BY EUGENE H. METHVIN
READER'S DIGEST Senior Editor Eugene H.
Methvin, was a member of the President's Commission on Organized
Crime from 1983 to 1986.
A MAFIA-CONNECTED CROOK takes over a waste-disposal
company by threatening its president with death. He then illegally
deposits toxic chemicals at a Staten Island dump, which eventually
explodes, causing a spectacular fire.
FBI agents monitoring an informant's body wire hear two men talk of bribing a New York judge to "fix" a narcotics prosecution. Their investigation ends with the conviction of the judge on four counts of accepting bribes, over more than a dozen years, to help a gangster, two gamblers and a narcotics dealer.
When Tony Scotto, a vice president of
the International Longshoremen's Association and a capo in the
Gambino Mafia gang, goes on trial for extortion from shipping
companies, then Governor Hugh Carey and former New York City mayors
Robert Wagner, John Lindsay and Abraham Beame testify as character
witnesses. FBI tapes of Scotto's own voice in criminal conversations
leave no doubt about his guilt, and he serves three years in prison.
When Scotto comes out, top New York politicians flock to a festive
"welcome home" dinner in his honor.
METROPOLITAN NEW YORK, home to 18 million
people, is also home to a clandestine army of 940 identified La
Cosa Nostra gangsters and nearly 10,000 criminal associates. From
their New York headquarters they manage illicit enterprises stretching
from Massachusetts to Florida to California. To a shocking degree,
the Mob "owns" New York.
The modern U.S. Mafia began in New York in
1931 when warring Italian gangsters made peace, dividing themselves
into five "families" and creating a "commission"
of bosses to arbitrate disputes and enforce rules. They called
their confederation La Cosa Nostra, "Our Thing." The
commission added representatives from other cities and grew to
rule a nationwide crime syndicate.
Consider how La Cosa Nostra reaches deep
into the pockets of New Yorkers and of every other American family:
Federal authorities say Mafia gangsters control 104 New York locals,
embracing 163,000 members, of four major unions-the Longshoremen,
Laborers, Teamsters, and Hotel and Restaurant Employees. Such
control, reports the President's Commission on Organized Crime,
"has enabled the Mob to determine who will do business, to
decide when and where people will work and even to dictate wages
and benefits. Millions of consumers unknowingly pay organized
crime a surcharge on a wide range of goods and services."
A tenth of the nation's sea cargo moves through
the New York-New Jersey ports, and Kennedy International Airport
handles most of the air cargo between the United States and Europe.
Controlling Teamsters who drive the trucks and Longshoremen who
man the docks, La Cosa Nostra levies a heavy tax on the nation's
consumers through extortion, hijacking, cargo theft and insurance
fraud. The Syndicate has undermined the competitiveness of American
goods and has placed a tremendous economic burden on the entire
Mob-dominated Teamster locals include some
2500 truck drivers, warehousemen and office workers who staff
Kennedy Airport's 200 air-freight companies and handle an estimated
$50 billion in cargo yearly. Their boss, according to the President's
Commission on Organized Crime, is Harry Davidoff, whom a Senate
report labeled "a ruthless thug." Gangsters use the
Teamster locals to maintain an intelligence-gathering network
for planning heists of rich cargoes- gems, negotiable securities,
cash. The Justice Department is prosecuting Davidoff and six others-a
company executive and five Syndicate associates-on charges of
conspiring to commit extortion.
New York's mobsters own major meat, fish and poultry suppliers.
During one legendary investigation, New York detectives recorded
a conversation between a gangster and a customer. The buyer, who
suspected he was being given horse meat, was told: "Well,
some of it moos, and some of it don't moo." A recent federal
indictment charges Anthony "Fat Tony" Salerno, the Genovese
gang boss, with extorting kickbacks on the rolls and hot dogs
supplied to many Manhattan fast-food eateries.
In 1982 a Teamster official's testimony and
FBI electronic surveillance revealed a cartel involving four major
city moving companies.. According to the resulting indictment,
Bonanno gang boss Phil Rastelli exacted an extortion fee on all
moving contracts and oversaw its distribution to Mob and union
officials. To its chagrin, the FBI found it, too, had unknowingly
paid tribute of $3500 when it used one of the companies to move
into the new Manhattan federal building.
A fifth of the nation's made-in-America clothing
comes through New York's Garment District, and virtually every
pocket is pre-picked by the Mafia. The industry is supplied by
small shops all over the city. To move their clothing to warehouses,
the shops must hire Mob-dominated trucking companies that charge
double what independent truckers would if they dared compete.
Shop owners do not hire cheaper competitors for fear of reprisal.
"Our shop doesn't have fire insurance," one owner explained
when asked why he did not hire a cheaper trucker. A trucking company
executive who dared tell a grand jury about Mob methods of dealing
with competitors and honest unions was murdered by a hail of bullets
from a passing car.
Syndicate domination of the waste-removal
industry goes back several generations. New York's 4oo,ooo industrial
and commercial enterprises have to rely on some 400 small carters,
mostly of Italian extraction. La Cosa Nostra enforces an illegal
customer-allocation cartel among them, collecting a share of the
profits. When one carter refused to join the Mob-dominated trade
association, his 73-year-old mother-in-law answered a knock on
her door and was killed by a shotgun blast in the face. Another
carter refused to sell a dump to a mobster; his house was torched
with his two children inside.
Over the past 30 years, at least 14 major
criminal Investigations and prosecutions, plus repeated Congressional
probes, have failed to loosen the Mafia's grip on carting. One
result, according to Rand Corporation economist Peter Reuter,
is that carting prices are 50 percent higher than they would otherwise
A recent investigation by The Wall Street Journal concluded that
New York's $2-billion-a-year construction industry is "riddled
with extortion, vandalism, bribery, bid-rigging and inefficiency."
Building costs are 25- to 35-percent higher than in any other
city, with more than half of that going into Mafia coffers. Take
just two examples:
Businesswoman Tama Davis budgeted $100,000
to open a small restaurant at the South Street Seaport. Shakedowns,
union featherbedding and other problems ballooned her start-up
costs to $$350,000. Her operation is now defunct.
As the new headquarters of Dow Jones &
Co. neared completion this year, the work was marked by shakedowns
and extortion. Vandalism alone cost the company $500,000, and
there were thefts of everything from a $$50,000 air conditioner
to a 400-pound safe. Says a Dow Jones official, "If it were
my decision, I would never build in New York again."
New York gangs also run a stable of experts adept in stock manipulations,
insurance and bankruptcy scams and sophisticated bank frauds.
Their swindles repeatedly cause financial disasters. For example,
four New Jersey banks closed after corrupt unions
lured them into accepting big deposits of
benefit funds and relending the money to gangsters-who failed
to repay. One Mob-connected swindler snaked $14.5 million out
of another New Jersey bank, much of which went into a loansharking
operation and to a drug dealer.
Colombo gang captain Michael Franzese defrauded
victims ranging from General Motors and Mobil to the U.S. Small
Business Administration. But his biggest scam was bootleg gasoline.
Franzese put together a combine of independent distributors, who
were seduced or muscled into a complex corporate shell game that
siphoned gasoline out of legitimate companies, via a chain of
phony companies, avoiding federal, state and local taxes. In two
years the combine stole more than $$150 million. After co-conspirators
turned government witnesses, Franzese, sentenced to ten years
in prison and five years' probation, was ordered to forfeit $4.75
million in property and to repay $10 million to various victims.
No one knows where the rest of the money went.
New York's Mafia bosses smuggle in a large percentage of the 13,000
pounds of heroin sold yearly in the United States, nearly half
of which is consumed by New York addicts. In 1984, federal and
New York City Police Department investigators began a two-year
probe, tracing dozens of seemingly separate sales organizations
to a handful of Mafia gangsters. These mobsters were smuggling
in more than $2 billion worth of heroin annually, enough to supply
nearly 100,000 addicts. In early-morning raids last April, federal
agents and state and city police rounded up 38 gangsters whose
top bosses belonged to the Lucchese and Genovese families.
SIX YEARS AGO, top FBI officials realized
their assault on the Mob was faltering. "Inadvertently, we
were a career-development service for them," one G-man told
me. "We'd knock off some older bosses and they'd promote
younger, more vigorous men. They kept growing richer and stronger."
So the feds launched a new attack, exploiting
a hitherto little used statute Congress had passed in 1970: the
Racketeer Influenced and Corrupt Organizations (RICO) law. Under
RICO, anyone who has committed, within a decade, two or more of
a long list of federal or state crimes while promoting a racketeering
enterprise, can be convicted of federal conspiracy, a felony carrying
a long prison term. Moreover, RICO provides for seizing racketeers"
property and for such civil sanctions as removing them from union
office, dissolving their corporations and imposing lifetime bans
on their engaging in specified businesses.
Today, counting FBI, IRS, Labor Department
and other federal, state and city agencies, almost a thousand investigators are after the Big
Apple's gangland chiefs. The New York attorney general's organized-crime
task force and U.S. Attorneys in Manhattan and Brooklyn have pooled
electronic surveillance evidence from dozens of sprawling investigations,
and the Justice Department has sent top experts from 14 cities
to screen the thousands of hours of secretly recorded Mafia conversations.
The result: the first indictments of the Mafia's top bosses just
for operating the Cosa Nostra Commission.
Meanwhile, in other trials, the Justice Department's
racket-busters have convicted one gang boss and one underboss;
prosecutions have been launched against four other bosses and
two underbosses. Of 57 identified active capos commanding La Cosa
Nostra groups in New York, IT have been jailed, 22 more indicted,
and the rest are under intense investigation.
Still, the racket-busters realize that this
is only a beginning. The Justice Department and federal judges
must do what Congress long ago ordered: move beyond jailing a
few top gangsters and corrupt union bosses, and use civil RICO
actions to seize the Mob's companies and property, and remove
the hundreds of union officials who betray their members' trust
by letting gangsters run their labor rackets. Until then there
will be all too much truth in the claim: "The Mob owns New