Bitter Fight Reveals Allegations of Corruption in
Laborers' Union
The White House says Hillary Clinton was advised of an
investigation and told to avoid private conversation with the union president.
This story was reported by Journal Bulletin staff writers Dan
Barry, John Mulligan, Mike Stanton, Dean Starkman and John Sullivan, and was written by
Barry and Stanton.
There are problems at headquarters.
The boss has suspended two executives because of suspected ties to
the Mafia. They've sued, alleging that the boss has also been linked to organized crime;
in fact, they said, he was once indicted with a mob kingpin from New England.
The front office here is at the Laborers' International Union, one
of the largest unions in the country. The boss is Arthur A. Coia. Formerly of Providence,
he now moves within America's most powerful circles; even President Clinton
enjoys his counsel.
But Coia and his union brothers are fighting for their
careers.
Their front-office brawling has spilled into open court. It has
brought to public light a swirl of allegations against Coia and other Laborers' executives
- as well as behind-the-scenes negotiations with the Justice Department.
The most stunning document is a draft of a civil
racketeering complaint that Justice officials delivered to the Laborers' Washington
headquarters last November. The draft was unsigned, and never filed by the federal
government in court; it surfaced as an exhibit in a lawsuit sparked by
the internal union struggle.
The draft complaint synopsizes a three-year investigation into the
Laborers'; it portrays the union as hopelessly corrupt, rife with organized crime, and led
by men who illegally -sometimes violently - crushed dissent and skimmed union funds.
The document zeroed in on Coia. According to
court records, the draft said that Coia has "associated with, and been controlled by
and influenced by organized crime figures." The draft also said that he had conspired
as recently as last year to funnel money from upstate New York locals to
the Buffalo Mafia.
The Justice Department was threatening to seek a government
takeover of the union. And it was demanding the ouster of Coia and other union executives.
Three months of negotiations followed. The Justice Department
dropped its demand for Coia's removal. Meanwhile, Coia suspended two vice
presidents accused of having mob connections - including Samuel J. Caivano, a longtime
ally of Coia's from New Jersey.
In February, the Laborers' and the Justice
Department signed an agreement designed to reform the union; both sides trumpeted the pact
as historic in union-government relations. Overseeing the union's cleanup was one of the
draft complaint's original targets: Arthur Coia.
Senior Justice Department officials have declined to explain why
they allowed Coia to remain in charge when their draft said he had
connections to organized crime. But that is exactly what Caivano has been wondering; his
lawyers argue that Coia betrayed union colleagues to curry favor with the government.
"The head man initially targeted by the
government was able to 'trade down' and convince the government to take two
vice-presidents in his stead," Caivano's lawyer argued in court papers.
"Defendant Coia had just struck one of the most delicate and fragile arrangements of
his life."
That Coia remains in charge of the Laborers' also
perplexed a federal judge who recently held a hearing on Caivano's complaint. "Here's
a man, the president of the union, who's accused of being associated with organized crime,
the focus of a 212-page complaint . . . ," U.S. District Court Judge Emmet G.
Sullivan said last month. "Why wasn't Coia removed?"
Robert D. Luskin, the lawyer who is representing the Laborers' in
the negotiations, says that the draft complaint was more of a bargaining tool for the
government to initiate talks than an accurate depiction of the union and Coia. Still, he
acknowledges that some of the Justice Department's concerns about the union
have merit.
Coia, meanwhile, denies any ties to organized crime, and derides
the government's draft complaint as "a history book," "a wish list"
and "window dressing." He also praises the agreement that allows him to remain
as general president, with new powers to foster reform.
"It's the best of times," he says.
Arthur Coia is paid $191,000 a year to oversee a
union with some 770,000 members in the United States and Canada - many of whom clean up
hazardous waste, work on road crews, and toil at construction sites. The dues paid to the
International exceeds $25 million a year.
In representing their interests, the 52-year-old Coia has become a
prominent social and political figure in Washington, and has emerged as
one of President Clinton's strongest supporters.
Coia's union loaned $100,000 to the Clinton
inaugural committee, and ranks among the top 10 contributors to the national Democratic
Party. He co- hosted a $1,500-a-plate fund-raiser that netted $3.5 million for the
Democrats. He pledged $100,000 in Laborers' funds to the U.S. Botanic Garden, which gave
him and his wife entree to an exclusive dinner attended by the Clintons.
Along the way, Coia has gone from a face in the White House crowd
to someone the President calls by first name. The two men share a
passion for golf, memorialized by the exchange of gifts of fancy golf clubs. They have
also developed what Coia calls a "letter-writing friendship."
Coia's letters have pledged support for Mr. Clinton's economic and
health care plans; expressed sympathy on the death of Mr. Clinton's mother; asked for help
with a labor-training project in Mexico; and given thanks for a breakfast meeting with the
President.
The President often responds, sometimes formally, sometimes
personally. In addition, the White House has extended various invitations to Coia: to see
the Pope in Denver; to a reception for the Emperor of Japan; to the
signing of the Israeli-Palestinian peace agreement; to breakfast with the First Lady; to
accompany Mr. Clinton on a campaign trip to Pawtucket.
In a single week last October, Coia sent Mr. Clinton four letters.
In one note, he and his wife thanked the President for a "wonderful evening of dinner
and entertainment at the White House."
"We must especially offer our compliments on your choice of
music for the event, and thoroughly enjoyed seeing a talented saxophone player entertain
the crowd."
Last Nov. 4, Mr. Clinton sent Coia a handwritten
note congratulating the union leader on becoming a grandfather, and thanking him for the
gift of a "gorgeous" golf club crafted by Coia's clubmaker in East Providence.
That same day, Mr. Clinton's Justice Department dropped off the
draft complaint at the Laborers' Washington headquarters that gave the devastating
overview of Coia's union - a union it said had "an aura of criminality and pervasive
lawlessness." Among its allegations:
In the last two decades, more than 80 Laborers'
officials have been convicted of racketeering, bribery, extortion,
usury, income tax evasion - even attempted murder;
The Mafia's dominant organized-crime families - Genovese,
Lucchese, Colombo - have been running or influencing union locals in New York, Chicago,
Cleveland, St. Louis, Buffalo, Florida and New England.
Union leaders have manipulated trusteeships, district councils and
hiring practices to suppress dissent and to maintain a corrupt status quo.
Union leaders have failed to
investigate corruption or to address organized-crime influence, and have "prevented
and inhibited the rank-and-file members from democratic participation."
It said that Vice President Samuel Caivano, a prominent labor
leader in New Jersey, was a Mafia associate who had appointed mob-connected men to oversee
union affairs in New York and New Jersey.
It said that Vice President John Serpico of Illinois was a Mafia
associate whose connections to the Chicago mob had influenced his union activities.
Nor did the draft complaint spare Coia. It resurrected his 1981
indictment - along with his father and New England mob boss Raymond L.S. Patriarca, both
now dead - on racketeering charges. The case was dismissed because the indictment was
filed after the statute of limitations expired.
The draft said that the union president has been associating with
New England crime figures for "a substantial period of time." But it provided no
specifics beyond the 1981 indictment.
The document also said that Coia and others had
recently used "actual and threatened force, violence and fear" to wrest control
of training funds from union locals in upstate New York.
The money in those funds, the document said, would be used to
establish mob-controlled training centers in Buffalo and Albany. Those centers would then
be used to reward mob-connected contractors, provide jobs to Buffalo organized-crime
figures, and pay for "unnecessary or extravagant" travel by union officials and
others.
Further details of the upstate New York allegations
were concealed; prosecutors blacked out more than four pages.
The document called for the removal of Coia, Caivano and other
union executives and the immediate appointment of federal trustees. This step, it said,
would ensure more open elections, correct "financial malpractice," and eliminate
organized-crime influence.
The Justice Department gave Coia's union two
weeks to respond.The Laborers' scrambled to salvage its cherished autonomy.It hired a
former Justice Department lawyer, Robert Luskin, to negotiate with high-ranking Justice
officials.
On Nov. 16, Luskin met with Paul E. Coffey, chief of the Justice
Department's organized crime and racketeering section. Luskin says that Coffey asked
whether Coia was prepared to "step aside" during settlement discussions, since
the union president was personally named in the draft complaint.
But Caivano said in a court affidavit that he
was told Coffey brought up the matter less delicately: "We won't talk to you as long
as Arthur Coia is president."
Luskin says he told Coffey that the request was
inappropriate, and that Coia would not step down. After that, he says, Justice Department
officials never again raised the matter of Coia's resignation - and neither did the union.
"After the first meeting with the government, on Nov. 16, the
terms of that draft complaint were never, never a subject of discussion between us,"
Luskin recalls. "The subjects of discussions were: 'How far can we trust you, why
should we trust you, and what are you prepared to do?' "
In fact, by early December, Coia had his personal lawyers
participating in the negotiations, including Brendan V. Sullivan Jr.,
whose defense of Oliver North during the Irangate hearings had earned him national
prominence.
On Dec. 14, Luskin says, the government proposed a settlement that
called for the removal of Caivano, Serpico, and others - but not Coia. Said Luskin in a
court affidavit: "At no point thereafter was Mr. Coia's status as General President a
subject of discussion or an issue in whether or not the government would
file the draft complaint."
Negotiations continued through December and into January.
On Jan. 4, president Coia informed his executive board of the
Justice Department investigation that was threatening the union's future. Caivano charges
in court records that Coia had not mentioned it earlier because "he was trying to
strike a deal to keep his position."
Coia and Luskin encouraged the board members to
endorse a "contract" with the Justice Department that was designed to prevent a
government takeover; it called for various internal reforms.
Caivano says in his court affidavit that he and
Serpico protested, saying that they had not read the document. In addition, they said that
the full membership should have a voice in the decision.
The meeting ended testily, and without a vote.
Two weeks later, the executive board reconvened. It was asked to
approve an ethics code that gave Coia unprecedented enforcement powers, and to adopt new
disciplinary procedures. Both measures passed.
Moments later, Coia suspended the only two
executives to vote against the proposals, Caivano and Serpico, apparently based on the
government's allegations that both men had organized-crime connections.
The suspensions ignited a war of words, waged
through the mail and over fax machines in local Laborers' offices around the country.
Members received copies of the agreement with an urgent message to
read the document: "You will then know how your general president Arthur Coia and the
executive board sold you down the river."
Coia countered with a "special notice": "The bottom
line is clear: The General Executive Board and I are working with, not for, the Federal
Government in our effort to make certain this union is operating in the
best interests of our members."
Caivano and Serpico also filed separate lawsuits against the
union. A common charge in their complaints: That Coia had ousted two former allies to
appease the government and to save his own career.
Stephen M. Ryan, one of Caivano's lawyers,
expressed disbelief at a U.S. District Court hearing in February. How could Caivano and
Serpico be removed, he wondered, when the draft complaint portrays Coia as a
"second-generation racketeer."
Ryan said the government's agreement with the union had allowed
Coia to "save his own skin at the expense of other people."
That members of the union's executive board had known each other
for decades made the dispute all the more painful.
For example, the Coia and Caivano families were
once close. As recently as last summer, Coia was effusively praising Caivano at the
dedication of the Samuel Caivano Training Center in Albany, N.Y.
A videotape, filed in court, captures Coia speaking at a
testimonial for Caivano a few years earlier. He called Caivano a close family friend, and
"more than a labor leader. He is truly a quality human being, a humanitarian, someone
I am proud to know and be part of his family."
Caivano declined comment; Coia wouldn't discuss
their relationship.
On Feb. 15, after three months of negotiations, the Justice
Department announced that it had reached an agreement with the Laborers' that was designed
to "rid the union of the influence of organized crime."
The agreement gave the union 90 days to demonstrate its commitment
to internal reform. But the government reserved the right to take over the union at any
time in the next three years if it believes that the union's actions are inadequate.
In addition to Coia, the document was signed by three top Justice
lawyers: Assistant Attorney General Jo Ann Harris; James B. Burns, the U.S. Attorney for
Chicago; and Paul Coffey, the chief of the organized crime and racketeering section.
Craig Oswald, an assistant federal prosecutor in Chicago who
participated in the negotiations, emphatically denies any "sweetheart deal for Arthur
Coia."
"Having participated in the heated negotations
myself - as one of the people who lost my temper more than others would
have - this is not in any way a sellout," Oswald says. Coia "theoretically is
subject to discipline."
Nevertheless, the agreement left Coia in charge. It makes no
mention of the allegations contained in the draft complaint that had been delivered to the
union just three months earlier.
"What happened was an extraordinary placing of trust,"
says Luskin. "It's unlike anything that's happened before. It is the first time that
a union, in an organized, aggressive way, has decided to clean up its own house."
In a statement Friday, Assistant Attorney General Harris - the
Justice Department's number-three official - disclosed that the government and the union
had developed a new, "agreed upon RICO complaint and consent decree" that it
reserves the right to file until February 1998.
Luskin declines to comment on the contents of a new draft
complaint. Although the union had offered advice on its wording, he says, "we do not
acknowledge the truth" of any of its allegations.
Throughout the negotiations, Luskin says, he
instructed Laborers' executives to avoid any appearance of seeking political favor.
There is no indication that the Clinton administration intervened
in behalf of the Laborers' or that the union sought such intervention. However, the
situation reflects the uneasy coexistence of business and politics in Washington, where,
Luskin says, "there's always an assumption of political strings being pulled."
"I made it very clear that it was not going
to happen here," Luskin says. "And so far as I know,
absolutely nobody contacted anybody at a political level. . . . It would be offensive and
it would be death."
Coia agrees. He says that in the weeks after receiving the draft
complaint, he continued to meet with top Clinton administration officials - but only to
discuss labor issues.
And he continued his cordial relationship with President
Clinton.
Days after the Justice Department delivered its ultimatum to the
Laborers', Mr. Clinton sent two notes to Coia. In one letter, which
opened with "Dear Art" and closed with "Bill," the President promised
to share Coia's views on labor with Labor Secretary Robert Reich. In the other, Mr.
Clinton thanked Coia for his support of the Democratic Party.
Coia says he was too embarrassed to mention the Justice Department
case to the top-level federal officials he was dealing with at the time. "Someone
says that the government wants to take over the union that I lead?" says Coia.
"That's an embarrassment to me."
Nor did the White House want to be embarrassed.
Word of the federal investigation of Coia and the Laborers' had
reached the White House Counsel's Office by early February, when First Lady Hillary Rodham
Clinton was preparing for a trip to Florida to speak at a Laborers' convention - at Coia's
invitation.
A White House deputy chief of staff advised the
First Lady to avoid "private meetings or conversations with Mr. Coia" because he
was "currently under investigation," according to a White House statement issued
Friday.
The statement also said:
President Clinton was not told of the Laborers' investigation
because "there was no occasion for which he had a need to know this
information."
Neither the President nor the First Lady was
told of the negotiations between the Justice Department and the Laborers, "including
any decisions regarding Mr. Coia's status as president of the union."
Neither the President nor the First Lady
discussed the investigation with the Justice Department. In addition, the President and
the First Lady "did not discuss the matter with Mr. Coia at any time."
The First Lady kept her engagement with the Laborers' in Miami.
During her visit, a White House spokeswoman says, Hillary Clinton had no
specific discussions with Coia.
But Coia has a different recollection. He says that during an
informal moment, he asked the First Lady if she had heard about his efforts to clean up a
corrupt local in New York. " 'I want you to know that we are, have
taken over that problem in New York City,' " Coia recalls telling her.
The First Lady replied that she wasn't aware of it, and the
conversation shifted to other topics, Coia says. "It was good that she didn't know
anything about it."
Investigations
The Laborers' 90-day "probation" runs out
tomorrow.
Atty. Gen. Janet Reno, who was in Rhode Island on Friday for an
awards ceremony, deferred comment on the Laborers' investigation. "I'll be glad to
check it for you," she said.
Coia and Luskin, meanwhile, believe that they will be allowed to
continue cleaning up the union without government intervention. They point out that the
union has hired former federal prosecutors and ex-FBI agents to investigate nearly 100
allegations of union corruption.
Luskin, who will oversee those investigations, says that he will doggedly pursue any lead he receives. He says, for example, that disciplinary proceedings are moving forward against Serpico and Caivano (Earlier this month U.S. District Court Judge Emmet Sullivan
denied, for now, Caivano's bid to be reinstated on the ground that
the Laborers' official had not exhausted his union appeal.)
But Luskin says he has not begun an investigation of Coia; nor has
he immediate plans to investigate the Justice Department draft complaint's allegations
concerning Coia.
Still, Luskin vows: "Before the end of the day, anything in
which Arthur's name comes up will be looked at . . . to determine whether or not there is
any substantiation."
Coia denies the characterization of him in the document -
including the organized-crime allegations - and says he would welcome a background
investigation. Such openness, he says, is in keeping with the "spirit of alliance and
partnership" that now exists between the government and the union.
"Our process is unfolding," he says.
"A lot of the credit I'd like to take personal responsibility (for) and pat myself on
the back."
Response from the White House
In response to questions from the Journal-Bulletin, the White
House issued a statement on Friday about the Justice Department investigation of the
Laborers' Union. That statement reads in part:
The First Lady accepted an invitation to speak at a Tri-Fund Conference in Florida on Feburary 6, 1995. A few days prior to her departure, Ms. Clinton was informed by the Deputy Chief of Staff that the Justice Department had informed the Counsel's Office that
Mr. Coia was currently under investigation; therefore, she should
not have any private meetings or conversations with Mr. Coia. The President was not
advised of the Justice Department's investigation of Mr. Coia as there was no occasion for
which he had a need to know this information. Neither the President nor the First Lady was
informed about the Department's negotiations in the investigation, including any decisions
regarding Mr. Coia's status as president of the Union.
The Department informed the White House Counsel's
office that Mr. Coia was under investigation. Neither the President nor
the First Lady discussed this matter with the Justice Department.
The President and First Lady did not discuss this matter with Mr.
Coia at any time.
Copyright © 1997 The Providence Journal Company.
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