by John Fund

April 17, 1997

The Senate and House committees investigating the 1996 elections have agreed in principle that the possible "improper" activities of independent groups outside the Clinton and Dole campaigns are worthy of scrutiny. To that end, Senator Fred Thompson's Government Oversight Committee has issued six subpoenas to GOP-leaning nonprofit groups that Democrats believe may have coordinated their activities with the Republican Party. But the Democrats curiously omitted labor unions from their list of requested subpoenas. Senator Thompson should address that glaring gap.

The unions and the Mob

It's no secret union leaders back Democrats in a big way; 95% of their PAC money goes to Democrats. Professor Leo Troy of Rutgers reports that the value of in-kind and donated volunteer efforts on behalf of Democratic candidates by unions probably exceeds $300 million. That dwarfs the amount of money and effort other independent groups such as the Christian Coalition put into the 1996 election, and is worthy of scrutiny. What's also worthy of investigation is the fact that several federal prosecutors fear that the Clinton administration has looked the other way when it came to their union financial angles and didn't vigorously root out the influence organized crime has on unions.

Hearings by the House Judiciary Committee last year uncovered the fascinating story of the Laborers' International Union of North America (LIUNA), which represents 750,000 construction workers, brick haulers and asbestos removers. On November 4, 1994 the Justice Department delivered to the union the results of a six-year investigation: a 212-page civil racketeering complaint that accused the Laborers' of being controlled by organized crime and called for the removal of union president Arthur A. Coia and a federal takeover of his union.

The complaint minced no words: It said Mr. Coia has "associated with, and been controlled and influenced by, organized crime figures." It detailed how Mr. Coia and his associates "employed actual and threatened force, violence and fear of physical and economic injury to create a climate of intimidation and fear." It charged that union leaders had conspired with such memorably named mobsters as Carmine (The Snake) Persico, (Trigger Mike ) Coppola and Anthony (Fat Tony) Salerno to loot the union. Despite these allegations, Mr. Coia was able to convince the feds not to file their lawsuit and allow him to remain as union president.

$3.7 million between friends

Mr. Coia strenuously denied having mob ties, and hired Williams & Connally, the Washington law firm that represents Bill and Hillary Clinton on Whitewater matters. At first, the Justice Department didn't budge. "Coia has to go. Everything else is on the table," Paul Coffey, the head of Justice's organized crime section, told Mr. Coia's attorneys on November 16. But over time, Justice dropped the demand for his removal. Brendan Sullivan, the crack attorney who was Oliver North's lawyer, convinced Justice to let LIUNA do its own housecleaning of mob connections. In a consent decree, the union pledged to allow members to vote directly for union leaders, appoin a former FBI official as inspector general and allow Justice to take over if it failed.

The union has driven some corrupt officials from its ranks, but several federal prosecutors question the remarkably gentle treatment of Mr. Coia. There is no evidence that his close political ties to President Clinton and the Democratic Party helped him retain control of his union, but those ties are certainly extensive. They begin with the fact that Harold Ickes, the White House's former deputy chief of staff, has served as a lawyer for LIUNA and other mob-tainted unions. Mr. Coia has also served as vice chairman of numerous multimillion Democratic fund-raisers including one in May of this year. He sits on the board of the "Back to Business" committee that takes out ads defending the Clintons on Whitewater. His union lent President Clinton's inaugural committee $100,000, and contributed $3.7 million to Democratic candidates between 1993 and 1996.

A real FOB

On the same day that the Justice Department delivered its complaint to him, Mr. Coia also received a letter from President Clinton thanking him for a custom-made golf club that Mr. Coia had ordered for him. It was signed, "Best, Bill." The month before, Mr. Coia attended a White House dinner and in a private meeting in the Oval Office, President Clinton gave Mr. Coia a golf club from his personal collection; it now hangs on Mr. Coia's wall. In February 1995, Hillary Clinton addressed a LIUNA conference in Florida only five days before the Justice Department finalized the consent decree that allowed Mr. Coia to remain in power.

For his part, Mr. Coia says the government did itself a favor by avoiding lengthy litigation and allowing him to clean up the union under its supervision. He says that his personal ties to the Clintons played no role in Justice's consent decree.

Bad judgement all around

Federal prosecutors are nonetheless concerned that a union as

suffused with mob influence as the Laborers' would be trusted to police itself. They noted that Ron Fino, a former LIUNA official who became an FBI informant, has testified that "during my nearly 24 years in the Laborers' Union, I learned that the union was run by, and for the benefit of, the mob, its members, and its associates." Federal prosecutors remain dubious about the consent decree that left Mr. Coia in charge. After the decree was signed, demands that the union's top officers be directly elected were rejected. Justice had to deliver an ultimatum that they were prepared to take over, before Mr. Coia agreed to a watered-down compromise. Prosecutors also note that the highly-paid appellate officer who will rule on any disputes with the union is Neil Eggleston, a former associate counsel to the Clinton White House who participated in controversial strategy meetings on Whitewater. "How eager will Eggleston be to rule against a friend and political supporter of the Clintons?" asks one investigator familiar with LIUNA.

Mr. Coia's background raises questions about how Mr. Clinton could have been so blind as to associate with him given that there is evidence the White House was warned about his ties to organized crime. In Arkansas, he also demonstrated poor judgment in his relationship with Dan Lasater, who went to prison on cocaine distribution charges.

As for Mr. Coia's remarkable luck at holding on to control of his union, there are even more questions. During a court hearing on the Justice Department's consent decree that allowed Mr. Coia to keep his presidency, U.S. District Judge Emmet G. Sullivan asked, "Here's a man who's accused of being associated with organized crime. Why wasn't Coia removed?" That's a question the Thompson committee could -- and should ask -- in the course of its investigation.

John Fund is a member of the editorial board of the Wall Street Journal. He is also a Contributing Editor of IntellectualCapital.com.

Responses

04/17/97 Charles Rank crank@csinet.net

It is a farce to talk about organized crime being connected with organized labor. Rather, the focus should be on the connections between organized crime a.k.a. "BIG BUSINESS" and government at all levels. The attempt to remove Mr. Coia is another brazen step toward breaking the workers' unions on the part of "BIG BUSINESS" a.k.a. organized crime and its allies in government offices. "The Ten Worst Corporatons of 1996" are discussed at the following URL for those with an open mind: http://www.essential.org/monitor/hyper/mm1296.04.html

Government of the people, by the people, and for the people should focus on eradicating the influence of organized crime on its activities and should bring to justice criminals who operated under the cloak of "BIG BUSINESS." If you agree or do not agree with my opinion (which was solicited) don't get personal about it -- just stick to issues and facts. Thank you.

04/18/97 Penny Knight rknight@means.net

Even I, a scanner of news articles, knew about the millions of dollars the Unions were spending propagating the Democrat party line. Why Sen. Thompson did not subpoena the labor unions is unbelievable. Thank you for this information. I will email Sen. Thompson for his explanation.

04/20/97 Scott Frehmont

re:BIG BUSINESS. The fact is without big business you union parasites would have no one to attack. Who will become the host then ?

04/21/97 TJ Tong Genwah@aol.com

What is amazing to me, is that the unions may have been putting large amounts of money into political coffers, for so little in return. The tax breaks alone which are lavishly heaped on such struggling concerns as McDonalds, Archer Daniels Midland, and Nike are staggering. Admittedly, Wall Street has a vested interest in maximizing the value to those who own stocks. But the unions, who are supposed to represent its members are content to support the status quo. (Not a peep from unions about $150 Nike shoes made with $2 "worth" of overseas labor, for example.) And then there are the individuals. The IRS codes that permit 4800 people earning $200K/year and up to pay ABSOLUTELY NO income tax. Then there are the aberations of people like Justin Dart, who siphon millions out of the American economy, pay no taxes, and "downsize" the workforce in years of record profits. The taxes of America's rapidly vanishing middle class disproportionally support these fat cats, and the union bosses are happy with a seat at the inagural. Yes, the unions are corrupt. They donate money to both parties, and allow both sides to ignore the issues, and if that's not criminal, nothing is.