A Corrupt Union Escapes Justice
By RAEL JEAN ISAAC
MONDAY, JULY 27, 1998
When the Justice Department entered into an "operating
agreement" with LIUNA, the mob-ridden Laborers International Union
of North America, Attorney General Janet Reno hailed the agreement as a
new model for racket-busting. Under the February 1995 agreement, the union would clean its
own house over three years, and if the Justice Department was not satisfied with the
union's progress, it would have authority to impose a previously agreed-upon consent
decree and take over as it had the Teamsters. Laborers President Arthur A. Coia, described
in a Justice Department memo as a "mob puppet," would remain in place,
supervising the cleanup.
But although Justice professes itself satisfied with progress and
has extended the arrangement until next January, there is evidence that there is less to
the internal reform than meets the eye. Justice had best return to the
drawing board while the threat of the consent decree still gives it clout over the union.
Raised Eyebrows
The agreement raised eyebrows at the outset, for it created the
appearance that Mr. Coia's wooing of Bill and Hillary Clinton had paid off. LIUNA was one
of the largest donors to the Democratic Party, and Mr. Coia contributed the maximum
possible to Mr. Clinton's legal defense fund. What's more, Mr. Coia was an outspoken
political ally, even breaking ranks with the entire labor movement to
campaign for the North American Free Trade Agreement. Financial and political support
brought social access, from breakfasts at the White House with Mrs. Clinton to
trips on Air Force One with the president. A House Judiciary subcommittee documented more
than 120 such contacts.
The Justice Department's draft complaint under the Racketeer
Influenced Corrupt Organizations law demanded Mr. Coia's ouster and declared that LIUNA
has been "continuously and systematically controlled, exploited and dominated in the
conduct of its affairs by the Cosa Nostra." The complaint arrived on Mr. Coia's desk
the same day as the president's thank-you note for the gift of a specially made golf club.
When the Justice Department abruptly backed down on its demand for
Mr. Coia's ouster, the appearance of White House interference led to July
1996 House hearings. But those hearings backfired on the Republicans. Justice Department
officials stoutly denied that any pressure had been brought to bear. Rather, they said,
.Justice had been given an attractive offer: Never before had a union offered to purge
itself of mobsters at its own expense, backing this up by hiring a team of former federal
prosecutors and FBI agents, with no one, Mr. Coia included, off limits for investigation.
Last Nov. 6 Robert D. Luskin, LIUNA's attorney
who is acting as chief prosecutor of corruption within the union, announced that he was
finally instituting corruption charges against Mr. Coia. But eight months later, union
members do not know what the specific charges are or what has transpired in the secret internal proceedings. Kenneth Boehm of the watchdog National Legal and
Policy Center says that although the team has at its command numerous former FBI field
agents, there have been no in-depth investigations of Coia's activities in Rhode Island,
his home base, or in Connecticut, where Mr. Coia had close ties to Local 230 and the
District Council.
"This isn't a reform process,"
says the business manager of a small local in San Francisco. "It's a retreat until
the government is out of the way."
This shouldn't be surprising. The .Justice Department had claimed
that its decision to allow LIUNA to investigate itself was based not on
Mr. Coia's high-profile friendship with Mr. Clinton but on the credentials of the
investigative team. LIUNA's general counsel, Michael Bearse, later assured Congress that
the union, "by entrusting oversight and enforcement to independent officials of
unquestioned integrity," had ensured that investigations would be conducted
"free from all internal or external political considerations."
But Justice should have seen a glaring conflict of interest at the
outset. For the man who sold Justice on the proposal that saved Mr. Coia's neck was
LIUNA's lawyer, Mr. Luskin. True, earlier in his career he had served as special counsel
to the Justice Department's organized crime section. But was it realistic to expect him to
turn overnight from Mr. Coia's advocate into Mr. Coia's investigator,
while he continued to be paid by the union? A telling early sign suggested that Mr. Luskin
continued to think like a Coia-partisan. In April 1995, U.S. district Judge Emmett G.
Sullivan asked why, given the Justice Department's 212-page draft complaint against Mr.
Coia, he had not been removed. Mr. Luskin's response, according to the Providence
Journal-Bulletin, was that the draft complaint was a government bargaining tool not an accurate depiction of the union and Mr. Coia.
Equally troubling, it turns out that Mr Luskin, at the very time
he was working out the unprecedented agreement between Justice and Mr. Coia, was allegedly
accepting "hot" money, to the tune of $700,000, from Stephen A. Saccoccia, a
Patriarca crime family associate now in prison for money laundering.
Mr. Luskin was representing Saccoccia on appeal from his 1993
sentence of 660 years. Saccoccia's assets were frozen under a court order, and the money
had come to Mr Luskin in the form of gold bars and Swiss wire transfers. Mr.
Luskin settled a case brought by the U.S. attorney's office in Rhode Island, which accused
him of "willful blindness" in accepting these "surreptitious and anonymous
payments." Earlier, a federal judge had shot down Luskin's argument that his
financial arrangements with Saccoccia were protected by attorney-client privilege. Mr
Luskin, claiming he had no idea the money was part of Saccoccia's ill-gotten gains and
calling the government's action "despicable," nonetheless forfeited $245,000.
A second member of the four-man team in charge of LIUNA's
anticorruption campaign has political ties to Mr. Coia's pal the president. W. Neil
Eggleston, who has the role of appeals officer, worked in the Clinton White House
counsel's office when the Whitewater investigation began and now
represents Mr. Clinton in his effort to assert attorney-client privilege in the Monica
Lewinsky investigation. Mr. Eggleston also represents Labor Secretary Alexis Herman, now
the subject of an independent counsel probe into suspected corruption.
While the other two members of the investigative team do not carry
political baggage, it is hard to imagine results embarrassing to the White House surviving
the LIUNA internal appeals process under Mr Eggleston's control. And
given that the Clintons ignored repeated warnings fron both Justice and the FBI to stay
clear of Mr Coia, his ouster would embarrass them.
The effect of the operating agreement so far as been to reinforce
Mr. Coia's power in LIUNA. Overnight he became the champion of "reform," and he
has taken credit for the trusteeships imposed on disrict councils in New York, Chicago and
Buffalo-an unavoidable action, given the detail with which the Justice Department's draft
complaint described the mob's robbery of Laborers' pension and welfare funds in these
councils.
But elsewhere, Laborer rank-and-file reformers
complain that the old pattern of corruption backed by intimidation and violence continues,
with the Luskin team failing to take appropriate action. In July 1997,
53-year-old Steve Manos, vice president of Local 230 in Hartford, Conn., was threatened,
cursed at and beaten when he probed union expenditures at an executive board meeting. Mr.
Manos was wearing a wire; audible on tape are a string of unprintable curses, the sound of
Mr. Manos being slammed against a concrete floor, and the ominous cry "We own you
now!" as he is chased to his car. But although this local had a record of corruption
(the previous business manager is in prison for takng a $500,000 bribe to invest $5
million of union pension funds in a worthless real esate scam), this incident resulted
only in a mild reprimand from Mr. Luskin. On May 4, Mr. Manos testified in a congressional
rearing that "Luskin's actions, in effect, have facilitated the
racketeering activities directed at me."
Severe Head Injuries
Joe Portiss, a member of Local 1089 in Sarnia, Ontario, and his
daughter, Laura, say they have compiled extensive documentation on violations of LIUNA's
ethics code by the local's executive board. Ms. Portiss says the Luskin team has ignored
their complaints. She describes a long patern of intimidation and violence, of which the
worst was a 1983 group assault on her father at a LIUNA meeting, in which he sustained
severe, permanent head injuries. She says she now endures a steady stream of harassment and threats but is prepared to keep up the struggle "no mater how much they scare me-and they do, to be perfectly honest. I am afraid of
them. "
Few Laborers expect Mr. Coia will be gone when the government's
chance to inervene lapses in January. Alex Corns, business manager of a small Hod Carriers
local in San Francisco, has been struggling against corruption in his district council
with scant help from Mr. Luskin's team. Says Mr. Corns: "This isn't a reform process.
It's a retreat until the government is out of the way."
Ms. Isaac writes on public policy issues.