In the Matter of the Construction & General Laborers’ District Council of Chicago & Vicinity
Laborers’ International
Union of North America
Independent Hearing
Officer
Decided February 7, 1998
This Order and Memorandum addresses the Complaint for Trusteeship ("Complaint") filed on June 13, 1997, by the Laborers' International Union of North America ("LIUNA" or "International Union") General Executive Board Attorney ("GEB Attorney") against the Construction & General Laborers' District Council of Chicago and Vicinity ("District Council"). The GEB Attorney brought the Complaint pursuant to Section 3 of the LIUNA Ethics and Disciplinary Procedure ("EDP") and Article IX, Section 7 of the LIUNA Constitution.
The
Complaint arises out of the District Council's alleged association with
organized crime in Chicago. In four counts, the Complaint makes general allegations
that imposition of a trusteeship is necessary to: (1) correct corruption and
eradicate the influence of organized crime from the District Council; (2)
restore democratic procedures; (3) correct financial malpractice; and (4) carry
out LIUNA's legitimate objects.
In eighteen
numbered paragraphs, the Complaint alleges facts that demonstrate a knowing
association between the District Council leadership and that of the Chicago
organized crime syndicate, the "Chicago Outfit." The Complaint avers that the District
Council acts to benefit Chicago Outfit members, associates, and relatives by
placing and retaining them in union positions, giving them unauthorized
"dual salary" payments, and committing other financial abuses that
inure to the benefit of the Chicago Outfit.
Finally, the Complaint alleges that the association of the District
Council and Chicago Outfit leadership has resulted in the District Council's
failure to hold democratic elections, to properly appoint trustees to
affiliated employee benefit funds, to attempt to rid itself of organized crime,
or otherwise to comply with the EDP and the LIUNA Constitution.
For the
reasons set forth herein, I find that imposition of a trusteeship over the
District Council is warranted. The GEB Attorney has established by a
preponderance of the evidence, that three current District Council officers are
associates or made members of organized crime. Further, the evidence chronicles
a history of organized crime influence over the District Council that spans at
least 25 years. The knowing association with organized crime has had a direct
and indirect effect on democratic process and the selection of District Council
officers and trustees to affiliated benefit funds. As a result, organized crime members and associates have received
the benefits of union membership and the privileges of holding union office and
acting as trustees over union funds worth more than $1 billion.
A
trusteeship is necessary to expel the influence of organized crime, restore
democratic procedures, and otherwise carry out the legitimate business of the
union as alleged in the Complaint.
The rulings
on the specific allegations of the Complaint are as follows:
The GEB
Attorney has proved by a preponderance of the evidence that officers and delegates
of the District Council have been or are associates or made members of the
Chicago Outfit, as alleged in ¶¶ 7-8 of the Complaint.[1]
The GEB
Attorney has not proved that the District Council made threats or attempted
bribery to discourage LIUNA's investigation into organized crime, as alleged in
¶ 9 of the Complaint.
The GEB
Attorney has proved by a preponderance of the evidence that there has been and
there is a failure of democratic process in the District Council, as alleged in
¶¶ 10-14 of the Complaint.
The GEB
Attorney has not proved that the District Council made unauthorized "dual
salary" payments, as alleged in ¶ 15 of the Complaint.
The GEB
Attorney has not proved that the City of Chicago "no-show"
investigation affected the integrity or operation of the District Council, as
alleged in ¶ 16 of the Complaint.
The GEB
Attorney has proved by a preponderance of the evidence that corrupt individuals
were appointed to employee benefit funds affiliated with the District Council,
as alleged in ¶ 17 of the Complaint.
The GEB Attorney has proved by a preponderance of the evidence that the District Council has failed and continues to fail to take steps to investigate or eradicate the influence of organized crime from the District Council, as alleged in ¶ 18 of the Complaint.
The GEB
Attorney filed the Complaint on June 13, 1997.
The hearing on the Complaint ("Trusteeship
Hearing") lasted for 19 days, beginning July 16, 1997, and continuing
intermittently through October 23, 1997. The record contains 4433 pages of
transcript and approximately 250 exhibits offered by the GEB Attorney and the
District Council. Both parties filed extensive post-hearing briefs. The
District Council was represented by an experienced and able Chicago labor
lawyer. The GEB Attorney was represented by a team of able attorneys. Both
parties acquitted themselves well.
The Chicago District
Council
The District Council represents 21 affiliated local unions throughout the greater Chicago area. The District Council engages in collective bargaining with private contractors and the City of Chicago on behalf of the local unions and their membership. The District Council manages several affiliated benefit funds, worth more than $1 billion, on behalf of the members.
Organized Crime and the
Labor Movement
The issue
in this proceeding is whether the District Council has developed close ties
with organized crime, and, as a result, organized crime is in a position to control
the District Council and dictate decisions affecting the District Council's
operation.
There is no
doubt that organized crime exists in the United States. Its existence is no
longer a shadowy subject alluded to by fiction writers, but a powerful force in
the economic marketplace of America.
Although
there were reports of organized crime in various areas of the United States
dating from the early 1920s, the existence of a national organized crime
structure gained media attention in 1957, when a number of individuals were
arrested while attending a secret meeting in Appalachin, New York. Sixty-two
organized crime leaders from across the United States attended what appeared to
be a national conference at the home of Joseph Barbara. Among the attendees was
Sam Giancana of Chicago. See Symposium--Perspectives on Organized Crime,
16 Rutgers L. J. 439, 443 n.21 (1985) ("Symposium"). Other
attendees included Joseph Bonanno and Vito Genovese of New York City; Antonio
Magaddino of Buffalo, New York; Russell
Bufalino of northeast Pennsylvania; and Santos Trafficante of Tampa, Florida.
They all were high-ranking members of organized crime. See GEB Ex. 3 (FBI
Organized Crime Report 25 Years After Valachi (1988) ("Valachi
Report"). The investigative efforts that followed revealed an organized
crime network that extended across the United States.
Congress held hearings on organized crime in 1967-68 which resulted in the enactment the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1961, et seq. In passing the RICO statute, Congress made the following findings:
(1) organized crime in the United States is a highly sophisticated, diversified, and widespread activity that annually drains billions of dollars from America's economy by unlawful conduct and the illegal use of force, fraud, and corruption; (2) organized crime derives a major portion of its power through money obtained from such illegal endeavors as syndicated gambling, loan sharking, the theft and fencing of property, the importation and distribution of narcotics. . .; (3) this money and power are increasingly used to infiltrate and corrupt legitimate business and labor unions and to subvert and corrupt our democratic processes; (4) organized crime activities in the United States weaken the stability of the Nation's economic system. . . .
See Pub. L. No. 91-452,
1970.
Organized
crime's use of labor unions is well documented. Through control of labor
unions, organized crime has directly affected the shipping and construction
industries. See e g., GEB Ex. 1 (Decl. of Alphonse D'Arco, United
States v. Mason Tenders District Council of Greater New York, 94 Civ. 6487
(S.D.N. Y. Oct. 5, 1994); GEB Ex. 167. In the 1980s, the FBI concluded that the
International Longshoremen's Association ("ILA"), Hotel Employees and
Restaurant Employees International Union ("HEREIU''), the International
Brotherhood of Teamsters ("Teamsters" or "IBT"), and LIUNA
were "substantially influenced and/or controlled by organized crime."
GEB Ex. 4 (President's Commission on Organized Crime, Report to the President
and the Attorney General, The Edge: Organized Crime, Business, and Labor
Unions, 98th Congress, 1st and 2d Sess. 208 (1983-84) (hereinafter
"PCOC Report").
As recently
as 1996, congressional hearings highlighted the influence of organized crime on
labor unions: "La Cosa Nostra placed a lot of individuals in positions of
importance like this, and from there they were able to establish themselves in
union office-holder positions. Once they gained union office-holder positions,
their democratic removal was almost impossible from within the union." Administration's
Efforts Against the Influence of Organized Crime in the Laborers' International
Union of North America, Hearings Before the Sub Comm. on Crime of the Comm. on
the Judiciary House of Rep., 104th Cong., 2d Sess. 37 (statement of Jim E.
Moody, former Assistant Director, Federal Bureau of Investigation) (“1996
Judiciary Hearings").
Utilizing the RICO statute, the United States Department of Justice has brought many indictments charging organized crime families as RICO enterprises. See, e.g., United States v. Pungitore, 910 F.2d 1084, 1097 (3d Cir. 1990) (involving the Scarfo organized crime family of Philadelphia); United States v. Salerno, 868 F.2d 524, 528 (2d Cir. 1989) (involving a Commission of a number of New York organized crime families).
That there
is a national Commission of La Cosa Nostra ("LCN") leaders was
dramatically proved in Salerno.
In that case, LCN was named as an illegal racketeering enterprise in
violation of the RICO statute. Court-authorized electronic surveillance of
organized crime leaders revealed that the Commission of LCN existed and acted
as a unit for coordinating joint ventures and settling disputes among organized
crime units across the country. Salerno, 868 F.2d at 528.
In 1988,
the Department of Justice brought a civil RICO suit against the Teamsters,
alleging that the union was influenced by organized crime. United States v.
IBT, 88 Civ. 4486 (S.D.N.Y. 1988). On March 14, 1989, the Teamsters and the
United States entered into a voluntary consent decree ("Teamsters Consent
Decree") establishing a mechanism and procedure for disciplining union
officials who were associated with organized crime. The concept of using civil
process to discipline or remove individuals from unions for associating with
organized crime was established. As a result, many Teamster officials were
removed from office and suspended or expelled from union membership. See,
e.g., United States v. IBT (DiGirlamo), 19 F.3d 816 (2d Cir.
1994); United States v. IBT (Sansone), 981 F.2d 1362 (2d Cir. 1992); United
States v. IBT (Cimino), 964 F.2d 1308 (2d Cir. 1992); aff'g United
States v. IBT (Cimino), 777 F. Supp. 1130 (S.D.N.Y. 1991); United States
v. IBT (Senese & Talerico), 941 F.2d 1292 (2d Cir. 1991), aff'g United
States v. IBT (Senese & Talerico), 745 F. Supp. 908 (S.D.N.Y. 1990); United
States v. IBT (Friedman & Hughes), 905 F.2d 610 (2d Cir. 1990).
The
Department of Justice also used civil sanctions against the ILA, HEREIU and the
United Brotherhood of Carpenters and Joiners of America ("Carpenters
Union") on both the international and local union levels, for associations
with LCN. See, e.g., United States v. HEREIU, Civil Action
No. 95-4596 (GEB) (D.N.J. 1995); United States v. ILA, 812 F.
Supp. 1303 (S.D.N.Y. 1993); United States v. District Counsel of New York
and Vicinity of the Carpenters Union, 90 Civ. 5722 (S.D.N.Y. 1990).
In 1995,
LIUNA entered into a voluntary agreement with the United States to reform the union
and remove the influence of organized crime. See Agreement (Feb. 13,
1995). Pursuant to that agreement, LIUNA adopted the Ethical Practices Code
("EPC") and EDP and amended the LIUNA Constitution to effect these
changes. The positions of GEB Attorney, Inspector General ("IG"), and
Independent Hearing Officer ("IHO") were created by these changes. See,
LIUNA, Innovation at Work (1996). The present Complaint was filed
pursuant to the reform effort.
The
Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. §§
461-466, empowers an international union to place its member organizations in
trusteeship to correct certain problems, provided that the union constitution
provides for such procedure and the union follows the procedure.[2] The GEB Attorney must establish the grounds
for a trusteeship by a preponderance of the evidence. The language of the LIUNA
Constitution mirrors that of the LMRDA provision. LIUNA Constitution, Art. IX,
Sec. 7.
The
Complaint alleges generally that a trusteeship is necessary to rid the District
Council of the influence of organized crime. The EDP permits LIUNA to impose a
trusteeship over a subordinate body of LIUNA to correct mismanagement and
corruption caused by individuals' barred conduct, including knowingly
associating with organized crime.[3]
Under the EDP, the term "knowingly associate" means that: (a) an individual knew that the person with whom he or she was associating was a member or associate of LCN; (b) the association related directly or indirectly to the affairs of the union; and (c) the association was more than fleeting or casual. EDP, Section 1. An association related directly or indirectly to the affairs of the union was further defined by the IHO in In the Matter of Napoli and Fallacara (Fallacara), IHO Order and Memorandum, 96-65D (1-2) (Sept. 25, 1997). There, the IHO stated:
The requirement that the association be directly or indirectly related to the affairs of the union will be liberally construed by the IHO to effect the purpose of the EDP. It is apparent from the agreement between LIUNA and the Department of Justice and the text of the EDP and the EPC that the major aim of the reform process is to rid the union of the influence of organized crime. It follows that the drafters of the agreement would not expect that the reform effort will be subjected to unduly restrictive definitions, so as to thwart the plain purpose of the initiative. The phrase directly and indirectly related to the affairs of the union will be construed to encompass any reasonable relationship to the affairs of the union, its members, or its officers. The relationship to the affairs of the union need not on its face affect the operation of the union; it need only reflect that the "knowing association" permits the undesirable individuals to have easy access to the union officers and members in the total atmosphere of the labor union operation.
Fallacara, at 6 ¶ 20.
In the
litigation under the Teamsters Consent Decree, the term "knowingly
associate" is used as it is in the law governing restrictions on the
activities of individuals on parole after conviction. DiGirlamo, 19 F.3d
816. The restrictions on parolees are not limited to associations that involve improper
activities, but are designed to penalize the parolees' "calculated
choice" to associate with a particular, designated class of prohibited
persons. Id. at 822.
The
International Union previously has placed a large local union under supervision
after alleging the local was under the influence of organized crime. In 1995,
LIUNA filed a complaint for trusteeship against Local Union 210, in Buffalo,
New York. See Complaint, In
re Local Union 210, IHO 95-35T (Dec. 18, 1995). That complaint resulted in
a settlement agreement between Local Union 210 and the GEB Attorney, under
which the parties agreed to a supervision by an outside supervisor, which is
still in effect. See Order, In re Local Union 210 (Feb. 26,
1996); Settlement Agreement (Feb. 22, 1996).
The
District Council argues in its post-hearing brief that imposition of a
trusteeship is improper because LIUNA's motivating purpose is reprisal against
District Council President/Business Manager Bruno Caruso for running against
Arthur A. Coia in 1996 for the office of LIUNA General President. See
Post Hearing Memorandum for District Council ("CDC Brief") at 109.
The GEB Attorney, however, has alleged and proved by a preponderance of the
evidence that a trusteeship is warranted for more than one proper purpose as
alleged in the Complaint. A union need establish only one proper purpose to
impose a trusteeship. Mason Tenders District Council v. LIUNA, 884 F.
Supp. 823, 836 (S.D.N.Y. 1995). Here, as set forth below in Section VI, the GEB
Attorney has established that a trusteeship is necessary to rid the District
Council of the influence of organized crime, restore democratic procedures, and
otherwise carry out the legitimate business of the union.
Evidentiary
Considerations
The District Council argues in its post-hearing brief that it was denied a full and fair hearing because the GEB Attorney failed to produce prior statements of its witnesses in a procedure similar to that required by the Jencks Act, 18 U.S.C. § 3500. See CDC Brief at 10001. The Jencks Act, however, applies only to criminal proceedings brought by the United States. 18 U.S.C. § 3500(a). The United States Department of Justice is not a party to this proceeding, and no federal or state action is implicated.
It is well
established that a trusteeship hearing "need not include all of the
formalities of judicial proceeding." Becker v. Industrial Union of
Marine and Shipbuilding Workers of America, AFL-CIO, 900 F.2d 761, 770 (4th
Cir. 1990). Moreover, in labor arbitrations such as this, there is no right to
discovery as in a formal civil case or even an administrative hearing. Hardy
v. International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths,
Forgers, and Helpers, 682 F. Supp. 1323, 1328-29 (E.D. Pa. 1988); In re
Local Union 210, IHO Order and Memorandum (Jan. 23, 1996). In an analogous
matter, a federal appeals court has held that Procedural Due Process concepts
applicable to criminal cases do not apply to union disciplinary proceedings. See
Senese & Talerico, 941 F.2d at 1296-98.
The
District Council notes that a trusteeship is proper only to correct "an
existing cause," not past improprieties. CDC Brief at 7. The District
Council emphasizes that much of the GEB Attorney's proof involves events that
occurred before 1987, and that imposition of a trusteeship is improper because
the GEB Attorney submitted insufficient proof of current Chicago Outfit
influence over the District Council. Contrary to the District Council's
assertions, however, the GEB Attorney offered sufficient competent evidence to
establish the Chicago Outfit's substantial presence on the District Council
today. See infra, Section VI, ¶¶ 36-195.
Evidence
regarding events that occurred in the 1970s through the late 1980s, while not
determinative, does have probative value. First, the duration and quality of
the contacts over the years between current members of the District Council and
known Chicago Outfit figures is evidence of an improper association with
organized crime. Senese & Talerico, 745 F. Supp. at 918; Fallacara,
supra. Second, the 25-year pattern of undemocratic procedures, in which
several of the current District Council officers with organized crime ties have
played a role, is evidence that the Chicago Outfit is embedded in the District
Council to this day. See infra, Section VI, ¶¶ 197-224.
Once established, the strong influence of organized crime does not undergo a
sea change and suddenly disappear of its own volition. 1996 Judiciary
Hearings at 37-39, 71 (statements of Moody).
The IHO,
like all labor arbitrators, must base his decision on reliable evidence. As is
the practice and custom of labor arbitrators, the IHO must engage in a thorough
review of what is probative and reliable. The fact that a document or certain
testimony admitted during the proceeding does not guarantee that, after the
close of the record, it will be deemed probative.
Certain criteria will be followed in this evaluation process.
Reliable
hearsay evidence is admissible in labor arbitrations. Associated Cleaning
Consultants and International Brotherhood of Printing and Allied Trades Local
327, 94 LA 1246 (1990); In the Matter of Joseph P. Crincoli, IHO
Order and Memorandum, 97-04D (Oct. 27,1997); Elkouri and Elkouri, How
Arbitration Works (4th ed. 1994). Hearsay evidence has been admitted
regularly in union disciplinary proceedings arising under the Teamsters Consent
Decree. Cimino, 964 F.2d at 1312; Senese & Talerico, 941 F.2d
at 1297. The test is whether the evidence is reliable. Senese & Talerico,
941 F.2d at 1298 (citing Richardson v. Perales, 402 U.S. 389, 402
(1971).
In Cimino,
964 F.2d at 1312, the court gave evidentiary weight to hearsay declarations of
three LCN members that were related by an agent of the Federal Bureau of
Investigation ("FBI"). The
court used a number of factors to evaluate the reliability of the statements.
The court noted that the statements corroborated each other in crucial
respects, the reports painted a consistent picture of the relationship of the
individuals, and the statements matched the FBI agent's declaration in the same
subject matter. The court held that these declarations constituted relevant
evidence that a reasonable mind might accept on the subject of association with
organized crime. Id.
In a LIUNA
trusteeship hearing, the same reliability criteria for hearsay apply as in a
disciplinary hearing; however, in some particular circumstances, information
from a confidential informant related by a witness is also admissible. See
Crincoli, supra. The
information must be related by a current or former law enforcement
professional, and the informant must be qualified as reliable by a recognized
method for testing reliability. Id. (discussing the difference between
reliable testimony from a qualified informant and testimony from a witness who
merely refuses to be named).
Contrary to
the District Council's assertion that the GEB Attorney was required to disclose
the identities of the confidential sources, maintaining the secrecy of
informants’ identities is appropriate under these circumstances. Here, the GEB
Attorney witness, a former agent of the FBI, qualified each confidential
informant using accepted standards, requiring that each be a proven, reliable
witness who has inside information about organized crime. Tr. 232. These
circumstances are distinguishable from those of Crincoli, supra,
where the witness merely summarized the testimony of several unidentified
witnesses without demonstrating their reliability.
Academic Opinion
Evidence
During the
Trusteeship Hearing both parties called as a witness a labor law professor. Tr.
1848-939, 4343-423. The witnesses' credentials were impressive, and the lengthy
testimony of each was interesting. In the end, the professors' testimony did
not advance either party's position and was not helpful.
Credibility of Certain
Witnesses
The GEB
Attorney called, among others, John O'Rourke, Thomas Bohling, John Dineen,
Robert Pecoraro, Gene Scaramella, Ronald M. Fino, Robert Cooley, Charles
Francis Bills, and Michael Corbitt. The GEB Attorney also relied upon
statements of Ken Eto, a former high-ranking Chicago Outfit associate who
became a government witness after a failed attempt on his life. Their
backgrounds require comment for a better understanding of their testimony.
John
O'Rourke served with the FBI for more than 25 years. Tr. 219-21. From 1973
through 1995, O'Rourke worked in the FBI Chicago office investigating organized
crime. Id. After retiring from
the FBI in 1995, O'Rourke spent 18 months as an inspector in the Cook County
Sheriffs Office, assigned to the FBI task force primarily engaged in
investigating organized crime in Chicago. Id. O'Rourke testified in this
proceeding in the capacity of an expert in criminal investigations and
organized crime matters. This technique has been accepted in similar union
disciplinary matters. See e.g., Senese, 745 F. Supp. at
914-15.
In his
investigation, O'Rourke used tested and accepted investigative techniques to
verify the credibility of the informants whose information he related. Tr.
231-32. O'Rourke related information and hearsay statements of eight named
individuals and 11 others he defined as reliable, confidential informants. Tr.
287-333. Before concluding that an individual named in the Complaint was an associate
or made member of the Chicago Outfit, O'Rourke required the independent
statement of two reliable witnesses who themselves were mob associates. Tr.
231. When O'Rourke used information from confidential informants to corroborate
statements of named witnesses, he relied upon no fewer than five confidential
informants. See infra ¶¶ 50, 70, 90, 146, 170, and 189. This
corroboration renders O'Rourke's conclusions reliable.
I find that O'Rourke is a qualified witness, expert in criminal investigations and organized crime matters, and his testimony, in conformance with accepted investigative techniques, is reliable.
O'Rourke
related information given to him by eight named individuals, all of whom, with
the exception of one, have cooperated with federal authorities. It is
appropriate that their background and experience be examined at this point.
Joseph
Granata is a member of the Cicero Crew[4]
and the son of Frank Granata Sr., a Chicago Outfit member who operated
the Galewood Funeral Home. Tr. 289. Granata's brother, Frank Granata Jr., also
is a member of the Chicago Outfit. Id. Granata became a cooperating
witness for the FBI and wore a recording device during conversations with
narcotics dealers and individuals involved in murder for hire. Tr. 289-90.
O'Rourke spoke to Granata as recently as July 14, 1997. Tr. 289-91. Granata's
information has been verified independently and has been found to be reliable
by O'Rourke and other law enforcement agents.
James Peter
"Duke" Basile was a collector and enforcer for the Cicero Crew and
worked with Jerry Scarpelli, Tony Borsellino, Butch Petrocelli, Michael Sarno,
and several other members of the Crew. Tr. 294. Basile agreed to cooperate with the FBI in an undercover capacity
for two years between 1986-88, and wore a concealed body recorder at meetings
with Chicago Outfit members. Tr. 294-95. Basile gave inside information on
robberies and murders. His information
was always reliable as he was in a position to observe the criminal activities
of the Chicago Outfit. O'Rourke spoke to Basile about Chicago Outfit activities
in 1996. Tr. 294-95. Basile's
information has been verified independently and has been found to be reliable
by O'Rourke and other law enforcement agents.
Leonard
Patrick was an associate of the Chicago Outfit for more than 50 years. Tr. 297.
At the direction of mob boss Sam Giancana, Patrick reported to Gus Alex. Id.
Patrick was a conduit for major bookmakers on the West Side, and then later on
the North Side of Chicago. Tr. 297-98.
In 1991,
Patrick was indicted, along with Mario Rainone, Gus Alex, and Nicholas Gio, on
RICO charges alleging acts of arson, intimidation, and extortion by the North
Side Crew. Tr. 298; GEB Ex. 19 (United States v. Rainone, 32 F.3d 1203
(7th Cir. 1994)). In that case, Patrick pled guilty and testified against his
co-defendants. Rainone, 32 F.3d at 1205. Patrick thereafter testified in
other criminal cases in which convictions were obtained, including the
prosecution of Sam Carlisi and more than a dozen co-defendants.[5]
Tr. 292, 298. O'Rourke debriefed Patrick extensively during 1990-91 about
the structure of organized crime in Chicago. Tr. 297-300. This information has
been verified independently and has been found to be reliable by O'Rourke and
other law enforcement agents.
James
LaValley was a collector and enforcer for the Chicago Outfit. Tr. 291. He
worked for Leonard Patrick, Mario Rainone and Gus Alex; his partner was Nick
Gio. Id. LaValley was indicted after an FBI investigation and agreed to
cooperate. Tr. 291-92. He provided information and testified in several trials,
including Rainone, supra. LaValley also testified in the Sam
Carlisi trial. Tr. 292. Beginning in 1988 and as recently as September 1996, LaValley
provided O'Rourke with information on the structure of organized crime in
Chicago. Tr. 292-9 This information has been verified independently and has
been found to be reliable by O'Rourk and other law enforcement agents. Id.
Umberto
Fillippi was born in Italy and came to live in Chicago. Tr. 301. Fillippi was a
professional waiter and a friend of Sal Mango (also known as Sal Tennini). Id. Fillippi became Mango's confidant, driver,
cook, and helper when Mango became terminally ill with cancer. Id. While in Mango's company, Fillippi saw Mango
meet with many Chicago organized crime figures. Fillippi provided information
on organized crime issues as recently as 1996. Id. This information has been verified
independently and has been found to be reliable by O'Rourke and other law
enforcement agents.
Richard
Mara is a former resident of the 26th Street neighborhood and ex-member of the
26th Street Crew. Tr. 262. Mara was a burglar, armed robber, and cartage thief
who operated in the 1960s and 1970s. Id. Mara testified in a theft from
interstate shipment case in federal court and was a cooperating witness in an
investigation in which he was a subject. Tr. 263. Because of Mara's cooperation
and testimony, all of the defendants entered guilty pleas before trial. Id. Mara entered the witness protection program
in the early 1980s. Tr. 263-64. Mara's information has been verified
independently and has been found to be reliable by O'Rourke and other law
enforcement agents.
William
Wemette was a member of the North Side Crew, operated a pornographic bookstore,
and was an FBI informant for approximately 20 years. Tr. 302. He collected
street tax payments for the Chicago Outfit and later testified at the federal
trial of Frank Schweihs and Mandy Daddino, both of whom were convicted and
given prison sentences. Tr. 302-03. In 1994-95, O'Rourke interviewed Wemette
about organized crime activities. Id. Wemette's information has been
verified independently and has been found to be reliable by O'Rourke and other
law enforcement agents.
Sam Louis
is a former Chicago police officer (1971-81) and former business agent for the
HEREIU. Tr. 303-05, 413-15. In 1997, O'Rourke interviewed Louis about organized
crime activities and testified in this proceeding about statements Louis
allegedly made during those interviews. Id.
The
District Council called Louis as a witness to contradict O'Rourke's testimony
that Louis told him that James DiForti and John Matassa Jr. were made members
of the Chicago Outfit. Louis denied having made the statement to O'Rourke. Tr.
4336-40. The District Council argues that this testimony casts doubt on all of
O'Rourke's testimony regarding informants. Louis's denial does not carry such
weight. Louis admitted to speaking with O'Rourke on at least two occasions, and
admitted to knowing Matassa, but denied knowing or hearing of DiForti. Tr.
4338-39. Louis's direct and cross-examinations indicate he was a reluctant
witness who was evasive, and at times purposely unresponsive. Tr. 4320-43. His
cross examination testimony, though evasive, indicates he knew many of the
respondents in this matter, and that he was in a position to know whether they
were associates of organized crime. Tr. 4323-40. I find that Louis did make the statements to O'Rourke, but
repudiated them when his identity was revealed.
Although I do not find that Louis's denials undercut the testimony of O'Rourke, I will not rely upon Louis's testimony at the hearing or any of the statements attributed to Louis by O'Rourke.
William
Jahoda was a Chicago Outfit member in the 1980s in charge of the gambling
operations for the Cicero Crew. Tr. 305.
Jahoda then became a cooperating witness, was debriefed extensively by
the Internal Revenue Service and FBI, and wore a concealed body recorder. Id. Jahoda testified against Rocco Infelise and
approximately 20 members of the Cicero Crew, all of whom were found guilty. United
States v. Infelise, 835 F. Supp. 1466 (N.D. 111. 1993). Jahoda has provided information to the FBI
about the structure of the Chicago Outfit. Tr. 307. Jahoda provided information
to O'Rourke on September 9, 1996. Tr. 301-07. This information has been
verified independently and has been found to be reliable by O'Rourke and other
law enforcement agents.
O'Rourke
testified about 11 confidential informants, upon which he relied to form some
of his opinions contained in his testimony. As seen below, O'Rourke did not use
consecutive numbers to identify the confidential informants.
Confidential Informant 1 is a Chicago Outfit associate who
had conversations over a period of 40 years with Anthony Accardo, Joseph
Aiuppa, and Joseph Ferriola[6]
and who provided information to O'Rourke from 1988 to 1996. Tr. 318-20.
Confidential
Informant 2 is a mob associate and former burglar and jewel thief who knew Tony
Spilotro and Joseph Lombardo Sr. Tr. 321. This informant has provided
information to O'Rourke from 1968 to the present. Tr. 321-22.
Confidential
Informant 5 is a mob associate who was affiliated with the Cicero Crew, has
worked in the past as a burglar, armed robber, and enforcer and is currently
employed by the City of Chicago. Tr. 322. He provided information to O'Rourke
before and after O'Rourke left the FBI. Id.
Confidential
Informant 6 is a mob associate who worked in the 26th Street/Chinatown Crew's
gambling operations, worked in connection with the Cicero Crew, and was in
regular contact with Michael Sarno, Sal Gruttadauro, Duke Basile, and Jerry
Scarpelli. Tr. 323. O'Rourke testified that Confidential Informant 6 has
provided information from 1985 to the present. Id. His information was
used to obtain search warrants and Title III wiretaps which resulted in the
arrest and conviction of mob members in the Infelise case. Id.
Confidential
Informant 7 is a mob associate who worked for Cook County and was in contact
with Al Pilotto, Al Tocco, Jerry Scarpelli, Jerry Scalise, Duke Basile,
Salvatore "Solly" Delaurantis, and Rocco Infelise over a number of
years. Tr. 324-25. This informant's information was used to support search
warrants and Title III affidavits over a number of years and led to the arrest
of several Cicero Crew members. Id.
Confidential
Informant 9 provided O'Rourke with information only for this proceeding.
O'Rourke stated that Confidential Informant 9 is from the 26th Street/Chinatown
area and has limited knowledge of organized crime. Tr. 325.
Confidential
Informant 10 is an organized crime associate familiar with the North Side Crew
and has been an FBI informant since the late 1970s. Tr. 325-26. Confidential
Informant 10 provided information to O'Rourke only for this proceeding. Id.
Confidential
Informant 11, although not a mob associate, has personal knowledge of organized
crime activity through his direct contacts with several organized crime
members. Tr. 326-27. He provided accurate information to the FBI over a period
of years. Id. He provided information to O'Rourke before and after
O'Rourke left the FBI.
Confidential Informant 12 is a mob associate who was
affiliated with the Elmwood Park Crew. Tr. 327. He was in personal contact with
Chicago Outfit members Marco D'Amico, John DiFronzo, and Peter DiFronzo, among
others. Id. He provided information to O'Rourke before and after
O'Rourke left the FBI. Id.
Confidential
Informant 13 is an associate of the Elmwood Park Crew who provided information
to both O'Rourke and the FBI in the 1990s and as recently as July 1997. Tr.
328.
Confidential
Informant 14 had contact with high-ranking Chicago Outfit members such as
Joseph Aiuppa and Tony Spilotro. Id.
He provided information to O'Rourke before and after O'Rourke left the
FBI.
Thomas
Bohling has been commanding officer of the Cook County Sheriff 's Office for
approximately three years, involved in, among other duties, organized crime
cases. Tr. 531-32. Prior to his
position with Cook County, Bohling spent approximately 20 years with the
Chicago Police Department investigating prostitution, obscenity and gambling,
and acquired an understanding of the influence of organized crime in those
areas. Tr. 532-37. In particular, Bohling's work in pornography investigations
brought him into contact with Michael Glitta and Tommy Matassa. Tr. 538-42.
John Dineen
was a member of the Chicago Police Department for 38 years, from 1959 until his
retirement in 1997. Tr. 674. In 1963, Dineen was promoted to detective and
worked in the homicide section on the West Side of Chicago, and in 1967, began
work in the intelligence division where he concentrated on organized
crime-related matters. Tr. 675-76. In that capacity, Dineen worked as a street
officer conducting surveillance of suspected Chicago Outfit associates. Id.
Dineen also worked in the gambling squad in the late 1960s and early 1970s. Tr.
676-77. From 1979 through 1993, Dineen was president of the Fraternal Order of
Police, and during that period of time did not participate in regular police
duties. Tr. 677-78. In 1993, he returned to intelligence work, which involved conducting
surveillance of known or suspected organized crime figures, coordinating his
efforts with the Cook County Sheriff's Office and the FBI. Tr. 677-79.
Robert Pecoraro became an FBI special agent in 1970. Tr.
621-22. He spent his first 18 months in Louisville, Kentucky, and Oklahoma
City, transferred to New York City in 1972, and then moved to Chicago in 1978,
where he worked until his retirement in 1993. Tr. 622. Beginning in 1972,
Pecoraro worked as an agent in the organized crime unit, first in New York, and
then in Chicago. Id. From 1978
until approximately 1981, Pecoraro was assigned to the downtown Chicago
organized crime squad, and then covered the south suburbs until his retirement
in 1993. Tr. 622-23.
Pecoraro's
work included various RICO and other cases leading to convictions of organized
crime figures. Tr. 622. For the past two years, Pecoraro has been employed by a
major insurance carrier in its special investigations unit. Tr. 616.
Gene
Scaramella has been in law enforcement for 16 years. Tr. 757-58. From 1981-86
he served in the Arlington Heights Police Department, and then served in the
Chicago Police Department as a patrol officer from 1986-91. Tr. 758. In 1991,
Scaramella became a detective in the organized crime division where he
conducted surveillance of suspected and reputed Chicago Outfit members. Tr.
758-59. At the request of the commander of the intelligence division and with
the help of Dineen, over an 18-month period Scaramella updated all of the police
records concerning the Chicago Outfit. Tr. 755.
As a result
of his police work and his project compiling Chicago Outfit members, Scaramella
has an in-depth understanding of the Chicago Outfit. Tr. 762-63.
Currently
Scaramella is a detective for the Cook County Sheriff s Office in the special
operations unit and is also the director of the Office of Organized Crime
Research. Tr. 757. He is an adjunct professor in the criminal justice
department of the University of Illinois. Id.
Ronald M.
Fino became a LIUNA member in 1964 and was Business Manager of Local Union 210,
Buffalo, from 1973 until early 1988. Tr. 1411-13; see also 1996
Judiciary Hearings at 80-81. In the 1970s, Fino's father was the acting
boss of the Buffalo crime family. Fino, became an FBI informant in 1971, and
provided the FBI with information regarding Local 210 for 18 years, including
the entire time he was Local 210 Business Manager. Tr. 1410-12.
Fino testified extensively in In the Matter of Bifulco,
IHO 96-48D(1-28), a LIUNA disciplinary hearing involving twenty-eight LIUNA
members. The decision in that matter is pending. Fino's position in LIUNA Local
210 and his access to the highest-ranking members of the Buffalo mob, as well
as other families in other cities, including Chicago, give his testimony
credibility in this matter. His information has been verified independently and
has been found to be reliable.
Robert
Cooley testified extensively during the Trusteeship Hearing regarding the
structure of organized crime, First Ward politics, and the involvement of
several of the District Council members in organized crime matters. Cooley was
a Chicago police officer from 1962 to 1970. Tr. 825. Over five years while
working as a full-time police officer, Cooley attended law school at night and
became a licensed Illinois attorney in 1970. Tr. 846-48. Cooley is now in the
federal witness protection program. Tr. 821.
Cooley's
position as a police officer in the 1960s and 1970s, and then as an attorney
during the 1970s and 1980s, gave him access into the world of organized crime,
and made him privy to a wealth of information. Cooley took bribes as a police
officer. Tr. 824-25. During his legal career, Cooley worked for various members
of the Chicago Outfit and, from the beginning of his practice,
"fixed" court cases. Tr. 1066-67. In the mid-1970s, Cooley's law
partner was John D'Arco Jr.[7]
Tr. 857-58.
Cooley's
initial contact with the Department of Justice lends credibility to his
testimony. Cooley had no compelling reason to contact the Department of Justice
and confess his illegal activities. Tr. 1016-20. When Cooley began cooperating
with the Department of Justice, he was not the subject of any investigations,
warrants, or criminal complaints. Id. Although the District Council
suggests that an outstanding gambling debt was the motivation for Cooley's
cooperation, I find that Cooley's debt was, relatively speaking, not
significant enough to be considered a catalyst for Cooley's actions. Tr. 1093-96.
Most
important, Cooley's long-term cooperation with the Department of Justice,
beginning in 1986, led to many federal convictions. Tr. 806-19. Cooley
surreptitiously recorded conversations for the FBI for approximately three
years in a project known as "Greylord." Id. More than one hundred (100) tape recordings
were made. Tr. 819. He cooperated at great personal risk. He testified in seven
trials regarding corruption in the court system and organized crime in the City
of Chicago. In each case, all of the defendants were convicted.[8] Tr. 806-19.
Based on
the foregoing, I find that Cooley's position as a police officer, and later as
a lawyer, the manner of his cooperation, and the quality and quantity of his
testimony in several major federal trials qualify Cooley as a credible witness.
His information has been verified independently and has been found to be
reliable.
Charles
Francis "Guy" Bills was born and raised in Chicago. Tr. 1106-07.
Bills's father, Charles "Duckie" Bills, was a bookmaker associated
with the 26th Street Crew. Tr. 1119-21. For years Duckie Bills was a friend of
Gus Alex, who ran organized crime activities in the Chicago Loop area and was
influential in Chicago's First Ward in the 1970s. Tr. 1121-23. Bills's father was
shot and wounded by Angelo LaPietra, later the head of the 26th Street Crew,
after a fistfight with LaPietra. Tr. 1233-34, 1280-8 1.
Bills has a
long history of criminal activity. In the early 1970s, Bills served time for
trafficking in stolen goods. Tr. 1116. He was also convicted of transporting
stolen automobiles over state lines and was later convicted of a RICO offense.
Tr. 1117-18.
Bills was
associated with the 26th Street Crew. Tr. 1110, 1236. Bills made juice loans
for LaPietra, collected street tax from car thieves and chop shop operators,
and was involved in gambling.[9]
Tr. 1242-45. Bills testified that
he owned, and stole cars for a chop shop. Tr. 1115
Bills was
prepared to testify in United States v. Frank Calabrese Sr., but
Calabrese pled guilty. GEB Ex. 24. In Spring 1997, Bills provided testimony
against Philip J. Fiori, who was found guilty. Tr. 1186, 1191. Bills's
information has been verified independently and has been found to be reliable.
Michael
Corbitt was a Willow Springs, Illinois, police officer beginning in 1965, and
police chief from 1973 through 1981. Corbitt Tr. 8-10. After leaving the police
force, Corbitt worked as an investigator for the Clerk of Court of Cook County
until 1987, when he was indicted on RICO charges related to his participation
in organized crime chop shop and bookmaking operations. Corbitt Tr. 5-9. He was
convicted on those charges in 1988. He was convicted in a second prosecution on
RICO conspiracy charges related to his part in hiding the body of Diane
Masters, the wife of a politically influential south suburban businessman,
after she was murdered.[10] Corbitt Tr. 5-6. At the time he testified
before the IHO at a federal correctional facility, Corbitt had served 10 years
of a 20 year sentence. He will be eligible for parole in less than two years.
Corbitt Tr. 7.
Corbitt admittedly associated with the Chicago Outfit from
his first day on the job with the Willow Springs police force. Corbitt Tr. 11.
Corbitt testified that Sam Giancana, head of the Chicago Outfit at the time,
secured Corbitt's job as a policeman, and said "[w]ell, if it works out
good, just remember your friends, just remember who put you in this
position." Corbitt Tr. 19-20.
Corbitt
testified at the Trusteeship Hearing that he agreed to cooperate with the GEB
Attorney's investigation because he believes that the Chicago Outfit has turned
against him. Corbitt Tr. 115-16. Although the GEB Attorney has offered to
inform Corbitt's sentencing Judge of Corbitt's cooperation in this matter, it
is unlikely that the GEB Attorney's offer influenced Corbitt's testimony,
inasmuch as Corbitt already has served most of his sentence.
Corbitt's
testimony detailed his associations with and activities of several individuals
affiliated with the Chicago Outfit, including Sam Giancana, Vincent Solano, Al
Pilotto, Pat Marcy, Fred Roti, and Bruno Caruso. His testimony is corroborated
by other evidence of record and by other witnesses in material aspects. Based
on Corbitt's detailed testimony, close association with the mob and the
corroboration of his testimony, I find that Corbitt's testimony in this matter
is credible.
Ken Eto was
long recognized by law enforcement authorities as a high-ranking mob associate
in the North Side Crew. Tr. 365. On February 10, 1983, Eto was shot three times
in the back of the head by John Gattuso and Jasper Campise. GEB Ex. 4, Tab
"Ken Eto Testimony"; GEB Ex. 73. He survived the shooting and became
a government informant, providing the FBI with details about the inner-workings
and structure of the North Side Crew. Id.
Eto told authorities that he, Gattuso, and Campise had been on their way to meet Vincent Solano for dinner when Gattuso and Campise shot him. Eto testified that he believed that Solan ordered Eto killed because Solano suspected Eto was cooperating with the government. GEB Ex. 73. On July 14, 1983, the mangled bodies of Campise and Gattuso were found in the trunk of a car in Naperville, Illinois. GEB Ex. 73.
Eto has
provided testimony in several trials and before the President's Commission on
Organized Crime ("PCOC"). See GEB Ex. 4, Tab "Ken Eto
Testimony." Based upon his former position in the organized crime
hierarchy, and the manner in which he began to cooperate, I find his testimony
is credible. His information has been verified independently and has been found
to be reliable.
1.
La Cosa
Nostra is a tightly structured criminal organization which operates in various
cities throughout the United States. It is in the business of crime for a
profit.
2.
The LCN of
today had its origins in secret societies formed in Sicily and southern Italy
in the late 19th Century. See Symposium at 440. Similar secret
societies emerged in the United States toward the end of the 19th Century. Id.
These societies were the antecedents of the present LCN. Id. at 441.
3.
In the late
1930s, one criminal group attempted to form an alliance of all the groups
involved in bootlegging. See id. at 441 (citing D. Cressey, Theft
of the Nation: The Structure and Operations of Organized Crime in America
(1969)). A power struggle erupted
between Sicilian and non-Sicilian groups. The struggle led to a violent,
private vendetta known as the Castellammarese War in New York. Id.
4.
The war
began in April 1931 and lasted through September 1931. During September 1931,
in a three-day period, forty (40) Italian or Sicilian organized crime leaders
were murdered. Id. at 442. The structure of the Italian-Sicilian
organized crime organization in the United States today was created by a peace
treaty ending the Castellammarese War. The resulting confederation became known
as LCN. Id.
5.
La Cosa
Nostra is comprised of groups of individuals organized into entities called
families.
6.
A number of
such families are located across the country, including New York City, Buffalo,
and Milwaukee. In Chicago, the group is not known as a family, but the Chicago
Outfit.
7.
The
hierarchy of the leadership of each LCN family consists of the head (the
"boss"), his assistant (the "underboss"), and an advisor
(the "consigliere"). The boss, underboss, and consigliere oversee the
activities of LCN members and their associates.
8.
La Cosa
Nostra members within the family operate in small groups called
"crews" which are headed by men called "capos" or
"crew bosses."
9.
A
"made member" has undergone an initiation ceremony conducted with
specific rituals and formalities. Tr. 185, 226; Fallacara at 4, ¶¶
12-13. Members share in the profits of the organization and have the ability to
operate their own crews. Tr. 226.
10. A mob
"associate" is one who works on behalf of made members and
facilitates mob activities. Associates either run day-to-day illegal operations
for the mob or are in legitimate business under the control and influence of
organized crime. Tr. 227-28; Fallacara at 3, ¶ 11.
11. As used in this opinion,
"street tax" is extortionate money paid to the Chicago Outfit by
individuals involved in illegal activities. Tr. 233. A "chop shop" is
a salvage yard where stolen cars are dismantled and their parts sold in an
illegal market. Id. A "juice loan" is an illegal loan made at
extraordinary rates, the interest on which is collected weekly with threats of
physical harm for non-payment. Tr. 234-35.
Structure of the Chicago
Outfit[11]
12. The Chicago Outfit is
headed by a boss who oversees the activities of a number of crews defined
geographically. Each crew's territory is fairly well defined, although the
areas have expanded, contracted or overlapped somewhat over the years.
13. Sam Giancana was the
boss of the Chicago Outfit from approximately 1956 until 1968, when he fled to
Mexico after being jailed for a year for refusing to testify before a federal
grand jury during his leadership of the Chicago Outfit. Giancana was described
by one writer as "the most powerful archcriminal in the world" when
he was the head of the Chicago Outfit. See Ovid Dernaris, Captive
City at 4 (1969). Giancana returned to Chicago in 1974, but was killed
shortly thereafter when he attempted to return to power in the Chicago Outfit.
14. In the mid to late 1970s, Anthony Accardo headed the Chicago Outfit, aided by two underbosses, Joseph Aiuppa and Jack Cerone Sr. GEB Ex. 4, Tab "Ken Eto Testimony"; 185, 686. In the mid 1980s, Accardo retired and Aiuppa succeeded him. Tr. 266. In 1986, Aiuppa and Cerone were sentenced to prison after being convicted of interstate gambling charges; at the time, Joseph Ferriola briefly took Aiuppa's place as head of the Chicago Outfit. GEB Ex. 167 at 81.
15. After Aiuppa was
convicted and Ferriola became ill, Sam Carlisi took over as head of the Chicago
Outfit, aided by underboss James Marcello. Tr. 261, 720, 1560; see also
GEB Ex. 49. James's brother, Michael Marcello, assisted James with gambling
operations. Tr. 721. In 1992, Carlisi and James Marcello were indicted on RICO
charges arising out of their illegal gambling, juice loan, and street tax
collection activities. GEB Ex. 27. Both were convicted. James Marcello is still
in prison; Carlisi died there. Carlisi was the brother of Roy Carlisi, who was,
until his death, a high-ranking member of the Buffalo LCN. Tr. 1507.
16. Historically, the Cicero
Crew has encompassed Cicero and the western suburbs of Chicago. Tr. 236. In the
mid to late1970s, Joseph Ferriola became the boss of the Cicero Crew. See
Infelise, 835 F. Supp. at 1478. After Ferriola became debilitated with
heart disease, Rocco Infelise became crew boss. GEB Ex. 49; Infelise,
835 F. Supp. at 1480. Members or associates have included Joe Granata, Duke
Basile, William Jahoda, and Solly Delaurantis. Granata and Jahoda have been
government informants and supplied information to O'Rourke for this proceeding.
Delaurantis, an enforcer, is serving a prison sentence for a RICO conviction.
Tr. 696.
17. The Elmwood Park Crew is
based in a nearby western suburb of Chicago. John DiFronzo was the crew boss as
of 1988. GEB Ex. 49. Other members or associates have included Marco D'Amico,
Frank Granata (brother of Cicero Crew associate Joseph Granata), Roland
Borelli, and Joseph Spadavecchio. Tr. 256, 289, 328, 417, 696, 830, 852,
997-98, 1182. D'Amico referred
mob-related clients to Robert Cooley when Cooley was a practicing lawyer. Tr.
848-50. D'Amico was second-in-command until his guilty plea to RICO charges
arising in 1994 from his organized crime activities. GEB Ex. 31. Spadavecchio,
an Elmwood Park Crew supervisor, was an associate of Donald Angelini and
Dominick Cortina, both of whom were convicted of gambling offenses. Tr. 696. In
1995, Borelli pled guilty to bookmaking offenses involving D'Amico, Robert
Abbinanti, Cooley, and others. GEB Ex. 22, 23.
18. The Grand Avenue Crew
encompasses a neighborhood in western Chicago near North Grand Avenue. Joseph
Lombardo Sr. was the boss of the Crew in the mid to late1970s until he was
convicted on federal charges and sentenced to prison. Tr. 261, 341; GEB Ex. 49.
Other members or associates included Tony Spilotro, William Wernette, and
Joseph "Caesar" DiVarco. Tr. 268, 274.
19. The Rush Street or North
Side Crew encompasses the Near North Side of Chicago. Dominic DiBella was boss
of the Crew until his death, when Vincent Solano took over, continuing as boss
through the mid to late 1980s. Tr. 336; Corbitt Tr. 71; GEB Ex. 49. Solano was
also the President of LIUNA Local 1 and a member of the District Council. At
the time, members and associates of the North Side Crew included Caesar
DiVarco, Joe Arnold, Jaspar Campise, Johnny Gattuso, and Michael Glitta. Tr.
274, 538.
20. Apparently, there is
some overlap in the jurisdiction of the Grand Avenue and North Side crews. For
example, Wernette and DiVarco have been identified with both crews. Tr. 274,
302.
21. In the 1980s, Michael
Glitta was the street boss of the North Side Crew working under Solano and
collecting street tax for the Chicago Outfit from pornographic bookstores. Tr.
538, 709; GEB Ex 5 at 177; GEB Ex. 98 at 2.
22. Beginning in
approximately the 1970s, John Matassa became affiliated with the Chicago Outfit
and the North Side Crew; he became a made member by at least 1989. Tr. 397,
418-19. At the time, Sal Gruttadauro and Frank "Babe" DeMonte, also
LIUNA officials, were members. Corbitt Tr. 98. Ken Eto was an associate of the
North Side Crew until 1983, when Campise and Gattuso shot him in a murder
attempt believed to have been ordered by Solano. GEB Ex. 4.
23. The evidence set forth
below establishes that in 1992, Matassa, a current officer of the District
Council, succeeded Solano as the boss of the North Side Crew as well as
President/Business Manager of Local 2, and two appointed positions affiliated
with the District Council. See infra ¶¶
172-92,
216.
24. The South Suburban or
Chicago Heights Crew encompasses Chicago Heights, Calumet City, and parts of
Lake County, Indiana, areas southeast of Chicago. Tr. 259. In the mid to
late1970s, Al Pilotto was the boss of the Chicago Heights Crew. Pilotto also was
President of Local 5 and a District Council member until his conviction, along
with James Caporale, another LIUNA member, on RICO charges related to a LIUNA
employee benefit plan. See infra ¶¶ 73-82.
25. After his incarceration
in 1981, Pilotto was succeeded as boss of the Chicago Heights Crew by Al Tocco.
GEB Ex. 49. Other members or associates of the Chicago Heights Crew included
Nicholas Guzzino, an employee of a District Council affiliated benefit fund,
who was a crew boss under Tocco. Tr. 767, 1688; Corbitt Tr. 97. Dominick
Palermo was a member of Local 5 and also was affiliated with the Crew. Tr. 626,
1199. Dominick's brother, Michael Palermo, has been a LIUNA member since 1982,
was a District Council Delegate until 1995, and currently is Vice President of
Local 1001.
26. The South Side or
Chinatown or 26th Street Crew (hereinafter the "26th Street Crew")
encompasses the old Italian neighborhood at 26th Street and Princeton Avenue in
southwest Chicago. GEB Ex. 49. Beginning in the 1950s, Bruno Roti headed the
26th Street Crew and was succeeded by Frank "Skids" Caruso
("Skids Caruso"), father of Frank "Toots" Caruso
("Toots Caruso"). In the 1970s or early 1980s, Angelo LaPietra became
the boss of the 26th Street Crew. Tr. 431-32. Other members or associates
included James LaPietra, Richard Mara, and Guy Bills. Joseph LaMantia was an
enforcer under Skids Caruso. Tr. 271.
27. In the 1980s, members or
associates of the 26th Street Crew included Ronnie Jarrett, Frank Calabrese,
Angelo Imperato, Anthony Imperato, James Cordovano, Jerry Scalise, and Jerry
Scarpelli. Corbitt Tr. 101. Currently, John Monteleone is the boss of the 26th
Street Crew and also runs gambling operations on the Chicago's west side. Tr.
432, 722. Alphonso Tournabene, Sam Carlisi's cousin, is an underboss to
Monteleone. Tr. 721-22.
28. James DiForti,
associated with the Chicago Outfit at least since 1988, and currently
affiliated with both the Cicero Crew and the 26th Street Crew, was an officer
of Local 5 and a District Council Delegate until his arrest for murder in July
1997. Tr. 513, 728, 768; Corbitt Tr. 102.
29. The evidence set forth
below establishes that Bruno Caruso and Leo Caruso, current officers of the
District Council, are either members or associates of the 26th Street Crew. See
infra ¶¶ 53-72.
30. To understand the
relationship among the District Council, Chicago politics, and organized crime,
one must be aware of the significance of Chicago's First Ward and its leaders.
The Chicago Outfit, and the 26th Street Crew in particular, was long aligned
with Chicago's First Ward. In the 1950s through 1962, during his tenure as
First Ward Alderman, John D'Arco Sr. was closely associated with Chicago Outfit
members such as Anthony Accardo and Gus Alex. See Captive City
at 151-52; Tr. 432.
31. In 1965, a grand jury
investigating organized crime subpoenaed several Chicago politicians, D'Arco
Sr., and Pat Marcy, an officer of the First Ward Democratic Organization, who
refused to testify. See Captive City at 160. Marcy remained an
influential political figure until his indictment in 1991 on RICO charges
related to his role in fixing criminal trials, civil cases, zoning changes, and
judicial appointments. GEB Ex. 40.
32. In the 1970s, the First
Ward maintained a reserved table at Counselor's Row, a restaurant across the
street from the Chicago City Hall and downstairs from the First Ward offices.
Tr. 953. The restaurant was a known meeting place for Chicago politicians,
union officials, and mob figures. At the First Ward table, D'Arco Sr., Marcy,
and Alderman Fred Roti conducted business. Tr. 954-55.
33. The testimony of Robert
Cooley and Michael Corbitt details the operations of the First Ward officials
at Counselor's Row. In a hallway, D'Arco Sr., Marcy, and Roti had private
conversations with various individuals. Tr. 955, 959. Over the years, several
individuals associated with the Chicago Outfit and LIUNA were often seen at the
First Ward table and also meeting in the hallway with Marcy and Roti. Tr.
975-82. Two of the current District Council officers, Bruno Caruso and Leo
Caruso, were often seen at Counselor's Row having private discussions with
Marcy. Tr. 976-78.
34. As an attorney, Cooley
began to represent organized crime figures in criminal matters in the 1970s.
Cooley fixed mob-related bench trials, often working with Marcy, who arranged
payments to judges. Tr. 887-89.
35. In the mid 1980s, Cooley
began cooperating with the government in an investigation of the First Ward's
connection to organized crime and fixing cases, which became known as
"Greylord." Tr. 806-19. His cooperation resulted in several
convictions, including that of Alderman Fred Roti.
Allegations
of Specific Individuals' Ties to Organized Crime (Complaint ¶¶ 7-8)
36. The Complaint alleges
that several former and current members of the District Council are associates
or members of the Chicago Outfit and that several of them have been arrested,
indicted and/or convicted of organized crime-related offenses. Complaint ¶¶ 7-8. Definitions of
"associate" and "member" are set forth herein supra
¶¶ 9-10.
37. The Complaint also alleges that several individuals who are relatives of organized crime figures have positions with the District Council or benefit funds affiliated with the District Council. Complaint ¶ 7. A son or near relative of an organized crime figure should not be penalized for the activities of his family member, unless he has been an active participant with the relative in prohibited activities.
38. In the context of this
proceeding, one may question why the sons or nephews of organized crime figures
are drawn to this union, especially if they have little or no prior experience in
the labor movement. A legitimate inference may be drawn, based upon the actual
organized crime associates and the sons and nephews of organized crime figures
in the District Council, that this union is a safe haven for the employment of
relatives of organized crime figures.
39. Frank "Toots"
Caruso was President of Local 1006 from at least 1986 to the early 1990s, was a
Delegate to the District Council from at least 1982 through April 1995, and
served as the Sergeant at Arms for the District Council from at least 1983
until April 1995. GEB Ex. 117; 116 at D001170, D002694. He was a Trustee to the
District Council Laborers' Pension Fund ("Pension Fund") from 1984 to
1994 and Trustee of another affiliated benefit fund from 1990 to 1994. GEB Ex.
126-34.
40. Toots Caruso is the son
of Skids Caruso, his uncle is former Alderman Fred Roti, and his brother is
Bruno Caruso, as described below. Tr. 431-32, 680-82, 1138-40, 1286; GEB Ex. 5
at 179. There is substantial testimony from John O'Rourke, John Dineen, Robert
Cooley, and Guy Bills that Skids Caruso was the boss of the 26th Street Crew
from the 1950s to the 1970s. Tr. 431-32, 680-82, 1138-40, 1286; GEB Ex. 5 at
179. Upon Skids Caruso's death in the early 1980s, Angelo LaPietra became the
boss of the 26th Street Crew. Tr. 271, 431-39.
41. Cooley was introduced to
Toots Caruso through Robert Abbinanti, a member of the Chicago Outfit. Tr.
867-68. Cooley said that Toots Caruso and Abbinanti had a close relationship.
Tr. 874. Cooley stated that Toots Caruso often sat at Pat Marcy's table at
Counselor's Row. Cooley said that he, Toots Caruso, Abbinanti, Marco D'Amico,
and Richie Catazone, as a group, frequented various Rush Street establishments.
Tr. 872-78. Catazone told Cooley that at two of the restaurants (which were
named at the Trusteeship Hearing) the group received free drinks. Tr. 875-76.
Cooley observed that Toots Caruso and Catazone were treated with great
deference by the staff at these two establishments.
42. Bills had a close
relationship with Toots Caruso as a teenager and in his early twenties. Tr.
1130-37. Bills testified that, in the early 1960s, he and Toots Caruso
socialized and were participants in some bar fights as the result of their
socializing. Tr. 1146-47. Bills also testified that the two participated in
various illegal activities together for a short period of time. Tr. 1142-44.
43. Bills testified that, on
four occasions, from 1979 until the early 1980s, Toots Caruso brought four
"give-up" cars[12]
to Bills's chop shop to be
dismantled. At the time, Bills worked for the 26th Street Crew. Tr. 1142-44.
44. Bills testified that he,
Toots Caruso, and Bills's cousin burglarized a dress shop on Wentworth Avenue.
Tr. 1138-39, 1164-65. The day after the burglary, Toots Caruso informed Bills
that his father, Skids Caruso, ordered them to return the goods. Id.
Bills then returned dresses to Toots Caruso's home. Id. Skids Caruso
warned Bills he was not to do any illegal job in the neighborhood without first
speaking to him. Id.
45. According to Bills, in
the 1970s, Toots Caruso obtained a job with the City of Chicago through Gus
Alex. Tr. 1155. Alex was not affiliated with the City. Id. Toots Caruso
also obtained a LIUNA position through LaPietra. Tr. 1156. LaPietra was not
affiliated with LIUNA. Id.
46. Richard Mara informed
O'Rourke that he had been involved in an armed robbery of a wealthy Chinese
businessman, Peter Pons, which had been set up and participated in by Toots
Caruso. Tr. 467-68.
47. Mara advised the FBI
that Toots Caruso and Larry Pusiteri owned the Hungry Hound Restaurant, located
at 300 W. 26th Street, and that various LCN-related activities occurred there.
GEB Ex. 73 at 28-50. Mara said that Toots Caruso set up robberies with his associates
via a telephone at the restaurant, and that Pusiteri and Toots Caruso operated
a juice loan and bookmaking operation from the restaurant. Id. Larry
Pusiteri also informed Cooley that Toots Caruso had an ownership interest in
the Hungry Hound dice game. Tr. 905-07.
48. Michael Corbitt
corroborated Mara's statement that Toots Caruso was involved in the juice loan
business. Corbitt Tr. 92. Also, he saw Toots Caruso with LaPietra, John
Monteleone, and several other Chicago Outfit figures at a restaurant named at
the hearing. Id.
49. Toots Caruso was
publicly identified as a member of the Chicago Outfit and 26th Street Crew in a
1983 Senate hearing on organized crime. GEB Ex. 5 at Tab "Chart."
50. O'Rourke testified that Toots
Caruso was a member of the 26th Street Crew base on information provided by
Mara, Joseph Granata, James LaValley, Duke Basile, William Jahoda, and eight
confidential informants. Tr. 468-90.
51. On April 10, 1995, Toots
Caruso received a notice of deposition from the GEB Attorney in relation to the
investigation of the District Council and, on April 11, 1995, resigned his
position as District Council Delegate and Sergeant at Arms, as well as all
positions at Local 1006. GEB Ex. 190-91. At the same time, however, Toots
Caruso retained his position as Associate Director of the District Council
Pension Fund. GEB Ex. 130 at D002573.
52. There is proof by a
preponderance of the evidence that Toots Caruso is at least an associate of the
Chicago Outfit.
53. Bruno Caruso is
currently the President/Business Manager of the District Council and the
President/Business Manager of Local Union 1001. Bruno Caruso has been a
Delegate to the District Council since November 1982, serves as a Trustee of
the Laborers' Welfare Fund, and is the Chairman of the Laborers' Political
League.[13]
See Tr. 3487; GEB Ex. 116 at D001015; GEB Ex. 132.
54. Bruno Caruso is the son
of Skids Caruso, brother of Toots Caruso and cousin of Leo Caruso. Tr. 431-32,
680-82, 1138-40, 1145, 1286.
55. Robert Cooley stated
that he was very well acquainted with the 26th Street Crew. Tr. 938-39. On
several occasions, Cooley had conversations with "Dirge" Imperato, an
associate of the Crew, in which Imperato implied that both Bruno and Leo Caruso
ranked above Imperato in the Crew's hierarchy. Tr. 922-23.
56. In 1993, Joseph LaMantia
entered a guilty plea to federal extortion charges. In the plea colloquy,
LaMantia admitted that he was a supervisor of the 26th Street Crew, heading up
the illegal gambling operations and collecting gambling debts, juice loans, and
street tax. GEB Ex. 74 at 4. Guy Bills said he often saw Bruno Caruso with
LaMantia. Tr. 1154-55.
57. Cooley attended the
Hungry Hound dice game run by Larry Pusiteri approximately a dozen times over a
period of three years beginning in 1978-79, and saw Bruno Caruso there with
Pusiteri and Richie Catazone. Tr. 939-50, 1154. Bills corroborated this
information, saying he often saw Bruno Caruso with other Chicago Outfit
associates, including Pusiteri, LaMantia, Donny Catazone, "Captain D"
DiFazio, and Leo Caruso, at different Chicago restaurants and the Hungry Hound
dice game. Tr. 1153-55, 1170-71, 1275.
58. Michael Corbitt considered himself a "very close associate" of Pat Marcy and, over a period of six to seven years, he delivered large sums of money from the Chicago Outfit to Marcy as part of the First Ward machine at Counselor's Row. Corbit