Copyright 1990 Post-Standard, All Rights Reserved.  

The Post-Standard (Syracuse, NY)
January 19, 1990 Friday Metro Edition
SECTION: NEWS; Pg. A1

LENGTH: 3027 words

HEADLINE: HUD-AIDED PROJECT PLAGUED BY LABOR QUESTIONS ILLEGAL ALIENS, LOW PAY ALLEGED

SERIES: SERIES/SPECIAL: LABOR QUESTIONS AT SACKETS HARBOR

BYLINE: BOB SANDERS The Post-Standard

BODY:
The developers of a federally financed project, pushed by U.S. Sen. Alfonse D'Amato's office to create jobs in the depressed North Country, fired their major local contractor and brought in workers from New York City, some of whom were illegal immigrants.

The developers are being investigated by the U.S. Department of Housing and Urban Development for allegedly violating prevailing wage laws and by the U.S. Border Patrol for possible violation of immigration laws.

The workers, mostly of Portuguese origin, were transferred last summer from Westchester County and the Bronx to the site of the $50 million Madison Barracks project in Sackets Harbor, Jefferson County. Some are living rent-free and making more than the local workers they replaced.

That July, one of the developers, Antonio Rodrigues, and his firm, Inner City Drywall, were indicted for bribing downstate union officials, resulting in the termination of all the firm's contracts for New York City.

Inner City is one of three partners in Madison Barracks Corp., a spinoff of Jobco Inc., the Long Island firm that initiated the project. Jobco contributed heavily to D'Amato's campaign and employs the law firm headed by the senator's brother. The third partner, Renata Inc., is from Manhattan.

HUD fronted $6 million for the luxury resort on the shores of Lake Ontario. The plans call for a hotel, marina and yacht club, health club, bridle path and polo grounds, a number of quaint shops, and a mix of newly constructed and renovated housing. The barracks was a headquarters of the U.S. Army during the War of 1812.

The renovated residential units in the Officer's Row portion of the project do not appear to meet HUD's requirements for low- and moderate-income housing.

On Thursday, D'Amato said he was unfamiliar with the problems at the project.

"There may be problems, there may be mismanagement, there may be a whole host of things, but that isn't for our office to assess," he said. "We have no role in operation nor did we have any role in securing funds. If something is wrong, HUD and others should look into it . . . we would join in that call if that's appropriate."

He has steadfastly defended his office's role in backing the project because of the barracks' historic value and the opportunity for economic development in a highly distressed area.

Despite the Fort Drum construction boom, Jefferson County's unemployment rate in November was 8.7 percent, three points above the statewide average.

Sackets Harbor Mayor Vincent Capozzella, like D'Amato, maintains that economic development and historic renovation are the major reasons the project is properly being funded by the federal government.

Capozzella said that although the developers promised to hire local construction workers, he understands Rodrigues' need to bring in some workers from New York City.

"He had some troubles down in New York and his business was dried up in the city, so he had a lot of workers out of work," the mayor said. "He had to use his employees someplace."

According to the indictment, Inner City was involved in a conspiracy with the Genovese organized crime family to bribe union officials for favorable treatment. Charges were dismissed last month because of a procedural error, but prosecutors are considering resubmitting them to a grand jury.

Rodrigues referred most questions to Michael Puntillo, chief executive officer of Jobco, who has repeatedly refused to be interviewed. Instead, Jobco issued statements through Howard Rubenstein, the head of a public relations firm in New York.

"The financial and partnership structures are in the midst of being restructured. All allegations are being reviewed by the appropriate government agencies," Rubenstein said last week. He would not elaborate further.

Rodrigues did say that the only the reason he brought workers up from New York City was "because they were good workers."

Capozzella said he is not upset because most of the North Country workers laid off were not from the village or the town immediately surrounding it, and therefore aren't really local. And the most important jobs -- permanent jobs created by the hotel and other retail jobs -- have yet to be produced, he said.

But several local subcontractors are not so forgiving, claiming they have not been paid by the developers. The contractors, and a number of angry workers, also say they have been intimidated by Inner City's alleged ties with organized crime.

George Walsh, one of 20 laid-off workers who have filed prevailing wage complaints, pointed to a 1984 charge against Rodrigues for attempted murder concerning the shooting by construction workers of members of a community group protesting the lack of minority hiring at a job site in the South Bronx. Rodrigues was acquitted of the charges in 1986, and said the community group was trying to "shake him down."

Walsh said he called off one protest because he feared a similar incident here.

"I didn't want to see anyone hurt," he said.

"There isn't enough work for people in town," he added. "We have to drive to work in the North Country. We don't need to bring them up from New York City. There are enough Americans up here willing to do the job. This is supposed to be about American history."

The developers say preserving history is precisely why the out-of-town workers were brought in.

"The accurate historical preservation of the site is a critical component to the long-term success of the project," said Rubenstein in a statement released last month. "For that reason stonemasons and other craftsmen had been sought to augment the local construction work force."

The augmentation has not been without friction.

Watertown Firm Fired

Sampson Construction of Watertown, the employer of some 40 local workers, was dismissed in the middle of the job in October 1988. Joseph Delaney, one of three Sampson partners who filed for bankruptcy, blamed Jobco for his plight.

"I lost everything but my house," he said.

Donald Sampson, the father of partner Jeff Sampson, could lose his. Sampson borrowed some $50,000 on behalf of his son and two partners against a modest ranch house he built himself 15 years ago.

He is trying to get refinancing, "but if I have to move, I have to move."

Sampson Construction signed a series of contracts, adding up to about $500,000, with Madison Barracks Associates and PRP Construction, in June 1988 to build 120 new housing units financed by federal Urban Development Action Grant funds. But by October, they were off the job.

"They said we were behind," Delaney said. "We were only working three months and finished half the job. I thought we were doing pretty well. He hired half of our people."

Sampson Construction officials claims the developers owe them more than $47,000.

"We were stiffed so bad, we had to stiff everybody else," said Sampson, referring to a three-page list of creditors.

He claimed the firm has not taken legal action against the developers because nobody at Sampson wanted to take on a company with alleged mob connections -- especially one represented by the brother of a U.S. senator.

"Such a big company, with such big money, could squish a small company like ours like an ant," Delaney said.

Capozzella, a strong defender of the project developers, said Sampson Construction was a "gypsy" organization that "just didn't do good work."

Local contractors, many of whom are suing Sampson for breach of contract, said the firm had paid its bills in the past and was not known for poor workmanship. A few said Sampson simply got in over its head.

Jim Jones, the manager of Gypsum Wholesalers Inc. of Watertown, placed the blame for the loss of $12,000 of roofing supplies on Jobco. He said Puntillo ripped up PRP's check to Gypsum, claiming that Sampson should pay it. The firm filed a lien against PRP and is considering legal action, Jones said.

"It left a sour taste in my mouth," he said.

Prevailing Wage Complaints

Contractors aren't the only ones crying foul.

Workers say that neither Sampson nor Madison Barracks Associates paid the prevailing wages required on all federally financed commercial projects.

Sampson says he was unaware that this was a HUD job, despite the fact that HUD regulations are attached to the contracts.

But Madison Barracks Associates was specifically told about prevailing wage rates.

The village sent the developers a notice dated Feb. 13, 1989, requiring them to post prevailing wages on all "commercial jobs and on Old Stone Row" -- the original barracks that is being renovated into a mix of residences and stores.

The notice was signed by James Yuhas and Karen Bassett, two accountants working for the village. A half-year later, while the workers were allegedly being paid below prevailing wage rate, Bassett was working for the developers as project site manager.

Pay stubs from PRP Construction to Walsh, who worked for both Sampson and PRP, show that Walsh, the laid-off Antwerp carpenter, was paid $12 to $14 an hour without benefits. According to February 1989 prevailing wage documents, Walsh should have been paid $16.36 an hour for carpentry, with $3.39 in benefits.

Walsh said prevailing wage notices were not prominently posted around the work site -- he only saw one when he was assigned to remodel the administration office.

Walsh originally complained to the Department of Labor, but HUD, which has first crack at any investigation involving HUD-financed projects, had the probe turned over to its Buffalo office.

So far some 20 workers have filed complaints with HUD, said Buffalo office spokesman Richard Tyksinski. Tyksinski emphasized that enforcing prevailing wage standards on this job is difficult, because certain jobs are covered by the prevailing wage law and certain jobs aren't.

"We have to figure out who did what kind of work on what job," Tyksinski said.

But Walsh said he worked on every job at one time or another, "so somewhere, something ain't right."

Other workers' pay differentials were even greater. Bernard Larkin displayed stubs showing $8.60 for carpentry work in 1988.

And three stonemason tenders were paid $8 to $10 an hour, according to pay stubs. The prevailing wage for laborers, including mason tenders, was $13.18 an hour with $2.70 in benefits.

The tenders worked for Dave Cooper, a subcontractor on the job. Instead of being informed of prevailing wages, Cooper said, "Rodrigues didn't mention anything about HUD financing. Instead, Cooper was asked how much his tenders would be willing to work for.

"I said $8 an hour. Later I learned that they were paying others $20 for the same work," he said.

Jose Malta, a Portuguese immigrant brought up from New York City to work on the project, said the jobs -- and higher pay -- simply went to the better workers.

"Other workers may be less qualified than we," he said. "We come from New York; we have a lot of skills. It's a matter of competition, not discrimination."

Nonsense, said Cooper. "They started sending people who couldn't understand English. Then they sent me a translator who didn't translate. They put this boy in who was never in a backhoe who darn near killed me."

Illegal Immigrants

After the Sampson firing, most of work force was kept on. But gradually, over last summer, Walsh wrote in a complaint with the state Division of Human Rights, "I noted a pattern and practice wherein American workers who were discharged or who resigned were always replaced by persons of Portuguese national origin."

It's unclear how many workers were replaced.

Jobco would not release figures. Rodrigues said that out of 130 workers, only 16 were from New York City. Malta said there were 20 out of 100. Walsh said there were at least 40.

Ronald Colburn, agent in charge of the U.S. Border Patrol in Watertown, said there were at least two dozen foreign nationals, mostly from the New York City area, working on the site. The figure does not include any U.S. citizens from New York City, nor illegal aliens that they did not detect, said Colburn.

Of the 14 cars parked on the construction site in November, nine were traced by The Post-Standard to addresses in the New York City metropolitan area and to owners with Portuguese surnames. Some stayed over the winter and were put up at the barracks rent-free, according to several workers interviewed in their apartments. Walsh said he was paid to move furniture into the workers' apartments.

Now, said Malta, only four or five workers out of the dozen working at the site over the winter are from the New York City area.

While Walsh was fired last fall -- he claims it was because he made a stink about the wage differential -- Cooper contends he was forced out during the summer when his job was canceled and he was assigned to work under the Portuguese.

"These were drywall people. They didn't know about stone work and they were supposed to tell me what to do," Cooper said.

Cooper's tenders -- Dave Taplin, Robert Lewis and James Britten -- all filed complaints with HUD about the alleged violation of discrimination and prevailing wage laws.

Walsh and Cooper suspected that some of the workers were illegal immigrants. When immigration authorities asked to inspect the place, said Walsh, "half the workers disappeared." Some, charged Walsh, were hiding in Rodrigues' office.

But on June 23, the Border Patrol nabbed four alleged illegal immigrants on the site, including Jose Malta's brother, Victor, who was a foreman on the project.

At first patrol agents were told to come back in an hour, said Ronald Colburn, U.S. agent in charge of the Border Patrol in Watertown.

"We removed ourselves to a vantage point and they (the alleged illegal immigrants) practically walked into our agents," he said.

All are out on bail paid by the developers, while awaiting deportation hearings, Colburn said. Jose Malta contends that his brother was legally in the country and that the arrest was in error.

The workers, said Colburn, "told us they were making $20 to $22 an hour. That's unusual. Usually illegals are brought in for lower wages."

Three years ago, the incident would have ended there. But because of the new immigration law, the employer himself could be charged with knowingly harboring the aliens, especially if the firm was involved in the smuggling or forging of any citizen documents.

After reviewing PRP's records, Colburn said, "I think we have a pretty good case." Colburn is in the middle of subpoenaing more records.

A History of Controversy

Both Jobco and Inner City are also targets of separate investigations by HUD's office of inspector general, The Post-Standard learned through a Freedom of Information Act request.

A spokesman at the inspector general's office would not reveal what the investigations were about.

The investigations could be related to a grand jury indictment accusing Inner City's Rodrigues of entering into a conspiracy to bribe officials of the New York City carpenters union. The conspiracy involved Vincent DiNapoli, a member of the Genovese crime family who founded Inner City in 1978, according to the indictment brought by the state Organized Crime Task Force and the Manhattan district attorney's office.

HUD indefinitely barred DiNapoli from all HUD contracts in 1983, following an indictment for labor racketeering. He is serving time in prison for another racketeering conviction. Inner City was also briefly barred from HUD contracts, but was taken off the list after DiNapoli sold off his interest in Inner City to Rodrigues, according to HUD.

But New York City cut all contracts with Inner City after the latest indictment last summer -- the same summer Inner City started transferring workers from New York City to Sackets Harbor. The latest charges were dismissed Dec. 21 because of an error in the judge's instructions to the grand jury, said Colleen Roche, a spokesperson from the Manhattan district attorney's office, but "the judge gave us leave to represent our case to a grand jury, and we are strongly considering doing that."

Rodrigues said the dismissal is an indication of his innocence, and that he has started bidding again on New York City work.

One of Jobco's other major customers besides HUD when it became interested in Madison Barracks was the Rev. Louis Gigante of Sebeco Corp., a non-profit housing development corporation in the Bronx. Gigante is the brother of Vincent Gigante, the Genovese crime boss.

According to a March Village Voice article, "The Priest and the Mob," DiNapoli, despite the ban, secretly participated in one HUD-financed project through Sebeco and Renata Construction Co., a partner in the Sackets Harbor venture.

Inner City recently helped to finance a DiNapoli family mortgage and worked with Renata President Sam Pompa to receive some $19 million of Sebeco contracts through the New York City Housing Authority, according to the Voice.

Rodrigues said he hasn't seen DiNapoli in years.

Pompa was involved with two New York City housing controversies while he was a partner with former New York City Taxi Commissioner Michael Lazar. The two were once the target of the Brooklyn district attorney's probe into the filing of a bogus document to obtain funding from the city housing department. And a city councilwoman once charged that the two rented out apartments in a subsidized housing project to friends, employees and relatives. No charges were filed, although Lazar was later convicted of racketeering and conspiracy charges in a Parking Violations Bureau scandal.

Rodrigues and Pompa were brought into the Madison Barracks project as partners in May 1989, after federal and state funding was secured. Armand D'Amato's law firm incorporated Barracks Development Inc., with Puntillo, Pompa and Rodrigues as the sole shareholders. The new firm replaced Jobco as a partner in Madison Barracks Associates.

"It is my client's intention to include Messrs. Pompa and Rodrigues in the entire development of Madison Barracks," wrote Joseph Mule, an attorney at D'Amato's law firm.