A Textbook Case Of Union Corruption
The bribery conviction of a top Connecticut
Laborer sheds light on an earlier union investigation which found
no wrongdoing.
By DAN BARRY
The anonymous letter said the top Laborers'
executive in Connecticut was corrupt. Among other charges, it
said he had been bribed with a $12,000 gold Rolex watch.
That letter was sent in November 1990 to
Arthur A. Coia, then the number- two official for the Laborers'
International Union of North America. And it was about one of
his longtime union colleagues.
Coia ordered an investigation that was conducted
by two of his associates from Providence: a lawyer who works out
of Coia's law firm, and a car salesman who worked for Coia as
a lawyer before being disbarred.
Their on-again, off-again investigation took
14 months, and found no evidence of wrongdoing. For the union,
that was the end of the matter.
Until last month, that is, when the Connecticut
union executive, Dominick Lopreato, was convicted of taking $350,000
in bribes - and the Rolex - in exchange for guiding $8 million
in union pension money into a series of corrupt real-estate investments.
That pension money has likely been lost.
Coia, who is now general president of the
770,000-member Laborers' International, did not respond to requests
for comment. But other union representatives say the Lopreato matter would have been handled differently
today, in the union's new age of reform.
The impetus for that reform is the threat
of a government takeover if the Justice Department is not satisfied
with Coia's efforts to rid his union of corruption and organized-crime
influence.
The Lopreato case serves as a model of what
the Justice Department says it is trying to eliminate from the
union, which has a history of harboring corrupt executives who
enrich themselves at the expense of their constituents - the laborers.
Business trips, expenses
For the last 30 years, Dominick Lopreato
has worked out of a squat building in Hartford's south end that
is named after Coia's late father, longtime Laborers' executive
Arthur E. Coia. But Lopreato was more than just the
business manager for Local 230; he was a Connecticut powerbroker.
He lived in an exclusive downtown condominium,
drove late-model Cadillacs leased by the union, cut deals with
contractors, hobnobbed with politicians. On his application to
a local country club, Lopreato listed a former lieutenant governor
as a reference.
Talk persisted that Lopreato ran a corrupt
hiring hall, and that he collected cash gifts in exchange for
job assignments from some of the local's 5,000 members. But he
always denied the accusations and the membership always returned
him to office.
His union position entitled him to more than a leased car and $100,000 a year; it also included trips to the frequent Laborers' gatherings at vacation spots around the country.
Those trips were paid for with money set
aside for union members' retirement, as well as from the dues
of laborers who spend their days toiling on Route 84 and removing
asbestos from Hartford office buildings.
Take Lopreato's February 1990 business trip
to Florida. Court records show that his two-week stay at the Fontainebleu
resort in Miami Beach, and then at The Diplomat resort in Hollywood, cost almost $3,600. There were
pay- television movies, a lot of room service, and $200 worth
of drinks at places called the Tiki Room and Coconut Willie's.
Lopreato later submitted an expense voucher
to the New England Laborers' Training Trust for $825 that he spent
while at the Fontainebleu. How he spent the trust's money is vague, even though the voucher requires receipts
for charges of $25 or more.
Lopreato claimed on the voucher that he spent
exactly $25 on breakfast, lunch, dinner, beverages, or taxis -
28 times.
'Very appreciative'
At the same time he was enjoying drinks at
Coconut Willie's, Lopreato was involved in a lucrative kickback
scheme that came at the expense of the laborers paying for his
liquor.
Beginning in 1988, court records show, Lopreato
began to receive cash payments from two prominent Connecticut
developers, Jonathan N. Googel and Benjamin J. Sisti, co-founders
of the successful and wildly ambitious Colonial Realty Co. Both
were known for their lavish lifestyles; Sisti owned three luxury
villas in Florida; Googel liked to play blackjack at $5,000 a hand.
Sisti and Googel paid Lopreato to steer millions
of dollars from the Connecticut Laborers' Pension Fund to a real-estate
investment venture under their Colonial Realty umbrella.
Federal prosecutors demonstrated that in 1988, Lopreato collected $45,000 in exchange for a $2 million investment, and another $150,000 for a $3.1 million investment in 1989.
In 1990, he was further compensated after
his Laborers' counterpart in Albany, N.Y., invested $3 million
in Colonial Metro.
Sisti and Googel were so pleased with Lopreato's
assistance that in December 1989, they presented him with an 18-karat
gold Rolex watch worth close to $12,000. Sisti later described
Lopreato as being "very appreciative."
That same night, the three conspirators attended
a Laborers' celebration at the Hartford Hilton, where the guest
speaker was the union's secretary- treasurer, Arthur A. Coia.
The investigation
A year later, in November 1990, Coia received
the anonymous letter raising questions about Colonial Realty and
Lopreato, his colleague for more than a quarter-century and occasional
golf partner.
Coia ordered an investigation of Lopreato's
conduct, which shows he took the allegations seriously, says union
spokeswoman Linda L. Fisher. "Most people ignore or disregard anonymous letters."
Coia assigned the task to Anthony M. Traini,
a lawyer who works out of the office of Coia's Providence law
firm, Coia & Lepore. Traini has done extensive legal work
for the Laborers' over the years.
Traini says his investigation focused on
the allegation that Lopreato had improperly influenced the pension
fund's trustees to invest millions of dollars with Colonial Realty; the Rolex allegation was one facet of the
inquiry.
Traini says the investigation took 14 months
partly because he was also running his law practice. He says his
inquiry was exhaustive; he conducted interviews and collected
many documents, ranging from minutes of trustee meetings to due
diligence reports on Colonial Realty.
Helping Traini with his investigation was
Salvatore L. Romano Jr., a former Rhode Island lawyer who had
once worked for Coia and Lepore.
Romano was convicted of five felonies, including
perjury, in 1980 for his role in a 1977 attempt to steal $1 million
in gold from a processing plant near his Lincoln home; he had allowed burglars to park their cars in his
driveway. He served almost two years in prison, and was disbarred.
He now works as a salesman for his father-in-law's
Viking car dealership - where Lopreato leased his Cadillacs -
and as a part-time training coordinator for the Laborers'.
Both Romano and Traini say Romano's criminal
past was irrelevant to his role in investigating a corruption
case. Says Traini: "It has nothing to do with his ability
or to do with his integrity."
Interviewing Lopreato
Romano's main contribution to the investigation
was his questioning of Lopreato in November 1991.
He recalls that on the day of the interview,
Lopreato's lawyer suggested that the three men have lunch at a
nearby Hartford restaurant. They talked while they ate.
Romano says he knew Lopreato. Although they
weren't friends, he says, the familiarity seemed to contribute
to Lopreato's candor in telling his side of the story:
After the Laborers' pension funds had invested
millions of dollars with Colonial Realty, Sisti and Googel invited
Lopreato to company headquarters."They appreciated whatever
input, if any, he may have given. . . " Romano says. "They thought he was helpful to them getting the
thing, when in fact it was clear that he wasn't, because he didn't
have a single influence over anything. So they said, 'Here's something
for you.'
"His response: He was uncomfortable.
He knew he didn't do anything, and he certainly wasn't entitled
to anything. But sometimes you do things that may not be correct
from a judgment point of view.
"He says, 'Oh Geez, thank you,' and
he took it.
"It turned out to be a gold Rolex. He
wore it. He thought it was frankly one of those real good imitations.
That's what he told me. Now I don't know if you've ever seen some
of them; some of them are remarkably real."
But Lopreato had the Rolex appraised after
receiving many compliments about the 18-karat gold watch, Romano
says. "When the jeweler said, 'This is worth a lot of money,'
he said, 'Oh my God' " - and gave the watch to a mutual friend
to return to Sisti and Googel.
"He was very direct, he answered everything,
and was cooperative" during the interview, Romano recalls.
"That was an indication of truthfulness to me."
Romano was asked whether he thought it was
likely that Sisti and Googel, two men renowned in Connecticut
for their extravagant spending, would summon Lopreato to their
lavish headquarters only to present the union official with a
fake Rolex.
"That's a great argument," he acknowledged.
Romano says that either Lopreato or Lopreato's
lawyer paid for the lunch, but adds that he doesn't think it's
relevant. The lawyer was hungry, but not Romano.
"I think I had a salad or something,"
he says.
Federal fraud charges
Traini and Romano's report, submitted in
March 1992, said they found no evidence that Lopreato had used
his influence in steering union money to the Colonial Realty investment.
Nor was there any evidence that Lopreato had kept the Rolex.
A few months later, Lopreato repeated his
version of the Rolex story while under oath at a federal civil
case.
"What was the gift?" he was asked.
"It was a Rolex watch," Lopreato
answered. "I found out what it was worth, I gave it right
back to them.
"I returned it in two weeks."
But Lopreato's problems had only just begun.
By this time, the $2 billion real-estate
empire of Sisti and Googel had gone bankrupt. Colonial Realty's
failure signaled the loss of millions of dollars in investments
- including those made by the Laborers' - and sparked
a federal investigation into allegations of fraud, bribery and
tax evasion.
In June 1993, Sisti and Googel pleaded guilty
to felony fraud, and began to steer the government toward other
potential targets, including the powerful Laborers' leader, Dominick
Lopreato.
That same month, the Hartford Courant published a story questioning the soundness of the investments that the Connecticut Laborers' Pension Fund made with Colonial Realty.
It mentioned the Rolex that Lopreato had
received and claimed to have returned.
Two days after that story appeared, federal
prosecutors say, Lopreato finally did get rid of the Rolex he
had received four years earlier. Prosecutors say he gave the watch
to a friend, who sold it for $4,000.
In September 1994, Lopreato was arrested
on several corruption-related charges, including the acceptance
of bribes. The bulk of the criminal case came from the cooperation
of Lopreato's former benefactors, Sisti and Googel, as well as
an old bookmaker friend of his whom Traini dismisses as a "rat."
After his indictment, Lopreato continued
to serve as Connecticut's most prominent Laborer, representing
the union at functions in St. Louis and Virginia.
Meanwhile, the Laborers' International was
being forced to disavow its past - a past that had allowed leaders
like Lopreato to thrive.
Last November, the Justice Department delivered
to the Laborers' the draft of a civil racketeering complaint.
The document, which was never filed in court, described the union
as thoroughly corrupt and union president Coia as an associate
of organized crime. Coia emphatically denies the allegation.
After three months of negotiations, Coia
signed a unique agreement with the government that gave him time
to institute internal reforms designed to rid the union of corruption
and organized-crime influence. If Justice officials
aren't happy with the union's progress, they can move to take
over the union - and oust Coia.
The union adopted an ethics code that calls
for the suspension of any officer who is indicted, and permanently
banning from office anyone convicted of a crime. It also hired
a team of former FBI agents, Justice Department lawyers, and Labor
Department investigators to investigate complaints against union
officials.
If the Laborers' were to receive an anonymous letter alleging corruption now, the retired law-enforcement officials would conduct the investigation, says union lawyer Robert D.
Luskin. "Nobody in the ordinary union
hierarchy would be in a position of having to pass judgment on
those things."
Meanwhile, Traini - who briefly represented
Lopreato after his indictment -and Romano defend the investigation
they did, noting that federal agents made their case against Lopreato
based on information from government informants.
"It was well before this stuff exploded,"
Romano says of the union investigation. "He certainly didn't
look like a target of anything, because no one was bothering him,
no one was asking about him, no one was calling him."
In March, two months after the ethics code
was adopted and six months after his indictment, the Laborers's
suspended Lopreato.
In May, a jury took five hours to convict
him on all eight felony counts. He is scheduled to be sentenced
next month.
With staff reports from Mike Stanton
Copyright © 1997 The Providence Journal Company.
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