Copyright 1988 Chicago Tribune Company  
Chicago Tribune
September 22, 1988 Thursday, SPORTS FINAL EDITION
SECTION: NEWS; Pg. 1; ZONE: C

LENGTH: 840 words

HEADLINE: HEALTH FIRM OWNER FACING INDICTMENTS

BYLINE: By Maurice Possley and John O'Brien.

BODY:
A federal grand jury in Chicago is poised to return indictments Thursday against the owner of two Chicago-based health benefit firms that obtained contracts with labor unions and sought business from such public agencies as the Chicago Transit Authority, the Chicago Board of Education, Cook County and the City of Chicago.

Sources familiar with the investigation said Wednesday that Angelo Commito, a former Chicago resident who lives in California, also will be indicted by grand juries in Baltimore, Atlanta and San Francisco.

Sources said several other people are expected to be charged as part of a nationwide investigation into the health care industry.

The investigation, coordinated through the FBI, the U.S. Department of Labor and the U.S. Justice Department, has attempted to determine if the two firms paid bribes or kickbacks to obtain contracts with government agencies, private employers and major labor unions.

The grand jury in Chicago had subpoenaed documents from officials in Cook County government and the CTA, with whom Commito's firms had been negotiating to obtain contracts for medical and dental care. The search warrants indicated that Commito also had corresponded with the Chicago Board of Education and the City of Chicago concerning such plans.

The investigation, which has used telephone wiretaps and at least one undercover agent posing as a health plan consultant for a private company, became public earlier this year when FBI agents conducted searches of Commito's home in Fairfax, Calif., just outside San Francisco, as well as the offices of his companies.

Dan Webb, former U.S. attorney in Chicago who is representing Commito, declined to comment. U.S. Atty. Anton Valukas and Gary Shapiro, chief of the Justice Department's Organized Crime Strike Force, also refused to comment.

In late January, agents carted out thousands of documents from the offices of the two firms-Labor Health and Benefits Plan and Dental Health Care Alternatives, located at 730 N. Franklin St.

Searches also were conducted at the Oak Park offices of R.P. Fox Associates, which handled computer processing for Commito; at union offices in Hawaii; at private companies and homes in San Francisco and San Diego; as well as the home of Thomas Matassa, an official of Commito's companies.

The searches sought documents relating to contracts with, and sales pitches to, a number of entities, including the CTA and other Chicago public agencies, the United Auto Workers, the International Brotherhood of Teamsters, the Service Employees International Union, Rockwell International and McDonnell Douglas Corp.

Sources familiar with the investigation said that one of the union officials under investigation in Chicago was affiliated with the health and welfare fund of Local 4 of the Service Employees International Union. Sources said the official was suspected of taking a commission from Commito for introducing a health benefits plan that later was accepted for union members. Commito's firms over the years obtained contracts with Service Employees Union Local 1, United Food & Commercial Workers Union Local 100 and the Du Page County Cement Masons.

Among the documents examined by authorities were records relating to a leased car provided for Anthony Bertuca, an assistant corporation counsel for the City of Chicago

The warrants also sought documents relating to a payment to Commito of $25,000 from Alan Cohn, an official of Baltimore-based United Health Care Inc. Authorities suspect the payment was in connection with an optical care plan that was sold to Munford Inc., located in Atlanta.

United Health Care is under investigation in Baltimore. Also under investigation there is a Philadelphia-based official of the U.S. Public Health Service in connection with the approval of a $2.3 million grant to run community health centers in Washington, D.C., sources said.

The government had sought documents concerning John LaFrance, the second- ranking public health official in the region covering the nation's capital, in an attempt to determine whether LaFrance attempted to engineer approval of the grant to a nonprofit organization, Washington Primary Care Network.

The Washington Primary proposal was rejected, one federal official said, because the group was merely a "front" for United Health Care.

Commito, who was convicted in federal court in Chicago in 1979 for failing to file federal income tax returns in 1974 and 1975, became involved in the health-care benefit business in 1972, when he set up a predecessor company, Labor Health Plans Inc.

In 1984, the U.S. Senate's permanent subcommittee on investigations issued a report on the Hotel Employees & Restaurant Employees International Union that took note of the testimony of Jimmy Fratianno, an admitted organized crime figure. Fratianno described how Commito allegedly obtained a health benefits contract with a Columbus, Ohio, labor union that was arranged through a Cleveland organized crime boss.