IN FEBRUARY 1995 Hillary Rodham Clinton journeyed to Miami Beach's posh Fontainebleau hotel to address nearly 1000 top officials of the 352,000-member Laborers' International Union of North America (LIUNA). The First Lady posed for photographs with union General President Arthur A. Coia, a slight, grinning figure among the hefty Laborers. In his introduction, Coia praised Mrs. Clinton as "one of the most compassionate Presidential advisers in modern times." For Coia it was the triumph of a long, costly campaign to win, and now flaunt,, his White House "access."

At that very moment Coia was locked in a bitter struggle with the U.S. Justice Department, whose racket-busting prosecutors were seeking to take over his union. They charged that Coia was "associated with and controlled and influenced by organized crime," a front man for labor racketeers who were looting pension and welfare funds.

Now 53, Coia joined the Laborers' Union in his hometown, Providence, R.I. at age 14. His father was the union's regional boss and a lifelong friend of New England Mafia godfather Raymond Patriarca, whose connections assured both Coias' success, federal investigators say.

By 1980 the elder Coia had become LIUNA's No.2 official, secretary-treasurer. When he was disabled by a stroke in 1980, his son, by then LIUNA's New England regional manager, bid to succeed him

In sealed testimony obtained by Reader's Digest, Coia, says he was summoned to Chicago, where he was met by Vince Solano, boss of Laborers Local 1--and a Mafia capo, killer and enforcer. Solano pounded the table and warned him that the Chicago Mafia's front man "will be the next general president of this union." By his silent acceptance, the New Englander had secured the No.2 job.

Coia contends from that moment on he knew federal charges of Mafia influence and dominance in his union were true. In fact, Coia was an integral part of the Mafia-LIUNA combine much earlier, according to a sworn affidavit by Ron Fino, a former Mob-controlled LIUNA official who became an FBI informant and whose testimony has helped convict numerous union racketeers. Fino lives in hiding because the Mob has ordered him murdered. He swears he and "Coia Junior" met several times a year during the mid 1980s. Coia urged Fino to listen to the Mafia bosses "because we are the future of the Laborers' Union." (Coia admits meeting with Fino, but denies the allegations.)

Beating and Bombing.

In 1988 the FBI announced a Racketeer Influenced and Criminal Organization (RICO) investigation of LIUNA. From informers and wiretaps, Justice Department prosecutors slowly built a detailed picture of how the crime syndicate had ruled LIUNA for a generation.

For one, there is LIUNA top-down organizational structure. Says Alex Corns, a union dissident and business manager of Local 36 in Daly City, Calif.: "The members have no say in the actual election process". The national president, secretary-treasurer, and the General Executive Board composed of nine regional vice presidents are elected every five years on a single slate. Any challenger must mount a costly national campaign. If reformers manage to win control of a local, Coia can submerge them under a district council dominated by racketeers and their collaborators.

Criminality in LIUNA ranges from penny-ante extortion of workers and employers to multimillion dollar piracy of pension and welfare funds.

• In Hartford, Conn., a National Labor Relations Board judge found that job steward Gary Wall was persecuted and blacklisted because he was "posing a threat to" Local 230 boss Dominick Lopreato's control. The judge ordered the LIUNA local to pay Wall $129,000 in damages. Lopreato was later convicted of taking $345,000 in bribes to invest more than $8 million in Laborers' pension funds in shady real estate schemes that went broke.
  

• In Antioch, Calif., Doug Murray launched a newsletter to challenge Local 324 officers' high expenses and salaries. He was cheated out of a job and during a union meeting was beaten up. A federal jury found the union and three officers had violated his rights-and awarded him $78,600 in damages.
  

• In Valparaiso, Ind., Joseph Bova's slate defeated Local 81's boss. Early on the morning of September 13, 1989, Bova, the victorious slate's secretary-treasurer, left home. When he started his Ford pickup, a bomb explored. Bova's wife ran out and found him crawling across the lawn toward the house. He died moments later. No one was ever convicted. Federal informants reported that a Mafia associate had approached Bova with a scheme to loot Local 81 pension and welfare funds, and Bova had refused.

Nowhere, prosecutors learned from testimony of mobsters-turned-witnesses, has the rape of LIUNA's rank and file been worse than in New York City. The Mafia controlled most of the New York metropolitan area's construction unions and parceled out jobs. A prime tool: LIUNA's Mason Tenders District Council (MTDC), composed of 12 locals representing some 7000 union members in New York's construction industry.

In 1989 Genovese capo James Massera, the MTDC's hidden boss, named Frank Lupo to succeed Lupo's father, a Genovese "soldier" who had run the council for years. Together, using fraudulent real-estate deals, the two drained $20 million from the MTDC welfare fund, leaving only $15 million for Laborers' medical benefits. In 1992 the union had to discontinue medical payments for half its rank and file, dependents and widows, and eliminated dental, eye and other care for the rest.

For four years as LIUNA's No. 2, Coia played his role quietly. Then, in February 1993, the union president died, and the General Executive Board named Coia to the top job. Some federal investigators believe the Chicago Mob acquiesced to his elevation in the belief that he would best shield the Mafia from the RICO investigation. For the next two years, Coia, these sources say, did nothing to disrupt Mafia control despite numerous prosecutions and media exposes of corruption. For example, Coia abstained from imposing a trusteeship on the MTDC. He told Reader's Digest he didn't want to interfere with the Justice Department's investigation. But court documents indicate that Coia ignored repeated suggestions by Justice to clean up the corrupt council.

Consider Local 435 in Rochester. There, the FBI and state and local police had convicted 22 gangsters and so weakened the Mob's grip that reformers were able to seize control of upstate New York's largest Laborers' local. In 1986, by a two-to-one margin, the 2000 members elected as their business manager Bob Brown, a black who began as a union ditch-digger and had built his own construction business. He soon had over $1 million in his union treasury and bargained 130 union contracts. He also built the pension fund to more than $150 million-- a pot of gold that drove the Mafia pirates crazy.

In 1992 LIUNA imposed a new district council dominated by the Mob-owned Buffalo local and appointed its officers. Brown and other rebels in the region repeatedly demanded an election, but for two years none was held. So Brown ignored the council's orders and continued negotiating his own contracts.

On April 7, 1997, Coia sent some 15 LIUNA "reps" into the Local 435 office. They changed the locks and denied Brown access. Brown went to court. Federal Judge Michael A. Telesca declared LIUNA's action a "clear violation" of its own constitution. He required Coia to hold an election in September 1994 for the new district council. Rather than face a vote, Coia disbanded the council.

White House Invitations.

Meanwhile, Coia worked furiously to build a political alliance with the new Clinton Administration. Even before the President took office, LIUNA made a $100,000 loan to his inauguration committee. Coia was the only major union president to defy the AFL-CIO and support Clinton in the bitter 1993 fight for ratification of the North American Free Trade Agreement. Coia spoke or wrote on several occasions to Mrs. Clinton about her proposed health-care reforms. His union political-action committee, the Laborers' Political League, contributed $1.2 million in the 1993-94 election cycle to federal candidates, overwhelmingly Democrats, and in June 1994 Coia co-hosted a $1500-a-plate Democratic National Committee dinner that raised $3.5 million. Contributors who gave $10,000 or more were invited to a White House reception.

For Coia, White House invitations came regularly: to share breakfast with the First Lady; attend a reception for the Emperor of Japan; see the pope in Denver; fly with Clinton on Air Force One to Haiti. In October 1994 Coia and his wife were guests at a glittering White House dinner at which the President entertained guests with his saxophone. Mrs. Coia was named to the committee to select the site for the 1996 Democratic National Convention.

The President even invited Coia along on a campaign trip to Rhode Island, and Coia had a local craftsman present Clinton a handmade golf club with the Presidential seal in the head. The President reciprocated by giving Coia an expensive Calloway Divine Nine club.

On November 4, 1994, Clinton penned a personal note: "Dear Arthur, I just heard you've become a grandfather Congratulations! Thanks for the gorgeous driver--it's a work of art. Best, Bill."

That same Friday afternoon, Justice Department racket-busters wrapped up the 212-page draft of their RICO civil suit. They delivered it to Coia's marble-arched LIUNA building two blocks from the White House.

The draft complaint charged that Coia and his co-conspirators "employed actual and threatened force, violence and fear of physical and economic injury to create a climate of intimidation and fear." They were accused of "systematic abuse" of Laborers' rights. Members were "intimidated into silence by violence, threats of violence economic coercion, and by the known ties of local and international union officials with organized crime." (Coia denies the allegations.)

Within days after the draft was delivered, Prisident Clinton sent two more personal letters to Coia. One "Dear Arthur" note signed "Bill" thanked Coia for his support of Democractic candidates, and another promised to share Coia's views on labor with Labor Secretary Robert Reich.

To counter the suit, Coia and the LIUNA Genereal Executive Board hired high-priced Washington defense lawyers. On November 16 one of them met with the Justice Department's Organized Crime and Racketeering Section chief Paul Coffey, a 26-year veteran. He told the lawyer, "Coia has to go. Everything else is on the table."

Weeks of negotiation followed. Each time the two sides deadlocked, LIUNA's lawyerws appealed to Clinton appointee Jo Ann Harris, assistant attorney general for the Criminal Division. Taut debates within the Justice Department ensued. The demand for Coia's removal was dropped.

Delaying Tactics.

Along the way, in the face of the devastating evidence spelled out in the Justice Department complaint, Coia and LIUNA's Executive Board began a public show of cleaning house. They temporarily suspended the Chicago and New York regional vice presidents, whose Mafia connections had been documented by the government. (Both men later left the union voluntarily and deny any Mob connection.) Coia announced that the union was creating the posts of "inspector general" and union prosecutor, and hired a retired FBI asssistant director and a former member of the Justice Department's organized crime section.

LIUNA's defense team adopted a strategy of delay. The union yielded as little to the Justice Department as possible, appealing over the heads of career prosecutors to the President's political appointees--and protecting Coia vigorously.

In February 1995, as Hillary Rodham Clinton was scheduled to address the Miami Beach LIUNA conference, Justice Department and White House lawyers debated whether she should go. A compromise was reached: Deputy Chief of Staff Harold Ickes told the First Lady that Coia was under investigation and that she should avoid any private conversation with him.

A week later the Justice Department announced an unprecedented agreement with LIUNA that preserved Coia's presidency. The union would be given an opportunity to clean its own house and install democratic election procedures in return for signing a consent decree allowing Justice to do so if LIUNA failed.

For the next seven months, LIUNA presented skimpy evidence of house-cleaning. Coia's lawyers rejected demands for direct election of all top officers. An angry union dissident, business manager Gene Johnson of the Central Illinois Laborers' District Council, wrote President Clinton on September 19: " We do not want you to succumb to the false words and enticements of Arthur Coia. We encourage you to avoid even the slightest appearance of intimacy. Coia cannot deliver the votes of Laborers because he does not have their respect or trust."

Ultimate Question.

In late September Acting Assistant Attorney General John Keeney, a career government lawyer, called Coia's lawyers in and delivered an ultimatum: give members the right to elect their officers, or we'll take over. Coia lawyer Brendan V. Sullivan, Jr., responded, " The decision to implement the consent decree will be made by the Assistant Attorney General" an appointee still to be named by the president.

Despite warnings from career racket-busters that giving in would raise suspicions of White House influence, the Justice Department agreed to a compromise: a rank-and-file ballot at least for president and secretary-treasurer, the two top national officers, in December 1996. Close observers predict that no rank-and-filer will be able to mount a national campaign to defeat Coia, whose friendship with the Clintons is seen as having boosted LIUNA's political clout.

Meanwhile, the LIUNA General Executive Board's new attorney has moved to place the 1300-member Buffalo Local 210 under trusteeship, listing 34 Mafia members and associates who have for the past 25 years "run the local for the benefit of La Cosa Nostra, rather that for the benefit of the members." (The case has not been decided.)

The White House has refused to answer questions from Reader's Digest about the President's knowledge of LIUNA's Mafia connections or the Justice Department investigation and negotiations. Has the Clintons' coziness with Coia dampened the Justice Department's drive to clean up this crooked union? In a court hearing regarding the unusual Justice Department-LIUNA agreement, U.S. District Court Judge Emmet G. Sullivan asked, "Here's a man, the president of the union, who's accused of being associated with organized crime. Why wasn't Coia removed?

It's a question thousands of honest Laborers are asking.