Providence Journal-Bulletin

Coia To Resign In Deal With Prosecutors, Officials Say

The Laborers' union president, under federal scrutiny for years along with the union, is expected to step down this month.

By JOHN E. MULLIGAN-Journal Washington Bureau
Oct. 1, 1999

WASHINGTON -- Laborers' union General President Arthur A. Coia, a major Democratic fundraiser who once swapped fancy golf clubs with President Clinton, plans to resign this month as part of a bargain with federal prosecutors, according to government officials familiar with the case.

The bargain stems from Coia's transactions with a Rhode Island Cadillac dealer who was a union vendor and who helped Coia to buy a $450,000 Ferrari, according to The Daily Labor Report, an industry newsletter, and The New York Times.

Coia, 56, of Barrington, was convicted last March by a union tribunal, in a noncriminal proceeding, of conflict of interest in the car deal. He was fined $100,000.

Officials said that Justice Department plea negotiations with Coia produced a deal under which he would quit his post with the Laborers, one of the nation's largest and most corruption-plagued construction unions, by Oct. 15, and enter a plea later. But one government official said news reports about the deal "could jeopardize an agreement that's still in the works."

The union's spokesman, David Roscow, was asked yesterday whether Coia would resign as part of a plea agreement. "You know, rumors have been out there for a long time," Roscow answered. "He has not resigned. He has not been indicted and he has not reached an agreement" with prosecutors. Later, Roscow called The Providence Journal to revise his earlier statement. "I know of no plans of his resignation or retirement," he said. Coia and his lawyer did not answer requests for interviews. A spokesman for the Justice Department in Washington declined to comment. A spokesman for Rhode Island's U.S. attorney,

Margaret E. Curran, did not respond to a message requesting comment.

Coia and the Laborers International Union of North America have been under federal scrutiny since President Ronald Reagan's administration. In 1994, less than two years after Coia took office, the Justice Department presented him with a draft racketeering suit that accused him of tolerating Mafia influence in the union. The document called for a federal takeover of the union. Instead, Coia and his lawyers negotiated a deal in February 1995 that let him preside over an internal cleanup of the union. The agreement specified that federal prosecutors could continue, separately, to investigate any union officer.

Union dissidents, later echoed by congressional Republicans, complained bitterly that the deal was a case of the fox -- the politically well-connected Coia -- minding the chicken coop. But the Justice Department has, by and large, defended the anti-corruption effort as a success. In 1996, congressional investigators saw potential conflict of interest in the Laborers-Justice deal, but found no evidence of impropriety.

In November 1997, the union's anti-corruption office brought charges against Coia himself. They were tried over a period of several weeks in 1998 at secret hearings in Washington, Chicago and Providence. The hearing officer for the internal case, Peter F. Vaira, ruled March 9 that Coia had avoided federal luxury taxes on the Ferrari F40, thanks to the "unique opportunity" that Carmine Carcieri gave him to structure a special-purchase deal in 1991.

But Vaira said it was not for him to decide on the in-house prosecutor's charge that Coia had committed a felony evasion of $42,000 in federal taxes in his dealings with Carcieri, proprietor of Viking Oldsmobile-Cadillac-GMC of Middletown. Vaira similarly declined to rule on the internal charge of civil tax fraud against Coia.

The report by internal prosecutor Robert D. Luskin on the Coia-Carcieri deal "can easily be referred to the IRS, an organization always eager to collect taxes," Vaira wrote. He added that he "would be surprised if such referral has not already been made." Vaira ruled that Luskin failed to provide any evidence for his allegation that Coia's Ferrari deal with Carcieri had also avoided $33,750 in Rhode Island taxes. He also ruled that while Carcieri had given Coia a "benefit," the deal entailed "no kickbacks." But Vaira said Coia's deal with his old friend Carcieri, who held the $1-million-a-year national contract to lease cars to Laborers officers, created "a definite conflict of interest and an appearance of impropriety." Vaira also ruled that the internal prosecutor had failed to give enough evidence for a number of separate charges that Coia had associated with mobsters.

Coia's Washington lawyer, Howard Gutman, declined to comment in March when asked whether Coia's dealings with Carcieri had been lawful. Coia did not appeal the internal conflict-of-interest conviction or the $100,000, payable over two years.

Deputy Atty. Gen. Eric Holder declined to comment in March on whether the Justice Department was pursuing charges against Coia. But two top subordinates pronounced themselves "disappointed with the decision" by Vaira and urged Luskin to appeal.

Luskin did so. In August, the union appeals officer, W. Neil Eggleston, upheld Vaira's decision. Dissidents have criticized the internal hearing process, noting that the prosecutor, hearing officer and appeals officer are all paid by a union board that Coia controls. They have also noted that Eggleston was for a time a Clinton White House lawyer. But the Justice Department has continued to defend the anti-corruption effort and has not exercised its power, under its 1994 agreement with the Laborers, to close the reform office and take over the union.