BY Cam Simpson Federal Court Reporter
August 5, 1999
A top Chicago union boss with political clout
and mob ties got $5 million in kinky loans and shared in almost
$334,000 in cash kickbacks after directing union funds to favored
banks and investors, a federal indictment charged Wednesday.
John Serpico, 68, of Lincolnwood faces charges
of racketeering, fraud and money laundering for allegedly running
a Chicago union group and a separate international union as if
they were his personal fiefdoms for at least 12 years.
Serpico is the chairman of the Illinois International
Port Authority, a position he has maintained under four Illinois
governors despite his connections to top Chicago mobsters. He also has doled out hundreds of thousands
of dollars in union campaign contributions to former governors
James R. Thompson and Jim Edgar, current Gov. Ryan, Mayor Daley
and other politicians. Ryan is weighing Serpico's reappointment
to the port authority, the sprawling South Side industrial harbor,
a spokesman for the governor said Wednesday.
Indicted with Serpico were longtime friends
and associates Gilbert Cataldo, 59, who is Chicago's former housing
director, and Maria Busillo, 53, who held numerous union positions
Serpico has held at least 15 top positions
in eight unions or labor groups since 1975. He was a top vice
president for the Laborers' International Union of North America
until being ousted in 1995 because of mob ties that surfaced in
congressional testimony as early as 1985.
Most of Serpico's clout, however, stems from
his control of the Chicago-based Central States Joint Board, an
umbrella group for eight small unions with as many as 20,000 members.
He was its president from 1975 to 1994, and now serves as president
emeritus and "consultant." From 1975 to 1985, Serpico
also was the secretary-treasurer of the International Union of
Allied Novelty and Production Workers, which has had as many as
The Central States Joint Board and novelty
workers union are at the center of Serpico's troubles. Through
his positions with them, Serpico controlled tens of millions of
dollars from union pension plans, health and welfare funds and
union operating cash.
The indictment alleges Serpico and Busillo
directed massive deposits to Capitol Bank & Trust and Gladstone-Norwood
Bank in exchange for nine personal and business loans totaling
about $5 million. The loans were handed out with sweet terms that
normal customers couldn't touch, the indictment charges. Many
were totally unsecured. Some had easy payment plans. Others allegedly
were made to cover interest payments on already existing loans.
One loan was allegedly used to finance a
film studio involving Serpico, an alleged organized crime figure
and former U.S. Rep. Morgan Murphy, who left Congress in 1981.
Others allegedly were used to buy apartment buildings, a condo
in Marco Island, Fla., and to finance a building to house illegal
aliens for the government. Capitol Bank & Trust issued eight of
the nine loans and pleaded guilty in 1996 for its role, paying
an $800,000 fine. Its plea agreement detailed more than $20 million
in union deposits and investments.
Separately, Serpico is accused of channeling
a $6.5 million loan from the union to a hotel and office development
in Downstate Champaign. Cataldo and Serpico shared in almost $334,000
in cash kickbacks paid out for the loan, the indictment charges.
The hotel complex was developed by a Chicago company headed by
one of Cataldo's relatives, who has not been charged.
Attorneys for all of the defendants either
declined comment or did not return calls. Serpico also did not
Through the Central States Joint Board, Serpico
has given at least $137,150 to the campaigns of Ryan, Edgar and
funds controlled by House Speaker Michael Madigan (D-Chicago)
since 1994. Thompson received at least $82,000 while in office
and Daley has received at least $86,600, records show.
Contributing: Robert Manor, Dave McKinney