Mobsters, Unions, and Feds: Organized Crime and Organized Labor (Preface)

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Mobsters, Unions, and Feds

Organized Crime and the American Labor Movement

James B. Jacobs

NEW YORK UNIVERSITY PRESS

New York and London

NEW YORK UNIVERSITY PRESS

New York and London

www.nyupress.org

CIP tk

New York University Press books are printed on acid-free paper, and their binding materials are chosen for strength and durability.

Manufactured in the United States of America

10 9 8 7 6 5 4 3 2 1

This book is dedicated to Herman Benson.

“Racketeering is the cancer that almost destroyed the American trade-union movement.”

-David Dubinsky, president of the International Ladies Garment Workers (1932 – 1966). David Dubinsky and A. Raskin, David Dubinsky: A Life with Labor (New York: Simon & Schuster, 1977), 145.

“American labor had better roll up its sleeves, it had better get the stiffest broom and brush it can find, and the strongest soap and disinfectant, and it had better take on the job of cleaning its own house from top to bottom and drive out every crook and gangster and racketeer we find, because if we don’t clean our own house, then the reactionaries will clean it for us. But they won’t use a broom, they’ll use an ax, and they’ll try to destroy the labor movement in the process.”

-Walter Reuther, president of the United Automobile Workers (1946 – 1970). Opening address of the sixteenth constitutional convention of the United Automobile, Aircraft and Agricultural Implement Workers of America, Atlantic City, NJ (April 7, 1957) reprinted in Henry Christman (ed.) Walter P. Reuther: Selected Papers (New York: Macmillan Company, 1961), 192.

Contents

Preface

Acknowledgements

List of Acronyms

1	Introduction	1
2	Organized Crime and Organized Labor	41
3	President’s Commission on Organized Crime	68
4	Labor Racketeering in New York City	103
5	Organized Labor’s Response to Organized Crime	138
6	Labor Racketeering and the Rank and File	184
7	Attacking Labor Racketeering Prior to Civil RICO (1982)	203
8	Civil RICO Suits and Trusteeships	240
9	The Liberation of IBT Local 560	270
10	The NYC District Council of Carpenters	315
11	The Four Big Bad International Unions	352
12	Evaluating Civil RICO	415
13	Concluding Reflections	440

Endnotes 458

Bibliography 535

Index 000

Preface

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 [‡]