Crain's Chicago Business

LOCAL LABOR BOSS FACES UNION OUSTER:

MOB CLAIMS ARISE AMID KEY CONTRACT TALKS WITH CITY

 

By PAUL MERRION

April 26, 1999

Citing his alleged ties to organized crime, Laborers Union investigators have launched a disciplinary proceeding against Chicago labor boss Bruno Caruso that could lead to his expulsion from the union.

According to The Laborer, the official bimonthly magazine for the union's members, Mr. Caruso and his brother, Frank, as well as his cousin, Leo -- all of whom are current or former officials with the union or its benefit funds -- were charged by attorneys for the international union with conduct barred under the union's ethics code and violations of the union's constitution.

The charges are filed with independent hearing officer Peter Vaira, who presides over a cleanup of the union under a 1995 agreement between the federal government and the union.

The magazine states that the charges stem from the three men's "knowing association with members and associates of organized crime and for permitting organized crime to exercise control over the affairs of the union."

Last year, the Washington, D.C.-based Laborers International Union of North America took over the Chicago District Council, which Bruno Caruso has headed since 1994.

The trusteeship relieved him of his position as president and business manager of the umbrella organization that oversees 21 Chicago locals and their 19,000 members.

"It's not questionable, I got charged," says Bruno Caruso. But the trusteeship and the most recent charges filed against him were "done improperly and never proven to begin with," he adds. "There is no question I wouldn't fight this. I'm going to take it wherever I can afford to take it."

'Big asset' in negotiations

Although an international union trustee now runs the Chicago District Council, Bruno Caruso retains a significant part of his power base as president and business manager of Local 1001, which represents about 2,700 city employees.

However, investigators for the international union may also seek a takeover of Local 1001, separate from the disciplinary charges pending against Bruno Caruso.

"It's under consideration," says Dwight Bostwick, one of the former federal prosecutors hired by the union's general executive board (GEB) to investigate organized crime allegations. "I can certainly say no one is ruling that out." He declined to comment on the charges.

The disciplinary action comes at a critical time for the Local 1001 president as he heads a coalition of unions now in talks with the city over a multi-union contract for about 10,000 workers in the Department of Streets and Sanitation and other city agencies.

It is not clear what effect these disciplinary proceedings will have on those negotiations, which began just recently and are expected to take several months to complete.

"If he's unable to attend or distracted in any way by this, we'll lose a good person who's there to represent his membership," says Daniel Stefanski, principal officer and secretary-treasurer of Teamsters Local 726, who co-chairs the union coalition's bargaining team with Mr. Caruso. "He's definitely a big asset at the negotiating table."

The recent charges filed against Mr. Caruso by the union's independent GEB attorney are among the latest in the international union's ongoing government-ordered housecleaning to rid it of its connection to organized crime.

Leo and Frank Caruso could not be reached for comment, but a spokesman for Leo Caruso, president of Local 1006, said he also would contest the charges.

"The charges will be fought by Bruno and Leo Caruso," said Stanley Kravit, a labor relations consultant for Local 1001. "There's no question about that."

Under a 1995 agreement with the Department of Justice, charges against individuals and trusteeship actions brought by the GEB attorney are referred to an independent union hearing officer, who rules on their validity and recommends disciplinary action to the union's general executive board.

Court filing

While specifics of the GEB attorney's charges against individuals are not made public, a court fight last year over the international union's decision to take control of the Laborers' Chicago District Council led to a report filed in the District Court discussing evidence of the alleged ties between the mob and Bruno, Frank and Leo Caruso.

"The evidence chronicles a history of organized crime influence over the District Council that spans at least 25 years," according to a trusteeship order by hearing officer Mr. Vaira, a former U.S. attorney in Philadelphia.

His order, based on the testimony of 45 witnesses and 200 exhibits presented over 19 days of hearings, was filed as an exhibit in federal court after Bruno Caruso and the Chicago District Council sought to block the takeover.

Vaira's findings

According to court records, Mr. Caruso refused to turn over the union's keys and bank records to attorneys for the international union until the trusteeship was enforced by a federal court order.

In his trusteeship order, Mr. Vaira found that the "contacts between Bruno Caruso and the mob are too numerous and too repetitive to be accidental. The testimony of witnesses who were well-situated in the Chicago Outfit is well-corroborated. Caruso's testimony regarding his lack of knowledge of the individuals is not credible. There is proof by a preponderance of the evidence that Bruno Caruso is at least an associate of the Chicago Outfit."

Mr. Vaira also found that Bruno's brother, Frank "Toots" Caruso, a former president of Laborers Local 1006, and Leo Caruso, the current president and business manager of Local 1006, were associates of organized crime in Chicago, according to the trusteeship order.

However, Mr. Vaira found that the GEB attorney did not prove charges of financial malpractice at the Chicago District Council.

1995 ethics code

According to The Laborer, the GEB attorney also initiated union disciplinary proceedings recently against James DiForti, a former mid-level Laborers official in Chicago who is under indictment for first-degree murder.

The murder allegedly was related "to a dispute over a mob 'juice loan,'" that Mr. DiForti was attempting to collect, according to the GEB attorney's post-hearing brief seeking trusteeship of the Chicago District Council, as disclosed in federal court last year.

Although Mr. DiForti and Frank Caruso no longer hold union leadership posts, they are eligible to apply for reinstatement, according to The Laborer.

In a final ruling in January, U.S. District Court Senior Judge James B. Moran upheld Mr. Vaira's authority as independent hearing officer (IHO) to impose the trusteeship.

"The IHO, as a due process filter, has heard and read a massive amount of evidence, and he has ruled," Judge Moran wrote. "Those rulings have evidentiary support. And that is the end of it."

However, the District Court decision was appealed earlier this month, according to Bruno Caruso.

In early 1995, to avoid federal racketeering charges, the union's international board adopted a new ethics code barring officials from "knowingly associating with any member or associates of an organized crime family or syndicate."

Later in 1995, the union entered a broad agreement with the federal government to hire a group of independent, outside lawyers -- including former federal prosecutors and a high ranking FBI official -- to enforce the new ethics code. The deal, which is closely watched by the Justice Department, calls for a federal takeover if the union fails to reform itself to the government's satisfaction.


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