Crain's Chicago Business






March 13, 1995

Chicago has become the focal point for growing opposition to a government-ordered crackdown on organized crime in the Laborers union.

Some local Laborers officials are said to be under intense pressure-caught between the international union's demand for cooperation and opposition from forces aligned with Chicago union boss John Serpico.

Mr. Serpico was suspended by the international union in January, after he refused to endorse a new union ethics code barring ties to organized crime.

Meanwhile, there is talk that some presidents of Chicago area union locals may soon resign.

"There's a lot of intimidation," says a Chicago attorney familiar with the situation. "Here's the problem: Nobody knows what to do."

The resignations have "not occurred yet," says a source close to the Laborers' Chicago District Council.

After several years of investigation, and under threat of federal racketeering charges, the Department of Justice and the 700,000-member Laborers International Union of North America (LIUNA) announced agreement on a consent decree Feb. 15 that would allow a federal takeover of the union if it fails to purge itself of mob influences within 90 days.

Federal investigators over the years have pointed to Chicago as one of the principal centers for organized crime influence in the union.

Anticipating the crackdown, LIUNA suspended Mr. Serpico and a New Jersey union official in mid-January.

By early this week, a New York local of the Laborers union is expected to file a lawsuit in federal District Court in Chicago, seeking to stop the international union's co operation in the federal government crackdown.

"We're trying to get a court to say you can't do it," says Richard Lipsitz, attorney for Local 201 in Buffalo.

That suit mirrors a class-action complaint filed by an individual Laborers union member in Chicago in early February.

The two suits are likely to be consolidated with one filed by Mr. Serpico to block his ouster, shortly after he was suspended from his post as an international vice-president.

Mr Serpico, who also is chairman of the Illinois International Port District, is a political powerhouse in Chicago who was appointed to head Chicago's port authority by the last three governors, despite his acknowledged longtime ties to individuals allegedly involved in organized crime.

However, Mr. Serpico's suspension from the union has prompted Gov. Jim Edgar to review his appointment of Mr. Serpico last year to another five-year term (CRAIN'S, Jan. 30).

Samuel Betar Sr., a prominent criminal defense attorney in Chicago, insists that his client, Richard Noreen, is the sole instigator of the class-action complaint against the international union officials.

Acknowledging an individual member's right to sue, a lawyer for the international union has warned Chicago union officials that union funds must not be used to pursue the suit.

"He's paying," says Mr. Betar. "I'm too old to do pro bono."

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