The National Review

The Real Clinton Record

It Didn't End With Whitewater

Rael Jean Issac

Mrs. Isaac is co-author, with Erich Isaac, of The Coercive Utopias.


IN his acceptance speech at the 1992 Democratic National Convention, Bill Clinton promised zero tolerance for those in government who ``cut corners and cut deals.'' But less than three years later the Justice Department cut a highly questionable deal with Arthur Coia, president of the mob-ridden Laborers International Union of North America, whose 700,000 members for the most part fill low-skilled construction jobs.

Corruption in the Laborers Union is an old and open book. As far back as 1978 a Justice Department report to the White House contended that the Chicago mob dominated Angelo Posco, then president of LIUNA, and in 1986 the President's Commission on Organized Crime, pointing to the looting of union benefit funds by the mob, death threats, and murders of opposing candidates, urged the Justice Department to file civil-racketeering charges. In 1988, the FBI announced a RICO investigation of LIUNA.

On November 4, 1994, the Justice Department delivered a draft of its 212-page RICO complaint to the Laborers: the key demand, Coia must go. The complaint chronicled a massive web of corruption that had continued for decades, with capos from an assortment of crime families either running locals directly or installing their appointees. LIUNA, it said, has been ``continuously and systematically controlled, exploited, and dominated in the conduct of its affairs by the Cosa Nostra.''

The complaint was unsparing concerning Coia personally. Four consecutive presidents of the union, including Coia, were ``controlled and influenced by organized-crime figures.'' Indeed, according to the complaint, Coia had tried (unsuccessfully) to replace the previous president in 1986 because he believed ``that [Angelo] Fosco's conduct harmed LIUNA and the Cosa Nostra's control of LIUNA'' (italics added).

From 1986 to July 1994, the complaint charged, Coia had conspired with the Todaro crime family of Buffalo to transfer training funds of upstate New York locals to Buffalo, where the money would be used for the benefit of Cosa Nostra families and associates. (They were foiled when the victim-locals protested and a court upheld them against Coia.) Some of the material was old but nonetheless telling, like the 1981 indictment of Coia's father (who, as secretary-treasurer of the union, was second in command), New England mob boss Raymond Patriarca, and Coia himself for racketeering and taking bribes from an insurance swindler: it fizzled when the judge ruled the statute of limitations had expired.

Despite the damning indictment, within three months Justice had cut a deal: Coia could stay. In fact, Coia would be Justice's subcontractor to clean up the union -- giving the ``appearance,'' in the delicate phrasing of Bill McCollum, chairman of the House Judiciary Committee's Subcommittee on Crime, of putting the fox in charge of guarding the chicken coop. Why did Justice make such an unprecedented arrangement? The official explanation is that the government saved money that would otherwise have been wasted in lengthy litigation, and that Coia himself -- who was more knowledgeable? -- could root out the mob more efficiently. Indeed, Justice professed great pride in this pioneering method of dealing with union corruption, and Attorney General Janet Reno cited it as a model for future racket busting.

There is no doubt that Coia had wielded a canny combination of carrot and stick. He threatened an all-out fight in the courts if he personally were pushed out.

Showing he meant business, he hired the firm of Williams & Connolly, which also represents President Clinton on Whitewater, to represent him in his negotiations with Justice. To represent LIUNA he hired Robert Luskin, himself a former Justice Department official. Luskin made an unusual offer on Coia's behalf: the union would hire him and a contingent of former FBI investigators to root out corruption. Moreover, Coia agreed to a consent decree acknowledging significant corruption in the union (which he had previously denied) that gave the Justice Department the option, until 1998, of putting LIUNA under trusteeship if it was not satisfied with Coia's progress.

Did Justice have other inducements to keep Coia in place? What has raised eyebrows is Coia's role as one of Clinton's most important political and financial allies. Coia has co-chaired a series of fund-raising dinners for the Democrats, each of which has raised millions of dollars. In 1994 alone, LIUNA contributed over a million dollars to Democratic candidates. It has become one of the largest donors of ``soft money'' to the Democratic Party. It even loaned $100,000 to Clinton's inaugural committee. Coia personally contributed $1,000 (the maximum permitted) to Clinton's Legal Defense Fund. He joined the board of the Back to Business Committee, where, humorously, he lent his moral authority to the committee's vigorous denials of merit in any of the ``character'' charges against the Clintons.

Money translated into social access. Soon the President and Coia were Bill and Arthur, eating breakfast together, exchanging gifts of specially made golf clubs.

(The President's thank-you note for his arrived on Coia's desk the same day as the Justice Department's complaint.) Coia was invited to a small White House dinner where the President played the saxophone; a Judiciary subcommittee documented over 120 such contacts.

DID all this have any influence on the decision-making process at Justice? At hearings by Rep. McCollum's subcommittee at the end of July, Justice Department officials vigorously denied it and Democratic members of the committee indignantly insisted that there was absolutely no evidence of any White House interference.

Was there then only the appearance of a quid pro quo? Coia knew the Justice Department complaint was coming. There were obvious channels for a discreet phone call. The President and Coia were represented by the same law firm, and attorney - client privilege would forever protect such a channel of communications. Or Coia might have approached White House Deputy Chief of Staff Harold Ickes. According to Coia himself, the President had designated Ickes as his White House contact. Before taking his White House post, Ickes had represented a number of unions on mob-related charges, including the Laborers. Indeed the court-appointed trustee for a Teamsters local demanded that Ickes's firm withdraw as the local's counsel because of what it complained was its ``lack of independence'' from mob influence.

But even if there were no contacts between the White House and Justice, there did not have to be interference for there to be influence. Janet Reno's Justice Department has bent itself out of shape to be helpful to the President on Whitewater, Filegate, Travelgate, Paulagate. The political appointees at Justice could not but be sensitive to the President's friendship with Coia. Last week, Ronald Fino, for 16 years an FBI informant within the Laborers on the Cosa Nostra, speaking behind a protective screen, warned McCollum's subcommittee that you can no longer tell a mobster by his fedora hat. ``Projecting an image of goodness, popping up and chairing charitable fund-raising functions combined with a voice for social justice, the racketeer builds a formidable defense against the Justice Department and prosecution.''

However the decision was made, and whatever the merits of the agreement between Justice and LIUNA -- and it is too soon to tell whether Coia will truly clean up the union or merely get rid of mob rivals -- several things are clear, all of them disquieting.

1. Coia had a tremendous victory as he was transformed overnight from accused racketeer to racket-busting pioneer. In effect now endorsed by the Justice Department, he is a sure winner in the union elections in September and is thus guaranteed control of LIUNA until well after 1998, when Justice loses its power to intervene if dissatisfied with Coia's ``progress.'' Significantly, under terms of the agreement, LIUNA's $1-billion pension fund, the pot of gold which had been the mob's chief target, is off limits to the team of investigators Coia agreed to hire. Reform in this area, U.S. Attorney James Burns acknowledges, is ``up to the union.''

2. The President continued to lend Coia the prestige of his public friendship (including 24 White House visits) after he had been warned about the forthcoming Justice Department complaint. At the McCollum hearings, documents were produced showing that the FBI wrote the White House counsel's office in 1994 that Coia ``is a criminal associate of the New England Patriarca organized crime family'' and the subject of an FBI criminal probe.

Another Justice Department memo that same year referred to Mrs. Clinton's staff having been warned, on the occasion of her planning to speak at a LIUNA conference, that ``we plan to portray him as a mob puppet.'' (Undeterred, in early 1995, while Coia was still fighting off the complaint, Mrs. Clinton went to Florida to address LIUNA's conference, Coia proudly accompanying her.) Kenneth Boehm of the National Legal and Policy Center, which focuses on ethical issues in government, says: ``The appearance problem is enormous here. In the case of a federal judge, a conflict of interest includes the appearance of a conflict of interest. The rationale is that the public should have confidence in its public institutions. If the President allows himself to be seen with a figure like this, it is a betrayal of public trust.''

3. Even as the Justice Department was chronicling the mob's wholesale pillaging of LIUNA's pension and training funds, departments of the Federal Government were providing the union with millions of dollars for ``training and education.'' A current study by the Heritage Foundation finds that in fiscal 1994 the EPA, HUD, Education, Labor, and Health and Human Services between them gave over $11 million to LIUNA, most of it as ``training funds.'' Bizarrely, the Department of Labor, in its annual Inspector General report, cites the prosecution of Michael LaBarbara for stealing training funds from a LIUNA local, while at the same time LIUNA received $475,000 more in, yes, training grants. The taxpayer hardly anticipates that government agencies will be showering discretionary funds on people with colorful nicknames.

One of the documents released by the McCollum committee shows just how far Coia thought he could go. At Coia's behest Democratic National Committee Chairman Don Fowler sent a memo to both Harold Ickes, who oversees the Clinton campaign from the White House, and Debra DeLee, chief executive of the 1996 Democratic convention, urging them to consider giving Coia a speaking role at that convention.

Sorry, folks. With all the publicity, he won't be at the podium.

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