Laborers' Reform Deal Proceeds In Secret

6/25/95

Laborers' Reform Deal With Justice Proceeds In Secret

The government's strategy against the union puzzles former members of a crime commission, which nine years ago said this was a "case waiting to happen."

By DAN BARRY and MIKE STANTON

Journal-Bulletin Staff Writers

Four months ago, the U.S. Department of Justice and the Laborers' International Union of North America trumpeted a unique agreement giving the union one more chance to cleanse itself of organized-crime influence - under the threat of a government takeover.

The agreement gave the union 90 days to demonstrate its commitment to reform. If the Justice Department was not satisfied with the pace of the cleanup, it could seize control and oust the union's leaders, including General President Arthur A. Coia of Rhode Island.

Since then, the trumpets have been silent. The 90-day deadline passed quietly last month, with no indication of the government's plans for the union. Justice officials have declined to release the union's 200-page progress report, or to answer questions about the arrangement.

A Justice Department spokesman explained that the agreement is an "internal matter" between the federal government and the 770,000-member union.

Meanwhile, Laborers' officials say the agreement reflects their commitment to creating an environment wherein hiring practices are fair, pension funds are invested prudently, and mobsters can find no refuge. They say they've hired a squadron of former federal prosecutors, FBI agents and Labor Department investigators to handle complaints and root out corruption.

And, in a recent letter to a watchdog group called the Association for Union Democracy, Laborers' president Coia said that "both we and the government have been very satisfied with the integrity and effectiveness with which our new enforcement tools have been put to use."

But the association's spokesman, Herman Benson, wrote back to Coia: "It would be self-defeating to try to construct a magnificent union program on a suspect foundation."

Others share Benson's skepticism, including two former members of President Reagan's Commission on Organized Crime: Temple University law professor Charles Rogovin and veteran journalist Eugene H. Methvin.

Nine years ago, the President's Commission chronicled the pervasive Mafia influence in the Laborers' International, then told the Justice Department there was "a case waiting to be made."

Nine years later, Rogovin and Methvin say they are still waiting for that case to be made - regardless of the recent union-government agreement.

Says Methvin: "The jury's still out as to whether the Justice Department won or the other side won."

Mob influence

Calls for reform are nothing new to the Laborers'.

In 1986, the President's Commission on Organized Crime issued a report, called "The Edge," that examined mob influence in labor unions. In particular, it focused on the "Bad Four": The Teamsters; the Longshoremen; the Hotel Employee and Restaurant Employees; and the Laborers.

The commission concluded that the Mafia had infiltrated the Laborers', and it urged the Justice Department to file a civil racketeering case designed to return the union to its members - a recommendation reflected in the title of the chapter addressing the Laborers': "A Case Waiting To Be Made."

The commissioners struck an almost paternal tone when discussing the union. The typical laborer has a limited formal education, they said, and performs the dirtiest, most dangerous jobs in the construction industry. More than any other worker, the laborer has the greatest need for honest union representation:

"If the union's leadership is corrupt - if the leaders steal or misuse workers' funds or if they accept payoffs to permit employers to overwork, underpay, replace workers or disregard job safety measures - the individual has limited recourse."

According to the commission, the Laborers' International presented just such a scenario:

"Organized crime has used its influence over the Laborers' union to obtain workers' benefit funds, provide no-show jobs for (La Cosa Nostra) members, pay the personal expenses of union officials, gain access to the political process, and . . . manipulate the construction market."

The Laborers', the report concluded, was corrupt from the top down.

The union's president, Angelo Fosco, was routinely meeting with the top leaders of the Chicago mob, and had appointed "made" members of organized crime to important union posts. Fosco appeared before the commission in April 1985, and refused to comment on the union's alleged mob ties; he invoked his rights against self-incrimination seven times during his brief testimony.

The commission also zeroed in on the union's secretary-treasurer, Arthur E. Coia of Providence, the father of the current union president. The elder Coia had been indicted on federal charges that he received payoffs for steering union business to select companies.

The case against Coia and his co-defendants - who included his son, Arthur A. Coia, and New England crime boss Raymond L.S. Patriarca - were dropped because the indictment was filed after the statute of limitations had expired. Still, the commission expressed outrage, in part because the elder Coia had spent $200,000 of Laborers' money to track the government's investigation of the union.

'I expected action'

The commission recommended that the Justice Department take immediate action against the Laborers' and, in an ancillary report, Commissioner Methvin criticized the government's performance to that point.

"The Justice Department's efforts of the last fifteen years have failed . . . It is time to bring civil RICO actions against (the Laborers' and other unions) and to seek lifetime bars for their corrupt leaders and the corrupt businessmen who deal with them."

Methvin now says he thought his harsh words would do the trick: That federal action would lead to the ouster of Fosco, Coia and others, and that the union would be reformed.

"I did have high hopes," Methvin says. "I expected action in a reasonably short period of time."

His former colleague, law professor Rogovin, agrees: "The commission felt strongly that this was a situation that ought to get some immediate attention."

Laborers' untouched?

The President's Commission report was released in March 1986 with great fanfare. Soon afterward, the Justice Department, acting in part on the commission's recommendations, filed a civil racketeering lawsuit against the Teamsters that led to broad reform within that union.

But when it came to the Laborers', there was nothing; no top Laborers' executives were arrested, and no racketeering lawsuit was filed.

Fosco, the friend to the Chicago mob, continued as union president for another seven years, until he died in Florida in 1993.

Coia retired as secretary-treasurer in 1989, but continued to hold nominal union posts until his death in 1993. His son, Arthur A. Coia, replaced him as secretary-treasurer, then succeeded Fosco as president.

Over the years, the federal government brought civil and criminal cases against Laborers' fiefdoms around the country, going after corrupt officials in Buffalo, N.Y., Cleveland and New Jersey. And last December, federal prosecutors in New York settled a racketeering case against a Laborers' subsidiary, the Mason Tenders, by negotiating an agreement with Coia that is expected to sweep out dozens of mobsters.

Still, the Justice Department never brought a case - either civil or criminal - against the union's national executives, despite the roadmap provided by the President's Commission.

Justice officials decline to say why. But Methvin, a Washington, D.C.-based writer for Reader's Digest, has no qualms about expressing his impatience.

"And my impatience," he adds, "is far exceeded by the poor rank-and- filers whose rights have been trampled on all these years."

The draft complaint

Finally, in November 1994 - more than eight years after the President's Commission report - the Justice Department took steps to reform headquarters at Laborers' International.

But federal prosecutors did not file a civil racketeering case against the Laborers'. Instead, they provided the union with a draft of a racketeering complaint - the culmination of a three-year investigation - that they threatened to file in federal court.

Documents filed in a civil lawsuit said that the draft described the Laborers' as corrupt, mismanaged, and rife with organized crime. It called for the ouster of Arthur A. Coia - the general president and son of Arthur E. Coia - and recommended a government takeover.

Some of the more damning material in the draft complaint dated back to the early 1980s, with accusations being leveled against men who were now dead: Fosco and the elder Coia.

Still, there appeared to be some new information, including the allegation that the younger Coia was a longtime associate of New England organized-crime figures; the draft provided no specifics, and Coia adamantly denies the accusation. The draft also alleged that the younger Coia had conspired as recently as last year to steer union funds to mobsters in upstate New York.

The threat of a civil lawsuit prompted months of negotiations, which culminated in a kind of uneasy alliance. The Laborers' were given time to clean up their own house, while the government retained the right to take the union over at any time over the next three years.

"We sincerely hope that (the union's) internal reform program is successful," U.S. Atty. James B. Burns said at the time. "Nevertheless, we are prepared to do whatever must be done to guarantee (the union's) freedom from the influence of organized crime."

'Best of all worlds'

The internal cleanup led to the ouster of two international vice presidents. One, from New Jersey, cut a deal in which he could retire with full benefits. The other, John Serpico of Chicago, continues to protest his dismissal; in 1986, the President's Commission identified Serpico as an organized-crime associate.

W. Douglas Gow, a former FBI supervisor who now serves as the Laborers' inspector general, says that the union-government agreement has fostered reform.

"We've had a number of successes in investigations," Gow says. "We've proven we can do certain things, and it is a cost-savings to the government. They don't have to devote the resources and it doesn't preclude them from continuing any independent investigations.

"So they've got the best of all worlds."

But the fact that the younger Coia was allowed to remain as president, and to oversee the internal reform movement, is an arrangement that perplexes former commission member Rogovin.

"It's certainly puzzling as to why so little progress was made, and then when some action was made . . . the resolution is to allow to remain in power a man so critically described in the draft complaint," says Rogovin. "Isn't that tantamount to putting the cat to watch the cream?

"It certainly has to raise from the very beginning a question as to how serious the Department of Justice is (about) the effort to achieve reform in the Laborers' union."

Both Rogovin and Methvin noted the irony of the title they gave to the chapter on the Laborers' so long ago.

"And the case still hasn't been made," says Methvin. "It strikes me as outrageous."

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