JULY 24, 1996

(703) 207-0600

Mr. Chairman, I appreciate the honor of appearing before you and the members of the Subcommittee on Crime. In order that the context and perspective of my comments are understood, perhaps I should briefly outline my background.

Entering the FBI in 1971, I was soon assigned to the investigation of organized crime matters in Milwaukee, Wisconsin. For the next six years, my investigative efforts focused upon the Frank Balistrieri La Cosa Nostra (LCN) crime family in Milwaukee.-an extremely cohesive and violent band of thugs who controlled through murder, extortion and bombings a variety of industries in Milwaukee, including the vegetable produce trade, as well as several local labor unions. A few courageous business-owners attempted to thwart the Balistrieri family's influence over their legitimate affairs, but were coldly shot down in broad daylight or blown into smithereens when entering their automobiles and igniting a cowardly-placed explosive device. Informants closely connected to the Balistricri family fearfully informed the FBI that the Balistrieri family would stop at nothing in their efforts to control legitimate businesses and labor union activity in Milwaukee, and despite the Bureau's intense efforts to penetrate the Balistrieri family's operations, we were largely unsuccessful in cracking the thick shell protecting this very insular family until the 1980s. But I'm getting ahead of myself.

In the mid-1970s, I coordinated for the FBI from Milwaukee all investigations nation-wide into "Gangland Slayings", a brutal but uniquely-effective Mob oversight tool wherein LCN members or associates that transgressed underworld policy (or Incurred the wrath of Mob bosses) found themselves gunned down or beaten to death by their former colleagues.' As a consequence of our work in this horrific arena, the FBI identified scores of deceased victims of Mob brutality, but unfortunately, we were seldom able to bring the cases to court due to an absence of cooperating (or living) witnesses, even though in almost every case we knew from informants who ordered the killings, as well as the identities of the mob members who actually carried out the crime. -Most of those heinous crimes to this day have never been adjudicated, and the murderers remain on the streets even as we meet here today, simply awaiting their next order to kill. And the fact that we know who the shooters are and can do nothing about it, manifestly intensifies our frustration and anxiety when considering who their next victim might be..

In 1977, I was transferred to Las Vegas FBI where I served both as a case agent on LCN investigations and also was designated as Organized Crime Coordinator. For the next several years, I witnessed first-hand the power of the Mob as that abhorrent subculture dictated the acquisition and financing of casino properties through the control of labor unions at their highest management levels. My extensive investigative experience in Las Vegas further convinced me that corruption of labor unions by Mob interests from Chicago, New York, Cleveland, Kansas City, Los Angeles, San Diego, Detroit and Milwaukee allowed the LCN to control almost every aspect of certain casino operations in Las Vegas. Not only was massive skimming of casino profits at some properties directed and controlled by Mob functionaries, but show reservation booths, gift shops, rental car agencies and tour groups all "kicked back" to the LCN to allow their otherwise legitimate activities within the confines of certain casino properties to take place uninterrupted by extortionate demands. Run out of money gambling? No problem ... for a while, anyway. The mob-controlled loanshark would gladly loan you funds at exorbitant rates--and break your knee-caps if you didn't pay it back. Often a large debtor to the Mob will (to this day) lose his house pursuant to a quit claim deed filed by a lawyer who has sold his soul to the LCN. The attorney then sells the house, collects his fee and the Mob rakes in the profits. Threats of work stoppages by certain local labor unions influenced by the Mob also have kept hotel/casinos in line, assuming Mob coffers of an ever-steady source of illegitimate income. People refusing cooperation with the mob in Nevada mostly end up face-down in a shallow desert grave and are yet today classified as "missing persons" their bones long since scattered by coyotes. Although Las Vegas is vastly cleaned up today as a result of outstanding law enforcement activity led by the FBI, we all should know that the glittering desert city that we visit today as an entertainment destination was in its vicious genesis created by greedy La Cosa Nostra members to serve their own unquenchable avarice, and it is an unarguable fact that American labor unions served both as the investment capital and operational vehicle supporting and sustaining that creation.

Later transferring to New Orleans FBI in the early 1980's, I served as the supervisor for the BRILAB investigation targeting the illegal control of labor unions by the Carlos Marcello LCN family. Carlos Marcello himself was convicted and jailed in this signal case, and I then transferred to Kansas City where I assumed the direction of the investigation into the control and manipulation of the Teamster's Central States Pension Fund by several Midwestern crime families. This highly successful FBI labor racketeering investigation (termed "Strawman-Argent") and subsequent RICO prosecution by the Organized Crime Strike Force of the Justice Department, demonstrably proved the absolute command by the LCN of the Teamster's Union at its highest levels and further resulted in the conviction and lengthy incarceration of the top Mob leadership of the Chicago, Kansas City, Cleveland crime families, as well as lengthy jail time for my old nemesis, Frank Balistrieri, Milwaukee's LCN boss. Never in an FBI case up to that pont had so many LCN bosses from so many different families been convicted, and it is my understanding that the recent film, 'Casino' is roughly based on this momentous investigation.

Promoted to FBI Headquarters, I soon assumed the role as Acting Unit Chief of the Labor Racketeering Unit, and in that supervisory role I recommended, drafted and implemented FBI policy aimed at targeting LCN control of the "big four" labor unions: the International Brotherhood of Teamsters; the Laborer's International Union of North America, the Hotel Employee's and Restaurant Employee's International Union; the Laborer's International Union of North America, and the International Longshoreman's Association. Overwhelming evidence that I reviewed from a variety of sources--wiretap evidence, surveillance reports and informant data--convinced me and other FBI managers that each of these four international unions was substantially controlled by organized ime interests. I subsequently wrote a report for the Director of the FBI outlining the Labor Racketeering Unit's position that the FBI should allocate major special agent and budgetary resources to the eradication of LCN influence over the affairs of labor unions and their locals. Director William Webster overwhelmingly agreed with this recommendation (as did the President's Commission on Organized Crime), and I was pleased to see that substantive labor racketeering investigations were ongoing nationwide upon my departure from the FBI in December, 1996.

My contacts and friends in the FBI and the Office of Labor Racketeering (Department of Labor) have informed me recently that organized crime still remains a major corruptive influence in this country's labor unions, and my own investigations conducted for the U.S. Congress over the past eight years in related fields of inquiry have also confirmed this abiding reality. By no means is La Cosa Nostra a dead or dying phenomena, and we must recognize that as long as there is one LCN member left alive or out of jail, then labor unions are necessarily threatened. It is a fact that labor unions have always represented the "gravy train" for the Mob, and that lamentable certainty will not change unless we reject and prosecute institutionalized corruption in the American labor movement.

Thank you for this opportunity to share my experiences with you.