Copyright 1994 The New York Times Company  
The New York Times
December 28, 1994, Wednesday, Late Edition - Final
SECTION: Section B;   Page 3;   Column 1;   Metropolitan Desk  

LENGTH: 642 words

HEADLINE: Federal Prosecutors Win Court Supervision of Union Once Controlled by Mob

BYLINE:  By RONALD SULLIVAN  

BODY:
The Federal Government yesterday succeeded in gaining tight control of a New York City union representing construction laborers, a union that prosecutors contended was dominated and repeatedly plundered by organized crime.

Mary Jo White, the United States Attorney in Manhattan, said the union, the Mason Tenders District Council of Greater New York, had entered a consent decree under which a court-appointed investigator and monitor would control new elections and the $270 million union benefits fund.

Ms. White said the consent decree "constitutes a significant step forward in the Government's ongoing efforts to eliminate pervasive La Cosa Nostra corruption of construction unions in the New York City area."

"Most importantly," she said, "it establishes the necessary procedures that will permit the honest, hard-working members of this union to have their business conducted in a democratic manner and in their best interests."

The union has 6,000 members in 12 locals.

The decree, entered by Judge Lawrence M. McKenna in the United States District Court in Manhattan, is similar to, but significantly tougher than, arrangements under which Federal prosecutors took control of such unions as the Teamsters, carpenters and painters under the Federal Racketeering Influenced and Corrupt Organizations Act, or RICO.

While scores of corrupt union officials with organized-crime connections have been convicted and sent to prison, Federal prosecutors say their best weapon in cleaning up Mafia-controlled unions has increasingly been civil suits under RICO. The suits have resulted in the banishment of corrupt union officials followed by new union elections.

The Mason Tenders yesterday acknowledged in the consent decree that the union's seven separate trust funds were operated through a pattern of racketeering.

The civil action, filed by the Federal Government in September, charged that Mafia-controlled union officials had wasted or stolen more than $50 million in employee trust fund money and had used the union as a no-show patronage bin for members and associates of various New York crime families.

The Government contended that union officials made "immense profits" by defrauding union trust and benefit funds by a 20-year pattern of kickbacks, skimming, payoffs, bribes, money laundering, waste, luxury purchasing, embezzlements, no show jobs, and shady real estate deals that cost the union $20 million in one deal alone.

Assistant United States Attorney Allan N. Taffet said the decree gives the monitor the power to file lawsuits to recover funds taken from union trust accounts and to determine who will be "suitable" to run in union elections, which prosecutors said have invariably been controlled by organized crime figures.

Both the investigator and monitor will serve four-year terms.

Among the more than 3,000 pages of evidence filed last month by Ms. White's office was testimony by Salvatore (Sammy the Bull) Gravano, the admitted Mafia underboss whose government testimony helped send John Gotti, the head of the Gambino crime family, to prison for life.

Mr. Gravano said the Mafia liked to control unions like the Mason Tenders because they gave it an almost unlimited pool for jobs, many of them no-shows, for deserving mob henchmen.

Government documents that the mob also wanted access to union trust and benefit funds.

Under Frank Lupo, the union president who is cooperating with prosecutors and who admitted he got his position from the Mafia, prosecutors said the Mason Tenders allowed an associate of the Genovese crime family to purchase a building on West 18th Street in Manhattan for $7.5 million, which the union had loaned to the associate. The union then agreed to buy it back a few months later for $24 million, and proceeded to pay an added $6 million for bogus renovations.