By Brian Lockett and Michael J. Bologna

March 10, 1999

The independent hearing officer for the Laborers' International Union of North America cleared Arthur A. Coia, the union's president, of multiple charges of association with organized crime figures filed against him under the union's ethical practices code.

The sole charge upheld against Coia in the March 8 decision by independent hearing officer Peter Vaira was a charge of conflict of interest resulting from the 1991 purchase of a car with an auto dealer in Providence, R.I., which also was a union vendor. For that "direct conflict of interest," Coia was fined $100,000, payable over two years.

Of the 16 disciplinary charges filed against Coia by Robert D. Luskin, the attorney and in-house prosecutor for LIUNA's general executive board, all but one charge were dismissed. Of the charges dismissed, Vaira ruled that one charge involved tax issues in which he lacked expertise. The remaining 14 charges alleged improper association with organized crime figures but they were not proved by a preponderance of evidence, according to the ruling.

Vaira's decision, made available to BNA March 9, was issued as the result of hearings held last spring over a period of three months. The 22 days of hearings produced 5,500 pages of testimony from 19 witnesses and more than 700 exhibits. Vaira is a former U.S. Attorney for the Eastern District of Pennsylvania and the former executive director of the President's Commission on Organized Crime.

The investigation of Coia and his alleged ties to organized crime was undertaken as part of an unusual consent decree negotiated in 1995 by LIUNA and the Justice Department that allows the union to root out corrupt practices through a range of internal reforms. The Justice Department has threatened to file an already prepared 212-page civil complaint under the federal racketeering statute and take over the union if it decides at any time LIUNA has failed to achieve significant reform.

Luskin generally seemed satisfied with the prosecution. He praised Douglas Gow, LIUNA's inspector general, for conducting "a thorough and aggressive investigation of every credible allegation" against Coia. Gow's investigation was conducted with "substantial assistance" from the Federal Bureau of Investigation and the Department of Justice, he said.

The prosecution was led by "skilled and experienced lawyers who presented all of the relevant evidence," Luskin said. The IHO's decision was made "in accordance with fair procedures applicable to all union members, following a long and sharply contested hearing," he said.

Luskin said a decision by his office to appeal Vaira's ruling to the Neil Eggleston, LIUNA's appellate hearing officer, will be made in the next 10 days.

Asked whether the Justice Department is free to pursue the same or similar charges against Coia that were raised in this case, Luskin said the department "is free to bring criminal action in this case" if they chose to do so.

Coia expressed relief with the decision. "Without a doubt, this has been a most difficult and trying time for me, for my family, and for my union," he said in a March 9 statement. He said his life has been "examined from top to bottom, inside and out...every action reviewed, every motive scrutinized, every decision questioned, every good deed doubted."

He expressed pride in LIUNA's reform process, which he said "has taken strong root and grows stronger each day...I am immensely proud of what we have achieved thus far."

Asked if he was satisfied with the outcome, Luskin said "we would not have brought the charges if they were not warranted. We presented all the evidence we had. After that point, my reaction is not relevant. It's all part of the adversarial process. You put forward your best case, then it's out of your hands."

Under union rules, Coia must pay his own attorneys' fees in connection with the probe by the hearing officer, Luskin said in a March 9 press briefing. If Coia substantially prevails on a particular issue, he can apply to the IHO for partial reimbursement. Granting the application is discretionary by the IHO and international union, according to Luskin. Coia was represented in the closed-door hearings by Brendan Sullivan and Howard Guttman, from the Washington, D.C., law firm of Williams & Connolly.

Michael Bearse, LIUNA's general counsel, said March 9 regarding the sole charge on which Coia was found guilty that no union funds were involved in the car purchase and that there were no kickbacks. The deal was prohibited under the union's code of ethics while Coia was serving as general secretary-treasurer.

Luskin, participating in the same press briefing, said the charge of receiving the use of something of value from a union vendor was an ethics code violation. He said the penalty "was commensurate with benefits improperly obtained."

The car in question was a new Ferrari F 40 that Coia and Viking Oldsmobile in Providence purchased in 1991 for $450,000. Coia put up the down payment for the purchase and paid the insurance, but Viking held the title. Financing was arranged through Viking, according to Luskin. The car was sold in 1994 for $380,000.

The Department of Justice expressed disappointment with Vaira's decision, asserting it was filled with "factual and legal errors." In a statement, James K. Robinson, assistant attorney general for the Justice Department's criminal division, and Scott Lassar, U.S. Attorney for the Northern District of Illinois, called on the Office of the GEB Attorney to appeal the finding to LIUNA's appellate officer.

"While we believe that the case was thoroughly investigated by the union's Inspector General and vigorously prosecuted by the General Executive Board attorney, we believe the opinion contains serious factual and legal errors," Robinson and Lassar noted. "We plan to discuss the opinion with attorneys for the union and we will urge the union's General Executive Board attorney to appeal the decision to the union's appellate officer."

Reformers within the union were shocked by the outcome and questioned the integrity of the internal reform process.

James McGough, a spokesman for a Chicago-based group of LIUNA reformers known as Laborers for Justice, said Vaira's decision demonstrates that real reform is not occurring under the oversight agreement between the union and the Justice Department. Unless the Justice Department takes a more aggressive posture with the union, McGough said organized crime would continue to have its arms around LIUNA.

"The Justice Department got snookered," McGough said. "In the event that Arthur Coia stays in office, reform in LIUNA will only be grudgingly granted."

In the absence of a vigorous internal reform process, McGough said Laborers for Justice would mount a campaign to oust Coia and all current members of the GEB during elections scheduled for 2001 (44 DLR A-13, 3/8/99). He said changes would only occur when reformers gain control of power positions within the union.

Mike Orrfelt, editor of Hard Hat magazine, which has advocated reform in construction trade unions, said the decision ought to make the Justice Department think twice about "clean-your-own-house" style reform agreements. He said the lesson from Coia's interaction with that process demonstrates only that huge sums of money from union coffers can be spent to achieve very little.

"There is no bitesize explanation for this. It would take a lot of deconstructing to see to what degree this is a whitewash," Orrfelt said. "This result, however, ought to give us a reason to talk about the design of this reform process. After all, this is the model for labor union reform."

The National Legal and Policy Center called the $100,000 fine against Coia "a slap on the wrist." According to the McLean, Va., based education and legal action group, "anything short of removing Coia from office...is unconscionable."

Text of the hearing officer's decision appears in Section E.

Copyright © 1999 by The Bureau of National Affairs, Inc., Washington D.C.