BY EUGENE H. METHVIN
READER'S DIGEST Senior Editor EUGENE
H. METHVIN was a member of the President's Commission On Organized
Crime and supervised its investigation into union corruption.
Joe Teitelbaum, owner of a Miami stevedoring
company, became so fed up in 1975 with shakedowns by the International
Longshoremen's Association (ILA) that he turned to the FBI. The
G-men were ecstatic to have an industry insider bold enough to
wear secret tape recorders and introduce undercover agents to
A federal probe lasting five years uncovered
a massive, Mafia managed cartel stretching from Boston to Houston.
The racketeers sold labor peace on the docks where delays can
cost shipowners $35,000 a day, rigged bids on ship repairs, orchestrated
fraudulent workmen's compensation claims, shook down employers
for payoffs and fingered cargoes for truck hijackers. Dockworkers
even had to pay a daily kickback to get work.
The FBI's biggest catch was the ILA's No.
3 officer, Anthony Scotto, boss of Brooklyn Local 1814. FBI electronic
surveillance captured irrefutable evidence that Scotto was a capo
in the Gambino gang, one of New York's top crime families. The
Gambino organization controlled the docks as far south as Norfolk,
Va., while the Genovese gang-another major New York crime family-ran
the ILA locals farther south.
By 1981 Justice Department prosecutors had
convicted 52 union officers and 58 company executives and corporations.
Despite the convictions, little changed. The FBI subsequently
recorded Gambino boss Paul Castellano boasting, "It's our
International." Last January the President's Commission on
Organized Crime reported, "Life on the docks today remains
much as it was."
The frustrating result of this, the most successful labor-racketeering
probe the FBI ever mounted, underlines a national scandal: four
major American labor unions, with a total of nearly three million
workers, are dominated by La Cosa Nostra, the crime syndicate,
and its allies. The "Bad Four" are:
The International Brotherhood of Teamsters
(IBT), whose l.9 million members
range from airline pilots to truck drivers. The IBT has been under
the mob's thumb for three decades. Former president Roy Williams,
imprisoned for conspiring with Mafia leaders to bribe a U.S. Senator,
acknowledged under oath that every major Teamster local "had
some connection with organized crime" and his successor,
Jackie Presser, is as controlled "as I was."*
representing 116,000 dockworkers on the East Coast, the Gulf Coast
and the Great Lakes. Through this union, reports FBI Director
William Webster, the mob imposes a "racket tariff" on
all goods shipped through U.S. ports. Syndicate-managed thefts
at Miami docks alone total $2 billion a year-costs that are passed
directly to shippers and consumers.
The Hotel Employees and Restaurant Employees
International (HERE), whose 400,000
members are "owned" by the Chicago Mafia, according
to Congressional testimony and the FBI. In nine years the union's
assets have dropped from $21.4 million to less than $14 million.
Millions have been siphoned away in "loans" to gangsters
The Laborers' International (LIUNA),
whose 509,000 members are concentrated in heavy construction and
the building trades. In addition to extorting kickbacks and payoffs,
LIUNA leaders rig bids, fix prices and order contractors to buy
supplies from mob-controlled firms. By one authoritative estimate,
the Mafia monopoly adds 20 percent to construction costs in New
The presidents of all four of 11 these unions
have invoked the Fifth Amendment in refusing to answer official
inquiries about criminal activities. Though AFL-CIO policy prohibits
officials who take the Fifth from holding union office, the presidents
of the three AFL-CIO unions continue to sit on the parent body's
executive board. (The Teamsters were expelled from the AFL-CIO
for corruption in 1957.)
Federal law-enforcement authorities, for their part, have ample
legal power to clean up these unions, particularly with two weapons
Congress gave the Justice Department in the 1970 Racketeer Influenced
& Corrupt Organizations statute (RICO).
Legislators provided in RICO both criminal
and civil sanctions for those engaged in a "pattern of racketeering."
To imprison them, prosecutors must produce "proof beyond
a reasonable doubt." But in a civil proceeding, government
prosecutors or private parties need only supply a "preponderance
of evidence." Then a jury or judge can impose triple damages.
A judge can dissolve or seize racketeers' companies, oust them
from their union posts or welfare-fund trusteeships, and ban them
for life from specified business or union activity.
The late Sen. John L. McClellan (D., Ark.),
the legislation's author, predicted the civil RICO law would assure
the "wholesale removal of organized crime from our organizations
and forfeiture of their ill-gotten gains."
But in 15 years, the Justice Department's
organized-crime strike forces have brought just 68 criminal RICO
prosecutions, with a distinct minority of those against union
racketeers. These cases yielded only $1.1 million in fines and
$3.2 million in forfeited assets. The neglect of the civil RICO
weapon has been even worse: a mere six cases in 15 years, only
one against a union racket.
By contrast, states that have adopted their
own RICO statutes have put Washington's record to shame. Florida
has had its statute only nine years, yet its attorney general
has won $8.3 million in 39 civil RICO cases against racketeering
enterprises as diverse as pornography, prostitution, theft, fraud
and drug smuggling. In six years Arizona has brought 75 RICO prosecutions
and chalked up judgments exceeding $16 million.
Clearly, there is a great deal more to do on the federal level.
Indeed, one of the few outstanding federal civil attacks on labor
racketeering shows what can be accomplished by an all-out offensive.
In New Jersey, Mafia capo Tony Provenzano
and his family ruled a Teamster empire, embracing 35 locals and
90,000 members, by sheer terror. In his own Local 560, two members
who dared oppose Tony Pro were murdered-one gunned down as he
left home the morning after speaking out at a union meeting.
The Provenzano group bilked Teamster welfare
funds and oversaw Mafia loan-shark activities. They also infiltrated
legitimate trucking companies to perpetrate a series of frauds
and inside thefts, bleed the firms white and force them into bankruptcy.
To avoid labor troubles, employers were compelled to make wholesale
payoffs and hire ghost employees.
Justice Department prosecutors sent Tony
Pro to prison for extortion. Yet he continued to run the union
from his prison cell, his brothers assuming his official posts
in Local 560. When Provenzano was finally put away for life for
murdering a Teamster worker, his successor was none other than
his 23-year-old daughter.
Then on March 9, 1982, Newark Strike Force
chief Robert C. Stewart filed the first-ever civil RICO suit against
a union. After a four month trial, he won a resounding victory.
Federal Judge Harold Ackerman declared that the evidence revealed
"how evil men engaged in a multifaceted orgy of criminal
activity," and he ordered the removal of the entire Local
560 executive board and the appointment of his own trustees to
run the union. An appeal of his order is pending.
Stewart's New Jersey triumph had strong reverberations in Washington.
Assistant Attorney General Stephen S. Trott told Congress, "The
Local 560 case has opened our eyes to the potential of civil RICO.
Future cases along the lines of Local 560 will be instituted."
Months passed, and nothing happened. Last
March, the President's Commission on Organized Crime scored Justice
Department inaction and called for a nationwide strategy "to
bankrupt individual mobsters and to discourage union officers,
employers and public officials from accommodating organized crime."
But an effective federal assault will have to overcome these longstanding
1. Lack of political will.
Busting union rackets has never been popular work in Washington.
Explains one former Labor Department investigator: "The rank-and-file
union members are powerless, while their leaders can make campaign
contributions, provide telephone banks and move voter blocks--muscles
that win elections."
Thus, ILA vice president Scotto marched Brooklyn
dockworkers to cheer candidate Jimmy Carter, and President Carter
invited him to lunch-even after FBI agents had recorded incontrovertible
proof of his Mafia membership and union piracy.
President Reagan has entertained Teamster
leaders Williams and Presser at the White House. In 1980 top LIUNA
officers trooped to the White House to have their picture taken
with Vice President Walter Mondale and present him with a campaign
contribution. In the last two Congressional campaigns, the Bad
Four collected $4.7 million to aid favored candidates.
Declares the President's Commission: "When
corrupt union leaders are seen joining hands with politicians
it conveys a message that political leaders are beholden to the
union. Such contacts can erode public confidence and dampen the
desire to end racketeering. Organized crime is aware of this and
purposefully seeks to cultivate and benefit from political influence."
2. Anemic enforcement.
Congress has never provided enough personnel and funds to enforce
the laws it has passed to safeguard union members' rights. "I
have fewer than two hundred people to oversee fifteen thousand
federally protected union pension and welfare funds containing
billions of dollars in trust for millions of workers," complained
Deputy Assistant Secretary of Labor John J. Walsh before he quit
in 1984. (The union funds are in addition to the 700,000 other
private pension plans that the Department oversees.) The DOL has
only 89 investigators to help the Justice Department combat labor
racketeering. A veteran prosecutor told me, "I could use
more than that in Manhattan alone."
The racket-busters' principal antagonist
is Robert J. Connerton, a lobbyist and LlUNA's longtime general
counsel. Lawyers in Connerton's firm wrote a law-journal article
denouncing DOL corruption fighters as "a national police
force with little accountability"-without noting that one
of their firm's major clients is the racket-ridden LIUNA. Connerton
spearheaded an AFL-CIO lobbying drive that sank a Reagan Administration
effort to persuade Congress to provide I50 more DOL investigators.
3. Bureaucratic bumbling and bickering.
For decades, lethargy and rivalry have dogged federal anti-racketeering
efforts. When the Justice Department indicted Florida LIUNA official
Bernard G. Rubin for embezzling $400,000, for instance, prosecutors
moved to place union funds under trusteeship. After DOL declined
to assist, pleading "lack of manpower," the Justice
Department abandoned the effort. Rubin was convicted (he is appealing),
but Senate investigators found he embezzled an additional $2 million
before he went to jail.
DOL's 89 crime investigators do not have
the authority to carry guns, execute search warrants or make arrests.
When a DOL agent wants to bust a racketeer, he has to hunt up
an FBI agent to accompany him. Sen. Sam Nunn (D., Ga.) has introduced
remedial legislation, but a turf-jealous Justice Department has
stalled it for almost three years.
4. Inadequate planning, analysis and pursuit.
The FBI, its agent strength cut by nearly ten percent between
1976 and 1980 has lacked the manpower to mine its vast lode of
surveillance tapes of top mobsters. The G-men in Chicago, for
example, recorded thousands of hours of criminal conversations
between Teamster president Roy Williams and his cohorts, but harvested
only a single case.
"I know what those tapes contained,
and it's a shame only a single prosecution came out of it,"
one FBI agent told me.
Proper planning and analysis could pyramid
such intelligence bonanzas into seizures of racketeers' property,
expelling them from office and placing their unions under court
supervision. Scores of FBI veterans are retired at age 55, when
they're considered too old to "work the streets." Why
not use them as intelligence analysts to pore through the files
and plan strategic long-range strikes?
5. Neglect of corporate racketeers.
While businessmen are often unwilling victims, they may also be
eager customers for the mob's chief product: muscle to terrorize
workers and keep them quiet while corrupt union and corporate
executives strike sweetheart deals.
The Commission on Organized Crime heard from
one self-styled mob "leg breaker" who described how
corrupt Teamster leaders conspired with Fortune 500 company executives
to cut wages and welfare benefits, and jettison safety rules.
The Justice Department prosecuted only seven
defendants-not one of them a Fortune 500 executive.
EVERY AMERICAN, whether union member or consumer,
has a direct stake in ending the mobster empire of labor racketeering.
When your Congressman and Senators ask for your vote this autumn,
ask them these questions: What have you done to root out racketeers
and get the Justice Department moving to break the Mafia stranglehold
on key unions? Are you accepting campaign contributions or endorsements
from the "Bad Four" unions?
Meanwhile, write Chairman Don Nickles (R.,
Okla.), Senate Labor Subcommittee, 428 Senate Dirksen Office Bldg.,
Washington, D.C. 20510;; Chairman William L. Clay (D., Mo.), House
Labor-Management Relations Subcommittee, 2451 House Rayburn Office
Bldg., Washington, D.C. 20515; or Attorney General Edwin Meese
111, U.S. Justice Department, Washington, D.C. 20530. Tell them
it's time to put labor racketeers out of business, now.