By John Mintz

Washington Post Staff Writer

March 10, 1999

A top labor union official who has been a leading Democratic campaign contributor was fined $100,000 yesterday for engaging in an improper business investment with a union vendor but was cleared of the more serious charges that he is under Mafia control and will be allowed to keep his job.

The ruling, by a union hearing officer, came in the case of Arthur A. Coia, general president of the Laborers International Union of North America. It overturned the recommendation of the union's internal prosecutor, who had urged that Coia be removed, and angered some of President Clinton's conservative and Republican critics, who see it as further proof that the administration has given favorable treatment to a close White House ally. The charges against Coia are a test case of an innovative agreement that the Justice Department reached with the Laborers and Coia in 1995. Rather than take over the mob tainted union, as the government had done in the case of the Teamsters union, Justice officials allowed the Laborers to try to root out corruption themselves.

A team of former federal prosecutors and FBI agents retained by the Laborers has ousted about 200 members and officials from their union jobs and has taken control of 20 mob-affiliated locals or district councils in the 750,000-member blue-collar workers union. Yesterday, in perhaps the union's most significant internal action, hearing officer Peter 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, who is paid $254,000 annually, took part in a "direct conflict of interest" by jointly owning an expensive Ferrari with a car-leasing firm that did business with the union. But he dismissed as unproven the accusation that Coia was an associate of the New England mob. The finding that Coia is not a mob figure undermines a key accusation that Republicans have mounted frequently against one of Clinton's most avid labor supporters. It also conflicts with the stance of Clinton's own Justice Department, which said in 1994 that Coia has "associated with and been controlled by" mobsters.

"The public shouldn't have any confidence in the integrity of this process," said Ken Boehm, chairman of the National Legal and Policy Center, a conservative group. "This is not the way to clean up a union." Boehm said the Clinton administration has shown undue deference to Coia, who oversaw $1.2 million in contributions to Democrats in 1997 and 1998 and has flown on Air Force One. He noted that first lady Hillary Rodham Clinton addressed a 1994 Laborers conference in Florida despite Justice Department recommendations that she not do so because of pending criminal investigations of the union.

Critics such as Boehm point out that Robert Luskin, the former federal prosecutor who filed the internal union charges against Coia, previously had been a lawyer for the union itself. "We didn't pull any punches," Luskin said. "I'm satisfied we did an able job. . . . We left no stone unturned."

Union officials cite the sterling reputation of the former federal investigators who had been recommended by the Justice Department and who handled the case. The chief investigator was former associate FBI director Douglas Gow. Vaira found after examining Luskin's case that not only was Coia not a New England mob associate, he was disliked by the Mafia boss there.

An FBI document introduced into evidence and released publicly for the first time yesterday shows that Raymond Patriarca Jr., the head of the New England Mafia, told agents in 1996 that while Coia's union official father was a mob associate, Arthur Coia "has forgotten where he came from" and "doesn't have the [nerve] to be a gangster." Patriarca went into detail about his resentment of Coia as an arrogant multimillionaire who lives in a wealthy suburb.

Vaira also rejected much of the testimony of two mob witnesses for the prosecution. One, a driver for mob figures, testified that Coia met scores of times in 1985 with mobsters, but Rhode Island State Police officials who had Coia under constant surveillance at the time said such meetings didn't take place. "The evidence overwhelmingly demonstrated that Arthur Coia isn't connected to the mob and that the mob hated him," said his attorney, Howard Gutman. "I intend to continue the work of making [the Laborers] the best, cleanest, most democratic union anywhere," Coia said.

The Justice Department still is investigating Coia and the Laborers and may yet file criminal charges on the same matters addressed yesterday, officials said. "We're disappointed with the decision," said Scott Lassar, the U.S. attorney in Chicago, who is leading the Laborers probe. "While we believe the case was thoroughly investigated" and prosecuted, he added, "we believe the opinion contains serious factual and legal errors." He said he will urge Luskin to appeal it.

But the union's 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 W. Starr over Clinton's assertions of privilege.

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