By RAEL JEAN ISAAC
MONDAY, JULY 27, 1998
When the Justice Department entered into
an "operating agreement" with LIUNA, the mob-ridden
Laborers International Union of North America, Attorney General
Janet Reno hailed the agreement as a new model for racket-busting.
Under the February 1995 agreement, the union would clean its own
house over three years, and if the Justice Department was not
satisfied with the union's progress, it would have authority to
impose a previously agreed-upon consent decree and take over as
it had the Teamsters. Laborers President Arthur A. Coia, described
in a Justice Department memo as a "mob puppet," would
remain in place, supervising the cleanup.
But although Justice professes itself satisfied
with progress and has extended the arrangement until next January,
there is evidence that there is less to the internal reform than
meets the eye. Justice had best return to the drawing board while
the threat of the consent decree still gives it clout over the
The agreement raised eyebrows at the outset,
for it created the appearance that Mr. Coia's wooing of Bill and
Hillary Clinton had paid off. LIUNA was one of the largest donors
to the Democratic Party, and Mr. Coia contributed the maximum
possible to Mr. Clinton's legal defense fund. What's more, Mr.
Coia was an outspoken political ally, even breaking ranks with
the entire labor movement to campaign for the North American Free
Trade Agreement. Financial and political support brought social
access, from breakfasts at the White House with Mrs. Clinton to
trips on Air Force One with the president. A House Judiciary subcommittee
documented more than 120 such contacts.
The Justice Department's draft complaint
under the Racketeer Influenced Corrupt Organizations law demanded
Mr. Coia's ouster and declared that LIUNA has been "continuously
and systematically controlled, exploited and dominated in the
conduct of its affairs by the Cosa Nostra." The complaint
arrived on Mr. Coia's desk the same day as the president's thank-you
note for the gift of a specially made golf club.
When the Justice Department abruptly backed
down on its demand for Mr. Coia's ouster, the appearance of White
House interference led to July 1996 House hearings. But those
hearings backfired on the Republicans. Justice Department officials
stoutly denied that any pressure had been brought to bear. Rather,
they said, .Justice had been given an attractive offer: Never
before had a union offered to purge itself of mobsters at its
own expense, backing this up by hiring a team of former federal
prosecutors and FBI agents, with no one, Mr. Coia included, off
limits for investigation.
Last Nov. 6 Robert D. Luskin, LIUNA's attorney
who is acting as chief prosecutor of corruption within the union,
announced that he was finally instituting corruption charges against
Mr. Coia. But eight months later, union members do not know what
the specific charges are or what has transpired in the secret
internal proceedings. Kenneth Boehm of the watchdog National Legal
and Policy Center says that although the team has at its command
numerous former FBI field agents, there have been no in-depth
investigations of Coia's activities in Rhode Island, his home
base, or in Connecticut, where Mr. Coia had close ties to Local
230 and the District Council.
"This isn't a reform process,"
says the business manager of a small local in San Francisco. "It's
a retreat until the government is out of the way."
This shouldn't be surprising. The .Justice
Department had claimed that its decision to allow LIUNA to investigate
itself was based not on Mr. Coia's high-profile friendship with
Mr. Clinton but on the credentials of the investigative team.
LIUNA's general counsel, Michael Bearse, later assured Congress
that the union, "by entrusting oversight and enforcement
to independent officials of unquestioned integrity," had
ensured that investigations would be conducted "free from
all internal or external political considerations."
But Justice should have seen a glaring conflict
of interest at the outset. For the man who sold Justice on the
proposal that saved Mr. Coia's neck was LIUNA's lawyer, Mr. Luskin.
True, earlier in his career he had served as special counsel to
the Justice Department's organized crime section. But was it realistic
to expect him to turn overnight from Mr. Coia's advocate into
Mr. Coia's investigator, while he continued to be paid by the
union? A telling early sign suggested that Mr. Luskin continued
to think like a Coia-partisan. In April 1995, U.S. district Judge
Emmett G. Sullivan asked why, given the Justice Department's 212-page
draft complaint against Mr. Coia, he had not been removed. Mr.
Luskin's response, according to the Providence Journal-Bulletin,
was that the draft complaint was a government bargaining tool
not an accurate depiction of the union and Mr. Coia.
Equally troubling, it turns out that Mr Luskin,
at the very time he was working out the unprecedented agreement
between Justice and Mr. Coia, was allegedly accepting "hot"
money, to the tune of $700,000, from Stephen A. Saccoccia, a Patriarca
crime family associate now in prison for money laundering.
Mr. Luskin was representing Saccoccia on
appeal from his 1993 sentence of 660 years. Saccoccia's assets
were frozen under a court order, and the money had come to Mr
Luskin in the form of gold bars and Swiss wire transfers. Mr.
Luskin settled a case brought by the U.S. attorney's office in
Rhode Island, which accused him of "willful blindness"
in accepting these "surreptitious and anonymous payments."
Earlier, a federal judge had shot down Luskin's argument that
his financial arrangements with Saccoccia were protected by attorney-client
privilege. Mr Luskin, claiming he had no idea the money was part
of Saccoccia's ill-gotten gains and calling the government's action
"despicable," nonetheless forfeited $245,000.
A second member of the four-man team in charge
of LIUNA's anticorruption campaign has political ties to Mr. Coia's
pal the president. W. Neil Eggleston, who has the role of appeals
officer, worked in the Clinton White House counsel's office when
the Whitewater investigation began and now represents Mr. Clinton
in his effort to assert attorney-client privilege in the Monica
Lewinsky investigation. Mr. Eggleston also represents Labor Secretary
Alexis Herman, now the subject of an independent counsel probe
into suspected corruption.
While the other two members of the investigative
team do not carry political baggage, it is hard to imagine results
embarrassing to the White House surviving the LIUNA internal appeals
process under Mr Eggleston's control. And given that the Clintons
ignored repeated warnings fron both Justice and the FBI to stay
clear of Mr Coia, his ouster would embarrass them.
The effect of the operating agreement so
far as been to reinforce Mr. Coia's power in LIUNA. Overnight
he became the champion of "reform," and he has taken
credit for the trusteeships imposed on disrict councils in New
York, Chicago and Buffalo-an unavoidable action, given the detail
with which the Justice Department's draft complaint described
the mob's robbery of Laborers' pension and welfare funds in these
But elsewhere, Laborer rank-and-file reformers
complain that the old pattern of corruption backed by intimidation
and violence continues, with the Luskin team failing to take appropriate
action. In July 1997, 53-year-old Steve Manos, vice president
of Local 230 in Hartford, Conn., was threatened, cursed at and
beaten when he probed union expenditures at an executive board
meeting. Mr. Manos was wearing a wire; audible on tape are a string
of unprintable curses, the sound of Mr. Manos being slammed against
a concrete floor, and the ominous cry "We own you now!"
as he is chased to his car. But although this local had a record
of corruption (the previous business manager is in prison for
takng a $500,000 bribe to invest $5 million of union pension funds
in a worthless real esate scam), this incident resulted only in
a mild reprimand from Mr. Luskin. On May 4, Mr. Manos testified
in a congressional rearing that "Luskin's actions, in effect,
have facilitated the racketeering activities directed at me."
Severe Head Injuries
Joe Portiss, a member of Local 1089 in Sarnia,
Ontario, and his daughter, Laura, say they have compiled extensive
documentation on violations of LIUNA's ethics code by the local's
executive board. Ms. Portiss says the Luskin team has ignored
their complaints. She describes a long patern of intimidation
and violence, of which the worst was a 1983 group assault on her
father at a LIUNA meeting, in which he sustained severe, permanent
head injuries. She says she now endures a steady stream of harassment
and threats but is prepared to keep up the struggle "no mater
how much they scare me-and they do, to be perfectly honest. I
am afraid of them. "
Few Laborers expect Mr. Coia will be gone
when the government's chance to inervene lapses in January. Alex
Corns, business manager of a small Hod Carriers local in San Francisco,
has been struggling against corruption in his district council
with scant help from Mr. Luskin's team. Says Mr. Corns: "This
isn't a reform process. It's a retreat until the government is
out of the way."
Ms. Isaac writes on public policy issues.