BY LESTER VELIE
While the press and federal law enforcers have focused on organized crime inside the Teamsters, the Mafia has moved, virtually unimpeded, into other unions affecting critical industries
FOR A LABOR LEADER,
Alfred Pilotto, president of Local No. 5 of the Laborers' International
Union, has curious credentials. Federal and local law enforcers
who keep tabs on him as part of their organized-crime intelligence
gathering activities describe Pilotto as a Chicago syndicate underboss,
supervising mob interests on the city's South Side. As such, he
is alleged to be one of five lieutenants immediately below the
Chicago mob's operating director, Joseph Aiuppa.
Another reputed gang underboss, Vincent Solano,
while serving as president of Laborers' Local No. 1, directs mob
interests on the North Side, according to law enforcers. The other
Laborers'' locals in Chicago are influenced by Pilotto from his
post as vice president on the Chicago Laborers'' District Council.
Change names and places-to New York State,
say, or Florida- and the Mafia is deep inside the Laborers there
as well. Organized crime's hold on this union of 650,000 largely
unskilled construction workers points to a frightening fact. While
the press and federal !law enforcers have focused on criminal
influence inside our biggest union, the Teamsters, the Mafia cancer
has spread, virtually unimpeded, in other important unions-including
the Hotel and Restaurant Employees and Bartenders International
Union (Culinary Workers) and the International Longshoremen's
Association, both affiliated with the AFL-CIO.
With these unions, the Mafia has control
over "tollgates" straddling such critical industries
as transportation, construction, hotels, tourism and eastern-seaboard
shipping. Through these tollgates pour millions in tribute from
the sale of labor peace (freedom from work stoppages) and from
sweetheart contracts (freedom from paying going wages). Add new
rivers of loot from union pension funds, whose assets now exceed
$25 billion, and from union health and welfare funds. This makes
labor racketeering one of the Mafia's biggest and most rewarding
industries. Few of us-either as wage earners who are robbed of
a just wage or as consumers who pay higher prices-remain untouched
Did we get into this fix because we lack adequate laws? No. We
have the Landrum Griffin Act, passed by Congress in 1959 following
Senate committee disclosure of union corruption. We also have
federal statutes against racketeering.
What has been missing is enforcement. Congress
handed responsibility for enforcing Landrum-Griffin to the Labor
Department. But, traditionally, Labor officials have been friendly
partners with union leaders in fashioning training programs,
safety regulations, full-employment pro projects. Also, Assistant
Labor Secretaries who enforce Landrum-Griffin come out of the
unions and understandably do not relish the role of "cop"
against fellow unionists.
Take the frustrating case of the Great Florida
Union Robbery. When William Gamble, a lanky and boyishly eager
Air Force veteran, joined the Labor Department as a Landrum-Griffin
compliance officer in 1970, he was assigned to the Organized Crime
Strike Force at Miami, one of 15 such units in the country. Captained
by a Justice Department lawyer, the strike force draws its investigative
manpower from the FBI, the IRS, the Drug Enforcement Administration,
the U.S. Customs Service, the Labor Department and other agencies.
As a Labor Department representative in Miami,
Gamble had opportunities for labor racket-busting as numerous
as they were urgent. Members from 17 of the country's 27 crime
families had taken up residence in the Sunshine State. Many had
come because the climate of law enforcement in southern Florida
was even milder than the weather, and because no single crime
family had staked out exclusive racket privileges. Others had
come, particularly from Chicago and New York, to infiltrate construction
unions and levy tribute both on contractors and workers engaged
in the building boom of the 1950s.
But when Bill Gamble rolled up his sleeves
to investigate labor racketeering, he found that the Labor Department
didn't regard him as a criminal investigator at all. Gamble investigated
the same crimes as his FBI colleagues on the strike force: embezzlement,
extortion, racketeering. He confronted the same violence: five
Miami union leaders would be murdered between 1968 and 1977. But,
unlike the FBI agents and other investigators, Gamble was not
empowered to carry a gun or sign out a search warrant. In 1969,
during the tenure of Assistant Labor Secretary Willie Usery,
the Civil Service Commission had classified Landrum-Griffin compliance
officers as "general administrative employees."
Ironically, "administrative employee" Gamble's first
major encounter was with a union extortionist, Richard Nell, head
of an International Union of Operating Engineers local. Nell's
heavies had destroyed thousands of dollars' worth of construction
equipment and had sent two policemen to the hospital. Gamble and
colleague Hugo Menendez ended Nell's reign with the help of contractors
and union members who risked their lives to testify. Nell was
sentenced to five years in prison for racketeering, extortion
and income-tax evasion. He would also have to serve three years
on a prior conviction.
Gamble and Menendez then targeted two more
predators. One was Bernard G. Rubin, czar of the six Laborers''
Union locals and trustee of six Laborers' trust funds in southeast
Florida. By 1974, Rubin was dealing himself $180,000 yearly in
salaries alone, without the consent of his 10,000 Laborers. This
was twice the salary of George Meany, president of the 14-million-member
Their other target was Rubin's union lawyer
and business associate, Seymour Gopman. Gopman counseled some
dozen locals and 40 union trust funds. His law firm had a virtual
monopoly on union legal work in southern Florida, drawing more
than $7 million yearly in fees.
Gamble and Menendez had run across the trail
of Rubin and Gopman while looking into the financial affairs of
the head of a Laborers' local. But when they started investigating
the pair, the Labor Department pulled Menendez off the strike
force to supervise union elections and handle similar civil chores.
There had been four Labor Department representatives
on the Miami strike force when Gamble joined up. Now, on the eve
of the Rubin-Gopman investigation, there were only two. And the
Labor Department kept interrupting Gamble's pursuit by assigning
him to inconsequential duties. Once, for example, Gamble had to
stop his strike-force work to look into the theft of $150 from
a union treasury- by a man who was already dead. When Gamble protested
against this interruption of his racketeering investigations,
his Labor Department superiors would tell him: "Remember,
we're not cops."
Eventually, the Justice Department supplied Gamble with a partner
who more than compensated for the distractions from the Labor
Department: lawyer Marty Steinberg. Together, the two tackled
a roomful of financial records pried from Rubin and Gopman.
In trailing union thievery, investigators
usually study one set of union books or trust accounts at a time.
But Gamble and Steinberg laid out the disbursement records of
all the locals and trust funds with which Rubin was involved.
When they checked travel claims against reimbursements, burglar
alarms began to clamor. For a union business trip to Honolulu,
for instance, Rubin billed the expense to one of his locals and
to three trust funds. The total: $7116. In over four years of
double and quadruple dipping, Rubin's peculations from this source
alone came to more than $$50,000.. Unauthorized salary increases
provided an additional $$329,000. Gopman had even more locals
and trust funds to tap. For one trip to San Francisco, lawyer
Gopman billed 12 union trust funds for a total of $15,600.
Tried first, Rubin was convicted on 103 counts
of labor racketeering, embezzlement, failure to keep union records
and tax evasion-and sentenced to five years plus a $$50,000 fine.
Although convicted, Rubin retained his union offices pending appeal.*
According to Marty Steinberg's sworn testimony before the Senate
Permanent Subcommittee on Investigations, Rubin also continued
to make out sizable checks against union treasuries and trust
funds. When Steinberg asked the Labor Department to name a monitor
to slam the door against further pillage, the Labor Department
said no. It wasn't until a federal court threatened to lift Rubin's
bond and jail him unless he resigned his union offices that Rubin
stepped down. By then, according to Steinberg's testimony, he
had allegedly embezzled an additional $2 million.
*This past October, the U.S. Supreme Court
considered Rubin's petition. Because the U.S. Circuit Court of
Appeals had not reviewed the two counts against Rubin relating
to unauthorized salary increases, the Supreme Court vacated the
judgment and remanded the case to the Fifth Circuit. A reversal
of these counts would not affect Rubin's sentence, but might make
him eligible for an earlier parole. Therefore, the Supreme Courts
ruled that he was entitled to a review of those charges.
Gopman presented other problems to Gamble and Steinberg as he
fought all the way to the Supreme Court to prevent the production
of his financial records. Although Gopman was unsuccessful in
this, the delay cost Gamble and Steinberg two years to win a 1977
indictment against him. It listed 104 counts, charging Gopman
with $1,840,000 of thefts from union members' dues and welfare
benefits. Gopman bargained out a four-year sentence by pleading
guilty to four of the charges, including embezzlement, accepting
kickbacks on a pension-fund loan, multiple expense-account billing
and income-tax evasion. He gave up his lawyer's license and accepted
a court order that barred him from ever serving unions or union
welfare funds again.
Yet, for Gamble and Steinberg, the end of
the Rubin-Gopman affair brought vexation rather than elation.
Much larger business remained unfinished. The Mafia's influence
in Florida unions still had to be uprooted. But, again, the Labor
Department wasn't cooperating.
Gamble and Steinberg had already gathered
substantial evidence of mobster influence in Florida's unions.
For instance, Steinberg had revealed in Senate testimony that
the Miami Strike Force had two protected witnesses who told how
New York and Chicago mobsters had gained control of some Florida
unions and their trust funds.
Gamble and Steinberg had sniffed out a Chicago
connection while exploring a maze of companies that administered
a dental and eye care program for members of the Southeast Florida
Laborers' District Council. The top company, based in Chicago,
was called Consultants and Administrators, Inc. (C&A).
Our own investigation revealed interesting
ties between C&A and the Laborers' Union, both in Florida
and in Chicago.
In Florida, for example, a director of the
C&A subsidiary, whose clinics provided the care, was Paul
Fosco, son of Laborers' president Angelo Fosco. Young Fosco pleaded
self incrimination when the Senate Permanent Subcommittee on Investigations
questioned him about his role in the sale of life and health insurance
to union groups.
In Chicago, C&A has a dental and eye
care contract with the Laborers' District Council health and welfare
fund, one of whose trustees is Alfred Pilotto, the reputed mob
underboss we have already met. C&A contracted part of its
administrative duties to a firm headed by Pilotto's son-in-law,
James Pinckard. The firm's incorporation papers listed as its
address the four-family dwelling occupied by Pilotto's family,
including the Pinckards-Jim and Celeste.
A federal grand jury in Chicago, assisted
by the FBI, is investigating the Chicago Laborers dental and eye
care program to see if racketeering laws have been violated.
In the meantime, in Miami, strike-force chief Atlee Wampler, III,
pleaded with the Labor Department more investigative manpower.
For want of sufficient help, Wampler argued, some 22 mobsters
and fronts continued their pillage immune from investigation.
The Labor Department's response at first was to announce the pull-out
of more of its men.
Early this year, Assistant Labor Secretary
Francis X. Burkhardt announced that, of the 64 of his compliance
officers assigned to the Justice Department, all but 15 would
be transferred by October 1-leaving but one for each task force.
These would "coordinate" rather than investigate. When
I asked Burkhardt about his agency's virtual withdrawal from the
Justice Department's strike forces, he gave me his own view on
how to fight labor racketeering. The most effective way, he said,
was by enforcing the pension-reform act of 1974 known as the Employee
Retirement Income Security Act, which calls for civil suits aimed
at removing faithless trustees and recovering pilfered money.
Justice officials scorn this approach, pointing out that it has
not broken the mob's grip on the Teamsters.
Moreover, to police some 2000 union pension
funds and another 2500 health and welfare funds (all jointly managed
by union leaders and employers), the Labor Department musters
a thin line of fewer than 300 investigators, accountants and lawyers.
Meanwhile, gangsters and their fronts remain in place to continue
depredations unrelated to pension funds.
The way to contain labor racketeering, Justice
Department officials contend, is to clean out tainted unions by
sending gangsters and their fronts to jail. And there is hope.
Under severe criticism from the Senate's Permanent Subcommittee
on Investigations, the Labor Department was in the process, last
October, of hiring go people- including 64 field investigators
and 14 supervisors-for assignment to the organized-crime strike
forces. While the Labor Department described its new sleuths as
"criminal investigators," they would not carry firearms,
or have arrest powers as FBI and Customs Service agents do. Consequently
they would not be assured the early retirement that goes with
hazardous work. This, it was felt by Justice Department critics,
would discourage experienced criminal investigators from seeking
the new Labor Department jobs.
So, while the Justice Department was happy
with the Labor Department's changed attitude toward labor racketeering,
law enforcers felt that they would have to rely chiefly on the
The FBI, our chief investigative arm, is
no longer reluctant to battle union corruption for fear of incurring
the charge of union busting. Indeed, stopping labor racketeering
has become one of the Bureau's top priorities. In specialized
programs at the FBI training center in Quantico, Va., agents are
studying union structure, labor law, and the techniques with which
racketeers plunder union funds.
A turn-around in the war against the Mafia's
power inside labor could be under way. With the expected new help
from the Labor Department and from the FBI, the Justice Department
plans a nationwide drive to break the Mafia's grip on the Laborers'