By Lawrence Morahan
CNS Staff Writer
11 March, 1999

(CNS)-- The U.S. Justice Department said it was "disappointed" with a decision by an in-house investigation that acquitted a top labor official who has been a leading Democratic campaign contributor on charges that he had ties to the Mafia.

The investigation cleared Arthur A. Coia, president of the 750,000-member, blue-collar Laborers' International Union of North America, of associating with members of organized crime, but fined the $250,000-a-year executive $100,000 for buying a $450,000 Ferrari with help from a union supplier.

The decision overturned the recommendation of the union's internal prosecutor, who had urged that Coia be removed. However, the ruling came as no surprise to critics of the investigation process, who said that allowing the union to investigate itself was a failure in the making. "There was no astonishment on the part of the union's critics in this decision," said Ken Boehm, chairman of the National Legal and Policy Center, a conservative group, in an interview with CNS. "If anyone had any doubts that letting the union investigate itself was a bad idea, this decision should remove those doubts."

Coia oversaw $1.2 million in contributions to Democrats in 1997 and 1998 and has flown on Air Force One, Boehm said. First lady Hillary Clinton addressed a Laborers conference in 1994 in Florida, against the recommendation of the Justice Department, who informed her of pending criminal investigation of the union, Boehm said.

The finding that Coia is not a mob figure also conflicts with a Justice Department statement in 1994 that said Coia has "associated with and been controlled by" mobsters.

However, after a three-year investigation, Peter F. Vaira, the union hearing officer, found there was not enough evidence to prove charges that Coia associated with New England mob boss Raymond Patriarca, or had other improper ties to organized crime. Federal prosecutors also have alleged that Coia's late father, who headed the laborers' in Rhode Island, was a close associate of Patriarca's late father, a legendary crime boss, reported Jim McGough, a spokesman for Laborers for Justice, in an interview with CNS.

"Vaira is no Oliver Wendell Holmes," McGough said.

Vaira, a former U.S. attorney in Philadelphia, released a 108-page decision on Coia, based on 22 days of hearings last year documented in 5,500 pages of transcripts.

Vaira found that Coia took part in a "direct conflict of interest" by jointly investing in the Ferrari with the help of Viking Oldsmobile, which leased cars to the union and was run by a longtime friend.

The Justice Department is still investigating Coia and the Laborers and may yet file criminal charges on the same matters addressed yesterday, McGough said. The Justice Department also said it will encourage the union prosecutor to appeal the decision.

Until Tuesday, the Justice Department defended the model in house investigation. When the probe was launched in 1996, the union was permitted to pursue an internal reform program designed to remove the influence of organized crime from its ranks. In return, the Justice Department would refrain from filing a consent decree that would have court appointed officers responsible for reforming the union, thus saving the government expensive legal bills.

However, after the ruling was announced, the Justice Department strongly criticized the decision. "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," senior Justice Department officials said in a statement.

But conservatives don't see much hope for an impartial appeals process under the current circumstances. The union special appeals officer in such a case is Neil Eggleston, a former federal prosecutor who has represented the White House in its disputes with independent counsel Kenneth Starr over Clinton's assertions of privilege. "This would be a blatant conflict of interest," Boehm said. "The appeal should be overseen by an impartial federal judge, not a political ally."