By SELWYN RAAB
August 8, 1999
A three-year inquiry has found evidence that
the Lucchese and Gambino crime families forged corrupt alliances
with local officials of New York City's carpenters, laborers and
bricklayers unions that reaped tens of millions of dollars in
recent years, law enforcement investigators said.
The illegal profits included payoffs from
construction companies of $100 a week for each worker kept "off
the books," or not listed as a union member on a construction
site, according to organized-crime investigators in the New York
Police Department and the Manhattan District Attorney's office.
The companies that routinely paid the bribes
enjoyed lucrative benefits, too, investigators said. They substantially
inflated profits by paying employees less than union scale and
by evading hundreds of thousands of dollars in payments to union
pension and fringe benefits funds, law enforcement officials said.
A state grand jury in Manhattan is reviewing
evidence, including secretly recorded conversations between suspected
mobsters and union and company officials, the authorities said.
Indictments on racketeering charges are expected to be unsealed
in the fall, they said.
Investigators identified the acting boss
of the Lucchese family, Steven L. Crea, 52, as a major figure
in the racketeering operations. Several Gambino family members
were implicated in similar schemes but to a lesser extent than
the Lucchese group, the investigators said.
The Lucchese and Gambino families, two of
the five Mafia factions in the New York metropolitan area, have
engaged in construction industry extortion and bid-rigging conspiracies
for more than 50 years, law enforcement officials say. One official
estimated that in the last five years the two families and the
contractors "ripped off tens of millions of dollars through
payoffs and by cheating employees out of fringe benefits."
Investigators said the evidence indicated
that the mob had altered its traditional kickback tactics in the
construction industry and was concentrating on medium-size renovation
jobs of less than $10 million rather than on large commercial
and residential projects worth $50 million or more.
In the last 15 years, Federal and state prosecutors
have convicted more than 30 Mafia leaders and lower-ranking gangsters
on charges that they organized groups of construction companies,
known as clubs, into bid-rigging conspiracies on large-scale projects.
The mobsters siphoned payoffs of 2 to 3 percent from each contract
obtained by club members, according to court testimony.
Because previous crackdowns have eradicated
large-scale bid rigging clubs, especially in the drywall, concrete,
painting and plumbing industries, the mob families switched systems
in the mid-1990's, the investigators said. Through links to corrupt
union officials, the Mafia got payoffs from medium size companies
that were allowed to violate collective bargaining contracts on
projects that mandated the hiring of union workers.
Patrick O'Neill, a former official in the
carpenters union in the city, said that a medium-size company
that employed 20 carpenters could illegally pocket more than $500,000
a year by evading union fringe benefit payments of about $800
a week for each worker. "These companies cheat by listing only
3 or 4 men as working on the job while they have another 15 or
more 'off the books,' " O'Neill explained. "They get
away with it by paying off someone in the union to look the other
way," he said, "and by exploiting minority workers who
need the jobs and new immigrants who have no access to their rights
or to information about what they are entitled to."
Police officials and prosecutors called the
investigation Operation Textbook because they considered it a
primer on the Mafia's latest shakedown strategy in the city's
In the paper-chase phase of the inquiry,
investigators from the District Attorney's office and the Police
Department's Organized Crime Control Bureau raided more than 50
sites in the city, New Jersey and Connecticut in June. They removed
records from the offices of three unions: Local 608 of the United
Brotherhood of Carpenters in Manhattan, Local 79 of the Laborers
International Union of North America in Manhattan and Local 1
of the Bricklayers and Allied Craftworkers Union in Long Island
Aides to the Manhattan District Attorney,
Robert M. Morgenthau, said that more than two truckloads of documents
and computers were impounded from the unions and from the offices
of more than 20 construction companies.
Investigators also searched the homes of
a dozen union officials and of Crea and Joseph J. Datello, whom
the authorities identified as a Lucchese family soldier with ties
to officials in construction trade unions in the New York region.
More than $250,000 in cash was found in the
homes of union officers and at the residences of suspected mobsters,
including more than $20,000 in Crea's home, law enforcement officials
said. The money was seized as possible evidence of bribes, the
Crea has an unlisted telephone number at
his home in Tuckahoe, N.Y., and could not be reached for comment.
Datello, 48, is the former president of Laborers
Local 20 in Manhattan. Officials of the laborers national union
said that he faced dismissal as a union member for refusing to
answer questions from union investigators about reports that he
had associated with organized-crime figures.
Datello, who lives on Staten Island, has
an unlisted telephone number. Attempts to reach him through the
laborers union were unsuccessful.
Most of the union officials whose homes were
raided are business agents and shop stewards and are chiefly responsible
for insuring that companies comply with union contract terms.
Police officials said they had uncovered
evidence that contractors paid business agents and other union
officials at least $100 a week for each employee not listed as
working. By doing this they avoided paying the unions up to $800
a week in fringe benefits for each worker. For additional payoffs,
companies were given a green light to pay wages below union scales,
The Lucchese and Gambino members who brokered
the deals got part of the payments from union officials and sometimes
were bribed separately by contractors for insuring labor peace
through their influence at the three locals, the officials said.
A spokesman for Laborers Local 79, Richard
A. Weiss, said that officials had turned over all records requested
in the raids concerning its 8,000 members. "There has been
no indication from anybody that the union or anyone in the union
is a target of this investigation," Weiss said.
Michael J. Forde, the president of the 7,400-member
Carpenters Local 608, acknowledged that the authorities had seized
records and union computers. "We'll cooperate," he said.
"We have nothing to hide."
Bricklayers Local 1 officials did not return
numerous telephone messages.
Investigators identified S & S Contractors
of Linden, N.J., as one of the construction companies suspected
of violating union contracts in a renovation project last year
and earlier this year at the Park Central Hotel in Manhattan.
S & S is owned by Sara Riggi, the daughter of John Riggi,
who is described by law enforcement agencies as the boss of the
DeCalvacante crime family in New Jersey and who is in prison on
a racketeering conviction.
The DeCalvacante family, the authorities
say, often cooperates with the Gambino family in racketeering
enterprises in New York and in New Jersey.
Ms. Riggi did not return telephone requests
for comment on the raid at S & S and its involvement in the
O'Neill, a former regional senior business
agent and trustee for the New York City District Council of Carpenters,
said in an interview that last year he found that the S &
S company listed only 6 Local 608 members as working on the Park
Central Hotel project while 24 more union carpenters were employed
"off the books." In addition to skipping welfare fund
payments of $800 a week for 24 employees, the company paid some
employees $15 an hour in cash instead of the union scale of $30
an hour, O'Neill said. "S & S beat the union out of more
than $20,000 a week in benefits," he asserted.
According to O'Neill, the Local 608 business
agent assigned to the hotel project told him he had overlooked
the violations because he feared retaliation from gangsters.
O'Neill, 34, said that after he cited the
S & S company and 11 other companies for violating union contract
provisions, he was dismissed in December by Roger Newman, who
was then the supervisor and top official of the district council,
which oversees all carpenters locals in the New York area. "When he fired me, Newman claimed he
was getting a lot of complaints about me," O'Neill said.
"Most of the complaints involved 'off the book' jobs that
I had reported to the council."
Newman, who is no longer with the district
council, did not return telephone messages left on his voice mail
at his home in Rocky River, Ohio.
Daniel J. Castleman, the chief of the Manhattan
District Attorney's Investigation Division, the unit that is in
charge of the investigation, would not speak about the case. But
speaking in general about the consequences of "off the books"
racketeering, he said: "Workers are not the only victims.
It is crime that prevents honest contractors from competing in
the city, and it ultimately raises prices for building owners
because organized crime figures are the ones who are secretly
profiting and determining the actual costs of construction."