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