked in large concentrated worksites. The workers were much more tied to their employers than were craft workers who often moved from job to job. Therefore it was much more difficult for labor racketeers to intimidate and dominate them. These unions were also more ideological than the craft unions; socialist and even communist ideology commanded a great deal of support. The more-ideologically minded labor officials were less attracted to corrupt opportunities for personal enrichment. The unions that represented the factory and mine workers were mostly affiliated with the Congress of Industrial Organizations (CIO). There have been very few examples of organized crime groups making any headway in these unions. In 1955, the American Federation of Labor (AFL) and the Congress of Industrial Organizations (CIO) combined to form the AFL-CIO.

In the late 1950s, the newly combined AFL-CIO took steps against labor racketeering in its affiliated unions. But by the 1960s those initiatives completely died out. Thereafter, the AFL-CIO almost always excoriated Congressional and law enforcement anti-labor-racketeering hearings, legislation and campaigns, seeing in such initiatives a sinister threat to the health and well being of the labor movement.

Employers

In the late 19^th century and early 20^th century up until passage of the Wagner Act in 1935, many employers, especially large employers, fought mightily to prevent the unionization of their employees. When unionization proved inevitable, many of these employers sought to sign representational agreements with gangster-controlled unions, which they much preferred to leftwing labor organizations because the former were susceptible to bribes in exchange for sweetheart contracts.11 Both the employers and the labor racketeers themselves used red baiting to smear dissidents who criticized or challenged them.12 (Echoes of such tactics can be found right up to the present day.)[§§§] The gangsters who controlled these unions could be bribed; indeed they were in the business of soliciting bribes, to make concessions in collective bargaining agreements and/or not to enforce the terms of the collective bargaining agreement.

Small employers in competitive industries had another reason for preferring to deal with unions controlled by racketeers. Where there are large numbers of small employers in a competitive industry (e.g. restaurants, laundry, trucking), the employers have a greater reason to accept, indeed to reach out to gangsters to “stabilize” cutthroat competition, neutralize labor unrest and opposition,13 and not enforce collective bargaining agreements.14 In addition, a strong gangster-controlled union could establish and enforce an employers’ cartel that would restrict the number of employers, fix prices and allocate contracts and customers to the cartel’s members.[****] The union was in a position to do this because it could “discipline,” even put out of business, any employer who refused to cooperate with the cartel.

Politicians, Police and Prosecutors

For much of the 20th century, urban law enforcement was laced with political influence and corruption. In most big cities, the police departments, and often the prosecutor’s office, was subservient to the party political machine which, in turn, was frequently allied to labor racketeers. (This was dramatically illustrated by the 1951-52 U.S. Senate Kefauver hearings.) By the 1940s, in many American cities the local “power structure” was a quadripartite alliance among organized crime, elements of organized labor, elements of the business community and the Democratic Party political machine, including even district attorneys and top police brass.[††††]15 For example, Frank Costello, the New York City boss of all bosses, was a power in Tammany Hall, and Tom Pendergast, the Kansas political powerhouse, was closely allied to organized crime in Chicago and New York.

Even when they were not corrupted, local police departments and county district attorneys’ offices did not have the resources to conduct the lengthy and sophisticated investigations required in organized crime cases. Special prosecutor and then Manhattan District Attorney Thomas Dewey’s anti-racketeering investigations and prosecutions during the 1930s were the exceptions. But before the days of legal electronic surveillance, witness immunity, witness protection programs, and methods to prevent juror intimidation, it was extremely difficult to investigate and convict organized crime figures. Moreover, individual convictions had no impact on deeply-embedded systemic criminality.

Hoover’s FBI (1924-1972)

Federal law enforcement had more resources and more freedom to deploy agents as it chose (rather than in response to citizen complaints), but FBI Director J. Edgar Hoover denied the existence of the Mafia and refused to devote investigative resources to organized crime.[‡‡‡‡] Scholars and other commentators still disagree about Hoover’s motives. Some believe that Hoover was being blackmailed by mobsters who knew about his (supposed) homosexuality.16 Other scholars believe that Hoover either: did not regard organized crime as a national problem; did not believe that the FBI had jurisdiction to investigate local gangsters; feared that FBI agents would be corrupted if they became involved in investigating the vice crimes that the Mafia was engaged in (gambling, drugs, etc.); or perhaps, prior to 1957, he simply did not believe there was any national crime federation. Still other scholars emphasize that Hoover did not want to divert resources from his top priority, investigating communists and political subversives.[§§§§] While we will probably never be able to choose definitively among these explanations, the facts are indisputable—until after Hoover’s death in May, 1972, the FBI was not seriously deployed against organized crime while it assigned top priority to exposing and prosecuting communists (broadly defined).17 The Industrial Workers of the World (IWW) and other left-wing labor groups were relentlessly suppressed while organized crime labor racketeers were hardly opposed until the 1970s. By putting FBI resources into suppressing “radicals” rather than Mafiosi, Hoover contributed to the emergence of an American labor movement heavily infiltrated and influenced by organized crime.

      Teamster history provides just one example of how

government, specifically FBI policy, chose a racketeer-ridden

labor movement over a left-wing labor movement. In the 1930's,

the most powerful Teamster leader in Minnesota was Farrell

Dobbs, a socialist and brilliant strategist who soon organized

over-the-road freight drivers and other dock workers and

warehousemen throughout the Midwest. His Teamster protégé and

eventual rival was Jimmy Hoffa who, from the early days of

his career, recruited thugs and individuals linked to organized

crime to help him battle employers. The FBI attacked Dobbs,

while leaving Hoffa to prosper. In the late 1930s and early

1940s, Dobbs and more than two dozen militant socialist trade

unionists were the first to be indicted under the anti-Communist

Smith Act. Dobbs himself was imprisoned until the end of World

War II.[*****]  Jimmy Hoffa became the undisputed leader of the

Teamsters in Minnesota and soon the entire Midwest. Hoffa's

connections with organized crime were instrumental in vaulting

him to the Teamsters general presidency and figured prominently

in his administration of the union.18

Post-Hoover FBI

After Hoover’s death in 1972, the FBI modernized and became a modern law enforcement (rather than anti-subversives) organization. Organized crime was defined as a serious problem and became a top priority.19 After Jimmy Hoffa’s disappearance in July 1975, the FBI defined labor racketeering as a key part of the organized crime problem.

Because the FBI came to labor racketeering as part of its campaign against organized crime, it always defined labor racketeering first as an organized crime problem and second as a union corruption problems. Despite the employers’ complicity with organized crime in exploiting their employees and corrupting their unions, investigators and prosecutors did not focus on labor racketeering as a problem of labor/management corruption.[†††††] The law enforcement agents and agencies typified corrupt employers as victims or, at worst, minor wrongdoers who could be recruited as cooperating witnesses against organized crime figures and the corrupt union officials. Labor racketeers who engaged in violence, extortion, intimidation and all sorts of crimes in addition to labor racketeering, fit law enforcement’s (and the general society’s) stereotype of criminals while employers did not. They also belonged to ethnic minority groups which, at the time, were widely believed to have a dangerous predilection for crime. Employers, on the other hand, fit law enforcement’s stereotype of essentially law-abiding citizens or, at worst, minor white collar offenders.

When the post-Hoover FBI finally did mobilize itself to attack organized crime, it did so in a massive and aggressive way. By the early 1980s there were 300 FBI agents in New York City assigned to organized crime investigations. The New York City office organized separate squads on each of the City’s Cosa Nostra crime families. With the urging of G. Robert Blakey and Ronald Goldstock, they redefined their mission as dismantling each family by attacking its revenue sources and as well as convicting its leaders. Unions, of course, were one of the key revenue sources and most important power base.

U.S. Congress

Until the late 1970s, the most important opposition to labor racketeering came from Congress via hearings and legislation. Beginning in the 1930s, but especially from the 1950s, Congress held dozens of hearings on corruption and racketeering in the labor movement, some attracting enormous publicity.20 Many labor officials regarded such hearings as motivated by a desire to weaken labor rather than to fight racketeering, and to an extent, they may well have been right. It is not impossible to dissect the motivations of all those senators and congressmen involved in labor racketeering investigations over many decades, but undoubtedly some of their motives were anti-labor or, at best, self-aggrandizing. The senators who were most aggressive in investigating and denouncing labor racketeering were southern conservatives who represented states where unions were weak and unpopular. And federal legislation that attacked labor racketeering usually was part of a larger bill that weakened organized labor. For example, the 1947 Taft-Hartley Act made it a federal crime for a union official to receive anything of value from an employer and similarly for an employer to give anything of value to a labor official. But the Act also contained wide-ranging provisions designed to curb union power.[‡‡‡‡‡]

On August 12, 1953, in response to a devastating New York State investigation of racketeering in the Port of New York and New Jersey,21 President Dwight Eisenhower signed the Waterfront Commission Act, an interstate compact which permitted New York and New Jersey to establish the Waterfront Commission of New York Harbor in order to regulate waterfront business activity and labor relations.22 The Waterfront Commission replaced the infamous “shape up” (whereby the union bosses picked out who would work that day from the men assembled on the pier) with a hiring system that licensed longshoremen, assigned them to jobs, and guaranteed them an annual wage. It also ended the “public loading”[§§§§§] racket, by which the International Longshoreman’s Association (ILA) required truckers to make corrupt payoffs in order to have cargo loaded or unloaded from their vehicles at the piers, even if the public loaders’ service was not desired or needed. The Act (and the implementing legislation passed by both the New Jersey and New York legislatures) gave the Waterfront Commission power to register workers, deny registration and employment on grounds of felony and misdemeanor convictions, and disbar ex-convicts holding elective ILA positions. The ILA resisted the Waterfront Commission by, among other things, challenging a provision in the law that prohibited unions which employed ex-felon officers from collecting members’ dues.23 In De Veau v. Braisted, the U.S. Supreme Court upheld the provision, observing:

In disqualifying all convicted felons from union office unless executive discretion is exercised in their favor ... [This law] may well be deemed drastic legislation. But in the view of Congress and the two States involved, the situation on the New York waterfront regarding the presence and influence of ex-convicts on the waterfront was not a minor episode but constituted a principal corrupting influence.24

The McClellan Committee (Senate Special Select Committee on Improper Activities in the Labor or Management Field), 1957 - 1959, eclipses all other legislative or commission investigations into labor racketeering. Its 100 staff members constitute the largest Congressional investigative staff in American history. The Committee called 1,525 witnesses, including high ranking union officials and mobsters, many of whom refused to answer on Fifth Amendment grounds. (These were the days before the federal immunity statute, so witnesses could not be compelled to answer questions under an immunity grant.) The clash between the Committee’s chief counsel, Robert F. Kennedy, and Teamsters vice-president and then (during the course of the Hearings) general president, Jimmy Hoffa, provided high drama to a national audience and left no doubt that there was something rotten in the state of the mid-century unions.

Senator John McClellan (D. Ark.) asserted that powerful mob figures like Anthony Corallo and John Dioguardi had assisted Hoffa in placing a supporter in charge of IBT Joint Council 16 so that Hoffa would have the necessary votes to win the IBT general presidency in 1958. The committee also uncovered mob links with other unions, businesses and industries. In his book about the McClellan Committee hearings, The Enemy Within, Robert F. Kennedy used apocalyptic terms to warn that organized crime’s strategic position in the labor movement gave it the power to shake down or shut down the nation. Kennedy wrote, “The point I want to make is this: If we do not on a national scale attack organized criminals with weapons and techniques as effective as their own, they will destroy us.”25

The McClellan Committee’s hearings led directly to the 1959 Labor Management Reporting and Disclosure Act26, known as the Landrum-Griffin Act which, for the first time, enlisted union democracy as a key strategy in fighting labor racketeering. Senator McClellan and his colleagues argued that the best antidote to labor racketeering would be an active and informed union rank and file that would monitor its officers and throw them out if they acted contrary to the interests of the membership. Landrum-Griffin set out a federally-guaranteed union members’ bill of rights, including the right to speak and associate freely, run for office in free and fair elections, and have the opportunity to find out about (and, in some cases vote on) what the union’s officers are doing.27

Congressional, usually Senate hearings on organized crime and on labor racketeering continued through the 1960s, 1970s and 1980s. There were several hearings on exploitation of the unions’ pension and welfare funds, leading to the passage of the landmark Employee Retirement Insurance and Security Act of 1975 (ERISA). (Senator McClellan introduced the first version of the bill that eventually passed). There were hearings on the four most racketeer-ridden national/international unions: Teamsters, Laborers, Longshoremen, and Hotel and Restaurant Workers. And there were hearings on the Department of Labor’s willingness and capacity to respond to evidence of labor racketeering and later on the efficacy and desirability of the RICO trusteeships.

U.S. Department of Justice (DOJ)

The U.S. Department of Justice is a cabinet-level department headquartered in Washington, DC and headed by the U.S. Attorney General. In addition to the DOJ attorneys who represent states in criminal and civil litigation, the FBI, Federal Bureau of Prisons and several other agencies come under the DOJ’s aegis. Importantly, however, the FBI is substantially independent of the lawyers’ side of the department. The FBI director is a presidential appointee, requiring Senate confirmation, who serves for a 10 year period. The DOJ criminal division’s priorities are not necessarily the same as the FBI’s priorities, so an organized crime control campaign required a great deal of coordination.

The DOJ’s criminal division is comprised of 20 different sections, e.g., fraud, domestic security, asset forfeiture and money laundering, etc. In the mid-1950s, under the Eisenhower Administration, the DOJ formed the Organized Crime and Racketeering Section (OCRS), to focus the Department’s anti-organized crime resources. OCRS remained a small, fairly inactive department until it was revitalized in 1961 by the new Attorney General, Robert F. Kennedy.

In addition to central headquarters in Washington DC, the Department of Justice is represented by a United States attorney’s office in each of the 93 federal judicial districts that cover the entire territory of the United States. (New York City, for example, has two judicial districts and two U.S. attorneys’ offices, the Southern District of New York (SDNY) which includes Manhattan, Bronx, Westchester and some other suburbs and the eastern District of New York (EDNY) which includes Brooklyn Queens, Staten Island and the Long Island suburbs.) The U.S. attorneys are appointed for four year terms by the President of the United States and, like cabinet officers and certain other high governmental officials, are subject to Senate confirmation. The budgets for the U.S. attorneys are set by central DOJ, but the U.S. attorneys have substantial autonomy and, to a large extent, choose their own investigative/prosecutorial priorities.

When Robert F. Kennedy, as U.S. Attorney General (1961-64), revitalized the Organized Crime and Racketeering Section (OCRS), he established the first federal organized crime strike force in Buffalo, New York.[******] The strike force was a way of circumventing both the FBI (controlled, at that time, by Hoover) and the U.S. attorneys’ offices. The strike forces would report directly to the head of the OCRS who, in turn, reported directly to Kennedy. Each strike force consisted of agents of a number of different agencies including the Internal Revenue Service, Labor Department, and FBI, although Hoover was not enthusiastic about cooperating. The strike forces undertook some important investigations and initiated some important prosecutions before RFK resigned as attorney general in 1964, several months after his brother, President John Kennedy, was assassinated. The OCRS was not abolished, but it lost the luster and prominence that it had under RFK. Not until the mid 1970s was it fully resuscitated and the number and resources of the federal organized crime strike forces increased. [††††††]

The turning point in law enforcement’s attack on organized crime generally, and labor racketeering specifically, was the disappearance (immediately assumed to be a mob “hit”) of Jimmy Hoffa in the summer of 1975, Hoffa disappeared while campaigning to regain the IBT general presidency from former protégé Frank Fitzsimmons with whom LCN had become quite comfortable.[‡‡‡‡‡‡] Organized crime had never before murdered a national figure of Hoffa’s stature (unless, as some people believe, it assassinated President John F. Kennedy).28 Almost immediately, organized crime control became the FBI’s top priority. The Hoffa assassination gave the post-Hoover FBI and the OCRS a successful rationale for launching and sustaining a campaign against the Cosa Nostra organized crime families that continues to this day.29 It bears emphasizing that the FBI viewed the attack on labor racketeering as part of its strategy of crushing LCN: without this link, union corruption would not have triggered the massive and sustained federal law enforcement effort.

Racketeer Influenced and Corrupt Organization Act (RICO)

In the late 1960s, Senator McClellan held hearings on the organized crime problem. Witnesses and the senators themselves observed that when an organized crime boss was put in prison, the Cosa Nostra bosses assigned another to replace him. To have any chance of eliminating, or substantially weakening organized crime, the government would have to do something other than prosecuting, convicting and punishing individuals for discrete crimes.30 The solution was RICO, a complex statute that provided DOJ and the federal law enforcement agencies with a multi-faceted remedial statute who’s criminal and civil provisions were aimed at convicting organized crime members and at eliminating their economic base.

The 1970 RICO statute, co-sponsored by Senator John McClellan, created three new federal crimes, and a fourth made criminal a conspiracy to violate each of the three. Under RICO: it is a crime to invest the proceeds of racketeering activity or collection of an unlawful debt in an enterprise (any legal entity or an association in fact); it is a crime to take an interest in any enterprise through a pattern of racketeering activity or collection of an unlawful debt, and; it is a crime to conduct or participate in the affairs of an enterprise through a pattern of racketeering activity or collection of an unlawful debt. In other words, it is a federal crime, punishable by up to twenty years in prison, to buy into an enterprise with “dirty money,” to use muscle or fraud to acquire an interest in an enterprise, or to use an enterprise as a vehicle for carrying out racketeering activity.

In addition to its criminal provisions, RICO contains two different civil remedies. One remedy, Section 1964(a), provides a private right of action (with treble damages) for the victims of racketeering. While prominent and controversial in the commercial litigation context, this provision has never been used by victims of organized crime to sue the Mafia for compensation. Maybe such victims doubt they would succeed in collecting any money from the mobsters; certainly fear of retaliation is a likely explanation for their failure to sue. In any event, it is the second civil RICO provision that has proved to be an outstanding tool for attacking systemic criminality like labor racketeering. Section 1964(b) authorizes the U.S. attorney general to seek wide-ranging equitable relief to prevent continuing RICO violations. If the attorney general can persuade a federal court (there is no right to a jury trial) of the need for extreme remedial action, the court is empowered to expel union officers, change election and hiring hall procedures, install financial controls and appoint a trustee to monitor and enforce the remedial decree. This provides for the possibility of ongoing federal court supervision, supported by continued FBI and DOJ investigations and enforcement.

In 1982, DOJ’s Organized Crime Strike Force in Newark, New Jersey brought the first civil RICO suit against a union, IBT Local 560, the largest Teamsters local in New Jersey (35,000 members). For decades, Local 560 had been the fiefdom of Tony Provenzano, a capo in the Genovese Crime Family and the local’s top official. Union members who dared to complain or challenge “Tony Pro” were threatened, beaten, even killed; collective bargaining contracts were mocked by sweetheart deals with employers. When Tony Pro finally was imprisoned, he handed off operational control of the union to one of his brothers (who himself was later sentenced to prison) and then to another crony.31 As would also be true in the many later civil RICO suits against unions, the government’s complaint in the Local 560 case named both union officials and mobsters as defendants. After a lengthy trial, Judge Harold Ackerman found in favor of the government and ordered broad relief, including a court-appointed trustee whose assignment was to purge the mob and establish union democracy—a task, as it turned out, that consumed 10 years.

All told, there have been 20 civil RICO suits resulting in court-appointed trustees tasked with eliminating organized crime and “restoring” union democracy. This litigation is one of the most ambitious, perhaps the most ambitious effort at government-sponsored and court-supervised institutional reform in American history.[§§§§§§] Government lawyers, federal judges, and court-appointed trustees have had to confront two of the most powerful institutions in American society: organized crime and organized labor. Consider that just before Rudy Giuliani, then U.S. attorney for the Southern District of New York, filed the first civil RICO suit against an international union (the International Brotherhood of Teamsters) in 1989, 264 members of the United States Congress signed a petition to U.S. Attorney General Edwin Meese, demanding that the rumored civil RICO suit not be filed. The letter insisted that “[t]he imposition of trustees to administer an international union by the government is, on its face, inherently destructive of the ability of workers to represent and speak for themselves through their unions.” 32 The suit, of course, was filed and ultimately resolved by a negotiated consent agreement which, among other things, provided for a type of trusteeship that, as of winter 2005, is still in effect.

What are the consequences of a century of labor racketeering? The American labor movement has been profoundly effected by organized crime infiltration and exploitation. For some unions, the consequences are obvious; their treasuries looted, their collective bargaining agreements unenforced, candidates for union office murdered and union democracy rendered meaningless. Other unions have suffered indirectly by the erosion of organized labor’s reputation in the eyes of workers, intellectuals and young people.

There can be no doubt about the American labor movement’s extraordinary decline since the 1950s.33 The peak year (in terms of percentage) of Americans’ membership in unions was in 1953, when 32.5 percent of workers belonged to labor unions. By 2005, approximately 13 percent of the workforce is unionized, with the percentage of public employees who are unionized higher than the percentage of private employees. Although there are a number of reasons for the decline in numbers, it seems a worthy hypothesis that the impact of labor racketeering has been an important contributing factor. Of course, there has been retrenchment and decline in many unions where there has never been a documented organized crime presence. Arguably, however, even those “clean” unions have been affected by the labor racketeering taint that tarnishes the reputation of organized labor generally. It is entirely possible that the labor movement as a whole would be much stronger if certain key unions had not been exposed as infiltrated and controlled by Cosa Nostra.

Another explanation for the decline of labor unions is that mob-dominated unions do not perform well for their members. Labor racketeers aim to maximize the wealth and power of their crime families and themselves. For them, participation in the labor movement is a racket, stealing from the unions and their benefit funds and soliciting bribes from employers. Labor racketeers are not good unionists; they exploit unions and union members. Labor racketeers are not interested in organizing more workers or running unions efficiently. They appoint and promote union officials on the basis of patronage, not competence. Their unions’ payrolls are loaded with relatives, friends and organized crime associates. The history of labor racketeering is rife with examples of sweetheart contracts, double breasted shops (allowing employers to hire non-union as well as union employees), allowing employers to avoid required pension and welfare contributions, workers being shuttled from high-pay to low-pay locals, AFL-CIO affiliated unions take “independent” and many other schemes that victimize rank and file union members in order to line the pockets of organized crime members and their corrupt union allies.34

What might America look like today if at least part of the American labor movement had not been hijacked by labor racketeers in the first decades of the 20th century? Would we have a socialist or socialist-leaning labor movement along the lines envisioned by Eugene Debbs, Norman Thomas, or even Walter Reuther? Would labor have involved itself in politics or even become a political party as Reuther once advocated?35 Would so-called “business unionism,” which defines labor unions as nothing other than a business which sells labor, have been relegated to the scrap-heap of history rather than standing as the reigning ideology of the American labor movement? We will never know, but we can be sure, given the importance of labor movements to contemporary western democracies, that the current socio-political organization of the United States would have been different if, as in the other western democracies, there had not been a long history of labor racketeering.

We might also ask what might have been if organized crime had not been enriched and empowered by labor racketeering? Without its base in labor, the Italian-American organized crime groups would have been left to supplying illicit goods and services on the black market. Of course, LCN was, and to some extent still is, deeply involved in drugs, gambling, and loan-sharking. But these rackets do not generate the kind of access to politicians and businessmen that labor racketeering does. Fabulously wealthy drug dealers have obtained considerable political power in some South American countries, but not in the U.S. where drug dealers remain socio-political outcasts. Drug dealers, at least in the United States, do not endorse and assist political candidates. They may corrupt law enforcement officials and politicians, but not as systematically and extensively as LCN and they are not nearly as able to protect themselves from arrest, prosecution and punishment. In short, it is a fair hypothesis that if LCN had not been able to penetrate and control elements of the American labor movement, it would not have reached the pinnacles of power that it did reach in the 1970s and 1980s.

Finally, we need to ask whether the use of federal civil RICO suits, leading to court enforced consent decrees, provides a model of organizational reform that will succeed in purging organized crime from the unions and which could be used to reform other types of corrupted organizations in the United States and other countries. There has been a long debate among political scientists and law professors about the capacity of courts to bring about socio-political change. This study takes that debate into a new venue and challenges us to consider again the potential and limits of law enforcement, courts and government itself to remediate deep flaws in the social fabric.

Organized Crime and Organized Labor

The meeting [of organized crime bosses in Apalachin, New York in 1957] gave to millions of Americans their first clear knowledge that we have in this country a criminal syndicate that is obviously tightly organized into a secret brotherhood, which none of its members dare to betray, and which has insinuated itself into business and labor and public life at high levels. ... One of the most significant results of this examination of the backgrounds of the Apalachin visitors was the revelation that twenty-three of them were directly connected with labor unions or labor-management bargaining groups. It was no coincidence that the names of these men and their cronies and associates kept cropping up during almost every investigation that was made of improper activities in labor and management. Hundreds of honest, decent union officials throughout the country, and perhaps millions of their hard-working members, are daily subjected to the manipulation of these racketeers and their henchmen.

--Senator John McClellan, Crime without Punishment (1962), p. 116.

The benefits a union officer’s position gave to a La Cosa Nostra member included the ability to transform an ugly criminal caterpillar into a very dangerous but beautiful butterfly. It gave instant legitimacy, an unlimited expense account, legitimate income for income tax purposes, plus all the money you could steal from union dues, an entree into the business community and an entree to those aspiring for political office. Later, the unions developed Political Action Committees or PACs to use for even more political leverage. To me, the unlimited possibilities the organized crime professional criminals involved in the American labor movement had to control the American public’s capitalistic and democratic society was frightening.

--James Moody, FBI official in charge of organized crime, Testimony Before Senate Permanent Subcommittee on Investigations July 24, 1996.

Labor racketeering has never been just a sideline activity for the Cosa Nostra organized crime families. The image that some scholars and observers have of organized crime moving into unions and industrial racketeering as a way of laundering funds obtained from gambling, prostitution, drugs and other black market operations is not accurate. Labor racketeering was a defining feature of American organized crime from the first decades of the 20^th century, perhaps earlier. Ultimately, it was labor racketeering that established Cosa Nostra as part of the socio-political power structure in 20^th century America.

Laying the Groundwork

During the first third of the 20th century, it was relatively easy for organized crime groups to take over local unions, especially craft unions. In violent conflicts between workers and employers, professional criminals supplied goons to both sides.1 Once the gangsters had a foot in a union’s door, they could take over by means of violence, intimidation and election fraud. The immigrant workers could be intimidated, coerced and deceived. But nefarious techniques were not always necessary. Some labor racketeers were charismatic leaders whom workers admired. No doubt, some workers in some situations thought they would be better off being represented by individuals with a reputation for being tough and well-connected. According to Harold Seidman’s study of early 20^th century Labor Czars (1938):

Unionists continued to do their own slugging until the great strikes of 1909 necessitated a change in tactics...the unions engaged gangsters to protect women strikers and pickets against employer thugs...The unions soon discovered that gangsters did not accept temporary work. Once hired, they remained permanently employed, whether the union liked it or not. ...2

Sometimes gangsters became labor officials without any vote or other action by the workers whom they came to represent. Under the 1935 National Labor Relations Act (NLRA), an employer could voluntarily recognize a particular union as the exclusive bargaining agent for his workers.[*******] That representation would be binding for three years and would continue unless the workers voted to be represented by a different union or by no union. Some employers happily recognized practically non-existent racketeer-constructed “unions” because, in effect, such unions were just a scam for the racketeers to extract bribes which were cheaper than bona fide collective bargaining agreements. Even if such unions provided no benefits for their members they could still serve a whole group of employers in a particular industry by establishing and policing an employer’s cartel. To cite just one early example, Joseph Landesco’s 1929 study for the Chicago Crime Commission reported that racketeers controlled the laundry industry by dominating the union that represented the drivers.

In the 1920s, such Jewish organized crime figures as Arnold (“The Big Bankroll”) Rothstein (1882 - 1928), Jacob (“Little Augie”) Orgen (1894 -1927), Jacob Gurrah Shapiro (1899 - 1947) and Louis (“Lepke”) Buchalter (1897-1944) infiltrated the International Ladies Garment Workers’ Union (ILGWU) and leveraged their union power into domination of New York City’s garment center.3 (Carl Sifakis, author of The Mafia Encyclopedia, calls Buchalter the foremost labor racket czar in the United States.)4

The labor racketeers of this era were even enlisted by “honest” union leaders to help defeat rival unions; Stanley Hillman, head of the Amalgamated Clothing Workers Union, and a key FDR New Deal advisor called upon Buchalter to suppress competing unions and recalcitrant employers who stood in the way of his union.5 Dutch Schultz (a.k.a. Arthur Flegenheimer (1903 – 1935)) forcibly took over and controlled the New York City Restaurant and Cafeteria Workers Union beginning in the 1920s. Among his many labor racketeering exploits, he assisted George Scalise in establishing Brooklyn IBT Local 272.

The Origins of Cosa Nostra Labor Racketeering

The Italian-American organized crime groups engaged in labor racketeering from the time they began to form in the United States. Joseph (“Socks”) Lanza (1904 - 1968) founded the Seafood Workers Union in the late 1920s and, from this power base, dominated the Fulton Fish Market in lower Manhattan, the largest wholesale fish market in the country; all the participants in the fish market made pay-offs to Lanza.6 Likewise, Anthony Anastasio (1906 - 1963), president of the International Longshoreman’s Association (ILA) Local 1814 and vice president of the ILA International, dominated the Brooklyn docks on behalf of his organized crime group (later taken over by Carlo Gambino and known thereafter as the Gambino Crime Family) from the 1930s to the early 1960s.

In Chicago, in the 1910s and 1920s, Al Capone’s (1899 - 1947) organized crime group (later “the Outfit”) dominated dozens of Chicago locals in the building trades, hotels and restaurants and other sectors. Sometimes the Capone gang wrestled control of a union away from union leaders who themselves were gangsters. Harold Seidman recounts that:

One of Chicago’s most powerful labor leaders was summoned to the presence of the ‘Big Fellow.’ Capone informed the unionist that the racketeers intended to take over control of his unions and, through his unions, capture many trade associations. He was advised that he could continue in nominal and titular control if he so desired. The labor leader elected to go along with the mob.7

Capone’s gang took control of the Chicago-based Motion Picture Operators Union. At first, the gang just demanded a partnership, but within two years Capone ordered the president killed.8 The Chicago Outfit leveraged its control over the Motion Picture Operators Union to extort the theater owners and Hollywood producers. The movie producers paid the mob $150,000 (the equivalent of about $2 million in 2003 dollars) for a 7 year no-strike contract.9 According to investigative reporter Gus Russo, under Capone lieutenant Curly Humphrey’s stewardship:

[L]abor racketeering was perfected, turning a modestly profitable con into a multi-million dollar operation, with the Outfit controlling as much as 70 percent of the city’s unions. In 1928, the boys were seeing an estimated $10 million [$107 million in 2003 dollars] a year in profit from Curly’s rackets; by 1931, the estimated revenue escalated to $50 million [$604 million in 2003 dollars] — small by bootlegging standards, but with unlimited potential, since unlike Volstead [the National Prohibition Act], labor was never going to be repealed.10

Capone biographer, John Kobler, notes that: “Toward the end of 1928 the [Chicago] state’s attorney’s office listed ninety-one Chicago unions and [employer] associations that had fallen under racketeer rule.”11 After Prohibition’s repeal in 1933, labor racketeering became even more important to organized crime.

When the International Alliance of Theatrical Stage Employees (IATSE) went on strike in 1933, the employers sought the Outfit’s help. The Outfit sent thugs to keep the theaters open and thereby broke the strike.12 Paul Ricca, Tony Accardo and Curly Humphreys demanded that IATSE hire Outfit members and associates for positions throughout the union, thereby ensuring the organized crime’s presence in the film business for decades.13 When President Ronald Reagan appointed the President’s Commission on organized Crime in1984, he explained that he was familiar with labor racketeering because of his experience as a leader in the Screen Actors Union.[†††††††]

Every Cosa Nostra crime family has a documented history of labor racketeering (See Table 2-1 at the end of the chapter). For decades, Al Capone’s protégé and successor, Tony Accardo, long-time head of the Outfit14 controlled numerous LIUNA locals in Chicago. The Outfit’s control over Laborer’s International Union of North America (LIUNA) locals enabled it to designate and control the national general presidents of the international union, Peter Fosco, later his son Angelo, and then Arthur E. Coia.15 Similarly, control over the Hotel and Restaurant Employees (HERE) enabled the Outfit to name and control General President Ed Miller and his successor, Edward Hanley.16 The Outfit, through its associate Stanley Korshak, exercised enormous influence over the IBT Central States Pension and Welfare funds as well as influence over the IBT itself.17

Angelo Bruno, LCN boss in Philadelphia, dominated the Roofer’s union as well as several Hotel and Restaurant Employees (HERE) locals in Atlantic City. Kansas City’s LCN boss, Nick Civella, controlled the powerful IBT Joint Council. He and several other organized crime figures, as well as corrupt union officials, treated the nation’s largest pension and welfare fund (IBT Central States Funds) as a bank for organized crime.18 (Las Vegas was first developed by loans from this Fund to organized crime figures through their front men.) Angelo Lonardo, boss of the Cleveland LCN family, was also heavily involved in labor racketeering. William “Big Bill” Presser, an “associate” of Cleveland’s Licovali Crime Family, headed IBT Joint Council 41 and served as president of the huge Ohio Teamsters Conference. From this power base, he and Lonardo, with help from Civella, were able to orchestrate (Bill’s son) Jackie Presser’s career in several different unions, culminating in Jackie’s 1983 succession to the IBT presidency.19 Cosa Nostra bosses chose or had a major role in choosing IBT general presidents Jimmy Hoffa, Frank Fitzsimmons, Roy Williams, Jackie Presser and William McCarthy.

The Licavoli crime family in Cleveland controlled a number of labor unions including ILA Local 1317 and Teamsters Locals 41, 410 and 416.20 Moe Dalitz (1899-1989) was the crime family’s chief labor racketeer. His connections to Hoffa and the Teamsters bore fruit when, later in his career, he used Teamsters’ pension fund loans to build Las Vegas casinos in partnership with LCN.21 The Cleveland organized crime family associate, William “Big Bill” Presser (1907 - 1981), served as president of IBT Joint Council 41. For years, Presser was one of the most powerful figures behind the Teamsters Central States Pension Fund.22 He placed his son Jackie (1926 - 1988) in office in several different unions (mostly HERE locals). Ultimately, Jackie became IBT general president (1983 - 1988).23

Practically every major Cosa Nostra figure in the 20th century can be linked to labor racketeering. To take a few examples: Anthony “Tony Ducks” Corallo (1913 - 2000), a Johnny Dioguardi protégé who worked his way up to boss of the (New York City) crime family, was closely linked and, at one time or another, held office in the Painters and Decorators Union, the Conduit Workers Union, the United Textile Workers, and IBT Local 239.24 He was convicted in the 1987 Commission Case and sentenced to 100 years in prison.25 Tony Accardo (1906- 1992), head of the Chicago Outfit for several decades, maintained and even extended the Outfit’s extensive labor racketeering interests in Chicago. Nicholas Civella (1912 - 1983) boss of the Kansas City crime family, through his control of IBT leader Roy Williams, was a major force in the IBT’s Central States Pension and Welfare Fund and in the IBT Central States Joint Council. Angelo Lonardo, Cleveland crime family boss (who became a cooperating government witness) explained how he teamed up with Civella to get the approvals of the Chicago and New York City mobsters to make Roy Williams IBT general president. At a 1985 trial of several organized crime figures, Williams testified that, at Civella’s insistence, he approved a $62.5 million pension fund loan ($107 million in 2003 dollars) to finance a mob associate’s acquisition of two casinos.26

In the 1970s, Nicodemo “Little Nicky” Scarfo (1929 - ) was in charge of Philadelphia’s Bruno crime family’s Atlantic City interests, most importantly HERE Local 54. Later, Scarfo himself became boss of the family. Raymond Patriarca (1908 - 1984), for many years boss of the New England LCN family, exerted influence over New England LIUNA and IBT locals. Toward the end of his life, he was indicted for labor racketeering, but was too ill to stand trial.27 Vincent “Chin” Gigante (1926 - ), boss of the New York City Genovese crime family, used the family’s control over Port of New York ILA locals to extort money from shipping companies. His imprisonment in 1997 changed nothing. The government’s 2003 sweeping indictment of Genovese members and ILA officials documents how the Genovese crime family continued its infiltration, domination and exploitation of the ILA, stevedoring companies and the port generally.

How Mobsters Gained Control Over Unions

It was not difficult for organized crime figures to take over a union local. They could use threats and actual violence to drive off competing unionists or anyone who opposed them. They could rig elections (using intimidation and fraud) to have themselves or their stooges elected to office. They could obtain recognition of their union from an employer by threats of violence, sabotage or promises of sweetheart deals. They were aided by the fact that most union members were not interested in participating in union politics or administration.28

Let us consider some examples:

LCN creates a union. John “Johnny Dio” Dioguardi, one of the century’s most notorious labor racketeers and an early member of Al Capone’s gang, moved to New York City where he became a capo in the Lucchese crime family. He and Jimmy Hoffa worked out a deal whereby Hoffa gave him a charter to organize seven (so-called “paper”) locals. Hoffa needed the votes of these seven locals to assure the election of an ally to the top position in the NYC IBT Joint Council.29[‡‡‡‡‡‡‡]

LCN takes over a union through intimidation. In 1921, several Building Service Employees International Union (BSEIU) leaders were convicted of conspiracy. The union’s officials managed to obtain pardons by appealing to the Outfit to use its political influence. However, as a result of that favor, the BSEIU became indebted to organized crime. Within a short time, organized crime moved to take control of the union. The union’s officers were given an ultimatum: put mob cronies in top union positions or leave town. Given the mob’s influence over Chicago’s political machine, there was no one to whom the union could appeal.30

LCN obtains control through election intimidation and fraud. In 1938, George Scalise obtained a charter to create Local 94 of the Bowling and Billiards Academy Employees Union. Scalise called on organized crime to stuff union ballot boxes.31 Not surprisingly, he “won” the election. The local was forced to transfer to the mob a large portion of the dues and control over decision-making.32 Using the same strategy of election intimidation and fraud, the mob later made Scalise the BSEIU’s national president.

LCN labor organization voluntarily recognized by employer as collective bargaining agent. The mob took control of some unions simply by creating the union and “persuading” employers to recognize it as the workers exclusive bargaining agent. A good example is New York City’s parking garage workers. When garage owners were threatened with systematic vandalism to their customers’ cars, they “voluntarily” signed representational agreements with a mob-dominated sham union; the workers paid dues without receiving any benefits or representation.33

      There is no historical record on when

organized crime’s infiltration of various unions

 began or when it matured into working control.

There is good reason to believe, however, that

Cosa Nostra’s influence continued to radiate

into previously untainted unions throughout the

later half of the 20^th century.  For example,

as new LIUNA locals were chartered in the New York

area, they quickly fell under mob control. Because

of international LCN domination, sometimes the

establishment of new locals, training funds, etc.

was dictated by the interests of LCN. Local 1030

in New Jersey is a prime example: it was set up

nominally to deal with asbestos removal, but it

appears that 1030 was intended from the beginning

to be a vehicle for the Riggi/decavalcante group to

get its share of the action (since the NYC locals

were largely Genovese and Lucchese) and to give them

the opportunity to get kickbacks from contractors

who were otherwise beyond their reach.

Yet another strategy that began to be used more regularly when civil RICO trusteeships started purging mobsters from the Teamsters, Hotel and Restaurant Workers, Laborers, and Longshormen’s Association was for the labor racketeers to start so-called “independent” unions, unaffiliated with any national/international union. For example, after being permanently expelled from the IBT in 1994 for embezzlement, dual unionism, and breach of other fiduciary duties, Vincent Sombrotto, former president of IBT Local 966 and that union’s former secretary treasurer, Edwin Gonzales, set up a new “independent” union, Local 116 in Secaucus, New Jersey. Sombrotto and Gonzales attempted to enroll current IBT Local 807 members into their new union. The Second Circuit held that by attempting to enroll employees who were currently represented by IBT Local 807 into Local 116, Sombrotto and Gonzales violated the district court’s consent decree, which prohibited them from having any association with the IBT. In other cases, however, the racketeers successfully decertified the old (now cleaned-up) union and reestablished mob dominance over the same workers but through a new independent union.

How Organized Crime Consolidates Its Union Control

LCN achieved working control of a local union by placing one of its members or an associate in the position of top union official or by intimidating or recruiting a union leader to do its bidding. The next step was to consolidate control through a combination of sticks and carrots. Any union member who dared to challenge the mob faced loss of employment or violent reprisals. There are many examples of “dissidents” being beaten at union meetings, having their homes firebombed, and even being murdered for criticizing the union’s administration or seeking union office.

Dissidents could be expelled from the union on some trumped-up ground. Or, if the dissident was dependent upon the union for job assignments through a hiring hall, as is the case in the construction industry and in longshoring, he would get no more job assignments. In industries where employers do their own hiring, a mob figure who controlled the union could tell the employer that one of his employees had become a thorn in the union’s side, and that the union would like to see that employee fired. The employer would likely comply in order to avoid labor trouble. Obviously, the fired employee would not get the union’s assistance in challenging the dismissal. Judge Harold Ackerman described organized crime’s complete lock on IBT Local 560, pointing out that LCN capo and Local 560 president, Tony Provenzano, had created a reign of terror by, among other things, killing two “dissident” Local 560 members. The message to the membership could not have been clearer: opposing the union’s leadership would be putting life and limb at risk.34

The mob figures who control a union local have many “carrots” to distribute. Friends and supporters can be appointed as business agents and shop stewards or assigned no-show or high-paying jobs or lucrative service contracts. Treating the union treasury as a trough, the corrupt leader could offer supporters all sorts of perks, including high salaries, no-show jobs, cars, trips, union reimbursement of personal expenses, loans, etc. If the union operates a hiring hall (as in the construction industry), friends and supporters can be assigned the easiest and most desirable jobs. For example, the NYC District Council of Carpenters Union used a special “pool” of workers designated by the Genovese crime family from which to choose carpenters for high-paying jobs at the NYC Javits Exhibition Center.35 Once the mob takes hold of a union, it has proven nearly impossible to throw them out.

How LCN Uses the Union as a Cash Cow

Labor racketeering has proved very profitable to organized crime, especially from the 1940s, when unions began bargaining to have employers automatically deduct union dues from union members’ paychecks.36 With the “check-off” in place, unions received a monthly flow of revenue without lifting a finger. A corrupt union official and the organized crime family that controlled him could take advantage of the ever-replenishing union treasury. Dues could be increased without regard for rank and file opposition.

There were many legal and illegal ways for labor racketeers to pull money out of a union. First, they could draw large salaries and generous perks, a kind of legalized graft. Some union constitutions require a membership vote on officers’ salaries; however LCN treated this rule as a formality if it recognized it at all. In addition to their salaries, corrupt union officials enjoyed use of union-owned cars, planes and boats. Frequently the union also provided overpaid jobs to family members, friends and mistresses. They also handed out no-show jobs.

Second, mob leaders could embezzle union funds. “Their unions” either maintained no financial records or kept such sloppy records that even if they were discovered, embezzlement was practically impossible to prove. Labor racketeering became much more lucrative in the 1940s and 1950s with the rise of multi-million (and soon, multi-billion) dollar union pension and welfare funds.37 It became commonplace for collective bargaining agreements to include the employer’s obligation to make payments to such funds on behalf of the employees. According to federal law, the funds would be managed by equal numbers of union-designated and employer-designated trustees, but in practice the employer trustees deferred to the union trustees because (in contrast with the union) having made the contributions, the employer had little interest in how the pension money would be invested. Racketeers who controlled pension and welfare funds could embezzle their assets, disguising such thefts as “loans,” payments for non-existent goods and services or as inflated payments for goods and services.

Third, labor racketeers could use their union position to solicit bribes from employers who wished to obtain relief from expensive collective bargaining agreement provisions. For the right price, corrupt union officials would allow employers to operate a “double breasted shop” (one employing non-union as well as union employees), or even to operate completely non-union. Corrupt union officials typically sold their members’ rights to over-time pay, pension and welfare contributions, and jurisdiction over certain work.

Fourth, labor racketeers could rake in money via the “strike insurance racket” or labor peace extortion, by threatening employers with labor problems. In many businesses, any disruption of operations is enormously expensive; prolonged disruption can mean bankruptcy.

Fifth, labor racketeers could make money by using the union to set up and police employer cartels. Once the union represented workers in all or most of the firms operating in a particular industry, the organized crime faction that controlled the union could organize an employers’ association. Employer’s dues were passed along to Cosa Nostra. But the employers got something important for their money; the union could effectively prevent firms that were not Association members from participating in the industry. If a firm tried to challenge the cartel, it would find itself beset by labor troubles and/or sabotage.38

Sixth, from control of an employer cartel, it was only a small step for LCN members and associates to start up, buy or strong arm their way into a firm doing business in the cartelized industry. The LCN-owned firms would have a competitive advantage over other cartel members; they would not have to hire union employees or, if they did, they could pay them less than union wages or fail to make required contributions to union pension and welfare funds.

Seventh, LCN could direct employers to purchase certain goods and services from mob-owned or mob-controlled supply companies. An employer who refused might face labor troubles or worse.

The Value of Labor Racketeering

There is no audit to tell us how lucrative labor racketeering has been for the mob, but there are bits of evidence here and there. For example, at its height, Robert Brindell was the highest paid union official in the country; around the turn of the century, his graft is said to have netted over $500,000 a year ($5.2 million in 2003 dollars).39 Thomas Dewey’s 1930s investigation into corruption within the restaurant industry found that racketeers embezzled one third of union members’ dues as well as $75,000 ($1 million in 2003 dollars) from Restaurant Workers Local 6, $45,000 ($600,000 in 2003 dollars) from Local 322 and $120,000 ($1.6 million in 2003 dollars) from an employer association.40 Additionally, the racketeers received about $150,000 ($2 million in 2003 dollars) from restaurant owners. In the 1960s, Genovese Crime family capo Tony Provenzano was the nation’s highest paid union official. Additional pension and financial packages were provided for him after his murder conviction.41 In Peter Maas’ biography of Sammy “the Bull” Gravano (one-time Gambino crime family underboss), Gravano states that union control and labor racketeering, when factored into a construction contract, could double the profit margin from 15 to 30 percent.42 A 1986 FORTUNE Magazine article, listing the 50 wealthiest underworld figures in the U.S. identified unions or construction (always union-related) as a key source of income for half of these individuals (See Table 2-2 at the end of the chapter).

The Socio-Political Benefits of Labor Racketeering

Labor racketeering gave Cosa Nostra its special character as an organized crime syndicate. Control over labor put LCN figures in close touch with businessmen who had to deal with the employers that represented the unions’ workers. The businessmen did not have the option of refusing to meet with, deal with, and get along with union officials. When businessmen ran into labor problems, they naturally reached out to the only individuals who could fix those problems – the local LCN boss. Because the LCN boss had influence in a number of unions, he could solve jurisdictional disputes or rein in an obstreperous union official. Their union influence turned LCN bosses into power brokers.

Labor racketeering also put LCN bosses in touch with politicians. In most American big cities, at least those in the east and midwest, organized labor was a powerful political force for much of the 20^th century. Labor endorsements were avidly sought; in addition, a supportive labor union would provide campaign contributions and manpower to distribute campaign literature and make phone calls. Union support also provided corrupt opportunities for personal enrichment. By contrast, labor opposition would practically assure defeat. Moreover, labor problems that make city life unpleasant or inconvenient during an incumbent’s term, especially near election time, could very much weaken a mayor’s or other public official’s appeal. For all these reasons, it was important for urban politicians to curry favor with organized crime figures who were influential in the labor movement.

Conclusion

Labor racketeering schemes were well established by the late 19th and early 20th centuries. The early 20th century Italian-American organized crime groups were drawn to labor racketeering just like their Jewish and Irish counterparts. As the bridge between underworld vice rackets and upper-world businesses and politics, labor racketeering turned LCN bosses into urban, regional and even national power brokers. Craft unions especially could easily be taken over by mobsters with the capacity and reputation for violence. The racketeering potential of labor unions was high. A regular revenue stream for organized crime could be generated by union salaries, perks, extortions, bribes embezzlements and frauds. By the 1940s, as Cosa Nostra emerged as the dominant American organized crime syndicate, labor racketeering was an important part of LCN crime families’ modus operandi. Labor racketeering is central to the evolution of Cosa Nostra as part of the power elite in 20^th century urban America. In fact, it is their role as labor racketeers that distinguishes Cosa Nostra organized crime families from other contemporary organized crime groups like biker gangs, street gangs, and drug trafficking organizations.

[Insert Tables 2-1 and 2-2]

President’s Commission on Organized Crime

My family [Genovese] made a lot of money from gambling and the numbers rackets. We got money from gambling, but our real power, our real strength, came from the unions. With the unions behind us, we could shut down the city, or the country for that matter, if we needed to get our way. Our brugad [crime family] controlled a number of different unions, some of which I personally dealt with, some of which I knew about from other amico nostra. In some cases, we got money from our dealings with the unions, in some cases we got favors such as jobs for friends and relatives—but, most importantly, in all cases, we got power over every businessman in New York. With the unions behind us, we could make or break the construction industry, the garment business, the docks, to name but a few.

--Vincent “The Fish” Cafaro, Quoted from an affidavit filed with Senate Permanent Subcommittee on Investigations, April 1988, 16-17.

The Commission believes that the first step in ending labor racketeering is a recognition that the problem is both persistent and pervasive throughout many areas of the United States. During the past 25 years, law enforcement agencies have often successfully used the tools available to them to prosecute individual labor racketeers. But ... criminal prosecutions alone are insufficient. Because of its insidious and systemic nature, labor racketeering is not easily deterred by prosecutorial efforts that merely “count bodies” as a measure of success. Instead, a new strategy must be developed to bankrupt individual mobsters and to discourage union officers, employers, and public officials from accommodating organized crime.

--PCOC, The Edge: Organized Crime, Business, and Labor Unions, Section 1: Overview and Summary of Recommendations, President’s Commission on Organized Crime (1986), p. 5.

How extensive has labor racketeering been in the United States? How extensive is it now? These are not easy questions. There are hundreds of national/international unions and thousands of local unions, which may or may not have been subjected to LCN influence over the course of an entire century. New unions are established, old ones die, some combine – so the absolute number of unions, especially locals, varies over time. Likewise, both the number and percent of unions “controlled” or “influenced” by organized crime has changed over the span of a century. Moreover, the concepts of “controlled” or “influenced” are not self- defining. In some local unions, labor racketeers (organized crime members or associates) have held high office and controlled day to day administration. In other unions, key officers have been the pawns of organized crime members or associates. Under either “model,” the mob can exploit the union.

Some commentators have attempted to minimize the extent of the labor racketeering problem by pointing out that there is documented evidence of organized crime domination for only a small percentage of unions. While that may be true, it does not mean that all the other unions have been untouched by organized crime. Ideally, students of labor racketeering would have an up-to-date list of all unions which, to some extent, have been controlled or influenced by organized crime. Unfortunately, there is no such list. We do not have accurate information on all or even a substantial minority of unions. Moreover, even if we had an accurate figure for the percentage of racketeer-ridden unions, that would not tell us what percent of all union members are members of the infected unions. Cosa Nostra’s domination of a 25,000 person local ought to count more (in any survey) than its domination of a 100 member union.

If a national/international union is run by labor racketeers and allows those racketeers to dominate key regional and local affiliates, to plunder its treasury and its pension and welfare funds, and to compromise its collective bargaining and contract enforcement, for purposes of assessing the problem should we conclude that everyone of that international union’s locals is negatively influenced by organized crime? Should we say that every one of that international union’s members is victimized by organized crime? For my purposes, it is not necessary to pinpoint the percentages of unions or union members who, at any point in time, have been dominated, controlled or affected by Cosa Nostra labor racketeers. The purpose of this chapter and the next is to establish that the problem is widespread, deep, persistent and significant. This chapter examines the extent of labor racketeering through the lens of the President’s Commission on Organized Crime, which was appointed in 1983. The next chapter presents a snapshot of labor racketeering in New York City during approximately the same time period.

Creation of the Presidents Commission on Organized Crime

In 1983, President Ronald Reagan appointed the President’s Commission on Organized Crime (PCOC) and charged it to provide “a full and complete national and region-by-region analysis of the nation’s organized crime problems, including information on its participants, an evaluation of applicable law and responses to the issue, and recommendations for future action.” The President appointed 18 commissioners and named as chairman, Irving Kaufman, a U.S. Second Circuit Court of Appeals judge. The other commissioners included Senator Strom Thurman (R. SC), Congressman Peter Rodino (D. NJ), law enforcement professionals with experience prosecuting organized crime, a representative of organized labor, several academics and the senior editor of Readers Digest Magazine. The Commission heard testimony from FBI and Department of Labor investigators, Department of Justice lawyers and labor leaders. The PCOC’s research staff also undertook a comprehensive review of prior Congressional investigations, hearings and reports. The PCOC produced a series of reports, including volumes on gambling, drug trafficking and money laundering. It devoted a thick volume, titled The Edge, to organized crime’s exploitation of labor unions.

Released on March 1, 1986, The Edge focused mainly on four international unions with the most extensively documented history of labor racketeering: the International Brotherhood of Teamsters (IBT), the Hotel and Restaurant Employees (HERE) International Union, the Laborer’s International Union of America (LIUNA) and the International Longshoreman’s Association (ILA). It also focused attention on labor racketeering within independent unions. Widespread labor racketeering, according to the PCOC, was distorting the nation’s economy and making a mockery of union members’ Landrum-Griffin rights and collective bargaining agreements. Organized crime’s influence over labor unions provided businesses owned, dominated or favored by organized crime an edge over competitors.

The Teamsters

The PCOC charged that “corruption and the Teamsters [are] synonymous” and that, since the 1950s, the Teamsters had been “firmly under the influence of organized crime.”1 John Dioguardi, a capo in the Lucchese crime family, and a power broker with influence in several unions (including United Automobile Workers—AFL), was one of Jimmy Hoffa’s key supporters in his rise to the IBT presidency. Hoffa gave Dioguardi charters for several New York area IBT “paper locals” (i.e., locals without any members, but officials who were either made-members or associates of the Mafia) in exchange for Dioguardi using those locals to support Hoffa’s efforts to control the important New York area IBT Joint Council, whose support he needed to become IBT general president. According to the PCOC, organized crime has continued to maintain a firm grip on the IBT long after Hoffa’s reign, using intimidation and occasional acts of violence “to quell all forms of dissent, criticism, and opposition.”2

The Edge explained that IBT presidents “[Jimmy] Hoffa and [Roy] Williams were indisputably direct instruments of organized crime,” while [Frank] Fitzsimmons held his office by “establish[ing] a measure of détente whereby he was allowed to head the union, while organized crime stole the workers’ benefit funds and used the union for numerous criminal ventures.”3 At the time of the Commission’s investigation, former IBT general president, was cooperating with the government. He had previously been convicted of attempting to bribe Senator Howard Cannon (D. Nev) to vote against trucking deregulation and was hoping to shorten his prison sentence. He testified that “every big [Teamster] local union ... had some connection with organized crime.”4 Williams himself had been controlled by Kansas City Cosa Nostra boss Nick Civella who had quarterbacked Williams’ campaign for the IBT presidency by obtaining necessary support from organized crime bosses around the country. The incumbent IBT president, Jackie Presser (whose father, “Big Bill” Presser, was a major Cleveland organized crime associate and an IBT Central States Pension Fund Trustee until he was forced to resign in 1976), depended upon organized crime support for his election. This charge was later confirmed by government prosecutors.5 Presser had also served as an FBI informant, strategically helping the FBI to make cases against his political rivals.

That Presser was controlled by organized crime was the Edge’s most spectacular charge. Presser was one of the nation’s most powerful labor leaders and one of the only ones to have endorsed Ronald Reagan’s presidential candidacy. The PCOC criticized President Reagan’s close ties with Presser: “[I]n the current administration, long delays in reaching a resolution of a DOJ investigation of Presser [could raise a concern] whether Presser’s support of the administration in the 1980 and 1984 election campaigns influenced the conduct of the investigation.”

The PCOC traced organized crime’s control over the IBT international union to its control over key IBT locals. It documented a relationship between Cosa Nostra families and thirty-six IBT locals, one joint council, and a conference (a regional association of joint councils).6 LCN converted control of locals into control of whole business sectors. For example, Gambino crime family associate Bernard Adelstein’s decades-long control of IBT Local 813 was the key to the mob’s domination of New York City’s waste hauling industry.

Mob-controlled union locals elected mob-controlled officers who chose mob-controlled convention delegates. The mob-controlled delegates ratified the decisions and proposals of mob-controlled international presidents, vice presidents and general executive board (GEB) members. Because the IBT’s general president and GEB were chosen by mob-controlled convention delegates and not by the rank and file members, the PCOC judged it “unlikely … that a reform-minded Teamster president can be elected in the near future.”7

The PCOC explained how the Cosa Nostra organized crime families’ influence in the IBT provided leverage over tens of thousands of businesses dependent upon truck deliveries; this leverage could be converted into cash through extortion, solicitation of bribes, and no-show jobs. The mobsters also enriched themselves by siphoning money directly from union coffers, by taking kickbacks for sweetheart service contracts and by arranging loans from IBT pension and benefit funds. LCN associates like Allen Dorfman and Sidney Korshack (Chicago) and Bill Presser (Cleveland) managed the IBT Central States Pension Fund (CSPF) for the benefit of organized crime. While a typical pension fund invested 5–10 percent of its assets in real estate, the CSPF invested more than 70 percent in real estate, much of it in mob-sponsored Las Vegas casinos. Despite the 1976 settlement of the government’s challenge to the Fund’s governance that put control over the Fund’s investments in the hands of an institutional fiduciary, organized crime continued to “plunder” the Fund. Moreover, Dorfman continued to draw substantial fees for handling the Fund’s insurance business.[§§§§§§§]

The Edge concluded pessimistically that “no single remedy is likely to restore even a measure of true union democracy and independent leadership to the IBT.”8 It urged the Department of Justice to commit itself to purging corruption and racketeering from the IBT through criminal prosecutions, civil actions, administrative proceedings, and civil RICO trusteeships. Even then, the PCOC foresaw only a “modest hope of success” in wrestling the IBT from the grip of organized crime.9

Hotel Employers and Restaurant Employees International Union

According to the PCOC, LCN exerted powerful influence over HEREIU since the days of Prohibition (1920-1933). The murder of a union member at that union’s 1936 national convention precipitated an investigation by New York City Special Prosecutor Thomas Dewey, who uncovered rampant racketeering in restaurant industry unions and employer associations; his investigation resulted in the criminal conviction of three union officials, the suspension of a union local, and the expulsion of several union officials.10 The McClellan Committee’s hearings (1957–59) revealed the pervasive influence of organized crime in Chicago’s restaurant industry through control of three HEREIU locals. Thirty years later, the PCOC charged that HEREIU has “a documented relationship with the Chicago ‘Outfit’ of La Cosa Nostra at the international level and [is] subject to the influence of the Gambino, Colombo, and Philadelphia La Cosa Nostra families at the local level.”11

The PCOC drew heavily on the Senate Permanent Subcommittee on Investigations 1981-1984 hearings. One of the Subcommittee’s reports stated:

The Hotel and Restaurant Employees Union represents the converse of the International Brotherhood of Teamsters. In the Teamsters, the corruption and organized crime influence are a result of the massive infiltration of the local unions. The HEREIU, on the other hand, has been infiltrated from the top. This occurred as a result of the power wielded in the Chicago area locals and the joint executive board by Joey Aiuppa, the underboss of the Chicago Syndicate. Edward Hanley was elected president of [HEREIU] in 1973 because of the power and influence of Aiuppa and the Chicago mob. This is not to say that none of the locals are hoodlum controlled or that Hanley is the first corrupt president of the union. Nevertheless, Ed Hanley represents the classic example of an organized crime takeover of a major union.

FBI officials told the Senate Permanent Subcommittee that HEREIU was forcing its locals to put their pension and benefit plans under the international’s control, so that international officers and LCN could exploit those funds. President Hanley reportedly said that he was “going to be able to loan out that money [pension and welfare funds] just like the Teamsters do.” HEREIU officials called to testify before the Senate Permanent Subcommittee repeatedly refused to answer questions. When Senator William Roth (R . Del.) asked HEREIU Local 54 President Frank Gerace (an alleged associate of the Philadelphia Bruno/Scarfo crime family) whether he subscribed to the 1950s AFL-CIO Ethical Practices Committee’s prohibition on labor officials taking the Fifth Amendment to avoid Congressional scrutiny, Gerace refused to answer on Fifth Amendment grounds. The hearings also established that HEREIU officials had raised bail for Nicodemo Scarfo, boss of Philadelphia’s Cosa Nostra crime family. The Subcommittee’s final report concluded that “many of the officers of HEREIU have consistently accorded a higher priority to their own personal and financial interests than to the interests of the rank and file membership.”12

PCOC branded HEREIU corrupt to the core. It charged that HEREIU’s president Edward Hanley had been hand picked by Tony Accardo, boss of the Chicago Outfit. Under Hanley’s regime, mob figures obtained union loans and jobs and feasted on the union’s assets. When the Senate’s Permanent Subcommittee on Investigations called Hanley to testify about HEREIU’s ties to organized crime, he invoked his Fifth Amendment right against compelled self incrimination.13

Due to HEREIU’s centralized organization, Cosa Nostra’s control over Hanley provided significant influence over numerous HEREIU locals. For example, since 1978, Local 54 in Atlantic City had been dominated by different factions of Philadelphia’s Bruno/Scarfo crime family. Several of Local 54’s officers had criminal records for murder, arson, extortion, drugs, bribes, kickbacks, and racketeering. (The struggle for control of Local 54 led to the 1980 murder of John McCullough, president of Philadelphia Roofers Union Local 30. He was shot to death at his home allegedly for competing with HEREIU Local 54 to organize Atlantic City security guards.)14 Local 54’s dental and welfare funds were controlled by organized crime. The Local corrupted businesses and the local government in Atlantic City.

In 1982, the New Jersey Casino Control Commission prohibited Local 54 from collecting dues from casino employees because the influence of organized crime made the local unfit to represent the casino workers’ interests. Ultimately, this decision was upheld by the U.S. Supreme Court, which observed that “The advent of casino gambling in New Jersey was heralded with great expectations for the economic revitalization of the Atlantic City region, but with equally great fears for the potential for the infiltration by organized crime ... Congress has indicated both that employees do not have an unqualified right to choose their union officials and that certain state disqualification requirements are compatible with [the National Labor Relations Act].”15

The PCOC found that HEREIU Locals 6 and 100 (New York City) had been chartered and governed for the convenience of the Colombo and Gambino crime families. What appeared to some observers as a jurisdictional dispute between these two unions, in fact represented the Colombo and Gambino crime families’ conflict over the division of New York’s restaurant workers into locals controlled by these two crime families. In an intercepted conversation, Paul Castellano, boss of the Gambino crime family, explained that the Chicago Outfit “own[ed] the international,” and that the Colombo crime family controlled the other local.16

Laboreres International Union of North America (LIUNA)

The PCOC found that organized crime had a documented relationship with at least twenty-six Laborer’s Union locals, three district councils and the International Union. The mob defrauded the union’s benefits funds, extracted no-show jobs from LIUNA employers, drew reimbursements for fictitious business expenses, and operated cartels in the construction industry in New York City and Chicago (probably other cities as well). The Commission complained that the federal government had never seriously attempted to attack this labor racketeering.17

According to PCOC, “organized crime exerts its influence [in LIUNA] principally through top officers who are associates of organized crime.”18 General President Angelo Fosco, LIUNA’s general president from 1968 to 1975 (whose father, Peter Fosco, was an Al Capone associate and Angelo’s predecessor as general president) was closely associated with the Chicago Outfit. The PCOC charged that Fosco provided jobs to organized crime members and associates and generally furthered organized crime’s interests. In 1982, Fosco and Tony Accardo, boss of the Chicago LCN family were tried (and acquitted) for defrauding LIUNA’s health and welfare funds.

PCOC asserted that LCN also controlled LIUNA Vice President John Serpico, an important LIUNA figure in Chicago. “Serpico admitted that he is a friend or personal acquaintance of virtually every important organized crime leader in Chicago.”19 He was also active politically. For example, he received successive gubernatorial appointments to serve as chairman of the Illinois International Port District. According to the PCOC, the Outfit used LIUNA’s international officers to gain access to Chicago mayors and and Illinois governors.20

PCOC provided numerous examples of how labor racketeers act contrary to the interests of labor unions and members. When the Commission questioned Vice President Serpico about John Fecarotta’s duties as a LIUNA business agent and organizer, Serpico could not name a single Fecarotta contribution to Local 8. For his part, Fecarotta could not remember having done anything for the union, did not know anything about the union’s collective bargaining agreements or pension plans, did not know what information was on the union membership cards he supposedly distributed and did not know the names of management employees or union officers with whom he supposedly worked. Clearly, Fecarotta was a “ghost employee” whose union position was a cover for his criminal career.21

Organized crime controlled LIUNA’s Chicago Locals 1, 5, and 8. Local 1’s president, Vincent Solano, territorial boss for the Outfit’s north side operations, used union headquarters as a “contact point for his criminal organization.”22 Local 5’s president was also a high-ranking Cosa Nostra figure. The PCOC called Local 8, Serpico’s home local, “ground zero for an organized crime-led LIUNA benefit plan scam.”23

Organized crime members and their associates siphoned money from LIUNA’s Central States Joint Health Board and Welfare Trust Fund. The dental plan was egregiously corrupt; 68 percent of its budget went to “administrative costs” rather than to services. LIUNA’s treasury paid lawyers’ fees on behalf of officials charged with looting the union as well as fees to private investigators for monitoring the federal government’s investigation of LIUNA.24

According to PCOC, the structure of LIUNA’s governance facilitated organized crime’s control. It was nearly impossible for an opposition candidate to be elected to a union office because LIUNA’s executive board members were elected on a nation-wide basis; no dissident could mount a nationwide campaign to defeat candidates put forward by the incumbent regime. When union offices became vacant, the mob-dominated executive board appointed replacements.

The PCOC found that Cosa Nostra used threats and intimidation to deter members from running for office against the ruling clique’s candidates. It alleged that General President Angelo Fosco personally threatened to kill a potential challenger. In an intercepted conversation, LIUNA’s International Secretary-Treasurer (and later its president), Arthur E. Coia, told a colleague that LIUNA would always be controlled by the “Italians.”25 At the 1981 LIUNA convention, a candidate who tried to speak in opposition to the ruling clique was assaulted on the spot. The PCOC pessimistically concluded that there was “little chance that the LIUNA membership will be able to eliminate organized crime’s influence or control over their union as long as governance structure remains intact. The commission believes that federal law enforcement agencies should give high priority to investigations of LIUNA and its locals.”26

The International Longshoremen's Association

Drawing on FBI investigations, prosecutions, and legislative hearings, PCOC called the International Longshoremen’s Association “virtually a synonym for organized crime in the labor movement.”27 Ships entering harbors, day or night, need to be unloaded and reloaded quickly. Delay is expensive, even ruinous. Thus, the longshoremen have enormous leverage over shippers who are extorted for labor peace payoffs. (The containerization of seaborne cargo since the late 1950s undermined this leverage.) Labor racketeers also enlisted port employees to facilitate cargo theft, solicited illegal labor payoffs, and extorted stevedores (companies that load and unload seaborne cargo). “Throughout its history, the international has done little, if anything, to disturb La Cosa Nostra influence in its locals.”28

Cosa Nostra became the primary power on the New York Harbor waterfront in 1937, when Anthony “Tough Tony” Anastasio (a.k.a. Anastasia) took control of the six New York harbor locals. (His brother, Albert Anastasia, was head of the infamous Murder Incorporated and boss of the crime group that later came to be known as the Gambino crime family.) “Under Anastasio, organized pilferage, strike insurance, kickbacks, and loansharking on the piers reached unprecedented levels.”29 Anastasio delegated control of the NYC locals to various organized crime members and associates.

The 1953 New York State Crime Commission report on labor racketeering in New York City’s harbor led directly to the establishment of the New York-New Jersey Waterfront Commission whose legality the U.S. Supreme Court upheld, observing that:

In disqualifying all convicted felons from union office…[the Waterfront Commission Act] may well be deemed drastic legislation. But in the view of Congress and the two states involved on the New York waterfront, the presence and influence of ex-convicts called for drastic action. Legislative investigation had established that the presence of ex-convicts on the waterfront was not a minor episode but constituted a principle corrupting influence.30

Despite the Waterfront Commission’s efforts, the situation did not improve. The PCOC charged that Cosa Nostra completely controlled Thomas (Teddy) Gleason, the ILA’s president from 1963 – 1986.31 In the New York-New Jersey port, the Gambino crime family controlled the ILA international union.[********] The Gambinos controlled the New York side and the Genoveses controlled the New Jersey side. After Anastasio died in 1963, control of ILA Local 1814 passed to Anthony Scotto, a son-in-law who, until he was sent to prison in 1979, flourished in the union and as a capo in the Gambino crime family. Scotto was also influential in New York City politics where he was a major fundraiser for Democratic Party candidates.

In 1975, the FBI launched UNIRAC, an investigation of ILA racketeering in the ports of New York City, Miami, Wilmington, Charleston, and Mobile. Using undercover agents and electronic intercepts, the FBI uncovered extensive labor racketeering up and down the east coast and on the Gulf coast. Ultimately, UNIRAC led to the conviction of over 100 persons, including twenty ILA leaders, among them Anthony Scotto and Michael Clemente, both of whom held positions in the ILA and Cosa Nostra. In 1979, Scotto was convicted of taking more than $200,000 in payoffs from employers. New York’s Governor Hugh Carey, and two former New York City mayors, John Lindsay and Robert Wagner, testified on his behalf at the sentencing hearing. (Scotto raised $1 million for Governor Hugh Carey’s 1974 campaign and $50,000 for Mario Cuomo.) When Scotto was sent to prison, Anthony “Sonny” Ciccone succeeded him as Gambino capo and ILA vice president.32 The transition was seamless.

The PCOC complained that while UNIRAC was “a very successful operation demonstrating law enforcement skill and tenacity,” subsequently there had been only sporadic investigations and prosecutions, leaving organized crime’s influence intact all along the eastern seaboard. In February 1981, the Senate Permanent Subcommittee on Investigations held hearings on waterfront corruption. Its report stated:

Witnesses testified that payoffs were a part of virtually every aspect of the commercial life of a port. Payoffs insured the award of work contracts and continued contracts already awarded. Payoffs were made to insure labor peace and allow management to avoid future strikes. Payoffs were made to control a racket in workmen's compensation claims. Payoffs were made to expand business activity into new ports and to enable companies to circumvent ILA work requirements.

Organized crime exerted significant influence over the ILA and many shipping companies. Some companies learned how to prosper in the corrupt waterfront environment. They treat payoffs to LCN as a cost of doing business.

The free enterprise system has been thrown off balance. Contracts were not awarded on the basis of merit. The low bid did not beat the competition. Profitability was not based on efficiency and hard work but rather on bribery, extortion and underworld connections. The combination of these corrupt practices was a recipe for inflationary costs and economic decline. Much of the corruption on the waterfront stemmed from organized crime’s control over the ILA, a condition that has existed for at least 30 years.33

Pointing to the 1984 Senate Permanent Subcommittee on Investigations’ findings, the PCOC concluded that, despite its successes, UNIRAC had not purged organized crime from the ports. “Corrupt practices … already have begun to return to the Atlantic and Gulf Coast docks. What is needed, then, is continued scrutiny of the maritime industry by government agencies.”34

Independent Unions

Independent unions are labor organizations that are not affiliated with a national/international union or with the AFL-CIO. Therefore they are free to “raid” AFL-CIO member unions. The McClellan Committee found that independent unions were particularly susceptible to organized crime’s influence because their unaffiliated status made them especially difficult to monitor and police. The PCOC found similarly and noted: “Because such unions are not part of a larger organization that might provide supervision, labor racketeers are free to create and strategically maneuver them with complete freedom.”35 The PCOC cited Daniel Cunningham’s control of the Allied Union of Security Guards and Special Police (Allied) as an example of how an independent union can become a “wholly-owned subsidiary of organized crime.”36

Allied was founded in the 1960s by well-known racketeer Benjamin “Bennie the Bug” Ross and Genovese crime family soldier Joseph “Joe Curly” Agone.37 After Ross’ imprisonment, Allied presidents maintained the union’s close ties to the Genovese family. In 1974, Cunningham literally purchased his position as head of Allied, using $90,000 to buy out the incumbent president’s term. The Genovese family supported him and there was no rank-and-file vote. In return, he placed the union’s pension and welfare funds at organized crime’s disposal.

Cunningham ignored the union’s constitution and federal labor law. No elections were held during his tenure. He appointed his cronies to top positions and increased his salary three-fold. His methods for exploiting the benefit funds included reimbursing his associates for fake expenses, taking kickbacks from no show employees and from employers and benefit providers, and making payouts to fictitious employees and service providers. In 1983, Cunningham was convicted of racketeering, bribery, embezzlement and obstruction of justice. The PCOC concluded that the unskilled and unsophisticated workers who belong to independent unions face an especially high risk of exploitation by racketeers, exacerbated by the government’s failure to investigate independent unions.

The Meat Industry

The PCOC devoted significant attention to racketeering within the New York City meat, fish and poultry industry. Organized crime families controlled local unions affiliated with the Amalgamated Meat Cutters and Butcher Workmen of North America. They used that control to set themselves up in wholesale and retail businesses where they sometimes profited from selling fraudulently dated or tainted meat. They also bribed government inspectors to falsely grade their meat products.

While the Bonanno and Lucchese families were also involved in the meat industry, the PCOC chose to focus on the Gambino family. Paul Castellano owned Dial Poultry which distributed chickens throughout the New York City metropolitan area. His brother, Peter Castellano, operated Quarex, an even wider distributor.38 Both of these businesses demonstrated how LCN can exploit its union power to achieve a competitive advantage for its own companies.

PCOC Criticisms of the Government and the AFL-CIO

The PCOC strongly criticized law enforcement’s efforts to oppose labor racketeering. It pessimistically noted that: “the government’s efforts to remove organized crime’s influence over unions and legitimate business have been largely ineffective. This situation does not stem simply from too few laws or unavailable remedies. It arises from a lack of political will, a lack of fixed responsibility and a lack of a national plan of attack.”39 PCOC concluded with a long list of recommendations.

The Department of Labor was criticized for failing to embrace law enforcement goals, being susceptible to political interference and failing to effectively enforce ERISA. It criticized the DOJ for failing to utilize civil RICO against labor racketeering. By contrast, it praised some states (e.g., Florida and Arizona) for aggressively using their own racketeering statutes. Finally, the PCOC criticized the National Labor Relations Board for not having a strategy to deal with corrupt institutions, the IRS for not giving significant priority to analyzing and investigating suspicious deductions and claimed expenses, and the AFL-CIO for denying responsibility to combat labor racketeering.

PCOC’S Reommendations

The PCOC divided its recommendations into five parts: general national strategy; protection of workers’ rights; the private sector; administration of justice, and; state and local government.

General National Strategy

· A greater political will to attack labor racketeering, a national plan of attack, and an understanding of the need to confront entire organized cartels rather than individual criminals.

· An end to piecemeal division of resources and accountability.

· Task Forces able to carry out industry-by-industry campaigns.

· DOJ must take a more aggressive stance towards organized crime’s labor racketeering.

· The DOL must play an active role in combating racketeering. It must consolidate enforcement and oversight of employee benefit plans and labor unions.

Protect Workers’ Rights

· Labor Management Relations Act should be amended to make it an unfair labor practice for a union to be controlled by or to assist organized crime. The NLRB should view racketeering activity within the framework of violations which it recognizes. Because the NLRB lacks the resources for investigations, DOJ should provide investigative assistance.

· Congress should pass a statute specifically making illegal the sale of a union, union office or union members’ right to work.

· Congress should give the Secretary of Labor power to act on behalf of union members when officers breach fiduciary obligations.

· Congress should make false reporting of union activities a felony.

· Congress should amend the Hobbs Act to prohibit violence regardless of whether a “legitimate union activity or objective” can be claimed.

· The DOL should computerize and more widely disperse its data.

· The Secretary of Labor should develop guidelines on unions’ excessive administrative expenses.

· The Landrum-Griffin Act should be amended to permit the DOL to set aside union elections that clearly violate basic legal conduct (violence, destruction of ballots, etc.) regardless of whether ( as current law requires) it can reach a finding that the violation would have changed the election’s outcome.

· The IRS should reform its enforcement policies to confront labor racketeering. The IRS should step in to actively disallow excessive salaries agreed to in collective bargaining agreements for employees assigned to union business. Employee benefit reports should be processed more quickly to eliminate unreasonable delays and backlogs.

The Private Sector

· The labor movement needs to confront organized crime’s influence in business and labor.

· The AFL-CIO needs to apply its code of ethical practices.

· The AFL-CIO should require that member unions file annual reports describing their measures to uphold and enforce the ethical practices codes. Reports should list all convictions and indictments of union officers and employees, fund trustees, consultants and service providers.

· AFL-CIO Ethical Practices Committee should become active and meet regularly.

· Unions not affiliated with the AFL-CIO should establish similar codes.

· Corporations should create and enforce codes of conduct that preclude doing business with organized crime.

Administration of Justice

· Tougher sentences for convicted labor racketeers.

State and Local Government

· State and local government should cooperate to protect the waterfront from labor racketeering.

· Local and state governments should not award government contracts to suspicious businesses. This is a low cost method for keeping organized crime out of the market place.

Reaction to The Edge

PCOC’s book-length report, The Edge, was well received by the media, earning praise for having shone a light on organized crime, corrupted unions and tainted businesses. The New York Times said that, “The report is not a how-to-do it manual. Its aim is to lift the consciousness of our citizens about what is going on around them, stealthily and adversely affecting their lives and fortunes. In the collision between society and organized crime, sunlight and the exposure that it generates are potent weapons. The Commission organized its affairs to generate as much light as possible with the resources put at its disposal.”40

The AFL-CIO strongly criticized The Edge, especially its recommendation that the AFL-CIO take a more active role in ridding its affiliated unions of organized crime’s influence. President Lane Kirkland stated, “If the labor movement is afflicted by racketeers, that points to a grievous failure by law enforcement authorities….Corruption and criminality are attributes of individuals, not organizations.” Kirkland denounced the Commission’s recommendations as “an Orwellian collection of proposals and in my view, a virtual blueprint for a police state.”41 This AFL-CIO response, as we noted in Chapter 1, is consistent with the labor federation’s longstanding denial of the problem. We will examine that position in some depth in Chapter 6.

Conclusion

This chapter and chapter 4 provide perspectives on the magnitude of the labor racketeering problem. I believe that a fair reading of the record would persuade an open-minded reader that the problem is significant . Over the course of the 20^th century, organized crime infiltrated and exercised influence, even control, over the nation’s largest private sector labor union and several; other important unions as well. In addition, of course, organized crime exerted control over hundreds of union locals. For example, approximately 80 Teamster locals (out of 700) have had documented or alleged connection to organized crime.[††††††††] Of course, in the great majority of Teamster locals, there was no organized crime presence.However, because of organized crime’s presence in the IBT at the national/international level, it’s largest pension and welfare fund, and a significant number of large and important IBT locals, labor racketeering almost certainly touched the lives of practically all Teamsters. In recent decades, the Teamsters constitute roughly 9% of all U.S. union members.[‡‡‡‡‡‡‡‡] If one were to add the percentage of union members in LIUNA, HEREIU, and ILA, it would be reasonable to conclude that at least as of the mid 1980’s, racketeering was a substantial presence and problem in the U.S. labor movement.

Labor Racketeering in New York City

New York City is the home base of a large corps of sophisticated and ruthless racketeers who not only engage in traditional organized criminal activity (including loansharking, gambling, narcotics, and redistribution of stolen goods), but who also play a major role in numerous legitimate industries, including private sanitation, garment, cargo freight, and construction.

--New York State Organized Crime Task Force (OCTF). Corruption and Racketeering in the New York City Construction Industry: Final Report to Governor Mario M. Cuomo (1990), p. 77.

In the building trades, the key to nonunion labor was Cosa Nostra control of union shop stewards, many of whom were made members or sons or relatives of members. On average, a subcontractor using union labor might expect a profit margin of 15 percent. With nonunion workers, even with payoffs, the profit was 30 percent or more. If all else failed, there remained the Gambinos’ control of IBT Local 282, so absolute that if all of the other New York families needed Teamster assistance, they had to share the proceeds with [Gambino boss] Paul Castellano.

--Sammy “The Bull” Gravano in Peter Maas’ Underboss (1997), pp. 116-117.

This chapter addresses the same question as Chapter 3 – how extensive was and is labor racketeering in the United States? Here we focus on just one city, New York, since approximately 1980. This is not an exposé. It does not draw on any confidential information. I am only identifying unions with publicly-documented histories of organized crime influence. Almost certainly, there is unrevealed LCN influence in other New York City unions.

The labor racketeering problem in New York City is not qualitatively different than the problems in other U.S. cities where workers are highly unionized. It is likely that there was more labor racketeering in New York City circa 1980 than in any other U.S. city if only because New York City has the most unions (approximately 350 locals), the most union members, the most organized crime families and the most organized crime members and associates. Since the early decades of the 20th century, New York City has been home to five Cosa Nostra organized crime families – Genovese, Gambino, Lucchese, Bonnano, and Colombo. Each of these crime families has been heavily involved in labor racketeering.1 In some cases, two or more families have exerted influence in a particular union. While New York City is not typical, it is certainly not unique. Chicago’s history of labor racketeering rivals New York’s and there is a solid documented record of labor racketeering for many other cities including Atlantic City, Boston, Buffalo, Cleveland, Detroit, Kansas City, Miami, Philadelphia, and Pittsburgh.

In creating a snapshot of labor racketeering in NYC circa 1980, I draw extensively on my 1990 collaboration with the New York State Organized Crime Task Force (OCTF), Final Report on Corruption and Racketeering in the NYC Construction Industry and on my 1999 study, Gotham Unbound: How New York City was Liberated from the Grip of Organized Crime. The OCTF report documented and analyzed organized crime’s penetration of New York City’s construction unions. Gotham Unbound illuminated Cosa Nostra’s role in the political-economy of New York City, spotlighting six commercial venues: Garment District; Fulton Fish Market; Jacob Javits Convention Center; cargo operations at JFK Airport; the commercial waste hauling industry, and; the construction industry. Thus, this chapter identifies labor racketeering in those industries and sectors and several others as well. Because a large number of unions are mentioned, the following preview may be useful:

The Garment District

· International Ladies Garment Workers Union (ILGWU) Local 102

Fulton Fish Market

· United Seafood Workers, Smoked Fish and Cannery Union Local 359

Air Cargo at JFK Airport

· International Brotherhood of Teamsters (IBT) Local 295

· IBT Local 851

Javits Convention Center

· IBT Local 807

· NYC District Council, International Brotherhood of Carpenters and Joiners (Carpenters)

· International Alliance of Theatrical and Stage Employees, Exhibition Employees Local 829

Waste-Hauling Industry

· IBT Local 813

Construction Industry

· IBT Joint Council 16

· IBT Local 282

· IBT Local 580

· Laborers (LIUNA) Blasters and Drill Runners Local 29

· LIUNA Cement and Concrete Workers Local 6A

· LIUNA Workers Local 20

· LIUNA Local 18A

· LIUNA Local 95

· LIUNA Local 66

· LIUNA Local 13

· LIUNA Local 23

· LIUNA Local 46

· LIUNA Local 59

· NYC District Council of Carpenters

· Carpenters Local 17

· Carpenters Local 608

· International Union of Operating Engineers (IUOE), Local 14

· IUOE, Local 15

· IUOE, Waterproofers Local 66

· Painters Union, District Council 9

· Plasterers Local 530

· Plumbers Union, Steam Fitters Local 638

Seaborne Cargo in the Port of New York

· International Longshoremen’s Association (ILA) Local 1814

· ILA Locals 824, 1809, and 1909 (collectively known as the West Side [of Manhattan] Locals)

· ILA Local 1804

· ILA Local 1588

· ILA Local 1

Other Industries

· Amalgamated Meat Cutters’ Union Local 174

· Newspaper and Mail Deliverers Union of New York and Vicinity

The Garment Center

Throughout most of the 20th century, organized crime has been a major presence in the New York City Garment Center (Manhattan, Seventh Avenue and mid 30s). In 1977, the garment industry’s leading trade magazine, Women’s Wear Daily, called ILGWU Local 102, which represented truck drivers carrying material and finished garments to and from the Garment Center, “an active tool of labor racketeers.” Sol C. Chaikin, the president of the ILGWU international union in the 1970s, admitted that “we have never been able to control [Local] 102.”2

The Gambino crime family leveraged control over Local 102 to establish and police an employers’ association, the Master Truckmen of America (MTA), which operated a cartel among truckers doing business in the Garment Center. In effect, the cartel, backed by the union’s power to shut down employers, determined which truckers could do business in the Center. Cosa Nostra enforced “marriages” between manufacturers and truckers; each garment maker was bound to a particular trucking company and, whether or not satisfied with the price it paid or the service it received, it could not make a change. No other trucker would handle its business. Even if the manufacturer chose to do its own trucking, it still had to pay its assigned trucker as if that trucker had done the work. Failure to comply would invite labor problems.

If a trucker refused to join the Association or to follow its rules, the MTA would order a Local 102 job action – e.g., drivers would sit down on the job or otherwise stop or subvert the “rebel” trucking firm’s operations. If that was insufficient to bring the “rebel” trucker into line, his vehicles would be vandalized or stolen. Cartel members also blocked curbs or entire streets to prevent a rebel trucker from making pick-ups and deliveries.

An incident in the mid-1970s provides an example of how Local 102 enforced the employers’ cartel. Soon as a government undercover agent purchased a trucking company as part of a sting operation, MTA President Frank Wolf (of the employer association!) threatened a Local 102 strike (by the union!) unless the new owner paid 10 percent of the purchase price to the MTA (the employers’ association!).

The mob’s control over Local 102 ensured that Cosa Nostra’s (mostly the Gambino crime family’s) trucking companies enjoyed labor peace. It also gave them an opportunity to make even more profit by not enforcing the collective bargaining agreement. For example, Thomas Gambino operated his trucking firm as a “double-breasted” shop, employing both unionized and low-wage non-unionized drivers. There was, of course, no objection from the union.[§§§§§§§§]

Fulton Fish Market

The Fulton Fish Market, the largest wholesale fish market in the U.S., was a Cosa Nostra power base and profit center since the early twentieth century. Beginning in the 1920s, the Genovese crime family’s influence in the fish market was rooted in its control of the United Seafood Workers, Smoked Fish and Cannery Union.[*********] As federal prosecutors noted in a 1981 sentencing proceeding involving several convicted officers of Local 359: “[I]n the wholesale [fish] industry, where competition is fierce and time is of the essence, it is crucial for businesses to maintain the good will of the union and the men who run it. Organized crime recognizes this power and knows how to use it.”3 The union had 850 to 900 members, including wholesalers, managers, supervisors, and the four hundred “journeymen” who set up the wholesalers’ seafood displays, negotiated the sales, and delivered the fish to the retail purchasers’ vans parked nearby.

Carmine Romano, a Genovese crime family associate, served as Local 359’s secretary-treasurer (the union’s de facto top position) from 1974 to 1980. In 1980, when Carmine became a trustee of the union’s pension and welfare funds, his brother Peter succeeded him as the Local’s secretary-treasurer. Both brothers were later convicted of RICO, conspiracy to violate RICO, aiding and abetting violations of the Taft-Hartley Act, misusing union pension funds, and extortion of union members and employers.4

Local 359 officers coerced wholesalers into paying for various “services” that they did not desire or need, like cardboard signs stating that they employed union labor. The Romanos received more than $66,000 ($200,000 in 2003 dollars) from this scam. Throughout the 1970s, union officials collected “Christmas gifts” of $300 (the equivalent of $900 in 2003 dollars) from wholesalers. The money was solicited as a holiday gift “for the boys in the union,” but the money went to the Genovese crime family’s coffers rather than to rank and file members.

Wholesalers paid $1,300 ($4,380 in 2003 dollars) a week to Carmine Romano’s Fulton Patrol Association to protect their fish from being stolen. Whether this was a protection service or a protection racket was unclear even to those who paid the premiums. Federal prosecutors charged that the Fulton Patrol Services functioned as a protection racket and collected more than $644,000 (the equivalent of $2,000,000 in 2003 dollars) from wholesalers from 1975 to 1979. At the Romanos’ trial on RICO charges, the president of the employers’ Wholesale Fish Dealers Association testified that “if the thieves knew that the union was looking out for us … they wouldn’t bother us … [b]ecause the thieves would be afraid of the union.”5 Following the Romanos’ convictions, the United Seafood Workers, Smoked Fish and Cannery International Union placed Local 359 under trusteeship and ousted Carmine and Peter Romano from their union positions. But the Genovese crime family retained its influence over the local though Carmine’s and Peter’s successor, their brother Vincent.6

Air Cargo at JFK Airport

Cosa Nostra’s influence in the airfreight industry is well documented. For several decades, the Lucchese crime family controlled IBT Local 295 and IBT Local 851 which represented the drivers who brought cargo to and from JFK airport. Once again, control over labor was parlayed into an employers’ association, the Metropolitan Import Truckmen’s Association (MITA), which operated a cartel.

IBT Local 295 was one of the paper locals given in 1956 by IBT General President David Beck and Vice President Jimmy Hoffa to Johnny Dioguardi.7 In 1970, the Lucchese crime family created IBT Local 851,8 to serve as a safe haven because the government was investigating Local 295. Harry Davidoff, a Hoffa protégé, ran Local 851 and Local 295 from the same office. In 1972, his son Mark succeeded him as head of Local 851.9 In the 1990s, the position passed to Anthony Razza, another Lucchese associate.[†††††††††]

Local 851 represented “lead agents” who assign jobs to truck drivers and other airport workers; some lead agents were also associates of the Lucchese crime family. They used advanced information about valuable cargo shipments to arrange give-ups and hijackings. In a give-up, a truck driver leaves the keys in the ignition of his parked truck so it can be stolen according to a prearranged plan. In a hijacking, a Lucchese crew would intercept the truck just outside the airport grounds and wrest it from the driver. Valuables could also be stolen from the warehouse. The most infamous such heist occurred in December 1978; thieves stole nearly $6 million (the equivalent of $17 million in 2003 dollars) worth of cash and securities from the Lufthansa Airlines cargo hangar. Most of the proceeds went to Lucchese capo Paul Vario.[‡‡‡‡‡‡‡‡‡]10

Through its control over the IBT locals, the Lucchese family extorted labor peace payoffs from freight forwarders by threatening strikes, picketing, work stoppages, slowdowns, and misrouting cargo. When such threats materialize they can impose staggering costs on freight forwarders, whose business depends upon the speedy delivery of air cargo.

Javits Convention Center

From the day the Javits Exhibition Center opened for business in 1986, the Genovese crime family, and to a lesser extent the Gambinos and Colombos, used their control over three labor unions that represented Javits Center workers to place members, associates, and friends in high paying jobs. IBT Local 807 represented workers who loaded and unloaded the delivery trucks and vans with exhibitors’ products and supplies. Members of Carpenters NYC District Council assembled the booths and electrical stations and, until July 1995, Exhibition Employees Union Local 829 represented general laborers.

IBT Local 807

Members of IBT Local 807 (Trade Show Division) loaded and unloaded vehicles bringing merchandise into and out of the Exhibition Center. Robert Rabbitt Sr. and his two sons controlled the union. Robert Sr. was convicted of second degree manslaughter in 1985 for fatally stabbing a shop manager. Upon release from prison five years later, he returned to his position. In 1992, a New York State grand jury indicted him for conspiracy, receiving bribes, larceny, falsifying business records, and possessing stolen property. He pleaded guilty to falsifying payroll records and served one year in prison. In 1994, the Independent Review Board (the court-imposed monitor in the IBT international case) charged Rabbitt with accepting bribes in return for allowing an employer to use nonunion truck drivers and laborers. Rabbitt avoided formal disciplinary sanction by agreeing to a five-year suspension from the union; his son Michael took over his union office.11 In 1995, the Independent Review Board (IRB) found that Michael had negotiated an agreement with Javits Center employers which made the job of general foreman a nonunion position thereby allowing his father, despite his felony record, to reassume the position. Michael was guaranteed $236,000 severance pay when he relinquished the job. Finding that the Rabbitts gave lucrative Center jobs to people connected to organized crime, the IRB recommended that Michael be removed from his job.12

While the Rabbitts’ connection to organized crime has not been proved, there is strong reason to believe that Cosa Nostra called the shots with respect to IBT interests at the Javits Center. Through its hiring hall, Local 807 assigned lucrative Javits Center work from a pool of forty-seven privileged members. One-third of the individuals on that list had documented ties to organized crime; some had not even belonged to the IBT before landing a Center job.13

Carpenters’ District Council

In the mid 1980s, the United Brotherhood of Carpenters and Joiners New York City District Council represented approximately 30,000 workers in 22 local unions. (The district council makes major policy decisions for the locals and negotiates the collective bargaining contracts). From the early 1970s, the Genovese crime family controlled the district council through its capo, Vincent DiNapoli.14 The FBI believed that Teddy Maritas, district council president from 1977 to 1981, was a Genovese crime family associate.15 In the early 1980s, a RICO prosecution of Maritas, DiNapoli and others ended in a mistrial. Maritas disappeared the evening before the retrial was schedule too begin, presumably murdered.16 DiNapoli pled guilty; during his five year prison term, his brother represented the Genovese crime family’s interest in the district council.

The Carpenter’s International Union placed the New York City district council under a temporary trusteeship, but that did not purge the union of organized crime’s influence. The trustee chose Local 608 president Paschal McGuiness, a Genovese crime family associate, 17 to be the new district council president.18 McGuiness put John O’Connor in charge of the district council’s daily operations. The Department of Justice charged O’Connor with 127 counts of racketeering, including bribery, extortion, and taking unlawful gifts from contractors.19 In 1990, he pleaded guilty to five counts and was sentenced to one to three years incarceration plus a $25,000 fine.20 McGuiness also hired Ralph Coppola and quickly promoted him to district council representative at the Javits Center; the Genovese crime family allegedly inducted him as a “made member” and soon promoted him to capo.21

The Carpenters’ Union had jurisdiction over the assembly of exhibitors’ exhibits at the Javits Center. The racketeers who controlled the district council assigned LCN members, relatives, and friends to jobs with “decorator” companies. (Show managers hire decorating companies to prepare the Center for exhibits; they employ workers, who are Carpenter Union members, to assemble and dismantle the exhibitions.) The Carpenters job-referral rules dictated that, with limited exceptions, jobs must be assigned to members according to length of time out of work, but the Genovese crime family’s interests trumped the rules. Typically, a Genovese family associate gave union officials a preferential hiring list, from which the union officials chose 30 - 40 people to work with the decorator companies. Many of these preferred workers had links to the Genovese family. Some were awarded Javits Center jobs as a reward for loyalty and service to the crime family. Others needed legitimate employment as a cover for their criminal careers and to satisfy probation and parole authorities. Many positions were treated as “no-show jobs.”

Expos Local 829

Workers who set up trade shows at the Javits Center were represented by the Exhibition Employees Union (Expos) Local 829. The Expos chief shop steward, much like the Teamsters general foreman, supervised Expos members and enforced their collective bargaining agreements. Steven Dellacava and Paul Coscia, reputedly associates of the Genovese crime family, were the Expos’ chief shop stewards at the Javits Center until mid-1995. (Coscia also served as the vice-president of Local 829.) They determined who could work, where and when.

Although the Local 829 apparently did not maintain a pool list for preferential hiring at the Javits Center, it did use selective criteria. Undercover police investigations revealed that to obtain a lucrative Center job—up to $100,000 a year salary—an ordinary Expos worker had to buy a membership book from union officials for $13,000 to $22,000. Individuals with organized crime connections purchased books at lower cost and enjoyed priority in obtaining Center assignments.

Expos union officials generated revenue for the Genovese family by other illegal schemes. They padded employers’ payrolls with six ghost employees for small shows and up to twenty ghosts for larger shows. Ghost employees shared their “salaries” with the shop stewards and the Genovese crime family. Another money making scheme was the filing of fraudulent workers’ compensation claims against the Center; injuries sustained outside-of-work were alleged to have been sustained at the Center.22

Waste-Hauling Industry

Circa 1980, commercial-waste hauling in New York City’s five boroughs was carried out by approximately three hundred small firms (one to twenty trucks) that together constituted a $1.5 billion per year industry. The carting companies were members of borough-based trade associations. LCN controlled both the union and the trade associations. The Association of Trade Waste Removers of Greater New York dominated the industry; for more than thirty years, James Failla, a capo in the Gambino crime family was its president. The other Cosa Nostra-linked waste hauler trade associations were the Kings County Trade Waste Association (Genovese), the Greater New York Waste Paper Association (Genovese), and the Queens County Trade Waste Association (Gambino).23

Approximately 4,000 carting industry truck drivers were members of IBT Local 813. Bernard Adelstein ran Local 813. His reign over the union began in 1951 when Carlo Gambino, who later became boss of the Gambino crime family, placed him in the Local 813.24 The McClellan Committee focused on the ties between Adelstein and Vincent Squillante, a high-ranking official of the New York City Cartmen’s Association and a prominent organized crime figure. It branded Adelstein the “abject tool” of organized crime. According to the Committee, “far from fighting Squillante ... [Adelstein] provided vital cooperation as [Squillante] moved ... to ruthless czardom of the garbage industry.”25

The situation did not change in later decades. In 1989, Salvatore “Sammy the Bull” Gravano, the Gambino crime family underboss who became the most famous and productive government cooperating witness of all time, testified that Adelstein took orders from Gambino capo James Failla; Failla exercised de facto control over IBT Local 813 while simultaneously serving as president of the employers’ association. A former IBT Local 813 employee testified that Adelstein and Failla worked together in “controlling and manipulating the [waste hauling] industry in the New York City metropolitan area.”26

Rick Cowan, an undercover police officer, spent several years implementing a sting operation by posing as a carting company executive. In Takedown: the Fall of the Last Mafia Empire, he and Douglas Century provide a fascinating picture of the connection among the carting companies, IBT Local 813 and the mob.27 They explain how the New York City waste-hauling industry functioned in the 1990s. In one instance, Failla prevented an IBT Local 813 strike by calling a meeting of waste haulers (employers, not union members!) and ordering them to “keep the trucks rolling.”28 According to Cowan and Century, “[e]ven though this was a meeting of management, a lot of the company owners in attendance also belonged to IBT Local 813. So if they went on strike, they’d only be striking against themselves.”[§§§§§§§§§]29

Under the Gambino, Genovese and Lucchese crime families’ influence, the commercial-waste hauling firms operated a “property-rights” system that bound every commercial customer to one carter. No other carter was allowed to solicit or accept a customer’s business. IBT Local 813, under Adelstein’s, served as the cartel’s enforcement arm. Local 813 drivers would refuse to work for a company that fell out of favor with Cosa Nostra; likewise, if a carter tried to hire non-union drivers it would be struck and/or sabotaged. In 1989, Robert Kubecka, a “rebel” waste hauler on Long Island, had his trucks’ tires slashed and windshields broken. A Gambino crime family associate offered to solve his union problems for a $20,000 payoff. (Kubecka was murdered later that year for cooperating with a law enforcement investigation.) Jerry Kubecka, Robert’s father, and himself the owner of a rebel carting company, charged that IBT Local 813 threatened his customers with labor problems and violence unless they submitted to being serviced by a designated waste hauler.30

Construction

Approximately one hundred building trades’ local unions represent the workers New York City construction workers.31 The mob’s influence and control over many of these unions provides a constant stream of bribes in exchange for labor peace and/or relief labor contract provisions. Once Cosa Nostra established a power base in the construction unions, it was a small step to organizing and policing employer cartels in the construction niches corresponding to each local union’s jurisdiction. For example, control over the union local whose members pour ready-mix concrete led to the establishment of a mob-controlled cartel in that crucial construction niche. There were also well-established cartels among drywall, window-replacement, and painting contractors.

Labor peace extortion was commonplace. For example, Attilio Bitondo and Gene Hanley, business agents for Carpenters Local 257, were indicted in 1987 on multiple counts of extortion over a ten-year period. 32 Among other things, they threatened to sabotage contractors by assigning them only unqualified and incompetent workers.33

In the 1970s, Carpenters Union officials received payoffs to permit two carpentry firms to hire nonunion workers, who were paid by the number of drywall sheets installed (i.e. piecework) rather than by the hour, to avoid overtime and fringe benefits.34 In December 2001, the U.S. Attorney for the Southern District of New York indicted a new generation of Carpenter officials for the same scheme.35 The defendants included 73 members of the Parrello Crew of the Genovese Crime Family, who were indicted on 98 counts, including extortion, labor racketeering, loan-sharking, illegal gambling operations, selling counterfeit money and gun trafficking. The indictment charged nine defendants with labor racketeering involving Locals 11 and 964, which together comprised the Suburban New York Regional Council of Carpenters. These defendants allegedly arranged for nonunion workers to complete carpentry jobs, allowing them to embezzle more than $1 million that should have been paid into of the Suburban Council of Carpenter’s pension funds.36

The construction unions’ pension and welfare funds have been persistently defrauded. One common scheme is for contractors to defraud the funds by bribing union officials to allow them to employ non-union workers for whom pension and welfare payments do not have to be made. Union members who complained were blacklisted, threatened, or assaulted. Corrupt pension and welfare trustees could embezzle funds by withdrawing money in their own or in fictitious names, by making “loans” that would not be repaid, by paying for nonexistent goods and services and by taking kickbacks from contractors and service providers.37 Dissident union members who challenged the leadership of mob-dominated unions were most vulnerable; they might be blacklisted or beaten. Uncooperative employers faced sabotage. Because of the presence of so many known organized crime figures, actual violence was rarely necessary. The implicit threat sufficed.

While a comprehensive audit of labor racketeering in the huge New York City construction sector is impossible, the New York State Organized Crime Task Force and subsequent investigators have identified organized crime’s influence or control over the following construction unions:38

International Brotherhood of Teamsters

· Joint Council 16: Joseph Trerotola, president of the Joint Council, became a vice-president of the International with Cosa Nostra’s approval. Patsy Crapanzano, the Council’s vice-president, was tied to the Genovese crime family. Gerald Corallo, president of Teamster’s Local 239 and son of former Lucchese crime family boss Antonio Corallo, was listed as a member of the Council’s advisory board.

· Local 282: John O’Rourke, president from 1931 to 1965, was closely associated with Lucchese Family members Johnny Dioguardi and Antonio Corallo. John Cody, president from 1976 to 1984, was an important Gambino crime family associate.

· Local 580 (Ironworkers Union): Peter Savino, a member of the Local with significant influence over illegal practices in which its officers engaged, was a Genovese crime family associate.39 In 1984, he gave control of the union to Joseph Marion of the Lucchese crime family;40 Lucchese family associate John Morrissey was also an important figure in the Local.41

Laborers Union

· Blasters and Drill Runners Local 29: President Louis Sanzo considered Lucchese Family soldier Samuel Cavalieri to be his boss. Cavalieri’s son was the administrator of the Local’s pension fund.

· Cement and Concrete Workers Local 6A: Ralph Scopo, president of the District Council, was a soldier in the Colombo crime family. His sons, Joseph and Ralph, were affiliated with both the District Council and Local 6A, with Joseph serving as president of Local 6A.

· Cement and Concrete Workers Local 20: Vice-presidents Luigi Foceri and Frank Bellino were members of the Lucchese crime family.

· Cement and Concrete Workers Local 18A: Genovese Family capo Vincent DiNapoli controlled the Local.

· Housewreckers Union Local 95: Vincent Gigante, boss of the Genovese crime family, controlled the Local.

· Local 66: Vice-president Peter Vario was a member of the Lucchese crime family.

· Mason Tenders Local 13: Mike Copolla, a capo in the Genovese family, controlled the union. Basil Cervone used his power over the Local and the District Council on behalf of Genovese crime family.

· Mason Tenders Local 23: President Louis Giardina was a soldier in the Gambino family.

· Mason Tenders Local 46: Peter A. Vario, nephew of Paul Vario, a Lucchese crime family capo, was business manager of the Local.

· Mason Tenders Local 59: Patsy D. Pagano, secretary-treasurer until 1974, was part of the Pagano faction of the Genovese family. Daniel Pagano, who later ran the Local as its business manager, was a Genovese family member. His cousin, a Genovese soldier, controlled the union in the 1980s.

United Brotherhood of Carpenters

· District Council: Teddy Maritas, president from 1977 to 1981, had a close relationship with Genovese capo Vincent DiNapoli; the FBI identified him as a Genovese family associate. The next president, Paschal McGuiness, was also a Genovese associate. In 2000, President Michael Forde was indicted for labor bribery. His co-defendants included a number of Lucchese family members, including acting boss Steven Crea.42 Crea pleaded guilty for a reduced sentence. Forde was convicted in 2004.43

· Local 17: In 1987, the Genovese family consigliere awarded Liborio Bellomo control of the Local, the largest in the district council. In 1989, Genovese associate Enrico Ruotolo was elected business manager.

· Local 608: President Paschal McGuiness (who also became president of the district council) was a Genovese crime family associate. A later president, Michael Forde and business agent Martin Deveraux were convicted in 2004 for accepting bribes from contactors in a case uncovering labor racketeering by the Lucchese family.44

Other Construction Industry Unions

· Builders and Allied Craftsmen, Local 1: President Santo Lanzafame was charged with accepting bribes in exchange for allowing job stewards to file fraudulent union documents to cover up violations orchestrated by Lucchese crime family members.45 The judge threw dismissed the indictment on legal insufficiency grounds and also under the specific Organized Crime Control Act interest of justice provision.

· International Union of Operating Engineers, Locals 14 and 15: Locals 14 and 15 represented workers at major building sites including the Museum of Modern Art and the federal courthouse in Brooklyn.46 In 2003, alleged Genovese soldier Louis Moscatiello, Colombo capo Vincent Ricciardo, acting Colombo boss Joel Cacace and son Joel Jr., and alleged Colombo underboss John DeRoss and son Jamie and dozens of union officials were indicted in both the SDNY and EDNY for running no-show job schemes at construction sites across New York City. The SDNY portion concerns Genovese control over these locals, while the EDNY part relates to the Colombos. Joel Cacace, the Acting Boss of the Colombo family, admitted to the murder of AUSA Bill Aronwald’s father, so his racketeering charges went away with his guilty plea to RICO with a 20 year cap. Along with Cacace, several other top officials of Locals 14 and 15 pled guilty to crimes including racketeering and receiving unlawful labor payments. With the defendants from both districts having pled guilty in November, 2004, the case came to an end.

· International Union of Operating Engineers, Waterproofers Local 66: John Morrissey, an associate of the Lucchese crime family, collected payoffs for labor peace for this Local.47

· Painters Union, District Council 9: Martin Rarback, secretary-treasurer until 1967, was an associate or at least closely associated with Cosa Nostra. The Lucchese crime family controlled Jimmy Bishop, secretary-treasurer from 1973 to 1990.48

· Plasterers Local 530: Genovese Family capo Vincent DiNapoli created the union, which Louis Moscatiello, a Genovese crime family associate, ran as business manager.

· Plumbers Union, Steam Fitters Local 638: George Daly, the union’s business agent, was an associate of Gambino Family boss Paul Castellano and Gambino soldier Thomas Bilotti.

Seaborne Cargo in the Port of New York

Through its power base in the International Longshoremen’s Association, Cosa Nostra has been a presence in New York City’s waterfront throughout the 20th century. There is documented mob control of at least six ILA locals.49 In 1990, the government filed a civil RICO suit against these six unions, their executive boards and officers, the Genovese and Gambino crime families, the Westies, an Irish organized crime group allied with the Gambino family, and five shipping companies. The Gambino crime family controlled Local 1814 in Brooklyn and Locals 824, 1809, and 1909 in Manhattan; the Genovese crime family controlled Locals 1804 and 1588 in New Jersey.50

The leaders of Brooklyn Local 1814, at one time the largest ILA local in the country, had decades-long ties to the Gambino crime family. Capo Anthony Anastasio, brother of the Gambino family boss Albert Anastasia (the brothers spelled their names differently), ran the union in the 1940s and 1950s. In 1963, his son-in-law Anthony Scotto succeeded him in both the union and organized crime. Scotto served as both president of Local 1814 and as a vice-president of the International. He was banned from union office after a 1980 conviction on RICO charges, but he remained affiliated with the union through 1990.51 Anthony Pimpinella, a Gambino soldier, and Anthony Ciccone, a Gambino family capo,52 both held positions in the local and International in the 1980s.53 Ciccone, who was prohibited from participating in union activities after 1991, maintained his influence into the 2000s through his connection to Local 1814’s president Frank Scollo.54

The Gambino family, in collaboration with the Westies, controlled ILA Locals 824, 1809, and 1909, collectively known as the West Side (of Manhattan) locals.55 Gambino boss, John Gotti, was named with John Bowers (president of three locals, as well as of the International) in a 1990 federal lawsuit alleging corruption in the West Side Locals (as well as in Locals 1814, 1804, and 1588).56 The lawsuit resulted in a consent decree, in which the government sought to eradicate the influence of organized crime in local unions affiliated with the ILA on the New York/New Jersey Waterfront.57

Genovese family capo Michael Clemente ran dock operations in New Jersey for Cosa Nostra as early as the 1960s, when he was banned from union office for extortion. Twenty years later, he was still involved.58 Tino Fiumara, a member of the Genovese crime family, represented Clemente in dealing with ILA Local 1804, of Bergen, New Jersey and ILA Local 1588 of Bayonne, New Jersey.59 Thomas Buzzanca, president of Local 1804 in the early 1980s, was also a member of the Genovese family.60 According to federal prosecutors, as recently as 2002, at least six officials of Local 1588, including President John Timpanaro, were Genovese crime family associates.61 Joseph Lore, another Genovese associate, stole hundreds of thousands of dollars from Local 1588 during the 1990s; he held no position in the union, but his girlfriend served as its office manager, and other mob-connected officials helped him divert funds from union officers and members’ salaries.62

Though only the six unions noted in the preceding paragraph were named in the 1990 civil RICO suit against the New York/New Jersey ILA,63 since then evidence has emerged of mob influence in other ILA locals. In 1998, the Waterfront Commission accused Louis A. Saccenti, who ran New York Local 1235, of being a Gambino crime family associate.64 Salvator Gravano, underboss of the Gambino family, appointed his former bodyguard to be the delegate of Local 1 of Newark, New Jersey to the Atlantic Coast District of the ILA in the early 1990s.65 The United States Department of Justice believes that Anthony Ciccone, the Gambino family capo whose involvement with Local 1814 is explained above, attempted to control the management of Local 1 as recently as 2001.66

Cosa Nostra used its influence in the ILA to exploit the locals, the shipping industry, and the longshoremen. It determined who worked on the docks and, most importantly, which ships were unloaded and when and in what order waiting trucks were loaded. Shippers had to pay off the mob to ensure that their ships were loaded and unloaded expeditiously and to avoid labor unrest. The cost of delay gave the union representing longshoremen leverage over shippers. Furthermore, Cosa Nostra orchestrated extensive and systematic thefts from the shipping companies. Labor racketeers bribed port employees to facilitate cargo theft, solicit illegal labor payoffs, and extort stevedores (companies that load and unload seaborne cargo).67 The labor racketeers victimized the ILA’s rank and file through embezzlement, benefit fund fraud, and violation of the rank and file’s rights through force and violence.

Other Unions

The unions named above are not the only New York City unions influenced by LCN. There is evidence of an organized crime presence in the moving and storage industry, linen services, restaurants and nightclubs, and other businesses and industries.68 Daniel Castelman, Chief of Investigations for the Manhattan District Attorney, has said that “Every industry I’ve ever seen the mob take control of started with their influence in the union.”69

Jonathan Kwitny’s book Vicious Circles describes Mafia involvement in the meat industry in the 1960s.70 He writes that Local 174 of the Amalgamated Meat Cutters’ Union, which represented butchers, “was merely a branch office” of the mob. Frank Kissel, the secretary-treasurer of the local, was a close friend of mobster Lorenzo Brescia71 and also worked with the Lucchese family’s Johnny Dioguardi. Money flowed to the union and the mob from the Meat Trade Institute, an association of employers.72

An investigation of Newspaper and Mail Deliverers Union of New York and Vicinity led to the indictment of several union officials and an alleged member of the Bonanno crime family, James Galante, in April 1996. Members of the union distribute papers for the New York Times, the Daily News, the New York Post, El Diario, and the Metropolitan News Company. Union officials were accused of cooperating in several schemes, including placing fictitious workers on payrolls, stealing newspapers, promoting certain employees in violation of seniority procedures, and assaulting union members who complained about illegal activities.73

Conclusion

Several dozen clear cases easily support the proposition that labor racketeering in New York City has been extensive and long lived. Of course, many New York City unions have not been tainted by organized crime. On the other hand, some unions that have been infiltrated, even controlled, by organized crime have so far not been identified as such.

Organized Labor’s Response to Organized Crime

Is the government going to be here in the year 2050? The year 3000? I don't know, but I think it's something that we should be talking about because of the tremendous burden on our membership ... They've eliminated certain pockets of corruption in the union, and I think it's time for us to move on.

--James P. Hoffa, following his election victory as general president of the International Brotherhood of Teamsters (Dec. 7, 1998).

I have had more obloquy and more scorn from the labor

movement for representing [Jock] Yablonski and [Ed]

Sadlowski [reformers who ran in the 1970’s against

corrupt and dictatorial presidents of the United Mine

Workers and United Steelworkers respectively] and helping

reformers in the Laborers and other unions than I ever got

from representing people under attack during the McCarthy

period in the 1950's. The problems we went through in

the McCarthy period were nothing compared to labor's

recriminations against those who have become spokesmen

for union democracy.

--Joseph Rauh (famous civil rights lawyer)

Other than the brief flurry of anti-racketeering activity in the 1950s, occasioned by the unification of the AFL and CIO and then by the Senate’s McClellan Committee hearings, the mainstream American labor movement has mostly denied or minimized organized crime’s influence over organized labor. While the AFL-CIO has steadfastly maintained that it is the government’s responsibility to investigate and prosecute crime, it has opposed practically every government initiative aimed at fighting labor racketeering.

Organized labor’s refusal to ally with law enforcement against organized criminal elements in the labor movement is often incomprehensible to law enforcement officials who view themselves as labor’s liberators. But the labor movement’s profound suspicion and distrust of local, state and federal governments has a long history. During labor’s formative years, government, acting through law enforcement agencies, often joined with employers to break strikes and punish strikers. In the late 19^th and early 20^th centuries, labor activists were often arrested and prosecuted, frequently for conspiracy. Distrust was exacerbated in the 1920s and 1930s when leftist elements in the labor movement were ruthlessly suppressed. Suspicion was confirmed after World War II by the Taft-Hartley Act (1947) which, among other things, prohibited jurisdictional strikes (dispute between two unions over which should act as the bargaining agent for the employees) and secondary boycotts (boycott against an already organized company doing business with another company that a union is trying to organize), outlawed the closed shop, permitted the union shop only on a vote of a majority of the employees, and removed all protections of wildcat strikes (unauthorized work stoppage when labor agreement is still in effect). A decade later, organized labor’s distrust of the government was reaffirmed with the passing of the Landrum Griffin Act (1959), which labor leaders regarded as undermining their ability to maintain discipline in their organizations. When President Ronald Reagan fired striking air traffic controllers in 1981, many labor officials saw a contemporary manifestation of a century-long government bias against and hostility toward organized labor. Likewise, they cynically regarded DOJ civil RICO suits against racketeer-ridden unions as more of the same.

Samuel Gompers (1886 – 1924)

Samuel Gompers and others founded the American Federation of Labor in 1886. [**********]Gompers served as president from 1886-1924. In the name of a strong labor movement, he turned a blind eye to labor’s reliance on gangsters to battle against strike-breaking thugs recruited by who could usually count on governmental support.1 He was unwilling to criticize the gangsters’ infiltration of numerous unions. anti-labor employers and then to the gangsters’ infiltration of numerous unions.2

Gompers was friendly with “Umbrella” Mike Boyle,3 boss of Local 134 of the International Brotherhood of Electrical Workers in Chicago. Boyle’s nickname referred to the umbrella he hung on a bar counter to receive money from contractors seeking favors (i.e. avoiding being held to the terms of their union agreements).4 Boyle, like many early labor leaders, was also an employer. He held a financial interest in an electrical manufacturing company, which sought to dominate the Chicago market. Gompers promised that Chicago union members would not install electrical switchboards made outside of Chicago. In return, Boyle helped Gompers fight off legislation that would prohibit the “closed shop,” a union-favored contract clause that commits an employer to hiring only union workers.5 In 1917, Boyle was convicted of a federal anti-trust violation, fined $5,000 and sentenced to a year’s imprisonment. Gompers successfully lobbied President Woodrow Wilson to commute the sentence.6

In order to counter the influence of the Central Federated Union, an AFL competitor, Gompers wanted to build up an AFL-affiliated New York City Building Trades Council.7 Toward this end, he reached out to the notorious Robert Brindell, czar of the New York building trades and gave him an AFL charter for a Dock and Pier Carpenters Union. Brindell forced the Board of Business Agents into the AFL-affiliated Building Trades Council;8 the business agents obediently elected him president for life and made him the country’s highest paid labor official.9

In 1922, the New York State legislature appointed the Lockwood Committee to investigate graft and racketeering in the building trades. When the Committee announced that it would focus on Brindell, Gompers denounced the Committee as “another part of the employers’ effort to discredit the labor movement and shackle the unions with government control.”10 He insisted that the labor movement itself could take care of corrupt labor officials, stating: “I think that the Legislature should not interfere in the matter at all, regrettable and bad as the condition may be.”11 Then he famously declared, “God save Labor from the courts.”12 Ultimately, Robert Brindell was sent to prison on a 5-10 year sentence for extorting labor peace payoffs from employers.13

During his long reign as AFL president, Gompers did little to prevent, investigate or punish labor racketeering.14 He was a realist. If the AFL were to expel racketeer-ridden unions, it would lose substantial dues revenue and weaken its position vis-à-vis employers and competing labor federations.15 In addition, Gompers might have feared that an attack on labor racketeers would have failed and resulted in his being deposed from the AFL presidency or worse.16

William Green (1924-1952)

When Gompers died, William Green became AFL president. Green immediately promised to combat corruption and racketeering. At the 1930 AFL Convention, he stated, “If there is brought to my attention the racketeer moving under the garb of trade unionism and I can place my hands on him with convincing evidence, I will drive him from this movement, if I can (emphasis added).”17 That situation seems never to have arisen since Green regularly claimed that he could do no more than exhort union officials to purge racketeers from their respective unions.18 For example, in 1932 the AFL’s Executive Council forwarded to P. J. Morrin, president of the International Iron Workers’ Union (IIWU), charges that the IIWU’s New Jersey representative, Thomas Brandle, had accepted a $10,000 ($135,000 in 2003 dollars) bribe from an employer association.19 Green asked President Morrin to take action “to safeguard the integrity, the good name and standing of your own International Union, as well as the organized labor movement.”20 When Morrin did not act, Green reemphasized that: “you have the power to deal with this case of Brother Brandle to which I am calling your attention, and neither the [AFL] Executive Council nor any other International Union has any authority to do so.”21 Nevertheless Morrin actually ordered Local 45 not to oust Brandle. The AFL took no action for more than a year. Finally, Morrin did expell Brandle from the union.22

In 1935, when Special Prosecutor Thomas E. Dewey began his NYC investigation of racketeering in New York City, Green appointed a committee to “assist” Dewey.23 But “assistance” was a misnomer. Green explained, “It will be the chief function of the committee to explain to Mr. Dewey that these [labor racketeering] charges were actuated by spite.”24

David Dubinsky, President of the International Ladies’ Garment Workers’ Union (ILGWU) (1932 – 1966), went to the 1940 AFL convention intent on strengthening the AFL’s authority to deal with racketeering in its affiliated unions. Dubinsky proposed giving the AFL Executive Council summary power to order a union affiliate to expel any officer or officers convicted of an offense involving moral turpitude or of using an official position for personal gain. Moreover, the resolution called for national and international unions to adopt rules and procedures to punish corrupt officers.25

The AFL’s Resolutions Committee opposed Dubinsky’s proposal on the ground that the AFL “is a federation of self-governing national and international unions who have been guaranteed their right to self-government, which includes their election and selection of officers and control over their conduct.” Green challenged the ILGWU leaders and other critics to “show any racketeering in the American Federation of Labor.”26

Our national and international unions are autonomous bodies, chartered by the American Federation of Labor, governed by their own laws and administered by the officers of said organizations ... We have never assumed and never will assume dictatorial policies toward national and international unions affiliated with the American Federation of Labor, but with all the power we possess we appeal to the membership of every International Union affiliated with the American Federation of Labor to keep the American labor movement clean, maintain it on a high plane, and if there is any attempt on the part of wrongdoers to seek to secure control of their movement, to deal with them vigorously at once.27

The AFL convention passed a watered-down resolution authorizing its Executive Council, when it believed that an international union was not fulfilling its responsibility, to act against corrupt officers, and to “apply all of its influence to secure such action as will correct the situation.”28

In 1942, there arose an excellent opportunity for the Executive Council to act. Three hundred members of Painters Local 102 complained to President Green that the International Painters Union had refused to remove a business agent who was a convicted bribe taker connected to organized crime. Green requested Painters Union President Lawrence P. Lindelhoff to take action.29 When Lindelhoff failed to act, the Executive Council assigned AFL Vice-President Matthew Woll to investigate. Despite the guilty jury verdict, Woll reported that he was unable to determine whether the business agent was guilty. Moreover, he emphasized that the 1940 AFL did not have authority to intervene in internal union affairs: “The Federation has no compulsory or disciplinary power. The power delegated to it is that of the use of its influence.” Therefore, he suggested that the aggrieved painters take their charges to the Painters’ international convention. The AFL Executive Council left final consideration of the matter to Green who took no further action.30

Congress of Industrial Organizations (1938-1955)

In 1938, five international unions broke away from the AFL to found the Congress of Industrial Organizations (CIO), a rival labor federation dedicated to aggressively organizing unskilled workers in the mass production industries. The CIO was led by John L. Lewis, head of the United Mine Workers of America (UMWA), Sidney Hillman, leader of the Amalgamated Clothing Workers, David Dubinsky of the International Ladies Garment Workers Union, and representatives of the Textile Workers and the Typographers unions. The CIO grew rapidly. It had almost 2.5 million members by 1940.

Because members of CIO unions were concentrated in large working groups in factories and mines, they were less vulnerable to intimidation than the geographically-scattered craft unionists who worked in small groups. Furthermore, the companies organized by CIO unions were much larger than the characteristically small AFL employers and far more difficult to intimidate These giant corporations could also control or temper competition (by explicit or implicit agreements with each other) without the need for organized crime bosses to set up and police cartels. CIO trade unionism was more ideological (left-wing) than the AFL’s business unionism.[††††††††††] Indeed, the AFL sometimes excoriated the CIO for being a tool of the Communist Party. 31 In return, the CIO branded the AFL racketeer-ridden.

John L. Lewis, long-time president of the United Mine Workers, was the first and president of the CIO. He had immense power and prestige as did his successor, Walter Reuther of the United Auto Workers. Among early and mid century labor leaders, Reuther stands out for his vigorous stand against corruption and racketeering. For example, in 1954, when the New York Insurance Board disclosed welfare fund irregularities among some local affiliates of the Retail, Wholesale and Department Store Union (“RWDSU”), Reuther wrote to Max Greenberg, the president of the RWDSU, stating that he expected a full report on discipline against those involved. Greenberg later reported that three locals had been placed under trusteeship, and one had been expelled from the RWDSU.32 At the 1954 CIO Convention, Reuther announced, “The CIO does not recognize any autonomous right of crooks and racketeers to use the good name of the CIO as a cloak for their corruption.”33 The convention approved the creation of the CIO Standing Committee on Ethical Practices to investigate cases of corruption and to recommend corrective action when necessary.

George Meany (AFL President 1952- 1955)

When George Meany became AFL president in 1952, he hoped for a merger with the CIO. However, a serious obstacle was the CIO’s highly critical attitude toward organized crime’s influence in AFL-affiliated unions. Meany seized upon racketeering scandals in the International Longshoremen’s Association (ILA) to demonstrate that the AFL was ready to act decisively.[‡‡‡‡‡‡‡‡‡‡]34 He wrote, “The Executive Council has the power now to apply all of its influence in order to correct a situation such as the press reports indicate exists in the New York waterfront.” While recognizing that the AFL is not a “police force,” Meany affirmed the labor federation’s responsibility “to see that unions protect their members and, if they do not, that the AFL ought to tell the corrupted union that it is not protecting its members and [that] we would like to have them let us know within a reasonable time what they have done about it.” The Executive Council appointed three vice presidents to study the problem. The result was a February 3, 1953 Executive Council letter to the ILA stating that, “No affiliate of the American Federation of Labor has any right to expect to remain an affiliate, on the grounds of organizational autonomy, if its conduct is such as to bring the entire movement into disrepute.”35 The AFL urged the ILA to remove any person with a criminal record from office, reform “shape-up” hiring (in which union officials choose the day’s workers from among those casual laborers who turned up at the piers), restore democratic processes within the union, and remove officers tainted by corruption.36

When he failed to receive a satisfactory reply, Meany advised the ILA that the Executive Council would recommend the union’s suspension from the AFL. Indeed, the AFL’s 1953 convention voted 79,079 to 736 to expel the ILA and authorized chartering a competing union, the International Brotherhood of Longshoremen (“IBL”), to represent longshoremen. However, in a blow to reformers, the longshoremen voted to continue being represented by the ILA.37 The defeat demonstrates what has been proved time and again in efforts to clean up racketeer-ridden unions: labor racketeers have enormous staying power and even, when put to the test, usually win elections on account of intimidation, election fraud, and charisma.

The Merged AFL-CIO (Meany President from 1955 – 1979)

When talks about a merger between the AFL and CIO began, AFL officials complained about communist influence in CIO affiliates; CIO officials expressed concern about racketeer influence in AFL affiliates. The merger moved forward when both sets of leaders agreed that there would be no place for either communists or racketeers in the house of labor. In 1955, AFL President George Meany became the merged AFL-CIO’s first president, a position he would hold until 1979.

Ethical Practices Codes

The AFL-CIO constitution38 gave an Executive Council authority to appoint a committee to investigate charges that a union affiliate was dominated by corrupt influences and, if confirmed, to make recommendations for remediating the situation. The AFL-CIO’s first convention (1955) vested a Committee on Ethical Practices “with the duty and responsibility to assist the Executive Council in carrying out the constitutional determination of the Federation to keep the Federation free from any taint of corruption ... in accordance with the provisions of the constitution.”39 In June 1956, the Executive Council authorized the Ethical Practices Committee to conduct hearings into corrupt practices and to formulate a set of principles to keep the federation and its affiliates free from corruption and racketeering.40 The promulgation of these ethical practice codes was the high water mark of the American labor movement’s response to corruption and racketeering.

The Ethical Practices Committee formulated six ethical practice codes. Code #1 stated, “A charter should never be issued to persons who are known to traffic in local union charters for illicit or improper purposes.” Code #2 prohibited any salaried union official from receiving additional remuneration from health, welfare, or retirement funds. It also mandated regular auditing of union financial records. The union had a responsibility to remove a fund administrator who received an unethical payment. Code #3 stated, “No person should hold or retain office ... who has been convicted of any crime involving moral turpitude offensive to trade union morality.” Code #4 prohibited union officials from maintaining investments or business interest that posed a conflict of interest. Code #5 called for proper financial practices. Code #6 required democratic elections and the protection of union members’ rights.41 While remaining on the books, these codes were defunct by the early 1960s.

George Meany and the McClellan Committee

The 1957-1959 McClellan Committee’s hearings exposed serious corruption in five unions – the Bakery and Confectionery Workers, the Allied Trades Union, the International Union of Operating Engineers, the United Textile Workers Union, and most importantly, the International Brotherhood of Teamsters.42 Moreover, dozens of labor officials, most notably IBT President Dave Beck, refused to answer questions.[§§§§§§§§§§] IBT Vice President (and then President) Jimmy Hoffa refused to answer some questions and was evasive and combative in his answers to others. The senators insisted that the AFL-CIO had a responsibility to act.43

Early in 1957, the Executive Council proposed as a formal policy that, “all officials of the AFL-CIO and its affiliates should freely and without reservation answer all relevant questions asked by proper law enforcement agencies, legislative committees and other public bodies seeking fairly and objectively to keep the labor movement free from corruption.”44 IBT president David Beck criticized this statement for infringing on member unions’ autonomy. Meany replied, “If the AFL-CIO follows the proposal of your organization and equivocates on this question, we will get legislation that will hurt every one of our members and hurt every one of our unions…We will be under Government control.”45 The proposed statement passed with only Beck dissenting.

Meany told the McClellan Committee that only “very, very small portions of the trade union movement are burdened by corruption.” Hoping to stave off federal legislation, he promised to take action.46 I don’t think that we should be a law enforcement agency, but I think that we have a right and a duty and an obligation to our people to try to run unions just as clean as they can be run. And run them for the benefit of members and not for the benefit of George Meany or anybody else.”47 Meany put action behind his words by removing Beck from the AFL-CIO Executive Council on account of Beck’s refusal to answer both the McClellan Committee’s questions and the Executive Committee’s questions.48

Enforcement of the Ethical Practices Code: United Textile Workers

Meany had begun an investigation of the United Textile Workers of America (“UTWA”) before the McClellan Committee hearings began. When the UTWA asked the AFL-CIO for a loan, Meany had asked to see the union’s financial records. He received what appeared to be falsified documents. In response to AFL-CIO concerns, the UTWA Executive Board promptly cleared its officials of wrongdoing. Meany explained to the McClellan Committee,

it disturbed me a great deal – maybe I was naïve – because I thought all that was necessary was to acquaint the ruling [International Union] body [with the fact] that money was being used in a loose fashion. ... Apparently, I was too optimistic about that.49

The AFL-CIO Committee on Ethical Practices held its own hearing, found that UTWA officers had altered financial reports to cover up misuse of funds, and ordered the UTWA to eliminate various abuses and to dismiss three union officers.50

On December 4, 1957, the AFL-CIO Executive Council suspended the UTWA from the labor federation. That action caused the UTWA Executive Board to agree to the AFL-CIO’s original terms. At a special convention in March 1958, it elected a new president and authorized several reforms. Still not satisfied, Meany demanded the removal of a vice-president and the continuation of the union’s probationary status. The union complied, but remained on AFL-CIO probation until February 16, 1960.51

Bakery and Confectionery Workers Union

The AFL-CIO Ethical Practices Committee also took action against the Bakery and Confectionery Workers Union (“Bakers”). Treasurer Curtis Sims brought charges against President James G. Cross and Vice President George Stuart for the misuse of union funds. After the Bakers’ Executive Board cleared the two men, it brought charges against Sims for injuring the union’s reputation by his charges. The Board suspended Sims from office. The McClellan Committee and the AFL-CIO Ethical Practices Committee both decided to investigate.52

The Ethical Practices Committee, finding that the Bakers were not in compliance with the AFL-CIO’s constitutional standards ordered the union to correct the abuses and to remove the guilty parties from office. The Bakers refused to expel Cross or to reinstate Sims. On November 5, 1957, Meany announced that the AFL-CIO had suspended the Bakers from membership.53

On December 5, 1957, the Appeals Committee of the AFL-CIO convention recommended that the Bakers be expelled unless the union fully complied with the AFL-CIO’s requirements. When the union failed to comply, it was expelled and a new union chartered. In January 1961, Cross resigned in exchange for $250,000 severance pay and the union’s commitment to pay his future litigation expenses. Later, Cross, Olson, and four vice-presidents of the old union were convicted of embezzling union funds. With Cross out of the picture, the old and new unions negotiated a merger.54

Distillery Workers

In June 1956, the AFL-CIO Ethical Practices Committee turned its attention to the Distillery Workers Union (“Distillery Workers”). Sol Cilento, executive vice-president in charge of NYC Local 2 had been indicted on bribery and conspiracy charges related to the union’s welfare fund. His co-defendants were former Building Service Employees President and mob-associate George Scalise and his LCN-sponsor, Anthony Pisano, once a member of Al Capone’s organization.55 The government alleged that the three men had received kickbacks on Fund loans totaling more than $300,000 (about $2 million in 2003 dollars) over a two-year period. The three were acquitted, but a fourth co-defendant was sentenced to prison.56 When the Distillery Workers refused to cooperate with the Senate Subcommittee on Welfare and Pension Funds’ investigation, the Executive Council directed the union to show cause why it should not be suspended from the federation.57 The union denied the need for reform. The Executive Council decided to suspend the union unless it accepted one year’s probationary status and the appointment of a monitor to supervise its affairs. Its back against the wall, the Distillery Workers accepted probation and a monitor. In January 1961, the AFL-CIO dissolved its monitorship and terminated the probationary status.58

UAW-AFL-John Dioguardi

John Dioguardi, a capo in the Lucchese crime family and notorious labor racketeer, was appointed president of the United Auto Workers Union (“UAW-AFL) Local 102 in New York at the 1951 convention despite never having been employed in industries whose workers were represented by that union.[***********] A year later, the New York City Crime Commission and Manhattan District Attorney Frank Hogan accused Locals 102 and 227 of various wrong-doing. (Dioguardi was associated with both locals, though he only held office in Local 102.) In February 1953, the AFL Executive Council ordered the international union to revoke Local 102’s charter or face suspension. The UAW-AFL complied by dissolving Local 102.59

The Manhattan District Attorney’s office convicted Dioguardi on state income tax charges, but he returned to union politics over UAW-AFL President Washburn’s opposition. In April 1954, Washburn expelled Dioguardi from the union and lifted the charters of six Dioguardi-dominated locals. Incredibly, the UAW-AFL’s Executive Board overruled Washburn, cleared Dioguardi of wrongdoing,60 and reinstated Dioguardi and the three locals. Washburn resigned in protest.

Eventually Dioguardi also resigned, but that did not end the union’s troubles. In 1955, a Senate Subcommittee investigated Chicago UAW-AFL Local 286, which was dominated by Angelo Incisco, a notorious organized crime figure. The UAW-AFL revoked the Local’s charter on February 1, 1956, but rescinded its action the following day. The Board then allowed Incisco to disaffiliate the local from the union (i.e. to turn the local into an “independent union”), taking with it assets equal amounting to one-fifth of those of the entire international union.61

On August 27, 1956, the AFL-CIO Committee on Ethical Practices declared that the Allied Industrial Workers of America (“AIW” - - the new name of the UAW-AFL) “may be dominated, controlled, or substantially influenced in the conduct of its affairs by corrupt influences in violation of the Constitution of the AFL-CIO.”62 The Executive Council gave the AIW the choice of accepting a monitorship and eliminating “corrupt influences” within ninety days or be expelled. The union complied, tossing four New York locals out of the union. A special convention replaced the international president. In October of 1957, the Executive Council lifted the AIW’s probationary status; the monitorship ended a few months later.[†††††††††††]63

International Brotherhood of Teamsters

David Beck’s conduct at the McClellan Committee hearings prompted the AFL-CIO Executive Council to suspend Beck from the Council and to order an investigation of the IBT.64 The AFL-CIO Ethical Practices Committee reported to President Meany that Beck and Vice-Presidents Brewster and Hoffa had misused union resources and union pension funds for personal purposes, used their official positions for personal profit and advantage, engaged in improper activities relating to health and welfare funds, engaged in extortion and bribery, failed to abide by the AFL-CIO policy against refusing to cooperate with congressional committees, failed to ensure that racketeers were not granted union charters, and that Hoffa had associated with known racketeers, including John Dioguardi.65 The AFL-CIO Executive Council ordered the IBT to report on its effort to eliminate corrupt elements by October 25, 1957.66

The Teamsters showed no interest in mollifying the AFL-CIO. Facing federal and state criminal charges, Beck chose not to seek reelection at the 1957 Teamsters convention. Jimmy Hoffa, with the support of Johnny Dioguardi and other organized crime figures, became the new general president president. The AFL-CIO Executive Council suspended the IBT on October 24th. The Appeals Committee rejected the IBT’s appeal and recommended expulsion.67 The 1957 AFL-CIO convention voted four to one to expel the IBT. However, the Executive Council held the door open for the Teamsters readmission if someone other than Hoffa became president. Removed from the AFL-CIO, the IBT no longer had to abide by the federations “no-raiding” pact; it was free to compete with AFL-CIO affiliated unions. In the next two decades, the IBT formed locals to represent teachers, security guards, police officers and all sorts of workers. It was said, with a grain of truth, that the Teamsters would organize any group of workers. Consequently, the IBT became by far the largest and strongest private sector union in the U.S. with approximately two million members in 1960.

The Landrum-Griffin Act

The revelations of labor racketeering brought out by the McClellan Committee’s hearings made some form of remedial legislation a foregone conclusion. Meany told a Congressional committee that “Unless certain safeguards are established, both through self-policing and legislation, the inducements and opportunities for illicit gain or improper practices will persist and there will be those who will yield to them.”68 The AFL-CIO opposed a union members’ bill of rights and some other proposals, but eventually supported requiring unions to make financial disclosures as long DOL would be responsible federal agency.

John L. Lewis, President of the United Mine Workers of America (UMW) testified in opposition to any remedial legislation, “We find ourselves opposed to the plan for Congress to enact regulatory or punitive legislation affecting welfare funds…there is ample legislation on the statute books.”69 He explained that the UMW opposed any governmental encroachment into the affairs of labor organizations and sharply criticized Meany: “I am completely impatient with the attitude of the present leaders of American labor who are, in effect, at the present time saying to the Federal Congress, ‘Please, gentlemen of the Congress, hurry up and enact a statute that will compel leaders to be honest and stop us from thieving from our membership.’”70

The Senate ultimately passed the Kennedy-Ives bill, requiring registration of pension and welfare plans with the Secretary of Labor, detailed reporting of receipts and expenditures, and public disclosure. In addition, the bill provided criminal penalties for failure to file, false filing, and embezzlement.71 The bill passed the Senate, but failed in the House of Representatives. The AFL-CIO announced that the “failure of Congress to pass the Kennedy-Ives bill can be laid squarely on the doorstep of those who sought not an anti-corruption bill, but an anti-labor bill.”72

In 1958, the Democrats won majorities in both houses. There seemed at that point no possibility that Congress would pass a bill less favorable to labor than the Kennedy – Ives bill.73 The AFL-CIO reiterated that, “We are determined that there be legislation which will eliminate the opportunities for corruption and at the same time preserve the traditional and legitimate functions of trade unions. In our opinion ... S.505 (now Kennedy – Erving Bill) meets this test.”74 During the debate, Senator McClellan introduced a “bill of rights for union members.” The AFL-CIO opposed it, arguing that it would weaken responsible unions and generate nuisance litigation. Nevertheless, Congress passed the union member’s bill of rights by a one-vote margin.75 President Dwight D. Eisenhower signed it.

The Landrum-Griffin Act (formally the Labor-Management Reporting and Disclosure Act, “LMRDA”) required unions to file with DOL reports on income, expenditures, and salaries: it required bonding of officers and staff members, forbade officers from having certain conflicts of interest, and prohibited union loans of more than $2,000 to officers or members. It empowered the Secretary of Labor to go to court for remedies if union members’ rights were denied or their benefit funds misused. Embezzling union funds became a federal offense. 76

The AFL-CIO denounced passage of the Landrum Griffin Act, which provided the legal foundation for union democracy, with the following formal statement: “This measure was designed to destroy organized labor, but we will not be destroyed…Our cause is just and we continue to move forward….”77 A year later, the AFL-CIO denounced the law as “the worst legislative blow suffered by the labor movement since enactment of the Taft-Hartley Act in 1947.”78

Post Landrum-Griffin Developments

In 1959, the ILA appealed to the AFL-CIO for readmission. The AFL-CIO agreed on condition that the ILA submit to any order issued by President Meany, provide whatever reports that the federation might require, and permit Meany to attend ILA Executive Council meetings. The ILA also had to recognize the right of the AFL-CIO to impose any appropriate discipline.79 The ILA accepted these conditions.

In 1960, a New York-New Jersey Waterfront Commission report concluded that the elimination of the “criminal domination and control (on the waterfront)…has not been fully accomplished.”80 The Commission proposed that: 1) ex-convicts, already barred from holding union office, be made ineligible to hold any position in a union pension and welfare fund; 2) additional misdemeanors be added to the list of offenses that bar individuals from working on the docks; 3) longshoreman be required to be registered with the Waterfront Commission and prohibited from interfering “with the duties of licensed or registered personnel without justification in law.”81 The ILA, strongly opposing all these proposals, unsuccessfully sought an AFL-CIO resolution condemning the Waterfront Commission and urging Congress to repeal the Act. However, the AFL-CIO’s 1963 convention did give the ILA part of what it wanted by opposing pending federal legislation that would have expanded the Waterfront Commission’s powers. In the end, Congress did not expand the Commission’s powers.82

Following the passage of the Landrum Griffin Act, President Meany took no further initiatives against labor racketeering. By the early 1960’s, the Ethical Practices Committee was dormant. The AFL-CIO ignored several questionable situations. For example, in 1963, Maurice Hutcheson, President of the powerful Carpenters Union was convicted of bribing an Indiana official to obtain advance information on highway routes.83 While that conviction was later reversed on appeal, Hutcheson was convicted of contempt of Congress and sentenced to six months in jail for refusing to answer committee questions. President Meany called Hutcheson a “man of character…an able, devoted and conscientious representative of the American trade union movement.”84

A more disturbing example of Meany’s indifference to labor corruption surrounded the power struggle in the United Mine Workers in the late 1960’s. In 1969, Jock Yablonski, leader of an insurgent movement sought to unseat President Tony Boyle (1963 – 1972). Although there was no organized crime labor racketeering in the UMW, under Boyle the union operated like a ruthless dictatorship.85 The election campaign was marked by threats and violence. When Boyle won the election, Yablonski charged election fraud and sought to have the result overturned. Shortly thereafter, he, his wife and daughter were murdered. Yablonski’s campaign manager asked Meany to allow Yablonski’s followers to state their complaints about Boyle to the AFL-CIO executive council so that labor might “clean its own house without Senate or Administrative inference.”86 Meany turned down the request on the ground that intervening “the AFL-CIO traditionally refrains from intervening in the internal affairs of its own affiliates, let alone outside organizations. Incredibly, Meany asserted that government or AFL-CIO initiatives to attack labor corruption or racketeering would violate a union’s “democratic structure.”87 In 1974, Boyle was convicted of first degree murder for having hired Yablonski’s assassins.

Lane Kirkland (1979 – 1995)

If Meany’s approach to combating labor corruption was passive, then his successor, Lane Kirkland’s approach was virtually non-existent. In 1979, at the height of LCN’s influence in the IBT, the AFL-CIO invited the Teamsters back into the federation. AFL-CIO President Lane Kirkland argued that the Landrum-Griffin Act, by assigning the job of policing the unions to the federal government and its agencies, relieved the AFL-CIO of responsibility for addressing corruption and racketeering in its member unions.88 Kirkland stated, “All sinners belong in the church. All citizens owe fealty to their country, and all true unions belong in the AFL-CIO.”89

By the late 1980s, the Teamsters wanted to rejoin the AFL-CIO. The Department of Justice was rumored to be preparing an unprecedented civil RICO suit against the Teamsters general president and executive board and the heads of several Cosa Nostra crime families. Reconciliation promised benefits for both sides. The Teamsters would increase the AFL-CIO membership by 15%, thereby boosting the federation’s finances and political clout. Moreover, as an AFL-CIO affiliate, the IBT would be bound by the federation’s non-compete rule, i.e. not competing to decertify other AFL-CIO unions.90 The IBT hoped that, with AFL-CIO support, it could derail DOJ’s civil RICO lawsuit, perhaps with federal legislation outlawing court-imposed RICO trusteeships.91

During the 1980s, the federal government again conducted hearings into labor racketeering and considered Landrum-Griffin reforms.[‡‡‡‡‡‡‡‡‡‡‡] In 1981, Senator Sam Nunn (D. GA.), chairman of the Senate Permanent Subcommittee on Investigations when the Democrats controlled the Senate, introduced legislation: 1) providing for the automatic suspension of union officers found guilty of wrongdoing (instead of waiting for the resolution of a final appeal), and; 2) making it a felony for an employer to pay a bribe of $1,000 or more to a union representative.92 The AFL-CIO supported this proposed legislation except for the automatic 10-year suspension period. Kirkland explained, “Both reason and human feeling support the view that there are situations in which a 10 year disqualification is too severe.”93 Kirkland argued that corruption is an individual, not an institutional problem and insisted that the AFL-CIO lacked power and authority to attack racketeering in its affiliated unions. “As spokesman for organized labor the AFL-CIO asks for that [federal governmental] protection, emphasizes that the trade union movement sees such protection as a benefit, and pledges its cooperation in a joint endeavor with the Federal Government to maintain the hard-earned honor of our institutions.”94

Kirkland told the senators that the AFL-CIO’s codes of ethics were still in place, but that the Landrum-Griffin Act usurped the federation’s ability to act under them because confusion and conflicts would arise if two parallel procedures (one by the AFL and one by federal agencies) operated simultaneously. Since the government had superior fact-finding tools, it should bear the primary responsibility for rooting out wrongdoing. Moreover, the AFL-CIO had only the drastic power of expulsion to use in corruption and racketeering cases. “It is as though you only had capital punishment as a punishment for every rank of crime.”95 Apparently Kirkland was not aware of or rejected the probation and monitoring that the AFL-CIO had successfully used in the mid 1950s as well as the possible use of fines or financial incentives.

Senator Warren Rudman (R. NH) expressed the frustration at union officers repeatedly invoking the 5th Amendment at Congressional hearings. He asked whether the AFL-CIO’s policy of disciplining members who refused to answer questions put by congressional committees still applied. Kirkland called it “an intricate question,” backing away from the AFL-CIO’s McClellan Committee era position. Clearly, the AFL-CIO was no longer interested in punishing union officials who refused to testify at Congressional hearings.96

The AFL-CIO supported a 1984 amendment to the Landrum-Griffin Act, which required union officers to relinquish their offices immediately upon conviction rather than months or years later after all appeals were exhausted. However, the IBT opposed even that law on the ground that while it barred convicted union officials from all union offices, it did not prohibit a convicted corporate official from holding a corporate position in a unit other than labor relations.97

A 1985 book by David Elbaor and Laurence Gold, counsel for the AFL-CIO, denied the existence of any organized crime problem in the labor movement.

Today’s anti-labor campaign, the intent of which is to associate unions with organized crime, corruption, and unsavory practices, is the lineal descendant of earlier efforts to tar the labor movement with simplistic yet sensational identifications between union action and Bolshevism, Communism, and other “un-American” thoughts.98

Elbaor and Gold excoriated the Department of Labor for departing from its historic mission to protect workers and for participating in criminal investigations against union officials. According to the authors: 1) nearly all union-related crimes are isolated offenses by individuals; 2) DOJ would not prosecute theft of such small sums if they involved officers of organizations other than unions; 3) federal prosecutors seek to establish new theories of labor crimes by criminalizing traditional union activities, and; 4) the government has abandoned civil and criminal enforcement of managements’ reporting and disclosure requirements.99 They concluded that, “The government’s campaign, by perpetuating the myth of union corruption with stepped-up and highly publicized prosecutions, maligns labor’s reputation and thereby threatens its future.”100

AFL-CIO’S Opposition to Rico Trusteeships

In 1987, the AFL-CIO Executive Council issued a statement opposing the rumored DOJ civil RICO suit against the IBT. “If the Justice Department brings suit seeking supervision over an international union, the AFL-CIO will do whatever is useful and productive in the legal circumstances to prevent such supervision.”101 However, the Executive Council added: “We support full and vigorous law enforcement aimed at the racketeers and the sharpsters who seek to prey on our movement; the government has an obligation to trade unions and their members to provide such enforcement.”102

In order to mobilize support against the civil RICO suit, the AFL-CIO established an organization called Americans Against Government Control of Unions (AAGCU). The AAGCU launched a public relations campaign that labeled the rumored suit part of the Reagan Administration’s conspiracy to crush organized labor. One of its promotional statements equated “the possible [DOJ] lawsuit to the suppression of free trade unions in Poland, the Soviet Union and Nazi Germany.”103 According to the AAGCU, the Justice Department’s proposal for a government takeover of any union in this country conflicts with the basic American concept of free trade unionism and violates the 1st Amendment guarantees of free speech and association.”104

President Kirkland publicly stated that there was “no justification whatsoever” for the Justice Department to seek to have the Teamsters put under a court-ordered trusteeship “simply because the leadership is influenced by organized crime;” He said, “organized crime influence is not a “problem of any significance at this time,”105 and that a trusteeship is not “the proper relationship between a government and a private institution in a free society.”106

Calling court-imposed union trusteeships contrary to the spirit of free trade unionism,107 Kirkland warned that a civil RICO suit against the Teamsters would be a “clear abuse of the government’s prosecutorial power.” He insisted that the Department of Justice should prosecute those who violate the law, but not seek remedies against unions themselves. The AFL-CIO issued a statement declaring, “In a democratic society, labor unions must be controlled by their members, not by the government.”108 With AFL-CIO and IBT prodding, 246 House and Senate members delivered a letter to DOJ urging that no civil RICO suit be brought against the IBT.109

The AFL-CIO criticism of and lobbying against the DOJ suit continued even after the suit was settled. Kirkland described Judge David Edelstein’s decisions enforcing the settlement, as “the latest in a string of orders directed at maximizing the government’s control over the Teamsters” and reasserted that “this kind of judicial interference with the right of union members to self-government and with the right of unions to their autonomy is excessive and unreasonable.”110

In 1989, President Kirkland testified before the Senate Permanent Subcommittee on Investigations that the use of trusteeships violated union members’ constitutional right of association: “Government control of a private association is thus fundamentally illegitimate in that the officials who exercise control are not drawn from, are not selected by, and are not responsible to the association members.”111 In President Kirkland’s opinion, corruption is an attribute of individuals not organizations and is properly dealt with by prosecuting racketeers rather than imposing expensive trusteeships which deny the membership control of its union.112 Kirkland stated that civil RICO suits should only be brought against unions in the event of a clear and present danger of ongoing criminality despite successful criminal prosecutions. In addition, he argued, even if RICO suits are necessary, trusteeships are not; DOL and DOJ had tools sufficient to address the problem of individuals suspected of having ties to organized crime without resorting to trusteeships.113 As AFL-CIO General Counsel Laurence Gold pointed out, there are other less intrusive equitable remedies, such as government oversight of elections, government scrutiny of expenditures, and injunctive relief against individual wrong-doers.114

The IBT and the AFL-CIO proposed amending RICO to: 1) preclude the “wholesale removal of a union’s elected officers and their replacement, for an indefinite period, by a court appointed trustee;” 2) to make it clear “that such a trusteeship, in any form, not be imposed unless and until there has been a full and final evidentiary hearing and the government has demonstrated, by clear and convincing evidence, that the interests of union members cannot be protected by any less intrusive means;” and 3) “that RICO be clarified so that no union is precluded from using its resources to hire legal counsel to defend itself or its officers.”115

The Senate Subcommittee on Investigations took the AFL-CIO’s criticisms seriously. Its 1990 report recommended that RICO trusteeships in labor cases “only [be imposed] in the most extreme circumstances” and called on the Justice Department to seek alternative remedies. Noting the AFL-CIO’s opposition to RICO trusteeships, the Subcommittee’s report called on the attorney general to issue guidelines limiting the circumstances under which DOJ would seek to have RICO trusteeships imposed on labor unions. The report recommended that a liaison be established between law enforcement agencies and the AFL-CIO to enhance cooperation.116 These proposals were not implemented, although it has become DOJ policy to allow unions targeted in RICO complaints to see and comment on the complaints before they are filed.

In 1996, the AFL-CIO opposed the House of Representatives Subcommittee on Human Resources and Intergovernmental Relations plan to hold hearings on the DOL’s response to labor racketeering cases. The AFL-CIO’s legislative director stated, “All they’ve dragged up are old news reports. They will look foolish if they try to have hearings.”117 When the hearings were officially announced in July, the AFL-CIO charged the Republican leadership with using the hearings as “an organized smear campaign against union leaders,” to divert attention away from the Republicans own agenda.118 AFL-CIO President John Sweeney (1995-present) charged that the hearings were being held to retaliate for the federation’s $34 million ad campaign against various Republican legislative initiatives.119

The AFL-CIO attacked the House Judiciary Subcommittee on Crime’s 1996 hearings on the 1994 consent agreement settling DOJ’s civil RICO suit against LIUNA120 as a waste of taxpayer money and an abuse of congressional power.121 Its press release defended LIUNA president, Arthur E. Coia, calling him a leader in “cleaning up corruption wherever he could find it. “Coia and the Laborers union should be applauded for their bold actions to crack down on the last vestiges of mob control in their union—not witch-hunted because of past problems and their current opposition to Gingrich’s attacks on working families.”122 (Subsequently, the former prosecutors hired to reform LIUNA charged Coia with being under the influence of organized crime; Coia was forced out of office after being convicted of corruption in federal court in Rhode Island).

AFL-CIO officials continue to reject government anti-labor racketeering initiatives as a figment of the prosecutorial imagination or a sinister plot to destroy the labor movement. The AFL-CIO’s general counsel, Jon Hiatt, pointed out that the government seeks to impose RICO trusteeships trusteeships on labor unions, but not on corporations, despite rampant corruption in the latter.123 Former AFL-CIO counsel, Laurence Gold, expressed a similar position: “I question whether comparable cases are being brought against people in other walks of life.”124 On December 6, 2001, an AFL-CIO resolution demanded termination of the Independent Review Board, established to enforce the settlement in the IBT international case.125

The goals of the Teamsters consent decree have now been secured. No legitimate reason remains to justify continued government intervention in that organization. It is time for the consent decree to end and the Teamsters Union returned to the full democratic control of its members.126

In early 2002, the AFL-CIO criticized the proposed fiscal year 2003 DOL budget for providing a $3.9 million increase for the Office of Labor-Management Standards (“OLMS”), which had requested $3.4 million and 40 additional staff positions for “enhanced enforcement and outreach assistance activities to ensure compliance” with the LMRDA.127 The OMLS’ ambition was to audit at least 1% of labor organizations each year and to increase the transparency of union finances by, among other things, requiring that LMRDA reports be made available to the public. The AFL-CIO questioned the increase in the OLMS budget for investigations into unions while cutting programs “that directly enforce workers’ job-based rights and protections.” It also criticized the proposed 9% budget increase and 25 new employees for the DOL’s Office of Inspector General.128

Conclusion

Over the course of the twentieth century, with a few significant exceptions, the leaders of the U.S. labor movement have accommodated rather than opposed labor racketeers. To be sure, a few labor leaders, like David Dubinsky, Walter Reuther, Harry Bridges and George Meany, denounced organized crime’s presence and influence in the labor movement as a serious problem. However, except in the 1950s, most labor leaders accepted organized crime as a fact of life and/or believed that an all out effort to purge racketeers from the labor movement would be disastrous for labor. And some AFL-CIO positions, like denunciation of Landrum Griffin and opposition to the civil RICO suit against the IBT, were affirmatively hostile to anti-labor-racketeering efforts.

In truth, there was probably not much that honest labor leaders could do about organized crime on their own. Entrenched labor racketeers backed by LCN are formidable. The AFL’s failed effort in replacing the ILA with a new honest longshoremen’s union demonstrates the sagacity of Gompers’ and Green’s judgment that the AFL had limited options for dealing with corruption and racketeering in its constituent unions. An AFL-CIO crusade against labor racketeers might well have weakened the labor movement, certainly in the short run. But a middle position did seem to hold a promise of some success. Denunciation of labor racketeers, cooperation with government enforcement agencies and creative use of sanctions like probation and monitoring did achieve some success in the late 1950s in cases involving the Distillery Workers, the Bakery and Confectionary Workers and perhaps one or two others.

Labor Racketeering and the Rank and File

But if the 1980s were difficult for most unions, for the Teamsters they were tragic. A combination of politicians, mafia-connected union officials, and trucking employers came to dominate the highest levels of the Teamsters. Under the control of these outsiders, during the worst years of the employers’ attacks on the unions in the 1980s, the Teamsters negotiated a series of sweetheart contracts. These contracts sold out the interests of union members and weakened the labor movement as a whole.

--Dan La Botz, “The Fight at UPS: The Teamsters’ Victory and the Future of the New Labor Movement,” A Solidarity Pamphlet (1997), p. 9.

It is beyond belief that 10,000 members would sit by and watch these things done and never utter a peep, unless a substantial number of the membership were fearful for their lives or their jobs.

--U.S. Second Circuit Court of Appeals, in affirming Judge Ackerman’s decision in the IBT Local 560 case, 780 F.2d at 278.

Rank and file union members are labor racketeers’ primary victims. In racketeer-ridden unions, workers suffer financially when the terms of their collective bargaining contracts are not enforced, when their pension and welfare funds are defrauded and when their dues are used to reimburse corrupt officers’ personal expenses. Of course their personal safety is also put at risk when corrupt officers refuse to press their safety-related grievances with employers, or worse, when officers turn a blind eye to unsafe conditions in exchange for bribes. The potential effectiveness of unions in negotiating contracts, enforcing contract provisions, handling grievances, organizing, running hiring halls and handling finances is undermined when union officials are chosen on the basis of their loyalty to an organized crime boss. The union movement is weaker than it might otherwise have been if officials are racketeers rather than relentless organizers; individual unions are weaker to the extent that, under honest leadership, they would have had more members. The members of racketeer-ridden unions suffer on account of the wholesale violation of their rights of free speech, participation in union elections, and fair representation in grievance proceedings.

Why does the rank and file tolerate such “leadership?” The most obvious answer is that the uncoordinated many are often at the mercy of the highly organized few. In the case of nation states, repressed populations rarely are able to overthrow totalitarian dictatorships which rely on carrots and sticks, including extreme violence, to achieve and maintain their power and privilege. So too, rank and file union members have almost no chance of overthrowing organized-crime-backed-racketeers. To be sure, some union members have testified at Congressional hearings, provided information to investigative journalists, campaigned as independents for union office, lodged complaints with the Department of Labor, brought lawsuits to redress their grievances and even begun reform organizations. Tragically, scores of such individuals have ended up losing their jobs, their physical security and even their lives. Until the federal government cleared the way by launching a war on organized crime generally and utilizing criminal and civil RICO against labor racketeers specifically, rank and file protesters and reformers had little hope of liberating their unions from the grip of organized crime. Even with the government’s assistance, successes have been few and hard won.

The Weakness of the Rank and File

We have already seen (chapter 2) that it was relatively easy for a small group of organized criminals to infiltrate and take over a union comprised of hundreds and thousands of members. This should not be surprising. History is replete with examples of small, tightly knit groups, specializing in violence, terrorizing and dominating disorganized collectivities.1 Labor racketeers only need to intimidate or otherwise neutralize a small number of union officials and active members, not the vast majority of the rank and file that is only weakly interested in union affairs. Not only are Cosa Nostra organized crime families closely knit groups that can draw on their expertise in intimidation and violence, they have been able to count on the cooperation of corrupt employers, the passivity of the AFL-CIO and the cooptation of politicians.

It would be a mistake to imagine labor racketeers positioned in stark opposition to the mass membership. The racketeers typically have supporters and allies at the early stages of their infiltration, and they attract new supporters as their hold on the union tightens. Labor racketeers are adept at operating union patronage systems. This is easiest to accomplish when the union operates a hiring hall (as in the construction industry) that can be used to reward cooperation and loyalty. Those in charge of the hiring hall can dispense the choicest (best paid; best conditions) work assignments to their friends, allies, and supporters. The racketeers can appoint their supporters as shop stewards and business agents. In a short time, a captive union’s entire administrative cadre will consist of individuals loyal to the racketeers. Contrariwise, dissidents and others who oppose the dominant clique will be frozen out of lucrative work assignments and union offices. If irritating enough, they will be blacklisted and thereby driven out of the industry and out of the union. Even where there is no hiring hall (i.e. employers do all their own hiring), the racketeers can easily make a “troublesome” union member unemployable by indicating to employers that the union member’s continued employment could lead to labor problems.

The threat and actual use of violence is a massive inhibitor to anyone considering running for office against the incumbent regime. The history of many unions includes the beating or kicking of dissidents for challenging the dominant clique. The collective memory of many unions holds stories of dissidents who were murdered when they brazenly challenging the ruling clique. Even if a union member is courageous enough to run for office against an incumbent, it is almost impossible for him/her to win. Incumbent labor racketeers have complete control over the union’s communications with the rank and file. Their “newsletters” provide a steady diet of pro-incumbent propaganda. Thus, while incumbents enjoy widespread name recognition, insurgents will likely be known only to a small circle. Incumbents cannot legally use union personnel and resources for their campaigns,2 but in practice they can count on the active support of the union’s whole administrative infrastructure. When racketeers have anticipated insurgent opposition, they have passed rules outlawing campaign donations by nonunion members, further limiting the insurgents’ chances.3 They have consistently turned to red baiting, branding critics as communists or radicals.[§§§§§§§§§§§]

The rank and file electorate is difficult for insurgents to reach and even more difficult to arouse. While a small percentage of union members are highly interested and involved in their union’s affairs, the great majority is apathetic. Most members look to their unions to negotiate collective bargaining agreements, provide grievance representation and someday pay their pensions, but they do not keep up with union politics or governance.4 Typically, less than 5% of eligible members turn out at regular union meetings; less than 25% vote in union elections. Many union members do not know who runs their union or whether they are doing a good job; many may have no idea that certain officers are organized crime members, associates or puppets. They may chafe at mediocre contracts, favoritism, and lack of accountability to the members but, in the end, just accept this reality as inevitable as bad weather.

Not only do incumbent labor racketeers have practically insurmountable advantages over insurgents in union elections, they also control the election machinery. They decide where elections will be held and the method of voting; they count the ballots and report the results. There is a long and sordid history of fraud in union elections. Moreover, under the Landrum-Griffin Act, only the Department of Labor can go to court to challenge the results of a union election and the secretary may not initiate action until her own investigation confirms that a violation probably made a different in the outcome.

Even if an insurgent somehow wins the top position in a union, he may be foiled by those lower level union officials who remain loyal to the racketeers. At every juncture, the reformer will face overt and covert opposition and sabotage. Furthermore, a local union reformer can be thwarted by an organized-crime-controlled district council or international union. There are many examples of international unions manufacturing charges of malfeasance against reformers, accusing them of violating the union’s constitution or bylaws and punishing them with expulsion from office or from the union altogether. A racketeer influenced international union can lodge trumped up charges against and replace local or district council officers with a loyal trustee. Under the Landrum-Griffin Law, trusteeships imposed on locals by the national union are presumptively valid for 18 months.5 In reality, given the time it takes to launch a legal challenge against such a trusteeship plus the challenger’s high burden of persuasion, it is practically impossible for a trusteed local or district council to overcome the 18 month presumption.

Individual Dissidents: Acts of Defiance

“Dissident” is an unfortunate term, conjuring up an image of a curmudgeon who cannot get along with anybody. Nevertheless, it is an appellation that union reformers routinely and proudly use in referring to themselves and one which others have long used to describe union insurgents. If I were writing on a fresh canvass, I would prefer the term union reformer or insurgent, but I will defer to the prevailing nomenclature.

However they are labeled, people willing to fight hopeless battles against massively stronger opponents frequently seem obsessed by systemic injustice to which the society appears oblivious. After months and years of futilely seeking support from international union officials, the Department of Labor, journalists and prosecutors, many union dissidents appear defensive and even paranoid. They believe the world is against them; of course, to a substantial extent, this is true.

It takes enormous courage for union members to openly criticize labor racketeers. Twentieth century history is full of examples of such critics being intimidated, threatened, beaten and killed. Consider this statement provided by LIUNA reformer Chris White for the government’s 1990’s civil RICO suit against the Laborers International Union:

I have been a member of the Laborers’ International Union of North America (LIUNA) for over twenty years and a member of Local 942 of LIUNA in Fairbanks Alaska for about the past eighteen years. For more than fifteen years, I have attempted to work within the union to make it more democratic and responsive to the needs of the rank and file. My efforts, and those of my fellow union members who participated with me in those efforts, were met with vicious suppression, including economic reprisals, violence, and threats of violence. My home has been vandalized, my friends have been beaten, shot at, assaulted with knives and guns. Over the years, I have observed a clear pattern within LIUNA of chilling the rights of LIUNA members and preventing democratic participation in the union’s affairs. Meaningful democracy is dead within LIUNA.[************]

Table 6-1 lists just some of the murders that can be attributed to labor racketeers. These murders were identified by a limited review of court cases, newspaper stories, articles and books. Undoubtedly there are many (perhaps even more than those listed here) that I have failed to discover. Moreover, we should also keep in mind that for every murder there probably have been a score of beatings. Some of these, like the attack with sulphuric acid that blinded crusading Daily Mirror columnist Victor Riesel, were very serious indeed.[††††††††††††] There are myriad documented incidents of dissidents being attacked at national conventions and local union meetings when they asked to be recognized in order to voice a criticism or make an unwelcome nomination.

While all of these murder victims listed in Table 6-1 were individuals who had a conflict with the incumbent union power structure, not all of these victims had unblemished records. Jimmy Hoffa, for example, had a career-long history of alliances with organized crime groups, but after Hoffa went to prison, organized crime preferred having Hoffa’s successor Frank Fitzsimmons as Teamsters general president.6 While Hoffa was hardly a dissident or reformer, his murder surely sent shock waves through the rank and file. We can imagine an ordinary Teamster thinking “If LCN would murder Jimmy Hoffa for challenging its authority, what would happen to me if I started complaining?” A few of the notorious murders listed in table 6-1 (e.g. Jock Yablonski) had nothing to do with Cosa Nostra. Nevertheless, I include Yablonski and a few others because, arguably, every high visibility murder of a union dissident sends shock waves through the whole labor movement.

[Insert Table 6.1]

Frank Schonfeld Story

One of the very few examples of rank and file union reformers succeeding in defeating a mob-dominated union occurred in the 1960s when Frank Schonfeld, a courageous member of the 12,000 member New York City Painters Union District Council 9 challenged the entrenched mob-supported regime.[‡‡‡‡‡‡‡‡‡‡‡‡] The mob-controlled leadership had signed lackluster collective bargaining agreements, been convicted for rigging bids on various projects, and provoked the scorn of many New York area painters. According to Herman Benson, who was personally familiar with Painters DC 9 at the time, “The union continued to crumble: it ceased to exist on the job sites as a protector of working conditions. The contract was not enforced. Between 1953 and 1967 there was not a single general membership meeting of DC 9 painters.”7

In 1961, Schonfeld ran for secretary treasurer (the district council’s top office). The district council immediately brought charges against some of his allies. Despite a Landrum-Griffin right to see and copy the list of union members so candidates could contact the electorate, Schonfeld was only provided a partial list of members. Moreover, the incumbent regime’s ballot counting was highly suspicious. Schonfeld was defeated by 3,700 votes to 1,700, but won a majority in locals where he had been able to get access to accurate membership lists.

After the election, the incumbent regime brought disciplinary charges against Schonfled and suspended him from the union (although a federal court nullified that move). According to Benson, for the next six years Schonfeld and other insurgents continued to hold meetings, run candidates, and publish a newsletter. But they faced relentless opposition. “Schonfeld and his supporters were being starved out, blacklisted, denied the right to work.” In 1967, the Manhattan district attorney brought a conspiracy case against the District Council 9’s top official, along with various painting contractors and city officials, charging them with operating a bid rigging cartel on New York City painting contracts. The secretary-treasurer had to resign and the Painters International placed the district council under a trusteeship that organized crime continued to dominate.

The Schonfeld group went to court to have the International Union’s trusteeship dissolved. The Department of Labor weighed in (as usual) on the union’s side. However, a federal judge found for the insurgents. “The history of D.C. 9 elections extending into the period of the trusteeship has been marred by fraud and other irregularities. [The International Union’s officers] witnessed, with apparent indifference, the repeated silencing of the opposition’s views at meetings, and blatant improprieties in local balloting.”8 Schonfeld was able to get the union discipline overturned in federal court and resume his campaign. The judge ordered that the election be overseen by the American Arbitration Association. In September, 1967 Schonfeld won a stunning victory.

Schonfeld won the district council’s top office, but the old regime held on to most other district council offices and opposed Schonfeld at every turn. Mob-backed units of the Carpenters and Teamsters union now raided the district council splitting away certain locals. At Schonfeld’s instigation, the rank and file voted by referendum to revamp the make-up of the district council in order to better reflect the size of the local unions comprising the district council. However, the Painters International Union vetoed the change, thereby ensuring that Schonfeld’s reform efforts would continue to be stymied. Once again the International charged him with union disciplinary violations and removed from office; once again, a federal judge reinstated him. However, in 1973, after just two three year terms, Schonfeld was defeated by Jimmy Bishop, a candidate allied with the Lucchese organized crime family and supported by the International Union and the members of the clique that had controlled the district council for decades. The reform was over. (In 1990, Jimmy Bishop was murdered by another organized crime faction).

Rank and File Reform Movements

A few racketeer-ridden unions have spawned national or at least regional dissident “movements.” It is difficult to calculate the size of these organizations or to gauge their strength, since the Internet permits a single individual to post a website, service email subscribers, etc.

The best known and most effective of the rank and file reformist organizations is Teamsters for a Democratic Union (TDU). TDU was founded in 1976.[§§§§§§§§§§§§] In 1980 it merged, under the same name, with the Professional Drivers Council, a (Ralph) Naderite public interest organization set up to lobby for improved safety conditions in the trucking industry.9 TDU surveyed workers, organized special committees to analyze safety and other problems in the industries in which Teamsters were employed, and came up with proposed rank and file contract demands. During its formative years, TDU’s primary concern was improving Teamster contracts, but it soon turned its attention to reforming the union’s governance. The goal was to create a substantial militant Teamster minority.10 By the mid 1980s, TDU published a regular newsletter called Convoy Dispatch and claimed to have 10,000 members. It. A flavor of what TDU stands for can be gleaned from its Rank and File Bill of Rights, which can be found on its website.[*************] Among the rights sought by TDU are a fair grievance procedure, direct election of officers, equality among Teamsters, and an end to discrimination.

TDU sometimes backs candidates in union elections. It campaigned hard for Ron Carey in the 1991 trustee-supervised election and helped make his victory possible. During Carey’s first term, however, TDU often criticized his Administration. TDU was clearly more comfortable in the role of critic than in the role of institution builder.

Carey (again backed by TDU) won the 1996 election against a strong challenge by James P. Hoffa (Jimmy Hoffa’s son). The election was marred by charges that the Carey team and Carey himself had used union funds to support its campaign. Ultimately, the court-appointed elections officer voided the election, disqualified Carey from the rerun election, and expelled him from the union. In the 1998 rerun election, TDU threw its support to Tom Leedham, a prominent reformer. Leedham collected 39% of the vote, but lost to James P. Hoffa (55%). In 2001, Hoffa defeated him again, this time by nearly a two-to-one margin (Hoffa, 200,168 – Leedham, 108,389).

There is no other dissident rank and file labor movement with the organizational coherence and strength of TDU. Nevertheless, there are always dissident voices, more so now with the advent of the internet. And these voices have been given some space by the federal government’s campaign against labor racketeering. Recently, for example, a group of mostly African-American Longshoremen in Charleston, Virginia, “the Charleston Five,” were jailed for peacefully picketing a shipping company. The “Workers Coalition”, which consists largely of officers from the Charleston Five’s local union, criticized ILA International President John Bowers for waiting over a year before making a public statement supporting them.11 The dispute has broadened into a more general challenge to the International’s leadership.

The Association for Union Democracy

The Association for Union Democracy,12 founded by Herman Benson and a small number of other labor radicals and idealists, is the only independent non-governmental organization that advocates and litigates on behalf of rank and file union members’ right to union democracy. AUD has always been hand-to-mouth organization with a small office in Brooklyn, a few paid staffers and a tiny budget. Still, AUD published a regular newsletter, “Union Democracy Review,” which exposes egregious assaults on union democracy as well as the occasional legal and electoral victories of rank and file reformers. It also holds conferences and organizes training courses and educational programs. Dissidents from any union can contact AUD for advice, including sometimes legal assistance from a very small number of volunteer lawyers.

Conclusion

Rank and file union members fit into our story mostly as victims. It cannot be over-emphasized that labor racketeers are in the business of stealing from rank and file union members and selling out the rights and interests. The lack of much rank and file rebellion against labor racketeers should not be understood as appreciation, respect, or satisfaction. Rank and file rebellion, like other rebellions against authoritarian regimes capable and willing to use violence, is extremely difficult. The collective action problem is important. It is immensely costly for any individual union member to protest against or try to organize opposition to incumbent labor racketeers. For the most part, reformers have been tragically unsuccessful, the victims of blacklisting, disciplinary actions, beatings and murder. In their struggles to win basic civil rights within their unions, “dissidents” have not been able to count on the mainstream labor movement, the government, law enforcement agencies, intellectuals or even the civil liberties community. It has been a very lonely struggle.

The federal government’s post 1980 campaign against Cosa Nostra has opened up space for insurgents to play a more active role. Even so, reform does not often just spring to life naturally and fear of the labor racketeers’ return to power is a major inhibitor. Moreover, there is no guarantee that the first wave of non-mafia connected reformers will have the competence and integrity to rebuild union democracy and effectiveness. Still, it must be emphasized that meaningful reform of historically racketeer-ridden unions cannot be achieved without the mobilization of rank and file union members in those affected unions.

Attacking Labor Racketeering Prior to Civil RICO (1982)

This is a preliminary report on the organized crime influence in the labor unions today in the United States. The picture that it presents is thoroughly frightening. At least four international unions are completely dominated by men who either have strong ties to or are members of the organized crime syndicate. A majority of the locals in most major cities of the United States in the International Brotherhood of Teamsters (IBT), Hotel and Restaurant Employees Union (HERE), Laborers International Union of North America (Laborers), and International Longshoreman’s Association (ILA) unions are completely dominated by organized crime. The officials of these unions are firmly entrenched; there is little hope of removing them by a free election process. Convictions for misconduct have been sparse and when one corrupt official is removed another soon takes his place. The result has been a complete domination of certain industries by hoodlums. Management personnel in the companies who must deal with these hoodlums have despaired of getting help from law enforcement authorities. They pay the price of labor peace so that they may survive. The cost is passed on to the consumer.

--Peter Vaira and Douglas Roller, Report on Organized Crime and the Labor Unions (1978), 1.

From the early 1930s until the mid 1970s, Congress was much more active than local, state and federal law enforcement in calling attention to the organized crime problem generally and labor racketeering specifically. The Copeland Committee in the 1930s, the Kefauver and McClellan Committee hearings in the 1950s, and the Senate Subcommittee on Investigations in the 1970s and 1980s publicized the problem, proposed new laws and increased sentences. By contrast, the federal enforcement agencies – the Federal Bureau of Investigation (FBI), the Department of Justice (DOJ) and the Department of Labor (DOL) -- for different reasons, did not make organized crime or labor racketeering a high priority. Occasionally, an LCN member was convicted, usually of a non-labor racketeering offense like income tax evasion or murder. Local police and prosecutors mostly ignored organized crime.

Congress Addresses Labor Racketeering: The Hobbs Act

In 1933, the U.S. Senate Committee on Commerce (called the “Copeland Committee” after its chairman, NYS Democratic Senator, Roy Copeland) held hearings on “racketeering,” including the role of mobsters within national and local labor organizations.1 Witnesses from the AFL Building Trade Unions’ Anti-Racketeering Subcommittee complained to the Senate Committee that “most of the unions in New York were saturated with rackets.”2 Employer-witnesses complained that labor racketeers extorted payoffs by threatening business-destroying labor problems.

The Copeland Committee’s hearings led to passage of a federal extortion statute, the Anti-Racketeering Act of 1934.3 Labor leaders complained that the draft bill could be used to prosecute non-violent bona fides strikes and other collection action by unions seeking to obtain better contracts. To alleviate that concern, the final bill defined extortion in a way that explicitly exempted conduct aimed at “the payment of wages by a bona-fide employer to a bona-fide employee.” If that were not enough, the Act also included a proviso stating:

that no court of the United States shall construe or apply any of the provisions of this Act in such a manner as to impair, diminish or in any manner affect the rights of bona fide labor organizations in lawfully carrying out the legitimate objectives thereof, as such rights are expressed in existing statutes of the United States.

A few years after passage of the Anti-Racketeering Act, federal prosecutors used the law to prosecute several Teamsters who prevented out-of-town trucking companies from driving trucks into New York City unless those companies paid the Teamster defendants for their assistance in guiding the trucks into the city. The Supreme Court reversed the convictions, holding that the Anti-Racketeering Act exempted from prosecution bona fide union demands, even if unreasonable.4 This decision, in effect, destroyed the Act’s potential to punish and deter labor racketeering; the racketeers could avoid criminal liability by disguising illegal extortions as legal union demands.

Congress quickly sought to pass a new federal extortion statute that would definitely cover the defendants’ conduct in the Teamsters case. The new Hobbs Act (1946) eliminated the Anti-Racketeering Act’s exemption for payment of wages by bona fides employers to bona fide employees, but its sponsors assured critics that the law could not be used to prosecute strikers.5 In the decades that followed, the Hobbs Act was used against individuals who hijacked trucks, against corrupt state and local politicians, and occasionally against labor racketeers. In 1956, another labor racketeering prosecution reached the U.S. Supreme Court. The defendant union officials had attempted to extort money (for their own pockets) by forcing an employer to pay for both fictitious and superfluous services; the Court upheld the conviction against a challenge that the law was unconstitutional.6 This decision gave federal prosecutors a green light to go after labor racketeers and they were able to obtain a number of convictions of union officials who extorted personal payoffs from employers.7 However, in 1973, the Supreme Court reversed a Hobbs a conviction against strikers who had used extreme violence, including high-powered rifles and blowing up a transformer substation, on the grounds that the Hobbs Act could not be used to punish individuals for pursuing a lawful union goal, even via criminal means.8

The Hobbs Act played an extremely important role in the civil RICO litigation brought against racketeer-ridden unions in the 1980s and 1990s. Prosecutors alleged and courts upheld the applicability of the Hobbs Act to LCN and union defendants who extorted union members’ Landrum- Griffin rights (i.e. non physical property). These Hobbs Act violations constituted “predicate offenses” that satisfied RICO’s requirement that the defendant be shown to have engaged in “a pattern of racketeering activity.”[†††††††††††††]

The Taft-Hartley Act

In 1947, over organized labor’s vehement opposition, Congress passed the Taft-Hartley Act which, according to its sponsors, sought to restore a more balanced relationship between labor and management.9 President Harry Truman vetoes the law, but Congress over-rode the presidential veto. Taft-Hartley gave employees the right to refrain from participating in union activities and added certain union conduct to the National Labor Relations Act’s list of unfair labor practices. It also banned Communists from serving as union officers. Among other things, the law made it a federal criminal offense for an employer to give or loan money or anything of value to a union, union official or union welfare fund. Likewise, it became criminal for a labor official to demand or accept anything of value from an employer. These criminal provisions have frequently been used to punish labor racketeers for taking employer bribes in exchange for sweetheart deals.

In 1956, the United States Supreme Court upheld the conviction of ILA President Joseph Ryan for taking payoffs from a stevedoring company in violation of the Taft-Hartley Act.10 As the recognized collective bargaining agents for longshore labor in the Port of New York, Ryan and the ILA bargained with a company engaged in stevedoring operations; the company’s employees were members of the ILA. The court found that the president of the stevedoring operations had given Ryan $1,000 each year from 1946-1951 in violation of Taft-Hartley. The District Court found Ryan guilty, but the Court of Appeals reversed, holding that the president and principal negotiator of an international union was not a “union representative” for purposes of the Hobbs Act. The Supreme Court rejected this narrow view, ruling that as president of the ILA, Ryan violated Taft-Hartley by accepting money from an employer with whom his union was bargaining.11 Taft Hartley’s labor bribery provisions have also been useful as a device for turning

Employers charged with making payoffs to union officials into cooperating witnesses.12

The Douglas Committee and Racketeering in the Pension Funds

After World War II, unions began to negotiate in earnest for employer-funded pension and welfare funds. (Such benefits were attractive to both management and labor because they are not taxable to employees while being tax deductible for employers.) Essentially, employers agreed to pay a certain amount of money on behalf of their workers into union/management administered funds to be used for union members’ pensions, medical and dental care, and legal services. According to federal law, the funds (sometimes called Taft-Hartley plans) are governed by an equal number of trustees labor and management appointed trustees and administered by a fund administrator. In practice, the employer trustees almost always defer to the union trustees: why would the employer wish to challenge how the union administered its members’ pension and welfare funds? Soon, such funds accumulated hundreds of millions, even billions, of dollars. Not surprisingly, labor racketeers immediately saw them as attractive targets for exploitation by embezzlements, fraudulent loans, kickbacks, and other manipulations.13 Labor racketeering became as much a matter of stealing from pension and welfare funds as a matter of stealing from the union’s treasury and extorting or soliciting payoffs from employers.

In the mid 1950s, the Senate Committee on Labor appointed a subcommittee, with Senator Paul Douglas (D. Ill.) as chairman, to investigate corruption in union pension and welfare funds. The subcommittee illuminated widespread corruption, fraud and abuse, especially in the Teamsters’ Central States Pension & Welfare Fund, the nation’s largest union pension and welfare fund. In 1959, in response to the abuses uncovered by the Douglas Committee, Congress passed the Welfare and Pension Plan Disclosure Act (WPPDA) which required pension and welfare plans to report certain fund information to the DOL. Congress intended the disclosure requirement to provide employees with enough information to monitor their plans effectively. This proved to be wishful thinking; abuses continued. In 1962, Congress strengthened the WPPDA by adding criminal provisions to punish fund administrators and trustees who took kickbacks from vendors of goods and services; enforcement authority was assigned to the DOL.14

Continuing mob exploitation of union benefit funds was one factor leading Congress to pass ERISA (Employee Retirement Income Security Act) in 1974.15 ERISA’s criminal provisions dealt with 1) theft or embezzlement from employee benefit plans; 2) false statements or concealment of facts in relation to documents required by ERISA; and 3) offers, acceptances, or solicitations to influence operations of employee benefit funds.16 Thus, federal prosecutors’ were armed with more crimes with which they could go after labor racketeers.

McClellan Committee Hearings (1957-1959) and the Landrum Griffin Law (1959)

The McClellan Committee’s hearings (1957-59), including some very sharp exchanges between Robert Kennedy and Jimmy Hoffa, were widely covered by newspapers, magazines and television; they generated inexorable momentum for Congressional action. In 1959 Congress passed the Labor-Management Reporting Act of 1959, popularly known as the Landrum Griffin Act. Among its numerous provisions, the law bans persons with criminal records from holding union office. A major section of the statute is the Union Members’ Bill of Rights which guarantees to union members basic democratic rights (speech, candidacy, voting) within their labor organizations. Another section makes unions accountable to their memberships by requiring unions to file various financial and organizational reports with the U.S. Department of Labor.17 The law also declares that union officers stand in the role of fiduciaries vis-à-vis the rank and file membership.[‡‡‡‡‡‡‡‡‡‡‡‡‡] For the most part, Landrum Griffin’s enforcement tools are civil rather than criminal. Congress assigned enforcement authority to the DOL which delegated that authority to its Office of Labor-Management Standards (OLMS). OLMS could investigate and take enforcement actions on its own. In addition, aggrieved union members could bring their complaints to OLMS or, in some cases, to the National labor relations Board or directly to federal court. Unfortunately, there have never been more than a handful of public interest lawyers available to help aggrieved union members vindicate their Landrum griffin rights. OLMS enforcement has been lack luster, at best.18

Landrum Griffin also contains a number of criminal provisions, including a wide-ranging prohibition on the use of violence to deny or interfere with the democratic rights the law guarantees.[§§§§§§§§§§§§§] Another provision makes it a federal crime to embezzle funds from a labor union.[**************] Still other provisions prohibit unions from making loans to or paying fines for union officers and filing false reports with the DOL. Over the years, the Department of Justice has used these provisions to obtain a number of convictions. For example, in U.S. v. Bertucci (1964), defendants were charged under the statute for beating union members with pipes and baseball bats when the victims 19 attempted to enter the union hall in order to vote on a proposed collective bargaining agreement. The court explained that: “The LMRDA gives to the individual union members certain rights which when interfered with by a union, its officials or its agents can be redressed civilly against them. In addition, there are criminal sanctions imposed against a person who interferes with those rights.”20

In 1961, Attorney General Robert F. Kennedy urged Congress to pass the Interstate and Foreign Travel in Aid of Racketeering Act, popularly known as the Travel Act.21 Its main purpose was to provide federal assistance in situations in which local law enforcement was ineffective in attacking criminal activities which extended beyond state borders.22 In his submission letter to the Senate Judiciary Committee, Kennedy stated, “Over the years an ever-increasing portion of our national resources have been diverted into illicit channels. Because many rackets are conducted by highly organized syndicates whose influence extends over state and national borders, the Federal Government should come to the aid of local law enforcement authorities in an effort to stem such activity.”23 Therefore, the Travel Act provided federal law enforcement with jurisdiction over use of interstate facilities to promote a number of illegal activities typically associated with organized crime.24 The Travel Act was an early effort, an initial step, to laying a legal basis for a federal war on organized crime.

RICO (1970)

The 1967 President’s Commission on Crime and the Administration of Justice’s Report, among other things, presented a frightening (and exaggerated) picture of Cosa Nostra as a well-coordinated nationwide conspiracy.25 Subsequent congressional hearings focused on LCN’s infiltration of the legitimate economy, especially labor unions and businesses. For example, on March 11, 1969 Senator McClellan told fellow senators:

Closely paralleling its take-over of legitimate business, organized crime has moved into legitimate unions. Control of labor supply through control of unions can prevent the unionization of some industries or can guarantee sweetheart contracts in others. It provides the opportunity for theft from union funds, extortion through threat of economic pressure, and the profit to be gained from the manipulation of welfare and pension funds and insurance contracts. Trucking, construction and waterfront entrepreneurs have been persuaded for labor peace to countenance gambling, loan-sharking and pilferage. All of this, of course, makes a mockery of much of the promise of the social legislation of the last half-century.26

Senator McClellan (D. Ark.), Senator Roman Hruska (R. Neb.) and others argued that the federal law enforcement agencies and courts did not have adequate powers to defeat organized crime. Hearings were held and Congress soon passed the Racketeer Influenced and Corrupt Organizations Act (RICO) which made it a federal crime to use dirty money (proceeds of racketeering activity or collection of an unlawful debt) to acquire an interest in or to seize an interest in, or to conduct the affairs of an “enterprise,” including labor unions, by means of a pattern of racketeering activity (defined as commission of at least two out of a long list of crimes within a 10 year period).27 RICO is punishable by up to a 20 year prison sentence, plus an additional 20 years for RICO conspiracy. In addition, to his RICO sentence, a defendant can be simultaneously convicted and sentenced for the predicate offenses that establish the “pattern of racketeering activity” (e.g. Hobbs Act offense, labor bribery, murder, fraud). Because it was new and complex, RICO was not used much for about a decade, but by the late 1970s RICO was quickly becoming the statute of choice in organized crime prosecutions.28 It provided federal prosecutors the advantages of draconian punishment provisions, mandatory criminal forfeiture, liberal rules on joinder of defendants and offenses and a means of prosecuting criminal conduct which heretofore was not reachable under federal law.

RICO also contains two civil remedial provisions. One empowers RICO victims to sue their perpetrators for treble damages. For obvious reasons, victims have not chosen to sue LCN members. The other civil RICO remedial provision authorizes the U.S. Attorney General to seek, and the federal courts to grant injunctions and other equitable relief to prevent defendants from committing future RICO violations. Beginning in the early 1980s, this remedy became the most powerful weapon for systematically attacking labor racketeering because it enabled the Department of Justice to obtain injunctions and consent decrees providing for court monitoring and, in some cases, administration of racketeer-ridden unions.

Federal Enforcement Agencies and Labor Racketeering

While Congress showed strong interest in labor racketeering, investigated the problem, publicized it, and passed substantive criminal laws with severe punishments, these laws were not much used until the late 1970s. For the FBI, this “hands off” policy reflected Director J. Edgar Hoover’s general unwillingness to devote FBI personnel or resources to organized crime investigations. Hoover’s view was that organized crime was a local phenomenon over which the FBI lacked jurisdiction and, in any event, lacked a comparative advantage over local law enforcement in investigating.

Without FBI investigations, federal prosecutors could do little to combat organized crime generally and labor racketeering specifically. Except for a small number of DOJ personnel who work at central headquarters in Washington D.C., federal prosecutors work for the 93 U.S. Attorneys (one for each federal judicial district), who are presidential appointees who operate with a good deal of autonomy from their titular boss, the U.S. Attorney General. In theory, the U.S. attorneys can develop their own priorities depending upon the particular crime problems in their jurisdictions, in reality they depend on the FBI and other federal enforcement agents to bring cases to them. While the FBI is also a unit of the U.S. Department of Justice, it has too has substantial autonomy. (J. Edgar Hoover, of course, had almost complete autonomy. After his death, Congress limited the FBI director to a single 10 year term.) Thus, it would have been impossible for DOJ attorneys themselves to launch a successful attack on organized crime or labor racketeering without the FBI director’s support.

Congress gave the Department of Labor authority to enforce the Landrum Griffin Act and the various pension and welfare laws. But the Department of Labor is a cabinet-level department whose main mission is to look after the concerns of organized labor. It is most definitely not a law enforcement agency. While over the years some Senators and Congressmen used Congressional hearings as an opportunity to criticize DOL for failing to aggressively investigate and prepare cases against labor racketeers, little could be done to change DOL’s sense of mission.

Despite these structural, bureaucratic and political obstacles to enforcing the anti-labor-racketeering laws, there were occasional prosecutions in the 1950s. Things changed in 1961 when Robert F. Kennedy, fresh from his tenure at the McClellan Committee, became U.S. attorney general. Kennedy immediately turned the office’s attention to organized crime. He made prosecution of IBT President Jimmy Hoffa his number one priority.29 OCRS prosecutors were sent around the country to investigate and prosecute organized crime.30 Under Kennedy’s tenure as attorney general, the OCRS conducted several successful prosecutions.

President John F. Kennedy was assassinated in November 1963. His brother resigned as attorney general in early 1964. Nevertheless, later that year, Jimmy Hoffa was convicted, first of jury tampering and then of pension fund fraud. In 1967, when his appeals were exhausted, he began serving a lengthy prison term. Reacting to the 1967 President’s Crime Commission's report and to Senator McClellan’s and other Congressmen’s lobbying, Congress provided federal law enforcement with electronic eavesdropping authority (1968), the Witness Security Program (1970) and RICO (1970).

J. Edgar Hoover died suddenly in 1972. The FBI passed into new hands. There were no interest groups pressing for a federal war on organized crime. The DOJ prosecutors and FBI agents themselves, in a sense, functioned as their own interest group. A modern-day law enforcement agency was affronted by the open and notorious existence of a powerful crime syndicate. In the Cosa Nostra Crime families, the FBI found an enemy worthy of the attention of a first class law enforcement agency. Perhaps the post-Hoover FBI was ready to judge itself by the power and reputation of the criminals whose careers it was seeking to end.

Following the 1967 Crime Commission’s understanding of the organized crime problem, FBI agents and federal prosecutors launched their organized crime control campaign by focusing on gambling, believing it to be LCN’s chief moneymaking activity. But federal judges were critical of prosecuting bookmakers and gamblers in federal court. They were not convinced that gambling was a serious national problem and several made it clear to U.S. attorneys that they did not think that these gambling cases belonged in federal court. When the gamblers were convicted, they often drew light sentences. The organized crime campaign floundered.

President Richard Nixon had pardoned Jimmy Hoffa in December 197131 in order to obtain the Teamsters endorsement for his reelection in 1972. While Hoffa remained popular with rank and file Teamsters, his former protégé, Frank Fitzsimmons, now serving as IBT general president, wanted to keep his position. Thus, he and the Nixon administration agreed that Hoffa’s pardon would contain a proviso that Hoffa agree to abstain from involvement in union affairs for ten years. Hoffa agreed, but immediately went to court to challenge this condition, and at once began campaigning to reclaim the Teamsters’ presidency.32

The Cosa Nostra crime families had achieved even more influence in the IBT under the compliant Fitzsimmons than with the feisty Hoffa. On July 30, 1975, Jimmy Hoffa disappeared; a mob “hit” was immediately presumed (and is now believed to have been orchestrated by Anthony Giacalone, a leader of the Detroit Cosa Nostra family, and Tony Provenzano, president of the IBT Local 560 and a capo in the Genovese crime family).33

A revitalized Organized Crime and Racketeering Section in the central DOJ established federal organized crime strike forces in 13 cities. These strike forces, comprised of personnel from DOJ, IRS, DOL, and other federal and local agencies, reported directly to OCRS in Washington rather than to the U.S. attorneys.34

After Hoffa’s assassination, the OCRS and the FBI switched their organized crime control focus from gambling to labor racketeering. This promotion of labor racketeering as an enforcement priority was motivated by the goal of eradicating LCN, not by the goal of cleaning up unions or perfecting union democracy. The revitalized post-Hoover FBI launched several ambitious labor racketeering investigations including, in the late 1970s, the massive UNIRAC (“Union Involved Racketeering”) investigation of the International Longshoreman’s Association. UNIRAC began as a Miami Strike Force project and spread to New York City and ultimately up and down the East Coast. It resulted in the conviction of 130 businessmen, union officials, and Cosa Nostra members including Anthony Scotto, an ILA vice president and a capo in the Gambino crime family.[††††††††††††††]35

Another FBI investigation, PENDORF (“Penetration Dorfman”) focused on Cosa Nostra control over the IBT Central States Pension Fund and resulted in the convictions of IBT General President Roy Williams, Joe Lombardo (member of the Chicago Outfit) and Allen Dorfman (Chicago Outfit associate who represented the mob’s interest in the Central States Pension Fund) for attempting to bribe U.S. Senator Howard Canon (D. Nev.) to oppose trucking deregulation. Cosa Nostra later assassinated Dorfman because of concern that he might become a cooperating government witness.36

The FBI’s STRAWMAN investigation focused on a conspiracy by four Cosa Nostra families to use the IBT’s Central States Pension Fund to obtain interests in Las Vegas casinos and to skim profits from those casinos; it resulted in convictions of Joey Aiuppa (boss of the Chicago Outfit) and Jackie Cerone (underboss of the Outfit), Angelo La Pietra and Joe Lombardo (Oufit capos), Frank Balistrieri (boss of the Milwaukee LCN family), and Thomas and Milton Rockman (associates of the Cleveland organized crime family).

The FBI’s LILREX (“Long Island Labor Racketeering and Extortion”) investigation targeted racketeering in NYC and Long Island’s construction industry. The investigation probed the relationship between organized crime and the construction industry, leading to the prosecution of Theodore Maritas, President of the NYC-area District Council of Carpenters. Prosecutors charged Maritas with taking $125,000 in payoffs in return for allowing contractors to use non-union labor on Manhattan and Queens’ construction projects and with unsuccessfully attempting to extort $100,000 more. Maritas was murdered on the eve of the trial. Five other defendants, including Lucchese Crime Family capo, Vincent DiNapoli, were convicted in the case. Jack McCarthy, a labor consultant with a string of labor racketeering convictions, pleaded guilty to a conspiracy count.37

The LIUNA investigation focused on Cosa Nostra racketeering in the Laborers International Union of North America. The investigation produced several convictions, but retired Outfit boss Tony Accardo and LIUNA president Angelo Fosco were acquitted. Tampa organized crime boss, Santo Trafficante, was indicted but avoided trial on account of poor health.38

A joint Labor Department and Justice Department investigation of the IBT Central States Pension and Welfare Fund began in the fall of 1975. The fund, more than 70 percent invested in real estate and casinos (mostly Las Vegas), was notorious for lending money to organized crime figures and their associates who, despite extraordinarily favorable terms, often failed to repay. The IRS sought to revoke the fund’s tax-exempt status, leading to a settlement in which twelve of the fund’s sixteen trustees resigned. The fund agreed to hire an independent fiduciary (Equitable Life Insurance Society) to handle investments.39 The trustees still had authority to purchase goods and services for the fund, to administer pension benefits, and to handle money from the time it was paid into the fund each month to the time (approximately 30 days later) it was deposited with the institutional fiduciary. Corruption and racketeering continued.

In 1981, DOL filed a lawsuit against all current and former trustees of the IBT Central States Pension Fund, alleging violations of their fiduciary obligation under ERISA. This lawsuit resulted in a consent decree that provided for a court-appointed fiduciary to manage the Central States Pension Fund and the IBT's Health and Welfare Fund.40 The consent decree prohibited the Fund from employing or doing business with any person who had been convicted of a felony or misdemeanor involving a breach of fiduciary responsibility and required the appointment of an independent special counsel to monitor the fund’s operations. The agreement provided that this oversight would sunset in ten years, but the agreement was amended and oversight extended until September 22, 2002, and subsequently to September 22, 2007.

Slowly, DOL began paying increased attention to labor racketeering. In 1978, Congress established a system of independent inspectors general in all cabinet-level federal agencies, accountable to Congress.41 The inspectors general’s mission was to combat fraud, waste, and abuse. The DOL’s inspector general was also charged with responsibility for investigating labor racketeering. This job was assigned to a new “Office of Labor Racketeering” (OLR) that would play a key role in several important investigations in the next two decades. OLR’s agents (many recruited from other federal law enforcement agencies) were the most law-enforcement-oriented personnel in DOL history and they participated fully in the federal organized crime strike forces.[‡‡‡‡‡‡‡‡‡‡‡‡‡‡]

In 1986, the President’s Commission on Organized Crime reported that the labor racketeering problem exposed and excoriated by the McClellan Committee almost 30 years earlier was just as bad if not worse. But even as the Report was released, the ground was changing. The first civil RICO suit against a labor union (IBT Local 560) led to a wide-ranging court decree, including a trustee to administer and monitor the union. More such suits, following up on criminal cases of the 1970s and 1980s, were in the works.

DOJ’s and the FBI’s campaign against Cosa Nostra was most vigorous and most successful in New York City where, of course, there were the most organized crime families and organized crime members and associates. The FBI organized separate units to focus on each of the crime families. Eventually, based upon massive electronic surveillance and some important LCN defectors, the federal prosecutors brought RICO criminal cases against each of the Cosa Nostra crime families, charging key members with participating in the affairs of the enterprise (the crime family itself) through a pattern of racketeering activity (any number of predicate racketeering offenses).

After the successful completion of the family RICO cases, Rudy Giuliani, then U.S. attorney for the southern district of New York (Manhattan and the Bronx) brought the most ambitious criminal RICO case in U.S. law enforcement history. In the 1985 so-called “commission case,” Giuliani’s office brought together in a single trial as defendants the bosses and several other leaders of the five NYC Cosa Nostra crime families, charging them with participating in the affairs of a Cosa Nostra “commission” through a pattern of racketeering activity. According to the indictment, the commission had been established by LCN bosses in 1931 to resolve disputes and regulate relations between the families. It was originally comprised of prominent LCN bosses from around the country, but by the 1980's, consisted of the five New York bosses. The indictment charged the defendants both with operating the commission through a pattern of racketeering activity and with conspiring to operate it as a racketeering enterprise. Through the enterprise, the defendants were alleged to have engaged in or aided and abetted the authorization of murders, narcotics trafficking, loansharking, and infiltration of labor unions.42

Much of the prosecution's case centered on defendants' labor racketeering, specifically their domination of the NYC Concrete and Cement Workers Union. The prosecution sought to prove that, using its control over the union, the commission had set up and enforced a concrete cartel, which permitted only the members of the cartel to bid on contracts worth more than $2 million. In exchange for this lucrative opportunity, the contractors in the cartel agreed to kick back to the commission 2% of the contract prices. After six days of deliberation, the jury found the defendants guilty of 17 racketeering acts and 20 related charges of extortion, labor payoffs, and loan sharking. Giuliani announced that "The verdict reached today has resulted in dismantling the ruling council of La Cosa Nostra."43 The commission case was probably the most high profile and important organized crime prosecution in U.S. history. It demonstrated even to the skeptics, that the federal government, when aroused to action, had the potential to crush the most powerful crime syndicate in the nation’s history. Moreover, during the 1980’s the boss of every Cosa Nostra crime family was put in prison, sometimes their successors as well.

State/Local Efforts

Most law enforcement in the U.S. is local. Police departments are organized at the town and city level. Prosecutors are organized at the county level. This kind of decentralized, small-unit law enforcement is not suited to complex organized crime investigations and prosecutions. Moreover, for much of the 20^th century, police departments in many large cities were severely compromised and/or corrupted in the investigation of organized crime.44 Consequently, with a few notable and sporadic exceptions, local law enforcement did not seriously oppose organized crime generally or labor racketeering specifically.45

The most notable exception was Thomas E. Dewey who served as Special New York City Anti-racketeering prosecutor from 1935-1937 and then as Manhattan District Attorney from 1937-1941.46 In 1936, using New York State law, Dewey launched an investigation and prosecution of racketeering in New York City’s restaurant sector where Dutch Schultz had taken control of the labor union and the employer association. While Schultz himself was murdered (by the mob for plotting to assassinate Dewey), Dewey’s team indicted fourteen defendants on embezzlement and extortion charges. The prosecution’s closing argument told the jurors that: “This is the first time that a full industrial racket has been presented in a single case. If there is anything that is important to the community today, it is a warning that rackets can be prosecuted and broken.”47

When Dewey moved on to the New York State governorship, he was succeeded as district attorney by Frank Hogan, whose 32 year tenure in office earned him the nickname “Mr. District Attorney.” Hogan’s office convicted the occasional organized crime figure, including the labor racketeer Joseph Fay.48 As vice president of the International Union of Operating Engineers, Fay extorted steam shovel and crane operators working construction sites along the Eastern seaboard.[§§§§§§§§§§§§§§] In February 1945, District Attorney Hogan’s office charged Fay and an associate with conspiracy to extort $703,000 from contractors on the Delaware aqueduct water-supply project. Some labor leaders sharply criticized the indictment. In a kind of response, Hogan told the jury: “Labor is not on trial here…These men are business partners in crime, and the business of the partnership is extortion…they are shakedown artists – ruthless, grasping thieves who have lined their pockets at the expense of the laboring man they represent.”49 Fay was convicted and sentenced to seven and a half to fifteen years in prison. Nine years later, in 1954, Hogan was responsible for handing John Dioguardi one of his numerous convictions accumulated in his long career in labor racketeering; this one was for failure to pay state income taxes.

Despite Hogan’s early success, labor racketeering continued to flourish for decades. In April, 1985, in the wake of media allegations of rampant corruption and racketeering in the NYC construction industry, Mayor Ed Koch urged Governor Mario Cuomo to appoint a special prosecutor. Instead, the governor requested the NYS Organized Crime Task Force (OCTF), a standing state agency, to undertake “an intensive and comprehensive investigation.”[***************] The OCTF initiated an unprecedented multi-disciplinary investigation of the almost century-long problem. In addition to utilizing standard law enforcement techniques investigative strategies, it also engaged economists, political scientists, labor relations specialists and construction industry experts. Its two volume report on the problem and its recommendations for reform is a milestone in our understanding of labor racketeering in the twentieth century. Among other things, the 1988 OCTF report found that the City’s five Cosa Nostra crime families controlled more than a dozen construction unions and several construction companies.

While the OCTF investigation was underway, Governor Cuomo also created the Construction Industry Strike Force (CISF), comprised of prosecutors, investigators, analysts, accounts and support staff from OCTF and the Manhattan District Attorney’s office. The CISF obtained or significantly contributed to the convictions of officials in a number of construction unions including laborers, carpenters, teamsters, bricklayers and mason tenders. The work of the ad hoc CISF led the Manhattan DA to establish a permanent labor racketeering unit.50

Systemic organized crime racketeering and the corrupt relationship between urban political regimes and organized crime led to the establishment of crime commissions in several major U.S. cities.51 Some of the commissions were arms of the legislature, while others were citizen groups (often businessmen) formed without funds or direction from local or state government. For example, the Chicago Crime Commission was founded in 1919 by 35 members of the Chicago Business Community. The Commission eventually came to be comprised of over 200 businesses and professional leaders from the Chicago metropolitan area. Similar to crime commissions in other communities, the Chicago Crime Commission is a volunteer organization, not affiliated with any government agency. Crime commissions still exist in several major U.S. Cities including New York, Chicago and New Orleans. Perhaps the most active and effective crime commission in the country has been the state-wide Pennsylvania Crime Commission. An investigative agency of the state government, the Pennsylvania Crime Commission was for decades the main weapon in Pennsylvania for exposing organized crime. It's investigations and reports uncovered organized crime activity ranging from gambling to narcotics to labor racketeering.52

The crime commissions do not have prosecutorial authority. Indeed, some of them have very limited investigative authority, but they do provide a forum to which people can bring complaints and information. In effect, the crime commissions call attention to the problem of organized crime at the state and local levels much in the way that Congress does at the national level. They regularly issue reports documenting organized crime groups and activities and excoriating public officials for failing to deal with the problem.

Conclusion

Until the late 1970s and early 1980s, neither the federal nor state/local governments had a plan or program to attack organized crime, much less labor racketeering. For most of the 20th century, law enforcement at all governmental levels was either unable or unwilling to combat organized crime. In part, this was due to corruption. In many cities organized crime figures were influential in politics and in the urban power structure. Their influence often reached well into the police department, where they were able to choose, or at least veto, commissioners, chiefs and heads of departments. Even where such corruption did not occur, city police departments did not have the legal, financial or technical expertise to mount a meaningful campaign against organized crime.

To be sure, there were sporadic eruptions of law enforcement activity. From time to time, federal prosecutors did convict LCN members, some of whom were labor racketeers. For example, in 1931 U.S. Treasury Department agents used income tax evasion charges to convict Al Capone (1899 – 1947), the most powerful Chicago organized crime figure and labor racketeer during the Prohibition era. Joseph “Socks” Lanza (1904 – 1968), who organized the United Seafood Workers Union and used his labor power to dominate the NYC’s Fulton Fish market, the largest wholesale fish market in the country, was sent to prison in 1932 for federal anti-trust crimes; in 1943, NYC prosecutors successfully prosecuted him for extortion. In 1966, federal prosecutors obtained a labor racketeering extortion conviction against Anthony Provenzano, who served as an IBT vice president as well as president of IBT Local 560; in 1979, federal prosecutors convicted Provenzano of murdering a union dissident. In 1973, federal prosecutors obtained a stock fraud conviction against John Dioguardi (1915 – 1979), one of the most powerful and prolific labor racketeers in American history. Over the course of his career he wielded power in the Teamsters, Auto Workers and several other unions. In 1979, Anthony Scotto, vice president of ILA and a NYC Gambino crime family capo was convicted of violating RICO. While labor racketeering was finally on federal law enforcement’s radar screen, decades of inaction had allowed the problem to become so deeply entrenched that it was not clear that even large scale investigations and regular prosecutions could cleanse the labor movement of organized crime and labor racketeers.

Even when labor racketeers were successfully prosecuted and sent to prison, there was little if any impact on racketeer-ridden unions because another organized crime figure would fill the shoes of the imprisoned racketeer.53 Thus, at a Senate hearing in 1978, then Assistant U.S. Attorney General Benjamin Civiletti (late U.S. Attorney General) testified that more than 300 union locals remained controlled or heavily influenced by organized crime.54 According to DOJ attorneys Peter Vaira’s and Douglas Roller’s report, Organized Crime and the Labor Unions (1978), organized crime’s influence in the labor unions “presents a thoroughly frightening picture. At least four international unions are completely dominated by men who either have strong ties to or are members of the organized crime syndicate.”55 In 1980, the Senate Permanent Subcommittee on Investigations’ hearings on the IBT, ILA, LIUNA and HEREIU revealed widespread looting of pension and welfare funds. 56

Slowly but inexorably, the tide began to turn once the FBI threw its resources into a war on organized crime. By the mid 1980s, the FBI was involved in a full-scale attack on LCN. There were several hundred agents working on organized crime cases in New York City alone. Separate squads focused on each of NYC’s five families and they began by charting the bases for each family’s financial strength. Faced with a realistic prospect of being imprisoned for life, Cosa Nostra members began to serve as cooperating witnesses for the first time in U.S. history. The family RICO cases and the commission case demonstrated that finally the full resources of the federal government were being mobilized against organized crime. It is against the background that we can understand and assess the extraordinary post-1980 campaign to vanquish labor racketeering.

Civil RICO Suits and Trusteeships[†††††††††††††††]

As Monitor I had the power to investigate and audit all aspects of the HEREIU, request assistance from any agency of the United States, retain investigators and auditors, attend all meetings of the HEREIU’s General Executive Board (GEB), and finally, perform all such functions necessary to fulfill my duties. In addition, I had the power to discipline officials and members, discipline ranging from a fine to permanent removal.

--Statement of Kurt W. Muellenberg, Esq. Former monitor of the HEREIU at the Subcommittee on Employer-Employee Relations. Hearing on the Hotel Employees and Restaurant Employees International Union, July 21, 1999.

A trusteeship has the advantage of providing an instant tangible structure that promptly functions in making changes and doing things. It also has the advantage of being separated from the court, thus giving the illusion of independence and opportunity. In a case where financial problems are the chief source of trouble in a Union, or where entrenched incompetence in leadership temporarily undermines the rights of the membership, a trusteeship may be the best choice. That is not the case here, where the court is confronted by a Union that has existed for many, many years as a criminal-dominated organization. The shortcoming of a trusteeship, however, is clearly the distasteful and unworkable act of forcing an authority figure on the existing Union leadership and membership, who they are required to be loyal to, and indeed, expected to like.

--Louis C. Bechtle, United States District Judge. U.S. v. Local 30, nited Slate, Tile and Composition Roofers, Damp and Waterproof Workers Association, 686 F. Supp. 1139 (1988).

It took a decade for prosecutors to grasp that RICO was not just a super-conspiracy statute, but a wide-ranging anti-racketeering remedial statute that contains extraordinary civil remedies in addition to criminal remedies.[‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡] After 1982, when federal prosecutors in New Jersey filed the IBT Local 560 case, the government’s most direct attack on labor racketeering utilized the RICO civil provision (1964a and 1964b) that authorizes the U.S. attorney general or her designee to seek injunctive and other equitable relief to restrain further violations of RICO. Section 1964(a) states:

The district courts of the United States shall have jurisdiction to prevent and restrain violations of section 1962 of this chapter by issuing appropriate orders, including, but not limited to: ordering any person to divest himself of any interest, direct or indirect, in any enterprise; imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce; or ordering dissolution or reorganization of any enterprise, making due provision for the rights of innocent persons.

Civil RICO is well suited to systemic organizational criminality that cannot be eradicated by one shot or even a series of criminal prosecutions. The injunctive remedy allows the government and the federal court to implement and enforce a long term strategy of organizational reform against a racketeer-ridden union.

Elements of a Civil RICO Suit

A civil RICO labor racketeering complaint essentially requires the same proof as a criminal RICO case. The government must prove that the defendants are likely to continue violating RICO by: 1) purchasing an interest in an enterprise (the union in this context) with funds obtained through a pattern of racketeering activity (sec. 1962a), or; 2) acquiring an interest in an enterprise (the union) through a pattern of racketeering activity (sec. 1962b), or 3) conducting the affairs of an enterprise (the union) through a pattern of racketeering activity (sec. 1962c). In less technical terms, the government must prove that the civil RICO defendants either: used dirty money to buy their way into a union; took control of a union through extortion, fraud or some other criminal means, or; conducted the affairs of a union through criminal activity, such as violence and extortion. Almost all of the civil RICO complaints have been based upon both 1962b and 1962c.

Both criminal and civil RICO require proof of a “pattern of racketeering activity,” defined as at least two of a long list of federal felonies and their state law equivalents.[§§§§§§§§§§§§§§§] The two “predicate offenses” must be related in some way to constitute a pattern but, in practice, practically any two qualifying predicate offenses will satisfy the pattern requirement. If the defendants have been previously convicted of two or more RICO predicate offenses, the government lawyers need do no more than enter proof of those convictions to satisfy the “pattern of racketeering activity” requirement. Since civil RICO requires only proof by a preponderance of the evidence and criminal RICO requires proof beyond a reasonable doubt, a civil suit can succeed against certain defendants merely by entering proof of a previous criminal RICO conviction. Alternatively, they can be proven at the civil RICO trial itself. Then, all that remains is for the government to persuade the court that aggressive equitable relief (e.g. an injunction, a trustee, etc.) is necessary to prevent continuing violations of RICO.

Under civil RICO, it is possible to obtain judgment against certain (union) defendants whose passive tolerance of LCN labor racketeering might not have been sufficient to support a criminal prosecution for aiding and abetting or for conspiracy.

The government’s civil RICO complaints typically ask the federal district court judge to enjoin the organize crime defendants from playing any role in the union’s administration or affairs. Unless the organized crime defendant is also a union official, there is no legitimate reason for the defendant (who may be in prison anyway) to play any role in the union. Therefore, an organized crime defendant will likely not spend time or money defending himself against a civil RICO labor racketeering lawsuit, but quickly settle the case by agreeing to have nothing to do with the union. The challenge for the government, the federal judge and the trustee, if one is appointed, will be to ensure that the organized crime defendants do not continue to exert influence over the union surreptitiously. If they do, the U.S. attorney in charge of the case can petition the judge for further relief, e.g. removing from office and perhaps from the union any official who has knowingly associated with an organized crime member. The federal prosecutor can also seek a contempt indictment against the non-complying organized crime defendant.

In their civil RICO labor racketeering suits, DOJ attorneys always name union officials as defendants. Unlike the organized crime defendants, these union official defendants have not previously been convicted of RICO predicate offenses; if they had been, they would not be lawfully permitted to hold union office. Thus, the government attorneys need to prove that the union defendants themselves violated RICO (1962b) by aiding and abetting the organized crime defendants in their acquisition of an interest in the union or that they violated RICO (1962c) by conducting or aiding and abetting others in conducting the union’s affairs through a pattern of racketeering activity including such RICO predicate offenses as extortion of employers or union members, murder, assaulting or threatening union dissidents, or defrauding the union’s benefit funds. Unlike their organized crime co-defendants, the union defendants may have an incentive to defend themselves, especially if the union pays their legal fees.[****************]

To recapitulate, in a civil RICO suit the U.S. attorney names both union defendants and organized crime defendants (and sometimes designates the union or its benefit fund as a “nominal” defendant), alleging that: 1) both sets of defendants have violated RICO by acquiring or aiding and abetting the acquiring of an interest in the union through a pattern of racketeering activity, typically by means of violence and intimidation against union members, but also by means of taking bribes from employers, election fraud and theft from union benefit funds, and; 2) both sets of defendants have violated RICO by conducting the union’s affairs through a pattern of racketeering activity, usually extortion, theft and fraud. As a remedy, the U.S. attorney asks that the judge remove the union defendants from their official positions, order organized crime defendants to sever all contacts with the union, enjoin all defendants from knowingly associating with organized crime members and associates and appoint a trustee empowered to: initiate disciplinary charges against union officers and members who violate the decree, union constitution, or bylaws; administer the union’s affairs; design and implement a fair election, and; to monitor a new regime for conformity with the decree, the union’s constitution, and the laws of the United States.

The specifics of the civil RICO decrees in labor racketeering cases differ. However, almost always there is a provision that empowers the trustee to act as investigator/prosecutor in initiating disciplinary charges. The judge (or perhaps another trustee) decides whether the facts establish the targeted official’s “guilt” and what sanction is appropriate. For example, in the IBT International case, the Investigations Trustee functioned as prosecutor and the Administrative Trustee functioned as trier of fact and sentencing authority. The decree usually provides that union members and officials found guilty of disciplinary violations (e.g. knowingly associating with LCN figures) have a right to appeal to the district court judge; if still dissatisfied, they may appeal to the applicable federal circuit court of appeals.

Remarkably, the DOJ lawyers have never lost a civil RICO labor racketeering case and only two of the government’s 21 civil RICO suits (IBT Local 560 and Philadelphia Roofers Local 30) necessitated trial; all the rest have been resolved by negotiated consent decrees that include appointment of a trustee whose job is to monitor compliance with and enforce the decree. The decree itself usually specifies whether the trustee should have full-time and/or part-time assistants, and the level of the trustee’s compensation, along with other procedural questions. See Table 8-1 below for a list of all the civil RICO suits as of February, 2005.

[Insert Table 8-1]

“Winning” a civil RICO labor racketeering case by achieving a favorable decree does not necessarily ensure that the racketeer-ridden union will be successfully reformed. These cases are really won or lost in the remedial phase. The prosecutors and judges know what they want to accomplish—the eradication of organized crime elements from the union and the establishment of healthy union governance capable of resisting future intrusions by criminal elements. How to achieve these goals is less clear. The first step is to obtain appointment of a trustee in whom the Department of Justice and the federal judge have confidence. This requires a person who understands organized crime and who enjoys the confidence of the FBI and DOL investigators (assuming they are still at work on the case). Almost by definition, such a person has to be a former federal prosecutor.

Selecting the Trustee

In the majority of cases, formal selection of the trustee has been left up to the presiding federal district court judge, with both the government and the union invited to make recommendations. In the HEREIU International case, both the government and the HEREIU sent the judge three names. The government told the judge that if one of the union’s nominees was chosen, the government would cease negotiating and prosecute the suit. The judge selected one of the government’s nominees, Kurt Muellenberg, a former head of DOJ’s Organized Crime and Racketeering Section. In almost all cases one of the government’s nominees has been chosen;[††††††††††††††††] no trustee has been appointed over the government’s objection.

In some cases the identity of the trustee has been included in the consent agreement itself. For example, the NYC District Council of Carpenters’ consent decree named a trustee (designated as the Investigations and Review Officer (IRO) and the members of an Independent Hearing Committee (IHC).1 Under this trusteeship, the IRO would prepare disciplinary cases and the IHC would adjudicate disciplinary charges.

One of the most arresting facts about the government’s twenty-year anti-labor racketeering campaign is that the trustees are almost all former federal prosecutors with experience investigating and prosecuting organized crime. Edwin Stier, trustee for a decade in the IBT Local 560 was a former state and federal prosecutor. Thomas Puccio, trustee in the IBT Local 295 case, was previously head of the Federal Organized Crime Strike Force in Brooklyn.2 Of the three members of the Independent Review Board in the IBT International case, William H. Webster was a former FBI director, Charles Carberry was a former Assistant United States Attorney, and Michael Holland was one of just a few labor lawyer trustees.3 Holland’s authority was limited to running the IBT’s national election.4 Table 8-2 provides a brief background of the trustees responsible for cleaning up corrupt unions.

[Insert Table 8-2]

The Duration of the Trusteeship

The DOJ favors RICO trusteeships of indefinite duration.5 The advantage of a trusteeship with no fixed duration is that neither the criminal element nor the rank and file will have cause to anticipate that the trusteeship will soon end with union affairs reverting to the status quo ante. The government wants the rank and file to believe that the trusteeship will remain in place until corruption and racketeering have been thoroughly eliminated. However, a trusteeship without a fixed termination date may cause the trustee (and provide an economic incentive) to operate without hurry, thereby draining the union treasury and unduly delaying the union’s return to self-governance. Furthermore, without a fixed or at least presumptive date of termination, it may be difficult to bring the trusteeship to an end. The union defendant will always prefer a trusteeship of limited duration, if for no other reason than that the shorter the trusteeship, the less financial drain on the union.

In the majority of labor racketeering cases, the consent decree provided for a fixed term trusteeship, ranging from as short as eighteen months (e.g. HEREIU International and HEREIU Local 100) to as much as six years (e.g. HEREIU Local 54) (see Table 8-3). Most of the decrees or consent agreements have included an option to extend the trusteeship’s duration for a further fixed period.6

[Insert Table 8-3]

The Terms of the Trustee’s Employment

At first blush, it might seem desirable to have a trustee devote full time to the enormous challenge of reforming a mobbed-up union. Indeed, trustees imposed by international unions on, for example, bankrupt locals typically function as full-time officials. However, it would be very difficult to recruit a full-time trustee from the ranks of private sector law firm attorneys with prior federal prosecutorial or organized crime control experience. To serve full time, the attorney would have to take an extended or indefinite leave from his or her law firm and perhaps a diminution in pay; even so, the salary might be prohibitive for a local union. Furthermore, a union trusteeship is not a step along a career path. Years later, when the trusteeship is terminated, the lawyer/trustee would have to reconnect with his old firm or find a new one. There would be no business and no clients to bring to the firm. He certainly could not count on more union trusteeships since there are so few. Realistically, if the RICO suits required full-time trustees, they would have to be drawn from another pool, perhaps retired prosecutors, or more likely career union officials. Thus, the trustees mostly serve on a part-time basis, compensated at an hourly rate. Their weekly hours might vary from 30 or more at the beginning of the trusteeship to 10 or less later on, according to the trustee’s judgment of what is necessary. The disadvantage of a part-time trustee is that he or she will not take ownership of the task. While operating a law office and/or a number of other jobs, the part-time trustee may not devote the time and energy necessary to reforming, reconstituting, and reconstructing a union that has been corruptly operated as a mob fiefdom for decades. But choosing a non-former-prosecutor would also have serious disadvantages. It is usually crucial that government investigators completely trust the trustee and thus feel comfortable in sharing sensitive investigative information with him or her. A union official will be very unlikely to enjoy this kind of trust.

Compensation is an important issue. Big law firm attorneys bill their time at $200 - $500 per hour, rates that union members find staggering. Some trustees have earned more than $100,000 per year for their part-time work.7 The trustee in the Local 295 case was paid $250,000 a year for his part-time services and his full-time deputy trustee received $150,000. Ironically, such compensation exceeds the remuneration of mob-connected union officials whose salaries and emoluments prosecutors condemned as bloated, unjustified, and indicative of racketeering. On occasion, the trustee’s wages have drawn criticism from those who oppose the trusteeship on other grounds, and in some cases, may have undermined the trustee’s legitimacy in the eyes of the union’s members. For example, the IBT went to court to challenge (unsuccessfully) the $350 hourly rate billed by Frederick Lacey as “Administrator” (one of the three trustees) in the IBT case.8

A trusteeship over an international union’s central office requires more time, personnel, and resources than a trusteeship over a local union. After the 1991 election, the IBT three-person (plus staff) trusteeship was replaced by a three-person Independent Review Board (IRB). The IRB hired the original Investigations Officer (Carberry) and authorized a staff of two full-time lawyers and eight full-time investigators. According to Teamsters General President James P. Hoffa (son of James R. “Jimmy” Hoffa) the IRB costs the IBT approximately $8-9 million per year.9 LIUNA estimates that it spends $5 million per year on the remediation effort led by Robert Luskin. 10 By contrast, the HEREIU International trusteeship was a much smaller and cheaper operation.11

Covering the costs of a RICO trusteeship over a previously exploited union often presents a major problem. The union’s coffers have been plundered by racketeers and depleted by litigation costs. Funding the trusteeship could bankrupt the union or require dues increases that might cause the rank and file to abandon it. In a few cases, the international union, a much deeper pocket, has contributed financial assistance.12 For example, the IBT Local 851 decree states that while the local must set up a fund from which the trustee can draw, the International IBT will supplement that fund. However, some trusteeships have floundered due to inadequate funding.

The Trustee’s Powers

The trustee’s powers emanate from the decree. Some trustees have been given all the powers and authority of all the union’s officers and/or executive board, in effect, empowering the trustee to administer the union, negotiate contracts, handle grievances, and initiate strikes;13 such a trusteeship resembles the trusteeships that international unions sometimes impose on affiliated locals.

The RICO trustee who is tasked with the responsibility of running the union has to devote a substantial portion of time and energy to day to day union administration rather than to organizational reform.14 In the LIUNA Local 6A trusteeship, Trustee Eugene Anderson and his assistant spent so much time supervising the daily administration of the union that they were unable to interact with the rank and file. On the other hand, the trustee who runs the union is in a position to earn the rank and file’s confidence by assisting the membership to achieve its goals rather than functioning solely as a policeman. If the budget permits, trustees who find themselves in this position (e.g. IBT Local 560) usually hire a seasoned union official to handle day-to-day union affairs while themselves concentrating on investigations, discipline, elections, and communications with the rank and file.

Trustees typically have the authority to examine the union’s books and records, and to compel sworn statements by officers, agents, representatives, employees, and members. In many cases (e.g. Roofers Local 30/30B) the trustees have been given authority to review collective bargaining contracts and to veto improper expenditures. Officers of the corrupt regime may have signed various contracts for goods and services with cronies before the trustee assumed his position, in effect providing golden handshakes to many members of the heretofore dominant clique. The trustee must also scrutinize the payroll for no-show workers, improper reimbursements and other fraudulent expenditures.

In some cases the power to bring suit on behalf of the union has enabled trustees to obtain reimbursement for exploitation of the union’s assets. For example, in the Mason Tenders District Council case, Monitor Lawrence Pedowitz filed lawsuits against former officers and trustees, recovering $12 million of $15 million lost due to their malfeasance. Ronald DePetris, trustee over IBT Local 851, filed two civil RICO claims against freight –forwarding companies and Local 851’s former secretary-treasurer. This was the first time a court –appointed monitor initiated a suit to recover civil damages on behalf of a labor union for past corruption. DePetris obtained more than $3 million for the financially struggling union. Such successes obviously contribute to the trustee’s credibility and popularity.

The Trustee’s Disciplinary Authority

In most but not all RICO union cases, the decree prohibits union members, and certainly union officials, from knowingly associating with organized crime members or associates.[‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡] For example, the consent decree in the IBT International case gave the Trustee Administrator the IBT general president’s disciplinary authority.15 The Independent Administrator Trustee, Frederick Lacy, held that this authority was sufficient to expel union members, not just officers, for bringing “dishonor and disrepute” to the Teamsters on account of their LCN ties. District Court Judge David Edelstein agreed; the Second Circuit Court of Appeals affirmed.16 The trustees in the LIUNA Local 6A and HERE Local 54 cases had authority to bar from union elections candidates who knowingly associate with organized crime figures, but not the authority to expel such individuals from the union. Under those conditions, disappointed office seekers continue to be a presence in the union, sustaining the prevailing atmosphere of intimidation.

The union trustees have usually had the power to hire members of the union staff including business agents who negotiate labor contracts, administer grievances, file unfair labor charges, and make decisions regarding strikes and other job actions. To be successful, the trustee must demonstrate that a new regime has permanently displaced the old one. New leaders must be encouraged to come forward. However, there is a danger that, in making snap hiring decisions, the trustee will appoint people who are incompetent, unpopular, or otherwise not likely to be effective leaders. Another problem is that the rank and file may resent having their officers chosen by “the government,” failing or refusing to distinguish between the courts/trustee and “the government.”

The Trustee’s Election Authority

RICO trustees are almost always empowered to implement and monitor elections. Holding a fair and competitive election is an important step in the union’s rehabilitation. Typically, mobbed-up unions have not experienced a fair election in the memory of any living union member. As Judge David Edelstein explained in one of his many opinions in the IBT international case: “…election rules must not be viewed in a vacuum, but instead placed in their proper context. This Court has reiterated that the [IBT] Consent Decree is a unique attempt to cleanse this union. These election rules are the linchpin in that effort. This Court will only approve election rules that will guarantee honest, fair, and free elections completely secure from harassment, intimidation, coercion, hooliganism, threats, or any variant of these, no matter under what guise.”17

A. B. The Trustee’s Preparation

Ideally, a new trustee should have general knowledge about organized crime, labor unions, labor racketeering, and very importantly, the history of previous efforts to reform mobbed-up unions. She should also know the specific facts of the case at hand, the history and politics of the targeted union, who the racketeers are and how they have exploited the union and its pension and welfare funds, and the local union’s relationship to its international union and to the employers for whom its members work.

There is no manual on how to organize and implement a RICO-spawned trusteeship. Remarkably, there has never been a conference or meeting to debrief the trustees or to memorialize their experiences. Their reports have not been assembled in any retrievable way and are usually difficult to obtain. Indeed, in some cases the reports have been purposefully sanitized because the judge or trustee feared having them made public. There has been little contact among the trustees, sometimes as a matter of policy. For example, Judge Bechtle in the Philadelphia Roofers’ Local 30/30B case instructed his trustee (“liaison officer”) not to have contact with trustees in other cases lest their mistakes infect the Roofers’ remediation.18

Typically the newly-appointed trustee is briefed by the federal prosecutors who have drafted the civil RICO complaint. However, the “briefing” may be no more than one or two informal discussions over lunch. Of course, the newly-appointed trustee can read the RICO civil complaint, the settlement agreement and other legal documents, including past indictments related to the union. However, because practically all of these RICO suits have settled quickly, there are rarely pre-trial depositions and no trial transcripts. At best, the new trustee will assume her role with knowledge of the prosecutors’ perception of the problem or, more accurately, of the problem’s symptoms—e.g. mob influence, bloated salaries, ghost employees, and money missing from the union’s treasury and benefit funds. Prosecutors cannot convey information about what they themselves do not know, like the union’s politics, culture, and organizational environment as well as the nature of the business or industry environment in which the union’s members work.

In the few instances where civil RICO suits against unions have gone to trial, the judge has had significant influence over the trusteeship. After a year-long trial in the IBT Local 560 case, Judge Harold Ackerman, appalled by the union’s history of corruption and racketeering (in his words “a shameful horror story”), became strongly committed to the trusteeship’s success. Without a trial, the judge may not be well-versed in the union’s problems. Where the judge is only tangentially involved in the case, she may leave the structure and powers of the trusteeship to be negotiated by the parties. Judge David Edelstein is a striking exception; even without a trial, he became strongly committed to reforming the IBT and handed down one decision after another supporting the government’s trustees’/IRB positions.

The trustee, for good reason, is likely to be suspicious of existing union officers. After all, these officials were probably complicit with and certainly tolerant of the labor racketeers if not actually part of the clique that exploited the union for many years. The integrity of the international union’s officers will also be uncertain. Years, even decades, of organized crime domination of a local or district council could not have gone on without the knowledge, acquiescence, and perhaps complicity of at least some international union officers. The trustee must be wary of appearing friendly to or allied with the incumbent international union officials lest the rank and file conclude that the trusteeship is just for show.

In a few cases the new union trustee has been approached by rank and file members, usually “dissidents,” who in the past have been bold enough to challenge the ruling clique publicly. While some dissidents provide useful information, others’ allegations are distorted by a paranoid worldview, not surprising in light of years of struggle and defeats. Too close an association with these dissidents may undermine the trustee’s credibility with rank and file union members.19

If the trustee is going to learn more about the union, particularly about corrupt individuals and schemes, the information will probably have to come from DOL and FBI investigators, who might or might not continue, after the negotiated agreement, to work on the case, thereby supporting the trusteeship. On the one hand, the investigators may be strongly invested in eliminating corruption and racketeering, root and branch. On the other hand, once there is a signed settlement, there may be departmental pressures to move on and make new cases. In addition, the investigators will not share information with a trustee whom they do not completely trust.

C. D. The Operation of the Trusteeships

What does a trustee in a civil RICO union case actually do to achieve the goals of the consent agreement? There is no “to do” list. Every trustee has had to invent the job, at least to the extent of identifying and prioritizing tasks and allocating time and resources among investigations, disciplinary actions, and union-democracy-building. Since no two situations are the same, it is inevitable and desirable that each trustee attempts to apply her skills and authority to the exigencies of the case at hand. Moreover, a successful trustee changes priorities and reallocates resources as weeks, months, and years pass. A RICO union trustee has to allocate time both to responding to problems (“problem solver”) and to pressing forward with a reform agenda (“organizational reformer”). Some trustees initially confronted so many union administrative problems that they were unable ever to move into the organizational reform mode.

The trustees have presided over regularly-scheduled and special union meetings where, among other things, they have sought to explain the trusteeship to the rank and file and solicited their support. They have contributed regular columns to union magazines and newsletters and published open letters to the membership explaining the civil RICO case, the charges against incumbent officials, and the trustee’s role. In some cases, trustees have sought to educate the rank and file about their Landrum-Griffin rights to speak freely, run for office, vote, inspect contracts, etc. Some trustees have maintained an open door or have met on an appointment-only basis with union members who wanted to convey their concerns or assuage their anxieties. Sorting out bona fide complaints from malicious rumors and politically-motivated accusation is a constant challenge.

Trustees have had to pour over books and records to determine which expenditures are legitimate and which are not. In the HERE International case, Trustee Kurt Muellenberg found a shocking lack of bureaucratic rationality in the union’s organization.20 There was no table of organization, job descriptions or administrative procedures. Muellenberg’s main contribution as trustee was probably his recommendations for transforming the union’s administration into a modern bureaucracy.

The trustees have invariably been involved, at varying levels of intensity, in investigating wrongdoing and wrongdoers. A minority of trustees has had an investigator working specially for the trusteeship.21 The majority has had to depend on FBI and DOL agents, which means persuading them of one’s reliability and integrity.

Trustees have had to replace business agents and other union personnel. They have spent time setting up fair election procedures, approving individual candidates,and supervising balloting and counting of ballots. Some trustees (e.g. Edwin Stier in the IBT Local 560 case) or their assistants have negotiated collective bargaining agreements, processed workplace grievances, and led job actions.

Conclusion

Civil RICO has proved to be a very potent weapon for DOJ lawyers seeking to eliminate LCN’s power base in certain unions. The DOJ lawyers have never lost a civil RICO union case, but that hardly means that they have achieved 100% of their goals. It has proved easier to draft the civil RICO complaints and to obtain favorable consent decrees than to establish successful union trusteeships. It has come as a surprise and major disappointment to government litigators and reformers that many union members have not greeted the court-appointed trustee as a liberator.

The trustees appointed in civil RICO union cases have been differently empowered, financed, and tenured. Some have exercised the same powers as the union’s officers, while others have been restricted to a passive monitoring and reporting role. Some have plugged away at their mission for more than a decade; others have completed their work in just eighteen months. Some have expelled dozens of union officers; others have expelled nobody. Some trustees, as we will see in Chapters 9, 10 and 11, appear to have succeeded in purging labor racketeers and bringing forth a new leadership cadre unrelated to the faction that corruptly dominated the union for decades; others have failed to free the union from the labor racketeers. Even where liberation has been achieved, there has been very little success in establishing union democracy.

The Liberation of IBT Local 560[§§§§§§§§§§§§§§§§]

It is not a pretty story ...[it] is a harrowing tale of how evil men sponsored by and part of organized crime elements, infiltrated and ultimately captured Local 560.

--Judge Harold A. Ackerman, United States v. Local 560, 581 F. Supp. 279, 282 (D.N.J. 1984).

Members were intimidated from expressing their opinions and disagreements. They were intimidated, sometimes it was subtle and sometimes it was not so subtle. The Union was a burden the members suffered. It did not negotiate good contracts, good wages or good benefits. It existed for the benefit of organized crime members who controlled the union, not for the members.

--Peter Brown, Local 560 president, testimony before a Congressional committee in 1999.

[T]he goal [of the Trusteeship] has been to transform the culture of the Union from one in which racketeering was acceptable behavior to one in which exploitation of the membership by organized crime, or any other form of corruption, will not be tolerated. I believe we have achieved that goal.

--Local 560 Trustee Edwin Stier, Report and Recommendations of the Court Appointed Trustee for Teamsters Local 560, January 1999.

Introduction

In 1982, IBT Local 560 had 10,000 members, making it one of the largest IBT locals in the country. Its members were employed by 425 companies,1 ranging from large national trucking companies to small cartage companies with as few as three or four Local 560 members. This was a huge and sprawling local whose members drove trucks, worked in warehouses, road construction sites and laundries.

IBT Local 560’s Executive Board, which managed the union’s daily affairs, consisted of seven elected officers, including president, vice-president, secretary-treasurer, recording secretary and three trustees. The Executive Board appointed business agents, shop stewards and benefit plan trustees.2 The business agents negotiated collective bargaining agreements and handled workers’ grievances.3 Shop stewards enforced the collective bargaining agreements at every workplace.4

LABOR RACKETEERING IN IBT LOCAL 560

From the 1950’s, Local 560 was dominated by Anthony “Tony Pro” Provenzano, his two brothers, Nunzio and Salvatore, and other relatives and cronies. They were members or associates of, and acted for the benefit of the NYC Genovese organized crime family. Tony joined the union in the late 1940’s, and had served as a business agent from 1948 until 1958 when he became president.5 Tony’s rise in Local 560 paralleled his rise in the Genovese crime family, which inducted him as a “made member.”6

In 1961, Tony enlisted Harold Konigsberg, Salvatore Briguglio, and others to kill Anthony Castellitto, the Local’s secretary-treasurer.7 Tony believed that Castellitto had informed authorities about his extortion of a trucking company (the Dorn Transport case). Seventeen years later, Tony was convicted of this murder and sentenced to life imprisonment.)8 Law enforcement authorities also suspected that Tony had ordered the 1963 murder of Walter Glockner, another Local 560 dissident. In 1966, Tony was sent to prison for extorting labor peace payoffs from a trucking company.9 While he was doing time, his brother Salvatore ran the union. Tony was incarcerated in the same federal prison as Jimmy Hoffa. The two had a falling out which perhaps for Tony’s suspected role in Hoffa’s 1975 assassination.10 n 1975, Tony was indicted for conspiracy to violate the federal anti-kickback statute.11 The charge related to a proposed loan from the New York State Teamsters Conference Employee Welfare and Pension Benefit Plan for a hotel renovation.12 Tony acted as a broker between the benefit plan’s trustee and the prospective borrowers, who had organized crime ties. The trustee demanded a substantial kickback for putting the loan through. The borrowers balked because other parties in the transaction also demanded payoffs. For his role in smoothing the waters and brokering the deal, Tony was convicted in 1978 and sentenced to a four-year prison term.13

In 1978, Tony was sentenced to life imprisonment for murdering Local 560 dissident Anthony Castellitto 17 years earlier. The Local 560 leadership quickly voted to pay Tony a lucrative pension for the rest of his life14 and selected his daughter, Josephine, as secretary treasurer. In 1979, at a federal trial, Tony and his henchmen Stephen Andretta, Thomas Andretta and Gabriel Briguglio were found guilty of violating RICO based upon labor peace extortions of two trucking companies. Tony and Thomas Andretta were sentenced to 20-year prison terms, while Briguglio and Stephen Andretta received 10-and seven-year sentences, respectively.15

In 1980, Tony’s two brothers, Nunzio and Salvatore, along with Michael Sciarra and Irving Cotler were indicted for a nine-year (1971 to 1980) extortion conspiracy that victimized four trucking companies. Nunzio Provenzano and Cotler were sentenced to ten years and seven years, respectively; Salvatore Provenzano and Sciarra were acquitted.16 Tony designated Sciarra to succeed him as Local 560’s top official. Gbriel Briguglio himself was murdered while awaiting trial for the Castellito murder. Tony died in federal prison in 1988.17

The Civil RICO Suit

In March 1982, the New Jersey U.S. Attorney’s office and the New Jersey federal organized crime strike Department of Justice filed a civil RICO18 complaint against Local 560 and its officers. The complaint named twelve individual defendants plus Local 560 and Local 560’s pension and welfare funds and severance pay plan. As remedies, the government sought: 1) to prohibit Tony Provenzano, Nunzio Provenzano, Stephen and Thomas Andretta and Gabriel Briguglio (the “Provenzano Group”) from having contact with any officer or employee of Local 560 or any other labor organization or union employee benefit plan; 2) to remove the Executive Board, which was comprised of Salvatore Provenzano, Joseph Sheridan, Josephine Provenzano, J.W. Dildine, Stanley Jaronko, Thomas Reynolds, Sr.(Nunzio’s brother-in-law) and Michael Sciarra; and 3) the appointment of a trustee to run and monitor Local 560 until free elections could be conducted.19

The complaint alleged that Local 560 satisfied the definition of a RICO “enterprise” (any individual, partnership, corporations, association, or other legal entity, and any union or group of individuals associated in fact although not legal entity.”) It then alleged two conceptually distinct RICO violations: (1) that the individual “Provenzano Group” defendants, associated under the leadership of Tony Provenzano and aided and abetted by past and present IBT Local 560 Executive Board members, violated RICO (1962b) by illegally acquiring and maintaining control of Local 560 through a pattern of racketeering activity; and (2) that the Provenzano Group violated RICO (1962c) by conducting Local 560’s affairs through a pattern of racketeering activity.

The first RICO charge alleged that the Provenzano Group and the Executive Board had violated the Hobbs Act by using “actual and threatened force, violence and fear of physical and economic injury in order to create…a climate of intimidation which induced members…to consent to the surrender of certain valuable property in the form of their union rights.”20 The complaint cited the union defendants’ extensive associations with Genovese crime family members, 28 specific crimes (including the murders of Anthony Castellitto and Walter Glockner), plus defendants’ failure to take any action to reduce members’ fears and perceptions, all of which created and sustained a climate of intimidation that deprived the member’s Landrum-Griffin rights.21

The second RICO charge accused the defendants of conducting the affairs of the RICO enterprise (i.e. Local 560) through a pattern of racketeering activity consisting of at least five predicate racketeering offenses: (1) the extortion of $17,100 from Dorn Transport in return for labor peace; (2) the wrongful conversion of $223,785 of Local 560 funds by Anthony Provenzano, who was aided and abetted by past and present members of the Executive Board; (3) the Provenzano Group’s wrongful receipt of payments from Interocean Service and Di-Jub Leasing in return for labor peace; (4) the unlawful receipt by Anthony Provenzano of Florida real estate from Thomas Romano in return for allowing Romano to obtain loans from Local 560’s benefit funds; and (5) Nunzio Provenzano’s wrongful receipt of labor peace payoffs from Pacific Intermountain Express Company, Mason and Dixon Lines, Inc., T.I.M.E., Inc. and Helms Express. The government also charged the Provenzano Group with conspiracy to violate the RICO.22

The Judgment

Prior to trial, the government entered into consent agreements with several of the organized crime defendants including Tony Provenzano, Nunzio Provenzano, and Thomas Andretta, all of whom were in prison at the time. These defendants agreed that never again to serve as union officials and not to associate with any enterprise that seeks to control or influence the affairs of a labor organization.23 The bench trial against the non-settling defendants consumed 51 days spread over the period from January 25, 1983 to May 17, 1983. Some of the most salient testimony came from Salvatore Sinno, a former Provenzano Group member and accomplice in the Castillitto murder who had become a government witness. He testified to Tony Pro’s role in the Genovese crime family and detailed how Provenzano gained and maintained control of IBT Local 560.24 Federal District Court Judge Harold Ackerman (a former labor lawyer) wrote in his opinion: “As described by Salvatore Sinno, the Provenzano Group began its activities as a wholly illicit and criminal enterprise in which each associate accepted orders and assignments from Anthony Provenzano and each was prepared to collaborate with other associates in carrying out particular assignments.”25

In his lengthy opinion, Judge Ackerman reviewed the history of corruption in Local 560, emphasizing the Executive Board’s failure to take any action against longstanding egregious corruption and racketeering. Ackerman determined that the Provenzano Group violated the membership’s Landrum-Griffin rights while the Executive Board looked the other way. The Executive Board, in his view, has “done nothing to devise or implement measures reasonably calculated to prevent and detect potential ‘labor peace’ abuses.”26 Furthermore, Judge Ackerman found:

... that a significant number of Local 560 members are in fear of the Provenzano Group, that they fear for their jobs and their physical safety, and that through this fear the members were induced by the Provenzano Group to part with their LMRDA-created union democracy rights.27

Judge Ackerman determined that Local 560 members and the local trucking industry would continue to suffer as long as Local 560 remained a “captive union” and that more criminal prosecutions would not break the Provenzano Group’s hold on the union. Therefore, Judge Ackerman enjoined imprisoned Provenzano Group members Stephen Andretta and Gabriel Briguglio from any dealings with Local 560. He removed all the Executive Board members from office even though none of them had been convicted of a crime and none had been proven to be a member of the Provenzano Group; in Ackerman’s view, it was sufficient that the board members had been indifferent to, if not complicit with, the Provenzano Group’s racketeering. In justifying this drastic intrusion into the Local’s governance, the judge systematically reviewed the actions and inactions of each Executive Board member. For example, in summarizing the conduct of Executive Board member Joseph Sheridan, Judge Ackerman stated:

Joseph Sheridan must be removed from office for the following reasons:

Like J.W. Dildine, Joseph Sheridan professes to earnestly believe that Local 560’s problems are the product of government vendetta.
Joseph Sheridan believes that both Anthony and Nunzio Provenzano were convicted of various crimes because of their names.
Joseph Sheridan does not believe in the truth of the allegations which resulted in Nunzio Provenzano’s conviction in the Braun case.
Joseph Sheridan is unable or unwilling to institute controls or safeguards to ensure that Local 560 is not victimized in the future by criminal conduct such as that which occurred in the Seatrain and City-man cases.
Joseph Sheridan does not consider Anthony or Nunzio Provenzano to be anything but good labor leaders.
If Nunzio Provenzano were eligible to serve on the Executive Board tomorrow, Joseph Sheridan, as a trustee and Vice-president of Local 560, would welcome him back with “open arms.”
Joseph Sheridan’s mindset, after all that has occurred over the past thirty years, would make it impossible for him to formulate and promote policies which would be reasonably calculated to prevent or discourage further racketeering activity within Local 560 and ameliorate the current climate of intimidation. As previously noted, his loyalty has been purchased.28

The Trusteeship

Judge Ackerman reasoned that only “through the imposition of a trusteeship for a curative period of sufficient length can the pattern of abuse be broken and future violations prevented.” He placed no time limit on the trusteeship’s duration, explaining that it would end when a democratic election was achieved. Thus, the IBT Local 560 trusteeship started its work in June, 1986, after the defendants’ appeals had been exhausted.[*****************] Judge Ackerman appointed Joel R. Jacobson as trustee, describing him as a “distinguished trade unionist and public official.”29 Jacobson had been an organizer for the International Ladies’ Garment Workers Union, served as president of the New Jersey C.I.O. and as community relations director of the United Automobile Workers.

Trustee Jacobson identified three major impediments to Local 560 operating as a proper union. Incredibly, LCN domination was not one of them! Rather, Jacobson’s diagnosis of the problem focused on: 1) lack of rank-and-file solidarity; 2) the disarray of pension and welfare funds and severance pay plan records, and 3) lack of training programs for union officials. Jacobson promised to reform the union by addressing these deficiencies and by impressing the membership with the advantage of a competent and professional administration.30 In his one year on the job, Jacobson increased union membership by 25 percent and negotiated contracts resulting in wage increases above the national averages.31 However, he did not confront the Provenzano Group’s continued control over the Local. Indeed, he retained most of the shop stewards who had been appointed by the Provenzano Group because he believed (1) that they were needed to carry out collective bargaining and contract administration duties; and (2) that removing elected union officials would not be consistent with the trustee’s goal to restore democracy. Jacobson did, however, (albeit after considerable delay) replace the business agents with individuals who had not held leadership positions during the Provenzanos’ reign.

Unhappy about the trustee’s inability or unwillingness to attack the provenzano Group’s influence in the union, Judge Ackerman fired Jacobson. The new trustee, Edwin Stier, had formerly been a federal prosecutor, New Jersey Deputy Attorney General and Director of the New Jersey Division of Criminal Justice. The associate trustee, Frank Jackiewicz, had been an IBT member for 46 years, having served as shop steward, vice president and secretary-treasurer of IBT Local 843.[†††††††††††††††††] The trustee’s mandate was to “create and foster conditions under which union democracy will be restored and racketeer influence will be eliminated.”32 To achieve the court’s objective the trusteeship was provided the full range of authority previously exercised by the union’s Executive Board. The trustees would:

Possess the same powers accorded to the Executive Board as stipulated by the Local 560’s by-laws and constitution (including participation in the affairs of all bodies related to Local 560);
Negotiate contracts, pursue grievances, conduct organizing campaigns and participate in all lawful activities granted to a labor organization;
Initiate, settle, defend litigation on behalf of the Local;
Hire and fire Local 560 employees and set their wages and terms of employment;
Appoint and remove business agents and shop stewards, subject only to the limitations established in the Local’s by-laws and constitution; and
Retain or terminate any outside legal, accounting or consulting professionals.33

Prior to the first election in 1998, Stier was compensated $1,467 a week for essentially full-time work. Following the 1998 election, hourly rate was set at $150 for the duration of the trusteeship. Local 560, through outside counsel representing the Executive Board, argued that the post-election rate was excessive and beyond the union’s means to pay. Judge Ackerman disagreed, ruling that if anything “the trustee’s ... hourly rates have been seriously undervalued.” He noted that Stier worked many more hours than he actually billed. Moreover, he held that Local 560 had failed to show that it could not pay the fees.34

When Stier and Jackiewicz began their work, the Provenzano’s influence still pervaded Local 560. Tony’s portrait still hung on the wall at Local 560’s headquarters. Union members still regarded the Provenzano Group’s hand-picked successor, Michael Sciarra, as the man in charge.35 Stier believed that to eradicate corruption and racketeering from Local 560, it would be necessary (albeit not sufficient) to transform Local 560 into a democratic union.36 He announced that the trusteeship would operate according to the following principles:

Union officers and business agents, should understand that in performing their duties, they must place the interests of the membership as a whole ahead of any other individual, group, or entity;
Union leadership should recognize that any compromise with individuals associated with organized crime creates a risk that they will gain a foothold in the union;
Local 560 members should be cognizant that they have the right to hold their officials accountable; and
An atmosphere should exist at union functions and on the job site in which members are free to question their leadership’s performance and voice dissenting perspectives.37

Stier pursued three reform strategies. First, with Jackiewicz’s assistance, he sought to provide effective representation for the membership. Second, he endeavored to thoroughly investigate and expose past and present corruption in the union and its pension and welfare funds. Third, he encouraged Local 560 members to participate in the union’s affairs.

Stier adopted procedures and initiated programs designed to show union members the advantage of an honest union that operated for the benefit of the members. For example, he established contract negotiating committees with rank and file members. To encourage the flow of information upward from the job sites, Stier maintained an open-door policy, urging members to bring complaints directly to him. He started a union newspaper, The 560 Free Press, and hired a professional journalist as editor.38 Stier retained most of the business agents appointed by Jacobson, some of whom by then having received training at the IBT Leadership Academy. Still, after decades of racketeer control and with many members of the Provenzano clique still active in Local 560, few union members stepped forward to participate in union affairs.

After two years of direct, hands-on control, Stier determined that the union was ready for an election.39 Toward this end, Stier convened craft-specific meetings by dividing members into groups based on their occupation. Placing members in smaller groups afforded potential candidates opportunities to meet the rank and file. He organized training sessions covering topics such as the rights and obligations of union members and union officers, the IBT constitution and Local 560’s by-laws. Stier established fair and secure election procedures, convened a nominations meeting and launched a voter registration drive.40

In a memorandum to Judge Ackerman on the role he anticipated playing after the election, Stier argued that he would need the following authority:

· Access to union facilities and documents;

· Establishment of a process by which the trustee can compel the appearance of witness for deposition;

· Authority to hold hearings and attend any union gatherings;

· Retain professional assistance if needed;

· Receive confidential information from union members;

· Establish conditions for the orderly transition of the union’s affairs from the trustee to the newly elected officials;

· Obtain audits of the union; and

· Authority to demand certain records from the Executive Board and documents relating to Funds.41

The Provenzano Group fought to retain its grip on Local 560. It organized Teamsters for Liberty (TFL), a self-proclaimed civil liberties organization, dedicated to “the termination of the Trusteeship and to the prevention of ‘[the] government[’s] takeover of our union.’”42 The TFL circulated petitions demanding an end to the trusteeship. It wrote to and met with government officials, invited public officials, labor leaders, and celebrities to its rallies, published its own newspaper, We the People, and retained attorneys to attack the trusteeship on an array of issues.43 The TFL dominated membership meetings. It selected former Local 560 president Michael Sciarra, the Provenzanos’ hand-picked successor, as its candidate for president and Joseph Sheridan for vice-president.44 The Provenzano Group also engaged in covert opposition to the trusteeship.

Stier and Newark federal Organized Crime Strike Force Chief Robert Stewart went back to court to prevent Sciarra and Sheridan from running for Local 560 office.45 The government charged that Sciarra was the designated representative of Matthew Ianniello, a capo in the Genovese crime family.46 It played recordings of intercepted conversations between Ianniello and various members of the pre-trusteeship Executive Board. These conversations illuminated Iannello’s position within the Genovese crime family and his intention to retain control of Local 560. In one conversation, Iannello told Stanley Jaronko (a union officer whom Judge Ackerman had found to have aided and abetted the Provenzano Group) that he had to “run the shop, or do something with the shop” and then “let Mike [Sciarra] run the show.”47

Judge Ackerman requested that another federal judge, Dickinson R. Debevoise, hear the government’s motion to bar Sciarra and Sheridan from the upcoming election. The federal prosecutors sought to prove that Sheridan had been responsible for negotiating a sweetheart contract between Local 560 and Walsh Trucking and Consolidating Company in 1978 and that, thereafter, Sciarra and Sheridan arranged sweetheart contracts with Walsh trucking.[‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡] Furthermore, the government presented evidence on Sciarra’s mishandling of members’ grievances against New England Motor Freight (NEMF) in support of Local 560’s sweetheart contract with NEMF.48 Finally, Stewart sought to show that Sciarra and Sheridan assisted Thomas DiBiasi, a New Jersey attorney, in setting up a fraudulent prepaid legal services scheme for Local 560 members.

According to Judge Debevoise, the government would “unquestionably be irreparably injured if preliminary injunctive relief [was] not granted…All [the government’s work] will have been expanded for no purpose if an election returns Local 560 to the Genovese family and its minions.”49 Consequently, in September 1988, Debevoise issued a preliminary injunction barring Sciarra and Sheridan from running for union office.50

Still the Provenzano Group did not give up. It chose Michael Sciarra’s brother, Daniel and Joseph Sheridan’s nephew, Mark to carry the banner for the Provenzano Group.51 In a heavy blow to the court and the trusteeship, Sciarra and Sheridan prevailed by a two-to-one margin.52 It appeared that Local 560 members preferred to be represented by organized crime figures and associates than by reformers supported by the government and the court-appointed trustee.[§§§§§§§§§§§§§§§§§]

Disqualifying Michael Sciarra

Daniel Sciarra appointed Michael Sciarra and Joseph Sheridan as Local 560 business agents.[******************] Stewart went to court to block the appointments, but Judge Debevoise decided not to prohibit Sciarra and Sheridan from serving as business agents, reasoning that the election had severed the link with the old regime, thereby entitling the Executive Board to a presumption that it would act lawfully and in the best interest of the membership.

The naiveté of this presumption was soon apparent. Michael Sciarra exercised de facto control of the union. By the third post-election union meeting, there were no longer any dissenting voices. Sciarra’s supporters, strategically positioned throughout the meeting hall, completely intimidated would-be critics.53 Indeed, they loudly heckled Stier. Sciarra himself physically threatened a Department of Labor agent who had come to the union hall on official business.54

In February 1990, Robert Stewart again asked Judge Debevoise to oust Sciarra and Sheridan from their positions as business agents.55 Sheridan agreed to resign and to cease attempting to influence Local 560’s affairs. Judge Debevois this time granted the government’s motion to oust Sciarra, concluding that “As long as Michael Sciarra holds any position within Local 560 he will be able through his forceful and dominating personality, through his hold on a large and vocal segment of the membership and by virtue of the inexperience and subservience of the present officers and Board members to dominate and control the Local.”56

Two months after Judge Debevoise removed Sciarra from his business agent position, the government sought to enjoin Sciarra permanently from any participation in Local 560 affairs.57 A two-day trial illuminated Michael Sciarra’s relationship with the Genovese crime family. Judge Debevoise permanently enjoined Sciarra from “holding any office or position of trust within or otherwise endeavoring to influence the affairs of Local 560.58 Nevertheless, Sciarra continued to exert influence.

In early 1991, the government sought to expand the permanent injunction against Sciarra.59 This time Debevoise permanently barred Sciarra from holding any position in Local 560, participating in any Local 560 functions, visiting the union hall, or attempting to influence the union’s affairs.60 This was the most drastic court-imposed sanction any court had applied to a union member who had not been convicted of a crime.

But Sciarra’s de facto power was not broken. The day after Judge Debevoise barred him from participating in union affairs, Sciarra met with the Executive Board members Daniel Sciarra, Robert Marra, Peter Granello and Alfred Vallee to settle a dispute between Vallee and the others. The Executive Board still looked upon Sciarra as its leader.61 Jobs were still awarded according to a member’s loyalty to the Provenzano/Sciarra clique.62 During a December 1990 membership meeting to nominate delegates to the IBT international convention, TFL supporters physically assaulted Carmine Pizzuto, a Sciarra critic.63

In September 1991, the Local 560 Executive Board went to court seeking termination of the trusteeship.64 Stewart counter attacked, requesting court ordered procedures for allocating construction jobs[††††††††††††††††††] and enhancement of the trustee’s investigative powers.65 After a hearing,[‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡] but prior to the judge’s decision, the Executive Board and the government entered into a settlement agreement, pursuant to which: (1) the Executive Board would be comprised of six members;66 (2) Daniel Sciarra would resign as president,67 and; (3) the Local’s secretary-treasurer Robert Marra, recording secretary Alfed Vallee, and trustee Peter Granello would retain their positions. Marra, Vallee and Granello were to select one individual from the remaining two trustees, James Bartolomeo and Nicholas Juliano and the vice president, Mark Sheridan, to serve as a trustee.68 They selected Bartolomeo.69 The court authorized Stier to fill two empty trustee positions with any Local 560 member of the Local in good standing.70

The settlement sought to eliminate corruption in the construction unit by authorizing Stier to appoint a new business agent and by ordering the Executive Board to create a plan for fairly referring union members to road construction jobs.71 Eventually, the Board implemented a complex formula for ranking members’ eligibility for job assignments.72

In September 1992, after becoming aware that Michael Sciarra was continuing to associate with Executive Board member Robert Marra and had attempted to defraud the benefit funds, Stier and Stewart obtained yet another court order, this one providing that the Local 560 Executive Board would be expanded to seven members headed by a president.73 Robert Marra was forced to resign.74 The Board appointed Al Vallee as president75 and Peter Granello as secretary-treasurer. Vallee and Granello had exhibited autonomy from the Sciarra group during their careers with Local 560. For the first time in living memory, the Board was comprised of a majority of officers independent of the Provenzano Group. In 1994, in a telling act of independence, the Executive Board itself removed three board members for failure to fulfill their fiduciary duty to protect the interests of the membership.76 By 1995, six of seven Executive Board members had no previous ties to the Provenzano Group.

With the Executive Board’s consent, the court gave Stier new powers to investigate violations of Local 560’s constitution and by-laws and authority to render binding decisions against union members.[§§§§§§§§§§§§§§§§§§] Between 1995 and 1998, four Local 560 members were expelled from the Local on account of having contact with Michael Sciarra and/or defrauding the union; a fifth member voluntarily resigned before formal charges were brought. All told, during Trustee Stier’s tenure, eighteen individuals charged with misconduct were expelled or resigned from the union.77

The 1998 Election

In 1998, three conditions convinced Stier to proceed with another election for Local 560 officers. First, union members were able to secure job referrals from the union without having to toady to Sciarra loyalists; this was most important in the construction unit, which Stier used as a barometer for the union as a whole. The job referral system was now based on defined criteria, not on loyalty to the Provenzano Group. Second, most of the organized-crime-connected Local 560 members had been ousted from the union. Third, a new group of leaders now held union offices. Stier observed that general membership meetings were “drastically different from those that were held during the era when the Sciarra group dominated…” and that “Local 560 members now viewed the Executive Board as the membership’s representatives and not as an arm of the government.”78

The incumbent Executive Board ran as one slate, led by Peter Brown, whom the Board had appointed as acting president in 1997. Brown had been a member of Local 560 since 1978. He was an early supporter of the trusteeship. In 1990, Brown was fired from his trucking company job, in his view at Michael Sciarra’s instigation. Brown’s fortune turned with those of the trusteeship. He was appointed as business agent (1993) and then as a trustee (1995).79 Brown’s slate faced two competing slates. A different Daniel Sciarra, this one Michael and Daniel’s nephew, led one of the slates. Alfred Laurie, a former office manager during Sciarra’s administration, led the other slate.80 The Sciarra and Laurie slates branded Brown and his running mates “government men.”

To ensure that the December 1998 election proceeded fairly, Stier decided that mail balloting would maximize participation and minimize intimidation. He also required candidates to keep detailed records on campaign donations and expenditures. Forty-six percent of the 4,400 eligible Local 560 members voted in the election.81 Brown received 1,049 votes (55 percent) and Daniel Sciarra, 376 (20 percent).82 This stunning result demonstrated that the power and prestige of the Provenzano Group had finally been broken. Peter Brown was sworn in as president of Local 560 on March 19, 1999 by IBT president James P. Hoffa, whose father had been murdered by a group of LCN figures, probably including Tony Pro.

Termination of the Trusteeship

On February 25, 1999, Trustee Stier, the DOJ, and the DOL recommended that the court end its oversight of IBT Local 560.83 The DOJ lawyers told Judge Ackerman that the union’s culture of corruption had been eliminated and that the union was now democratically governed. Judge Ackerman terminated Stier’s monitoring and investigative roles. However, he required the Executive Board to name Stier trustee of the Local’s pension and welfare funds.84 Furthermore, Ackerman approved a four-year consent decree between the Justice Department and the union that allowed Ackerman to re-appoint a trustee if systemic corruption or Cosa Nostra influence re-emerged.85 As with the previous consent decree, union members could be expelled for knowingly associating with Cosa Nostra members or expelled union members.86 No problems arose during the course of the next four years.

Factors That Led to the Purging of Cosa Nostra from Local

560

Although court-appointed trustees have monitored, supervised or managed other “mobbed-up” union locals and even internationals, one scholar recently commented that “only Local 560 has seen a real transformation.”87 This is particularly impressive since no union local was more thoroughly dominated by organized crime than IBT Local 560. What accounts for the successful transformation of Local 560? Undoubtedly there were a confluence of favorable forces at work, but the most important was the structure and continuity of the trusteeship, the judges’ support for the trustee and the trustee’s skill in producing reform.

The Framing of the Trusteeship

The persistence into the 1980s of labor racketeering in Local 560 provides strong support for the conclusion that criminal prosecutions alone cannot eliminate entrenched labor racketeering. The Provenzano Group proved very resilient. When Tony Pro and his brothers and henchmen went to prison, they chose loyal subordinates to fill their vacated positions. Civil RICO permitted a comprehensive remedial regime to be put in place to attack the whole corrupt regime, root and branch. But the precondition for a comprehensive remedy was the willingness of two district court judges (Ackerman and Debevoise) to act decisively and a trustee to commit himself to seeing the job through to a successful completion.

Importance of the Trial

A lengthy trial enabled Judge Ackerman to learn first hand the depth of the corruption and racketeering in Local 560, which he called a “multifaceted orgy of criminal activity.”88 Over the course of the fifty-one-day bench trial, witnesses detailed the extensive organized crime entrenchment in Local 560. Judge Ackerman heard Genovese capo (and the government’s star witness) Salvatore Sinno testify about the link between the union and organized crime. 89 He listened to Executive Board members express loyalty to and admiration for Tony Pro, a convicted murderer, labor racketeer and member of the Genovese crime family. Such testimony persuaded Judge Ackerman to impose a heretofore unprecedented remedy, a court appointed trustee empowered with all the authority of the union’s Executive Board.90 It should not be forgotten that Judge Ackerman himself had been a union lawyer before being appointed to the bench and was thus almost uniquely qualified to understand the “situation on the ground” that needed to be changed. Furthermore, Judge Ackerman had had considerable experience in a previous institutional reform case involved the Essex County jail.

Many civil RICO actions against mobbed-up unions are resolved by negotiated consent decrees. In those cases, the judge who approves the decree may not fully grasp the magnitude of the corruption and not have become personally committed to ending it. Without a trial, the government may have negotiated a settlement with Local 560 that was not as far-reaching as Judge Ackerman’s order. Furthermore, because of the trial, Judge Ackerman was in a position to deal confidently with subsequent DOJ petitions. At every step of the way, Stier benefited from the strong support of the Federal Organized Crime Strike Force, especially AUSA Robert Stewart, who stayed with the case from beginning to end. Judge Ackerman’s and Judge Debevoise’s determination and perseverance were critically important as well.

Wide-Ranging Trusteeship

Judge Ackerman defined the trustee’s goal in broad and ambitious terms. He empowered the trustee “to act as he may, in good judgment, to administer the affairs of Local 560 and to create and foster conditions under which union democracy will be restored and racketeer influence will be eliminated.”91 His remedial decree authorized the trustee to initiate whatever policies he deemed necessary and in the best interest of the Local. Unlike trustees in other civil RICO consent decrees, Stier was not burdened with the time-consuming process of repeatedly having to petition the court for approval prior to instituting reforms.

Transforming the Role of the Trustee from the Union Manager to Corruption Fighter

The judge’s choice of Stier as trustee was extremely significant. Although Judge Ackerman applauded the efforts of his first trustee, Joel Jacobson’s, he knew that a different approach was needed to “insure that the documented egregious pattern of racketeering activity does not re-emerge…”