Copyright 1994 The New York Times Company  
The New York Times
 Papers Diagram Mob's Grip on a Union

 By RICHARD BERNSTEIN 

There was the medical exam union members were urged to take that was supposedly a "result of the fantastic advances in the world of medical research," but was actually part of a fraud, costing many times what a normal physical exam would cost.

There were real-estate deals, one of which involved a building worth about $5 million that was sold to a union pension fund for $24 million.

There were also no-show jobs and kickbacks worth millions of dollars, paid by everybody from construction companies to lawyers and accountants.

There was even a special panel to help three organized-crime families resolve disputes over what they saw as a bedrock part of their illegal operations -- the control of labor unions.

In papers filed in court yesterday, Federal prosecutors described these and other elements of what they called a systematic pattern of fraud and deception used by organized crime to loot tens of millions of dollars from the pension and benefits funds of the Mason Tenders District Council, whose 12 locals supposedly protected the interests of general laborers, brick haulers and asbestos removers at numerous construction sites in the New York metropolitan area.

The court papers are part of a civil lawsuit, filed by Federal prosecutors in September, in which the Government has moved, in essence, to appoint its own trustees for the Mason Tenders District Council. The Government contends that the union has long been controlled by three New York families of La Cosa Nostra, the Genovese, Gambino and Lucchese families, who the government maintains "dictated union leadership and decision making."

Mob influence and profiteering have long plagued labor unions, with the current civil suit against the Mason Tenders only one of several suits filed against union trustees in recent years. But papers in the Mason Tenders case present an unusually detailed picture of how, according to the Government, organized crime infiltrates and controls the unions, why it often makes organized labor the target for criminal activities, and how the specific acts of looting work.

One of the Government's main cooperating witnesses is Frank Lupo, the president of the District Council, who has admitted that the mob picked him for the job and that his father, a member of the Genovese family, and his grandfather had held it before him.

Corruption permeated a wide range of union activities, prosecutors say. The special medical exam, for example, was advertised in the in-house union journal, The Mason Tender. The magazine itself was run by a company whose co-owner, a lawyer for the union, Roger M. Levin, admitted to prosecutors that he paid a regular 10 percent kickback to Mr. Lupo on the value of the magazine contract.

The medical tests, according to the Government, were part of an arrangement with a chiropractor, Tom Fitzgerald, who supposedly developed the special medical exam, known as the B.E.S.T Test, that union members were told "gives you the complete picture of your health, from heart disease to all organs and chemistries of your body." The Government says Mr. Fitzgerald received a total of $4 million in medical service fees, in part by charging as much as $901 for a physical exam. Other doctors had offered exams to union members for $125, the Government contends.

Prosecutors say Mr. Fitzgerald paid a kickback to a District Council delegate -- which, in the delicate legal language of the court papers, "suggests one possible explanation for the Fitzgerald expenditures."

Mr. Fitzgerald's lawyer, Mark Yarkin, called the allegations "ridiculous and totally unfounded."

Telephone messages left with a receptionist at the Mason Tenders District Council office in Manhattan went unanswered.

The medical service involved relatively small amounts of money compared with real-estate transactions, detailed in the Government's papers, that raked tens of millions of dollars from the union's pension and welfare funds.

In the case of one of the transactions, the Government describes how Ronald Miceli, described as an associate of the Genovese family, bought a building on 18th Street in Manhattan in 1990 for $7.5 million. A few months later, he sold it to the union for $24 million.

In addition, the Government papers indicate, the union's trustees authorized nearly $6 million in payments for renovations on the building, which, in turn, provided opportunities for hundreds of thousands of dollars in kickbacks, often for work that was incompetently done. After all of that, an independent appraisal put the value of the building at only $5 million.

Meanwhile, according to the Government's papers, the union's Welfare Fund, which had assets worth about $30 million in 1987, had net assets of less than $15 million by 1992, which caused the union to eliminate several medical services that had earlier been provided to its members.

The Government's papers suggest that the mob and the union maintained a kind of interlocking directorate, giving crime families ultimate control over the union's large trustee funds.

For example, the Government papers include a secretly recorded conversation at a Long Island diner in which James Messera, identified as a "capo," or captain, in the Genovese family, boasted to two confederates how he placed a family associate, Mr. Lupo, at the head of the Mason Tenders District Council, the union's governing board.

"I told Frankie, 'All right, Frankie, you got the No. 1 position there,' " F.B.I. microphones picked up Mr. Messera as saying.

Formally, of course, the union leadership is chosen by its own members, but witnesses interviewed by the prosecutors show how mob figures can manipulate union elections. The key was union control over shop stewards, according to a declaration made by Salvatore "Sammy" Gravano, a former underboss of the Gambino family whose testimony has been crucial to several mob prosecutions in recent years.

The shop stewards, Mr. Gravano told prosecutors, control which union members fill available jobs. They can arrange no-show jobs by clocking in a member who will not actually work, and they can do favors for union members, like allowing them to leave early or arrive late.

"In return for such favors, the shop stewards can demand that union members vote for the Gambino family's choices as officers of the local and delegates to the District Council," Mr. Gravano said.

Why the unions? The Government papers include a statement from Alphonse D'Arco, identified as the former acting boss of the Lucchese family, that specifies why La Cosa Nostra has traditionally aimed at controlling unions.

"Principally," he said, "control over labor unions enables an L.C.N. family to obtain a large amount of revenue through both legitimate and illegitimate activities."

For one thing, Mr. D'Arco said, the unions function as a source of no-show jobs for mob associates. In addition, he said, mob control of unions can provide "a competitive advantage to businesses that are influenced by the L.C.N."

Mr. D'Arco explained: "It can allow L.C.N.-owned businesses to operate without a union contract, while forcing unions to enforce the union contract against non-L.C.N. businesses."

What is striking about the papers filed in the Mason Tenders case is how practically every activity of the union became an opportunity for profit for the mob.

In a declaration made to prosecutors, for example, Mr. Levin, the District Council lawyer, described how his firm paid kickbacks to the Council presidents as far back as the 1960's. Mr. Levin said the kickbacks were started by his father, Harold Levin, who was a founder of the firm where his son later worked.

"On several occasions," the younger Mr. Levin said, "I took sealed envelopes that I believed to contain cash from my father's desk and delivered them to Frank Lupo at the offices of the Mason Tenders District Council on 37th Street in Manhattan."