By John O'Brien and Stephen Franklin, Tribune Staff Writers

Web-posted Tuesday, October 21, 1997; 6:00 a.m. CDT

Bruno Caruso, head of the Laborers Union's 19,000-member Chicago District Council, faced internal union charges Monday that could lead to the council being taken over by the union because of alleged ties to the mob."I'd like to but I can't comment," the Chicago labor leader told reporters when asked about his appearance before the union's independent hearing officer, Peter Vaira. "It's a closed hearing."

Caruso referred to testimony expected to be heard this week regarding allegations thatthe union's Chicago operations are mob dominated and serve as a hiring hall for shady characters. Accompanied by union officials, including several identified by federal authorities as mob figures, Caruso dodged questions as he left the lobby where the hearing is being held in the Day's Inn hotel in Chicago's Streeterville neighborhood.

Under way since July, the hearings reflect efforts by the union and President ArthurCoia to rid the Laborers of corruption. Since it reached an agreement with the Justice Department two years ago, the union, which represents construction workers, has been under pressure to carry out its own cleanup or face a government takeover. Caruso's late father, Frank "Skids" Caruso, was the mob's longtime boss in Chinatown, according to federal authorities.

Besides Caruso, district council lawyer Sherman Carmell has said four other ChicagoLaborers officials will testify in their bid to avert a trusteeship. Carmell identified them as John Matassa, Joey Lombardo Jr., John Galiotto and Leo Caruso, a cousin of Bruno Caruso.

The testimony of the Chicago leaders challenges that of witnesses for the union, including a dozen former federal agents, police investigators and turncoat mobsters.They have portrayed a close association between the local union and organized crime.

Chief among the witnesses was Michael Corbitt, a former police chief in suburban Willow Springs, who told of witnessing Bruno Caruso and others meeting with crime figures.

Corbitt is serving a 20-year sentence for bribery, extortion and racketeering. Among the crimes for which he remains behind bars was his role in the coverup of the 1982 murder of Dianne Masters, a suburban college trustee.

As a witness, Corbitt established himself as a corrupt mob insider, according to testimony obtained by the Tribune. Corbitt recounted how onetime Chicago mob chieftain Sam Giancana put in the word that enabled him to become a policeman in Willow Springs."He just told me one thing," Corbitt said of his benefactor, Giancana, whom he got to know while servicing slot machines. "Just remember your friends," he quoted the mobster as telling him. "Just remember who put you in this position." Corbitt's testimony marked the first time he has spoken as a stool pigeon, naming names and providing details of criminal behavior.

As a money courier for the mob, Corbitt said he had access to top mob bosses and officials of the Laborers Union, such as Al Pilotto of Local 5 in Chicago Heights and Vincent Solano of Local 1 in Chicago. He told of seeing Bruno Caruso and Bruno's brother, Frank, a power in the union's health and welfare fund, in the company of the late Pat Marcy, a 1st Ward political fixer and known associate of rackets bosses.

Corbitt said he saw Bruno Caruso give Marcy an envelope that investigators believe contained a mob street tax.Corbitt portrayed Marcy as someone "pretty much privy to everything that was going on in the city--vending, juice loans, prostitution. . . . And I believe that he ultimately got a piece of everything that was going on because he was the major fixer."

By that, Corbitt said he meant that Marcy "made judges" and fixed traffic tickets and zoning matters. For a price he also was able to get hard-to-get mooring slips for boats in crowded Chicago Park District harbors.Vaira, the independent hearing officer, Monday said he will decide within six weeks whether to allow or deny a trusteeship over the Chicago Laborers.