Sunday September 24, 1995
By MIKE STANTON
Journal-Bulletin Staff Writer
Five years ago, investigators combing through
the rubble of the looted Heritage Loan & Investment Co. found
a mysterious passbook locked in the vault.
The passbook recorded the fact that a secretive
customer, the North American Laborers Defense League, had kept
$420,000 in a savings account at Joseph Mollicone's bank on Federal
Hill in Providence.
This was no ordinary account. It paid no
interest, a fact that helped conceal the league's financial affairs
from the government.
And the passbook contained a name that was
well known in national and local labor circles: "Arthur Coia."
Now the mystery surrounding the North American
Laborers' Defense League has taken a new turn.
Although the league got its $420,000 back
last year, it is now suing to collect back interest - even though
the money was in a non-interest-bearing account.
The defendant, as it happens, is the state
of Rhode Island, which took over Heritage following its collapse
Meanwhile, Arthur A. Coia, who has risen
to the presidency of the 770,000-member Laborers' International
Union of North America, declined to be interviewed about the league.
Despite the presence of his name on the passbook,
and evidence of ties between Coia, the union and the league dating
to 1981, the Laborers, in a statement, said that Coia has no formal
connection to the league or the account.
THE LEAGUE was formed in 1980 to defend union
members against criminal investigations and charges. Shortly after
that, the league solicited donations to assist union officials
- including Coia and his father, Laborers secretarytreasurer Arthur
E. Coia - indicted for racketeering along with New England mob
boss Raymond L.S. Patriarca.
The league's recent lawsuit against the state
brings new attention to the secretive organization at a time when
Coia and the Laborers have come under federal scrutiny for alleged
labor racketeering and misuse of union funds.
Earlier this year, Coia resolved a U.S. Justice
Department racketeering investigation of the Laborers by agreeing
to oversee internal union reforms.
In July, the Journal-Bulletin reported that
Coia personally benefited last fall when another legal fund, also
run by Laborers officers, bought an office building that was partly
owned by Coia.
Those associated with the league decline
to discuss it.
James Merloni, the league's administrator
and president of the Massachusetts Laborers' District Council,
could not be reached at his office at the Laborers training facility
in Hopkinton, Mass., at the Arthur E. Coia Conference Center.
. IN THE SUMMER of 1980, while newspaper
headlines trumpeted the sweeping federal probe of nearly two dozen
Laborers officials, including the Coias, and mobsters, including
Patriarca, the New England Laborers' Defense League, as it was
originally called, quietly set up shop.
The league was run by three trustees: Charles
J. Rogers Jr., a one-time lawyer for Patriarca; Monsignor Galliano
Cavallaro, a Federal Hill priest who had vouched for Patriarca
at a parole hearing; and Dr. Albert C. Picozzi, a North Providence
dentist who helped found the Arthur E. Coia Educational Scholarship
Its bylaws recognized that "working
people and their representatives do not possess or have available
the degree of economic resources" to defend themselves. The
league submitted those bylaws and other records to the state in
support of its claim on the money on deposit at Heritage.
The bylaws said the league would solicit
funds to assist union members facing investigation or indictment.
In a worst-case scenario, the league would "assist such persons
who may be incarcerated or unable to secure employment as a result
of such charges."
In an interview, Rogers said he was asked
to be a trustee by one of the Coias - he doesn't remember which
one - and that the trustees would meet at the Laborers offices
on South Main Street in Providence.
The younger Coia, then a top Rhode Island
union official and a Providence lawyer whose law firm was in the
same building, told a reporter in 1981 that the league was started
at his suggestion.
Coia said he bowed out of the league's operation
once it was established.
Asked if he would draw from the fund for
his defense, Coia replied: "If I have to."
Coia said, however, that the league was formed
to help all union members, not just himself and others targeted
in the federal racketeering case.
IN 1981, THE COIAS and Patriarca were indicted
along with 18 others, including Laborers general president Angelo
Fosco of Chicago. Prosecutors charged that Coia and his father
steered lucrative union insurance business to a company in return
for kickbacks, which they split with Patriarca.
Not long after the indictment, Monsignor
Cavallaro, pastor of Our Lady of Mt. Carmel Church, appealed to
rank-and-file Laborers throughout New England - the ditch diggers,
the construction workers, the government clerks - to reach into
their pockets and donate money to help defend their leaders.
Writing on the stationery of the New England
Laborers' Defense League, Cavallaro thundered that the Laborers
leaders were "the targets of a concerted and well-orchestrated
campaign by the federal government to repress individual rights."
Three years later, a federal judge dismissed
the charges, saying the government had not filed them in a timely
How the Coias ultimately financed their defense
is unclear. League officials won't say how much they collected
for the Coias' defense, or how it was spent.
In spite of the league's existence, the Coias
drew on union funds to pay at least some of their legal bills.
In 1986, the President's Commission on Organized
Crime criticized the Laborers "extraordinary expenditures,"
particularly for criminal defense fees.
The commission singled out $200,000 the elder
Coia had spent on private investigators to track the federal investigation
of the Laborers'.
The elder Coia also helped his son obtain
$40,000 from the union for legal expenses, the commission said;
when the union's controller sent the bills to a union lawyer for
authorization, the elder Coia ordered them paid "without
ANOTHER WINDOW into the early operation of
the defense league is provided by a government informant named
Fino, a former Laborers executive in Buffalo,
N.Y., and onetime confidante of the elder Coia, said in an FBI
statement obtained by the Journal-Bulletin that union officials
outside New England were receiving money.
Fino, who has testified against several Laborers
officials and organized crime figures, told the FBI that he saw
the elder Coia give a large amount of cash to another defendant
in the racketeering case at a hotel restaurant in Florida.
The money, "to take care of (his) personal
and legal expenses regarding the upcoming trial," came from
the union's legal defense fund, Fino recalled the elder Coia telling
Fino also remembered the elder Coia telling
him about the defense league.
"This particular fund is a 'pet' of
Coia, Sr. and it was set up and controlled by Coia, Sr. solely,"
Fino's FBI statement says.
Federal prosecutors have brought dozens of
criminal cases against Laborers' officials around the country
since the defense league was formed. But who has received money
from the league is a mystery.
There is no way to know whether the money
has gone exclusively to union executives or whether any rank-and-file
Laborers have gotten help.
"As far as I was concerned, the union
had some type of help for people who couldn't pay for lawyers,"
says Rogers, the league's former chairman.
Rogers said the league officials would meet
and review written requests for assistance from members.
Rogers said he remembers meeting in the Laborers
offices in Providence, and that the walls were decorated with
framed photographs of former New York Yankees ballplayers: Babe
Ruth, Lou Gehrig, Joe DiMaggio.
But Rogers said he can't recall any specific
By 1988, Rogers had resigned. The league's
new chairman was George F. McDonald, a Cranston lawyer and former
state representative who had had his own legal troubles.
In 1975, McDonald pleaded guilty to soliciting
a bribe as chairman of the state Bicentennial Commission from
a company that wanted to manufacture bicentennial souvenirs. The
company had planned to hire then-House Speaker Joseph A. Bevilacqua
as its lawyer.
McDonald declined to discuss the defense
IN 1982, THE LEAGUE changed its name to the
North American Laborers' Defense League. The reason it gave, according
to league minutes: the "strong, consistent and enthusiastic
support of laborers, their officers and representatives throughout
the United States and Canada."
Through the 1980s, after the Florida case
had ended, the league continued to raise money.
At its Oct. 5, 1988, meeting, the league
reported a balance of $290,000, and bank accounts in Rhode Island
and Massachusetts, according to its minutes.
Rank-and-file Laborers were called on to
In a grimy union hall in Boston, home of
Laborers' Local 88 of the Compressed Air Tunnel Workers, Robert
Schleiff said he learned about the defense league in the late
Schleiff, who operates a tunnel-boring machine,
said that members were told they would have to pitch in $100 in
cash - $50 if they weren't working. A bucket was placed in the
union hall, he said, and members tossed their money in as someone
stood by, checking their names off a list.
"The guys complained, but they coughed
up," said Schleiff.
IN 1987, THE LEAGUE asked its lawyer for
advice on the desirability of moving its money to interest-bearing
accounts. The no-interest accounts had cost them significant interest
income as the league's coffers swelled with cash.
The lawyer, Robert Bogucki of New York, responded
with a letter that laid out the implications of collecting interest:
The league would have to pay taxes and file income tax returns,
exposing itself to the possibility of audits that would open its
books to the government.
"It should be recalled that the IRS,
in many instances, functions in cooperation with other government
agencies (e.g. Department of Justice)," Bogucki advised.
The lawyer could cite only one "significant
disadvantage" to keeping league funds in non-interest bearing
accounts: "the loss of income."
Bogucki said it was up to the league's committee
to decide "at what point does the loss of investment income
outweigh the implications of filing annual returns and paying
The following year, the committee opened
a $280,000 account at Mollicone's Heritage Loan & Investment
Co. - in a non-interest-bearing account.
The minutes of the league's Oct. 5, 1988
meeting reflect that the trustees voted to open a "holding
account" at Heritage for "the prompt deposit of voluntary
But the passbook was locked in the vault
at Heritage, and no individuals ever contributed to the account
In July 1990, the league deposited another
$140,000, by wire transfer from another bank, bringing the balance
EARLY THAT MONTH, banking examiners began
digging into the records at Heritage, eventually uncovering a
multimillion dollar embezzlement.
That fall, Mollicone fled Rhode Island, leaving
a statewide financial disaster in his wake. The state took over
the bankrupt Heritage and began paying out most depositors.
But the state questioned the North American
Laborers' Defense League account. Heritage records indicated that
Coia had withdrawn the money and used it to buy stock in the bank.
Later, investigators would conclude that
Coia's signature had been forged to cover up Mollicone's theft
of the money. Coia testified that he had not authorized the withdrawal;
in fact, he said, he had nothing to do with the account.
The state also questioned the unorthodox
practice of keeping $420,000 in an account that paid no interest.
The Superior Court special master who heard the case agreed it
was "unusual," but ruled last year that it was a valid
account and ordered the money repaid.
MOLLICONE'S EMBEZZLEMENT has obscured the
question of why the league put money at Heritage in the first
When Coia testified in the receivership case
in 1993, the state's lawyer, Laurel Bristow, asked him about his
relationship with Mollicone and whether it had anything to do
with the account being opened.
Coia said he had known Mollicone since the
late 1970s, and that he did some personal banking at Heritage.
In April 1990, Coia dealt with Mollicone directly on a $50,000
loan from Heritage - a loan for which, Coia testified, he put
up no collateral.
Bristow asked if Coia had ever discussed
the defense league's account with Mollicone.
"I don't know," Coia answered.
"I could have and may not; I'm not sure."
Bristow asked if Mollicone had expressed
a desire to Coia to have the defense league put some of its funds
"I don't - I'm not sure if he did or
not," Coia replied.
Coia also testified that he was not involved
in the decision to form the league.
The union leader said he wasn't even sure
if he knew the league had money at Heritage until after the bank
closed, and he was shown the passbook with his name on it when
he went in to see about his own account.
THE MATTER of the mysterious $420,000 bank
account at Heritage didn't end with the state's repayment of the
money last year.
This spring, the North American Laborers'
Defense League sued the state demanding back interest on the money
for the four years the state held it.
Lawyers for the league argue that the state
unreasonably delayed paying the league's claim even after it agreed
that Mollicone had stolen the money. Consequently, the league
was forced to hire lawyers to pursue its claim "at significant
One of the two law firms that has represented
the league in the Heritage case is Coia & Lepore. Coia is
a partner in the firm.
As a result of the state's delay, the league
contended, it "has been unequally and unfairly treated."
The state counters that it was justified
in delaying repayment while it investigated this unusual account.
"Ordinarily, most depositors of a financial
institution do not put hundreds of thousands of dollars in an
institution with no expectation interest will be paid," the
state's lawyers argued in court papers.
The league's demand for back interest "is
especially ironic," the state noted, "in that (the league)
insisted throughout the course of these proceedings that its $420,000
'deposit' was not interest bearing."
MEANWHILE, THOSE most familiar with the league
remain silent. They won't discuss the league's affairs, including
how much money has been raised, how it is spent or whether Coia
has received any, as a lawyer or a defendant.
Merloni, the league's administrator, was
away recently at a union conference in New Mexico. His secretary
said he would have no comment.
Monsignor Cavallaro declined, through the
doorman at his downtown Providence residence at Park Row West,
to meet with reporters.
McDonald, who was listed as league chairman
as recently as 1990, refused comment. A former Journal-Bulletin
reporter, McDonald said he charges his standard legal fee of $250
an hour for interviews.
Picozzi, the league's other original trustee,
died in 1991.
Mollicone, who is serving a 30-year prison
term at the Adult Correctional Institutions, did not respond to
a written request for an interview.
Coia told the Journal-Bulletin in 1993 that
he has contributed to the league but knows little of its affairs.
The Laborers, in the recent statement, said
that Coia is acquainted with the league's trustees, and that Monsignor
Cavallaro is Coia's "confessor."
The statement said, however, that Coia no
longer has any connection to the league.
"Ben Franklin discovered electricity,
but Thomas Edison developed the light bulb," the statement
said. "The analogy holds true for Arthur Coia and the North
American Defense League: The idea was Mr. Coia's, but he played
no role in its creation and has no role in the organization now."
The statement said Coia does not recall discussing
the league with Mollicone; it also said Coia is not aware of any
legal work performed for the league by his firm, Coia & Lepore.
Coia referred all questions about the North
American Laborers' Defense League to Bogucki, its general counsel.
Said Bogucki, "It's simply an ironclad
practice of mine not to coment on clients' activities."
* * *
CAPTION: ON THE BLOCK: People wait outside
the Heritage Loan & Investment Co. on Atwells Avenue in Providence
before an auction in 1991.
JOSEPH MOLLICONE is in prison for looting
the Heritage Loan & Investment Co. Arthur A. Coia is president
of the Laborers' International Union of North America. Charles
J. Rogers Jr., left, was a trustee of the North American Laborers'
Contents copyright 1982 to 1995 by The Providence