from THE NEW YORK TIMES:

September 4, 2000, Monday
         Metropolitan Desk  

   Mob's Shadow Still Falls Across Building Projects


   By WILLIAM K. RASHBAUM
   Several months ago, the city suspended more than $80 million in contracts
with a construction company that has a key role in closing the Fresh Kills
landfill so that officials could investigate allegations that the company
had ties to organized crime.

   The city's action against the company, Interstate Industrial Corporation,
which has also done work on the city's new $71 million stadium complex on
Staten Island, attracted little attention. Yet it was hardly an isolated
case. Last year, for example, two successive companies hired by the city to
supply concrete for the renovation of City Hall Park were thrown off the job
in two months because of similar suspicions. And during construction of his
high-rise apartment complex on Manhattan's West Side in 1997, Donald J.
Trump faced problems because one contractor -- who was indicted in 1987 in a
mob-related bribery case -- provided substandard concrete that had to be
replaced. Another company on the job was owned by a man whom the F.B.I. had
long identified as a mob associate.

   Despite state and federal racketeering cases over the last two decades
that broke organized crime's monopoly in the construction business in the
New York area, the mob has remained entrenched in the business, feeding off
public works projects and private developments, law enforcement officials
and industry experts say.

   ''There are still many industries, including the construction industry,
that suffer from its insidious influence,'' said the Manhattan district
attorney, Robert M. Morgenthau, who has investigated construction industry
corruption since the 1980's. ''The effect of the mob's continued involvement
in these industries is to impose a mob tax, which raises prices and makes
New York City a less attractive place to do business.''

   In the case of Interstate, a Sanitation Department spokesman said the
investigation would have no effect on the scheduled closing of the landfill
in December. But industry experts said rebidding the work could add tens of
millions of dollars to the $500 million cost of closing Fresh Kills.

   In March, the city halted work on $31 million in Department of Sanitation
contracts with Interstate, which is based in Clifton, N.J. At least $30
million more in work that had been awarded to the company but not yet
started was also suspended, city officials said. The company was hired to
cap portions of the landfill and provide dirt for Fresh Kills. The city also
suspended a $24 million contract with the company for road construction in
Brooklyn.

   Through its lawyer, Harold J. Ruvoldt Jr., Interstate adamantly denied
that the company or its owners, Frank and Peter DiTommaso, had ties to
organized crime. The DiTommasos are brothers. Mr. Ruvoldt said Interstate
was cooperating with the city and expected to be cleared -- with the
contracts reinstated.

   Prosecutors and investigators said it was impossible to precisely gauge
the extent of organized crime's continued role in the construction industry,
given the shadowy nature of its influence. Christopher Prather, who oversees
the organized-crime task force for State Attorney General Eliot L. Spitzer,
said corrupt labor unions or individual union officials were still central
to organized crime's ability to make money in construction, a $29 billion
industry that accounts for more than 7 percent of New York City's economy.

   Common schemes generally involve bribing union officials so that a
company can hire cheaper nonunion workers and forgo expensive payments into
pension, benefit and health and welfare funds. The schemes violate
prevailing-wage laws, which require contractors on public works projects and
in some cases large private projects to pay workers a set wage.

   ''There are bound to be a few takers'' when a contractor can drastically
reduce his payroll costs through bribery, Mr. Prather said. ''Once you get a
few takers, it puts pressure on an industry. Pretty soon, people who want to
play by the rules finally can't compete and it becomes a race to the bottom
as far as who is going to cheat the most.''

   Violations of the prevailing-wage laws are at the heart of an extensive
labor-racketeering indictment expected to be unsealed in Manhattan soon that
names about three dozen union officials, contractors and reputed mobsters,
according to an investigator.

   The indictment is based on a long investigation by Mr. Morgenthau's
office and the New York Police Department's Organized Crime Investigative
Division. It involves three different mob families in construction projects
around the city, said the investigator, who spoke on the condition of
anonymity.

   Among those charged in the case will be Steven Crea, 53, the acting boss
of the Lucchese crime family, who the authorities have said played a direct
role in many of the family's construction rackets, and two of his senior
aides, Dominick Truscello, 66, and Joseph Tangorra, 51, who is known as Joey
Flowers. Police detectives have dubbed the case Operation Textbook because
they see it as a primer on labor racketeering.

   The indictment outlines organized crime's involvement in the construction
of city schools in the Bronx and Queens and in projects built for the
Metropolitan Transportation Authority and the city's Department of
Transportation, the investigator said. In addition to the role of the
Lucchese group, one of New York's five Mafia families, the indictment
implicates associates of the DeCavalcante family, a smaller mob group based
in New Jersey, and the Bonanno crime family.

   A lawyer for Mr. Tangorra, who is already under indictment in Brooklyn on
federal extortion charges, said yesterday that his client had never been
convicted of a crime and denied that he had any times to organized crime.

   Robert Leighton, who represents Mr. Truscello, would not discuss the
pending charges, and Mr. Crea's lawyer could not be reached yesterday.

   Prosecutors and industry analysts said that although it was difficult to
estimate the cost of mob infiltration of the construction business, the
price could be measured in some tangible ways. They pointed to the reduced
number of school seats available in neighborhoods where organized-crime
figures have hijacked school construction projects and the effect that
higher building costs can have on the construction of public and low-cost
housing.

   In 1990, the city set up its Vendex database to screen contractors and
suppliers in an effort to weed out those with histories of poor performance,
corruption or ties to organized crime. But in many cases, such problem
companies slip through. In the case of Interstate, there was nothing in the
database that would have raised any flags.

   Interstate's problems began in October 1996, when the company bought a
transfer station for dirt and construction debris, Metropolitan Stone
Corporation, which government documents say was owned by one reputed member
of the Gambino crime family and controlled by another, Edward Garafola, 62,
a larger-than-life figure in the construction industry for more than two
decades. Mr. Garafola is married to the sister of Salvatore Gravano, the
Mafia turncoat known as Sammy the Bull, whose testimony sent John J. Gotti
to prison for life. Prosecutors say Mr. Garafola took over many of Mr.
Gravano's construction rackets when Mr. Gravano became a government witness.


   After the purchase, the city's Trade Waste Commission began reviewing
Interstate's license application for the transfer station and subsequently
opened a criminal investigation with federal prosecutors in Brooklyn,
investigators said.

   Meanwhile, the authorities in New Jersey, who had been reviewing the
company's application for a license to do construction work at casinos in
Atlantic City, issued a report raising questions about possible ties to
organized crime.

   Although the report did not recommend denying the license, it called for
a hearing to explore its concerns. Three days later, an official with
Interstate, Lawrence Ray, 40, was indicted on stock fraud charges by federal
prosecutors in Brooklyn after an unrelated investigation. Mr. Garafola was
charged with extortion as a result of the same investigation.

   The pressure intensified, and within weeks, the city suspended its
contracts with Interstate. Mr. Ruvoldt contended that Interstate was being
unfairly singled out, saying it was helping the city clean up the transfer
station by buying Metropolitan Stone. ''The DiTommasos are getting tarred
because they came to the table as good guys and bought out a transfer
station, helping the city accomplish its goal, and this is simply unfair,''
he said.

   A spokeswoman for Mayor Rudolph W. Giuliani, Sunny Mindel, said, ''At
this point, these are allegations which are being investigated, and final
decisions will be made upon completion of the investigation.''

   Since the early 1990's, Interstate has done hundreds of millions of
dollars' worth of work in major private and public projects, including
concrete work on the stadium complex in Staten Island. Michael G. Carey, the
president of the New York City Economic Development Corporation, said
Interstate had nearly completed $7 million in work at the complex. Mr. Carey
said that at the time the company was selected, there was no reason to
question its fitness.

   The DiTommaso brothers are the sons of a New York City police officer,
Anthony DiTomasso, who in the 1950's started L&T Contracting with his
brother, a city firefighter, according to documents the brothers filed with
the city. Among the jobs that Interstate has completed, the documents said,
are the control tower at Kennedy Airport, the new federal office building in
Lower Manhattan and the Martin Luther King Jr. Federal Courthouse in Newark.


   Like the city, New York State has spent millions on construction projects
that have involved companies with ties to organized crime. In one case,
Worth Construction Company was awarded a $20 million state contract to help
build a hospital wing at the Bedford Hills Correctional Facility, a state
prison for women in Westchester County. The company, which also did $14.4
million in work at the Triborough Bridge for the Metropolitan Transportation
Authority, is owned by Joseph Pontoriero, 60, who law enforcement
authorities contend is tied to the Genovese crime family.

   Caroline Quartararo, a spokeswoman for the State Division of Criminal
Justice Services, would not discuss how the contract was awarded to Worth.

   Mr. Pontoriero was listed as an unindicted co-conspirator in the
so-called commission case, a key prosecution in 1986 that helped break the
mob's stranglehold on the concrete industry. That trial, a 10-week glimpse
at gangland lore, established the existence of a Mafia politburo, known as
the commission, and resulted in the conviction of the city's top crime
leaders.

   He was a regular visitor to the Palma Boys Social Club in East Harlem in
the 1980's, where, according to the F.B.I., he often met and talked with
Anthony Salerno, then the crime family's boss.

   In 1998, Worth, based in Bethel, Conn., was disqualified by the New York
City School Construction Authority's inspector general from bidding on city
school jobs because the company refused to answer questions about
accusations that Mr. Pontoriero and his company were controlled by organized
crime. The company did not return telephone calls seeking comment, but in
the past it has denied any links to organized crime.



         Copyright 2000 The New York Times Company