| Manuel J. Reyes
Carol Corrigan Justin J. Dintino William J. Guste Judith R. Hope
Justin J. Dintino
William J. Guste
Judith R. Hope
* Commissioner Rodino, in view of his position
as Chairman of the Committee on the Judiciary of the United States
House of Representatives, takes no position concerning the recommendations
included in Section Eleven of this Report.
| Summary of Recommendations
o Section One Section Two Section Three Section Four Section Five Section Six Section Seven Section Eight Section Nine
A CASE WAITING TO BE MADE
The Laborers International Union of North
America (LIUNA), formed in 1903, is one of 15 unions that belong
to the Building Construction Trades Departments of the AFL-CIO.
It represents approximately 400,000 laborers in more than 900
locals around the nation and in Canada. Of all construction workers,
laborers perform the dirtiest, most strenuous, and some of the
most dangerous jobs. They do demolition, blasting, and excavation
tasks. They pour cement and move debris. They also carry out a
variety of other tasks, such as removing asbestos, which are sometimes
done by other union groups; thus, they function as a ready source
of substitute labor on the construction site.
The typical laborer has a limited formal
education and few skills. He depends on the collective strength
of the union to provide job security, a fair wage, and health
and pension benefits. If the union's leadership is corrupt --
if the leaders steal or misuse workers' funds or if they accept
payoffs to permit employers to overwork, underpay, replace workers
or disregard job safety measures -- the individual has limited
Collectively laborers play an essential and
pivotal role in the construction industry. If organized crime
influences the laborers' union, it is in a powerful position to
pressure and threaten contractors. As the case study of the New
York City construction industry in this report demonstrates, organized
crime can use its influence over the union to exact payoffs, force
contractors to deal with organized crime-affiliated suppliers
or subcontractors, or punish legitimate unions by substituting
lower cost laborers in place of a higher cost trade union.
Based on reports of Federal law enforcement
and its own investigation, the Commission has found that organized
crime has a documented relationship with at least 26 LIUNA locals,
3 district councils, as well as the International Union.
Organized Crime's Influence
On the international level organized crime
exerts its influence principally through top officers who are
associates of organized crime. This judgment is supported by surveillances
of LIUNA General President Angelo Fosco meeting with members of
the Chicago La Cosa Nostra group known to its members as the "Outfit".
For example, Fosco was observed meeting with Paul DeLucia, former
leader of the Chicago La Cosa Nostra; and
Dominic Blasi, member of the Chicago LCN.l
According to former union officers, Fosco
does not have a reputation for being a dynamic or influential
leader within the union, but he does have the power to authorize
expenditures of union funds and award certain patronage jobs,
including posts known as "special international representatives."
Fosco has named as special international representatives convicted
Chicago LCN territorial boss Al Pilotto and indicted Laborer's
official and St. Louis LCN boss Matthew Trupiano.2
One of LIUNA's vice presidents is John Serpico.
Serpico is also president of LIUNA Local 8 in Chicago.3
In testimony before the Commission in 1985, Serpico admitted that
he is a friend or personal acquaintance of virtually every important
organized crime leader in Chicago.4 These include Tony
Accardo, the "boss of the bosses" in the Chicago La
Cosa Nostra, and Joseph Aiuppa and Jackie Cerone, the LCN's principal
underbosses to Accardo. Serpico also knows several LCN territorial
bosses who report to Aiuppa and Cerone, including Vincent Solano,
president of LIUNA Local 1, Al Pilotto, formerly president of
LIUNA Local 5, and Joseph Ferriola, who Serpico stated was a "close
As president of Local 8, Serpico has employed
LCN members to serve as the local's officers and agents. Business
Fiore Buccieri is the son of deceased LCN
territorial boss "FiFi" Buccieri. Business agent Steve
Torello is the son of deceased LCN territorial boss "Turk"
Torello. The union's lawyer is Jack Cerone, the son of LCN underboss
For approximately seven years Chicago LCN
member John Fecarotta was listed as a Local 8 "business agent"
and "organizer." Fecarotta, himself a boss in the Chicago
LCN, reports to territorial boss Angelo La Pietra.7
In his testimony to the Commission Serpico could not relate a
single specific contribution that Fecarotta made to Local 8. Serpico
did recall that Fecarotta, in addition to his salary, was given
a union car for providing two organizing "tips" to the
union. Neither Serpico nor Fecarotta could remember what those
"tips" were. In fact, when questioned by the Commission,
Fecarotta could not remember anything he did for the union. He
did not know any terms of the union's collective bargaining agreement
or its pension plan. He did not know what information was on membership
cards he claimed to have handed out. He did not know the name
of management employees or union stewards with whom he dealt.8
Fecarotta was apparently a "ghost" employee who
received an unearned salary and apparently used his union position
as a legitimate cover.
Organized crime has also used LIUNA to gain
access to the political arena. For example, John Serpico, LIUNA
International vice president and Local 8 president, has maintained
an active relationship with LCN leaders; at the same time, he
is a Chicago
civic leader of some importance. Serpico
has served multiple terms as a member, and has served as the chairman
of the Chicago Regional Port Authority.9 This position
provides a salary over and above his union salary, and could provide
a source for patronage jobs and contracts. Serpico told the Commission
that, while Chicago Mayors Daley and Byrne and Illinois Governors
Walker and Thompson were in office, each received or returned
his phone calls as a matter of course. 10 Serpico's relationship
with Democratic and Republican office holders could provide the
opportunity for him to use his union position to advance the interests
of his organized crime acquaintances.
As Serpico's Local 8 illustrates, organized
crime's influence over LIUNA is most extensive at the local level.
This control is particularly concentrated in large cities, such
as Chicago, Cleveland, St. Louis, and New York, as well as smaller
cities such as in New Jersey.
The best documented examples are influenced
locals in the Chicago region. Again, the degree of the control
is relative to the number of union offices held by LCN members
or their relatives. For example, LIUNA Local 1 in Chicago provides
a safe haven for known members and leaders of the Chicago La Cosa
The president of Local 1 is Vincent Solano,
a territorial boss of the LCN Outfit on the north side of Chicago.
Ken Eto, an LCN associate, who knew Solano for many years and
reported to him for almost a decade, described Solano's operation
and the territory he controls in testimony before the Commission.
According to Eto, Solano controlled all forms
of illegal gambling, including poker, bolita, ziganetta, horse
bookmaking and sports bookmaking in his area. Solano also ran
extortion rackets against bars, restaurants, topless clubs, pornographic
bookstores, and massage parlors, and supplied these businesses
with vending machines, such as cigarette and jukeboxes. Solano
used the Local's headquarters as a contact point for his criminal
organization. Eto told of how Solano confirmed meetings at prearranged
locations near the union hall and met with members of his crew
to receive payoffs, give directions, and, in the words of Eto,
receive "respect" from those who worked for him. Eto
personally paid Solano a share of the proceeds of his illegal
gambling operations. At Solano's direction Eto made regular payments
to other LCN members.ll
Solano apparently suspected that Eto might
become a government informant, and he ordered him killed. On February
10, 1983, John Gattuso and Jasper Campise, members of Solano's
group, shot Eto three times in the back of the head while the
three were allegedly on their way to meet Solano for dinner. Miraculously,
Eto lived, and subsequently became an FBI informant.l2
14, 1983, the mutilated and strangled bodies
of Campise and Gattuso were found in the trunk of a car in Naperville,
Illinois. Without the testimony of Campise and Gattuso there is
little chance that corroborative evidence can be found to convict
Solano of Eto's attempted murder. Solano remains president of
LIUNA Local 1 vice president is Salvatore
Gruttadauro. The recording secretary is Frank "Babe"
DeMonte. Both Gruttadauro and DeMonte are members of the LCN whom
Eto stated directed groups of criminal soldiers and associates.13
Gruttadauro is presently awaiting trial on charges of violating
the Taft-Hartley Act, 29 U.S.C. §186 in the Northern District
of Illinois (No. 85-Cr-731). Gruttadauro owns an interest in the
Triple A Chemical Toilet Company, which rents portable toilets
to construction sites and to the City of Chicago. DeMonte is a
second generation member of La Cosa Nostra; his father was a member
in the Chicago LCN.14 DeMonte has served time in jail
for contempt rather than testify before a grand jury. DeMonte
assists Solano in the operation of his illegal activities.l5
Chicago LIUNA Local 5 is another influenced
local union. Former special international representative and local
president Al Pilotto, who also served as vice president of the
Laborers District Council in Chicago, is an LCN territorial boss.
Another LCN member who has served as a union officer is Dominic
Palermo, field representative.
In 1981, in law enforcement's single major
case against LIUNA racketeering, United States v. Accardo, Pilotto
was indicted with LIUNA general president Fosco, LCN boss Tony
Accardo, and other LIUNA officials for looting the union's health
and welfare funds. In July 1981 Pilotto was shot by mob hit men
while playing golf. Pilotto survived and was ultimately convicted
in the insurance fraud scheme.
LIUNA locals in Chicago are not isolated
instances of organized crime's control over the union. For example,
in St. Louis the connection between the LCN and the Laborers Union
is Matthew Trupiano, the president of Local 110 and boss of the
St. Louis LCN family; and in New Jersey Local 394 business manager
John Riggi is underboss and acting boss of the DeCavalcante family.
The Commission's attempts to explore LIUNA
officers' ties to organized crime were repeatedly hampered by
certain officers' refusal to cooperate with the Commission's investigations.
LIUNA general president Fosco and other LIUNA officers repeatedly
refused to answer questions or testify, invoking the Fifth Amendment
protection against compulsory self-incrimination.
Labor Racketeerinq at LIUNA
Organized crime has used its influence over
the Laborers' union to obtain workers' benefit funds, provide
no-show jobs for LCN members, pay the personal expenses of union
officials, gain access to the political process, and (as discussed
in the case study of the New York construction industry), manipulate
the construction market.
John Serpico, president of LIUNA Local 8
and president of Central States Joint Board Health and Welfare
Trust Fund, provides an example. In January 1985 the Commission
began to examine in detail the dental program of the Central States
Joint Board Health and Welfare Trust Fundl6 (Local
8 was one of the eight unions affiliated with this fund) and the
roles that administrator Robert J. Cantazaro and union executive
John Serpico played in that $5 million benefit plan. This investigation
disclosed that the Chicago LCN apparently participated in a scheme
to siphon off hundreds of thousands of dollars from LIUNA Local
8's dental plans.17 The front man for the scheme was
The scheme began in the spring of 1976 when
John Serpico introduced Cantazaro to the trustees of the Fund
as an "insurance specialist."18 In fact,
Cantazaro at the time was a bail bondsman who dabbled in insurance
from his home office. He had no prior experience in administering
dental plans and providing dental care. As a bidder for the Fund's
dental contract, Cantazaro presented his dental plan to the trustees
approval. Three other bidders also presented
plans. Because Cantazaro also acted as the Board's insurance broker,
he had solicited and reviewed these competitive proposals, a fact
not disclosed to the trustees.l9
On September 16, 1976, Cantazaro was formally
awarded the Fund's contract for a dental program. Under the contract
Cantanzaro was to operate a clinic in a building he owned and
rented to the Fund, process members' claims, and perform other
administrative tasks. Fifteen months after the clinic began operations,
it closed. The clinic ended its operations just when there were
complaints that more clinics were needed to improve service to
the membership. Sufficient funds had already accumulated to build
additional clinics but, instead of opening more clinics, Cantazaro
closed the one that seemed to operate satisfactorily.20
Under Cantazaro's new agreement to process
members' claims and perform other administrative functions, he
did not provide any actual dental services. He simply paid claims
as they were presented to his insurance company. From January
1, 1978 through December 31, 1983, Cantazaro received $5,131,000
in insurance premiums. More than 68 percent of this money was
used to pay corporate overhead and profits for Cantazaro's companies.
The Commission's investigation disclosed that, of total insurance
premiums paid, approximately $ 2.5 million was directly traced
to Cantazaro and his family.21
The Commission's investigation of the dental
fund scheme was hampered by the refusal of several witnesses to
testify. On March 21, 1985, Robert Cantazaro was immunized by
the Commission but refused to answer any questions and was imprisoned
for contempt.22 John Fecarotta, former Laborers Local
8 business agent and an LCN member, was also subpoenaed and compelled
to testify. Three days prior to a hearing to consider whether
he should be held in contempt, Fecarotta claimed he suffered angina
and diabetes attacks. Fecarrotta checked himself into hospitals
in three states, and ultimately answered questions by deposition
from his hospital bed.
The Commission found that only 32 cents of
every dollar contributed to the Central States Joint Board Health
and Welfare Trust Fund dental plan was applied to members' benefits.23
The case underlines the need for new efforts to prevent the loss
of benefit fund money paid to fund administrators who charge grossly
inflated service fees. Despite Cantazaro's extraordinary profits
and despite the evidence of his organized crime connections, he
apparently violated no federal law in handling union funds. At
a Commission hearing George Lehr, the current executive director
of the Teamsters Central States Pension Fund, commented on the
administrative fees paid in the Cantazaro case:
I find it outrageous. It's a ripoff on its
face. Our administrative costs, which we are unhappy with, are
6.8 percent. They are down from a little over 8 percent.
I would tell you 25 percent was a ripoff.
There is nothing to describe 68 percent in my opinion.24
In addition, if the trustees of this Fund
had employed basic precautions the breach of fiduciary responsibility
evident in the Cantazaro case might have been avoided. These include
using an independent consultant to evaluate competitive bids,
ascertaining to whom brokers' fees and commission had been paid,
and requiring in-depth periodic reports by the benefit plan provider
about utilization, service received, cost of administration, and
the amount of trust monies actually spent to provide benefits.
In other abusive spending incidents LIUNA's
top officers have disbursed union funds for so many extraordinary
expenditures, particularly for the payment of criminal defense
fees, that at one point the international had insufficient income
to pay its monthly bills.25 In one incident the union
appropriated over $550,000 to pay the legal fees of Angelo Fosco
in the United States v. Accardo trial. LIUNA officers have taken
the position that all defense costs incurred prior to issuance
of an indictment are legitimate expenses if the target of a grand
jury is a union officer.26 Accordingly, legal defense
costs stemming from criminal charges -- even charges arguably
unrelated to the officer's union responsibilities -- will be paid
for by the union.
Another spending incident involved the second
ranking member of the international's hierarchy, secretary-treasurer
Coia.27 Coia, with Fosco's acquiescence,
spent approximately $200,000 of the membership's money to hire
a private investigative firm to keep track of the United States
Government's investigation of LIUNA. The private investigative
firm never provided specific details of services provided to LIUNA,
but Coia personally ordered that the bills be paid.28
Coia also attempted to obtain substantial
attorney's fees from the union. Coia obtained assistance for his
son, a LIUNA officer in Rhode Island, who petitioned the international
for $40,000 to pay legal fees stemming from a government investigation
of the union. When the international's controller sent this bill
to LIUNA's general counsel for authorization, Coia ordered the
legal bills to be paid without question.29
The Persistence of Organized Crime
Influence: Manipulation of Union Governance and Violence
Like other unions influenced by organized
crime, LIUNA's internal structure perpetuates the existing leadership.
Since LIUNA Executive Board members are elected at-large, it is
almost certain there can be little effective opposition to national
officers within the union. First, there is no power base upon
which the opposition can rely. Consequently, opposition candidates
run against a unified slate, and must conduct national campaigns.
Second, LIUNA holds its conventions once every five years, the
legal maximum under the Landrum-Griffin Act, and the elected at-large
executive board fills all vacant executive board
positions. The infrequency of LIUNA conventions,
coupled with the power to appoint executive board vacancies, leaves
few offices contested. When the use of violence and intimidation
are added, the membership has little opportunity to express itself
As an illustration of the ability of an incumbent
to control the union convention, general president Angelo Fosco,
while under indictment for racketeering activities against the
union, won election to a full term. Fosco's electoral success
is also attributable to use of force and threats of violence against
potential competitors. Fosco personally threatened long-time international
vice-president Robert Powell with death, confronting Powell in
public at a LIUNA dinner several months before the convention.31
At the Commission's public hearing in Chicago, Powell testified
that Fosco's ties to the Chicago LCN made such a threat believable.32
Fosco was subpoenaed to appear at a Commission deposition and
called to testify at a public. Hearing he refused to answer questions,
invoking his Fifth Amendment privilege against compulsory self-incrimination.33
LIUNA secretary-treasurer Arthur Coia also
tried to influence Robert Powell's decision not to seek the union's
presidency. Powell was one of the few black leaders in a union
whose membership is between 50 and 65 percent non-white. Powell
testified under oath that Coia informed him that the "Italians"
had organized LIUNA, and no one outside that
group could ever take control. Powell understood this to mean
that Coia was referring to a traditional organized crime group,
not the ethnic Italians in the union's rank and file.34
Powell received other anonymous death threats.
On one occasion, a dead rat was placed on his car. Later, a pair
of dead pigeons was left in the same place. Threatening telephone
callers asked Powell if his life insurance was paid up and whether
he "liked breathing." One caller suggested Powell should
be careful to give testimony in a certain way in a civil case
that rank and file members initiated against Fosco, LIUNA general
counsel Robert Connerton, and others.35 As a result
of these threats, Powell gave false testimony in the lawsuit,
which he recanted when questioned by the Commission.36
Powell was forced to take certain precautions, such as sending
his wife to live in another city for over a year. He wore a bullet-proof
vest and carried a handgun. Powell declined to run for International
president, and, within two years of Fosco's initial threat, he
retired. During this same period the union's comptroller believed
his office and home phone might be tapped.
He told the Commission that his employers
were concerned about "leaks."37
At the 1981 LIUNA convention a symbolic candidate,
who had no chance of winning the election, was beaten
by fellow delegates
in full view of the convention when he attempted
to speak on the floor.38
Other Laborers officials have been murdered.
For example, on January 17, 1982, 49 year old Bienvenido Medina,
the long time recording secretary of the Philadelphia area Hod
Carriers Local 332, was beaten to death by five masked men who
visited his home in the middle of the night. Medina was murdered
several days after he resigned his office and announced his candidacy
for business agent of the local.
The chilling effect of such violence cannot
be lost on local leaders or rank and file union members.
A Weak Governmental Response
The government has done little to end organized
crime's hold over LIUNA. Its efforts have taken the form of criminal
prosecutions, and even these have been only partially successful.
The most important criminal case was United States v. Accardo,
which began in 1981 with the indictment of LIUNA general president
Angelo Fosco, Chicago LCN bosses Tony Accardo and Al Pilotto,
other LIUNA officials, and a number of businessmen. Joseph Hauser,
who carried out massive insurance fraud against the Teamsters
Central States Pension Fund, as well as other union health and
welfare trust funds in Florida, Indiana,
Massachusetts, and Arizona, was named as
an unindicted co-conspirator.39
The defendants were charged with racketeering
activities against local LIUNA health and welfare funds that consisted
of setting up insurance companies and inducing the LIUNA locals
to funnel business to them. The conspirators then looted the pool
of assets generated by the high insurance premiums charged by
the union. One witness at the defendants' trial, Daniel Milano,
testified that union general president Fosco regularly accepted
kickbacks and payoffs for his part in the racketeering scheme.
Other testimony established that Fosco's son, Paul, was part of
one Hauser-created insurance firm that contracted with LIUNA officials.
After a lengthy trial, the jury acquitted Fosco and Accardo but
convicted the other defendants, including: LCN leader Al Pilotto,
president of LIUNA Local 5; John Giardiello, president of Fort
Lauderdale LIUNA Local 767; Salvatore Tricario, business agent
and welfare fund trustee of Local 767; Bernard Rubin, a Florida
LIUNA official and fund trustee; and Seymour Gopman, a prominent
In another case a federal grand jury indicted
the second ranking member of the LIUNA international hierarchy,
secretary-treasurer Arthur F. Coia, and charged him with racketeering
violations against the unions' benefit funds. The government alleged
that Coia received payoffs in return for steering union insurance
business to selected companies. Coia's
friend and acquaintances include such persons
as Joe Hauser, who specialized in looting Laborers' health and
welfare funds, often with the cooperation of Laborers' officials.
Coia and his son were involved with Hauser's schemes.40
Hauser was overheard discussing the importance of Coia with the
powerful LCN boss of New Orleans, Carlos Marcello.41
The conversation implies that Coia is a trusted associate:
Hauser: Carlos listen to me, I'm meeting
with Arthur tomorrow. I don't know if you know about it.
Hauser: Arthur Coia, and I'm meeting with
him, listen to me carefully, he's going to give me some money
tomorrow. These guys have been supporting me, theirs is
blood, blood's thicker than water you know.
The case against Coia was dismissed because
the indictment was filed after the statute of limitations had
run on the allegations.
The Waiting Case
Although LIUNA has not achieved the notoriety
of the Teamsters' Union, it is nevertheless a union with clear
ties to organized crime. This is particularly unfortunate because,
perhaps more than any other group of workers, laborers need a
strong and honest union. The Commission believes there is little
chance that the LIUNA membership will be able to eliminate
organized crime's influence, or control their
union, if the current leadership or governance structure remains
intact. The Commission believes that federal law enforcement agencies
should give high priority to investigations of LIUNA and its locals.
La Cosa Nostra leaders were subjects of routine surveillance by
a number of law enforcement agencies. The Commission has interviewed
agents who observed and identified Fosco in such routine meetings
during 1966 and 1967.
of Thomas W. Needham, LIUNA Comptroller, before the President's
Commission on Organized Crime, May 28, 1985.
- 2 Reports of LIUNA.
of John Serpico before the President's Commission on Organized
Crime, April 16, 1985.
has utilized his personal monies for outside investments. One
investment he made was in a business known to Chicago law enforcement
as a La Cosa Nostra front, Chicago Studio Rentals, Inc.,
through John Credidio, who Ken Eto informed the Commission is
an associate of LCN member Joseph Ferriola. Serpico claims he
lost $75,000 in that business. Organized Crime and Labor-Management
Racketeering: Hearings before the President's Commission on Organized
Crime, April 24, 1985 at 497 (testimony of John Serpico) [hereinafter
Labor-Management Racketeerinq Hearings].
of John Serpico, supra.
Racketeering_Hearings, supra note
5 at 42 (testimony of Ken Eto.)
of John Fecarotta, May 22-23, 1985.
of John Serpico, supra note 4.
Labor-Management Racketeering Hearings,
supra note 5, at 12-44.
with Ken Eto, DeMonte's father was listed in charts of the Outfit
prepared by the McClellan Commission.
Racketeering Hearings, supra note
5, at 12-44.
Fund is unrelated to the Teamsters' Central States Pension Fund.
Racketeering Hearings, supra note
5, at 456-462 (testimony of PCOC staff investigator John Walsh).
deposition of Charles Schiffman, Apri1 12, 1985.
Racketeering Hearings, supra note
5, at 456-462.
incarceration has been affirmed by the Court of Appeals. In
Re Sealed Case 776 F.2d 335 (D.C. Cir. 1985). As of publication
of this report, Cantazaro remains incarcerated.
Racketeering Hearings, supra note
5, at 600.
of Thomas N. Needham, supra note 2.
Testimony of Robert Connerton, Jan. 9, 1985 in United States
v. George Osley, Jr., and Bernard Hawkins, Cr. 84-177 HDM
(D. Las Vegas).
States v. Coia,___ F.2d_____ (llth
Cir. 198 _).
of Thomas N. Needham, supra note 2.
Appendix, 8 rooks and Gamm, A Union Democracy as a Deterrent
to Corruption and Organized Crime.
Racketeering Hearings, supra note
5, at 99-128 (testimony of Robert Powell .
at 128-135 (testimony of Angelo Fosco).
White v. Fosco, Cir. No. 81-1500
(D. C. 1981).
36 General Counsel Connerton has brought a counter-quit against
Powell, who was not a plaintiff in the lawsuit,
and is seeking over a $1 million in damages for Powell's alleged
part in a conspiracy to embarrass Connerton and take over the
of Thomas W. Needham, supra note 2.
Racketeering Hearings, supra
note 5 at 99-128;deposition of Robert Powell before the President's
Commission on organized crime.~
generally S. Rep. No. 427, 96th
Cong. 1st Sess. (1979)
Labor Union Insurance: Hearings Before the Permanent Subcommittee
on Investigations of the Senate Committee on Governmental Affairs,
95th Cong., 2d Sess. 50 (1979).
transcript of court authorized intercept at the Maison Dupuy Hotel,
New Orleans, Louisiana, April 2, 1979.