By STEVEN GREENHOUSE
December 7, 1999

Arthur A. Coia, the embattled president of the laborers' union, announced his retirement Monday, two months after several union and federal officials said he would soon step down as part of a deal in which he would plead guilty to fraud charges.

Coia, 56, one of President Clinton's biggest labor supporters, said he was retiring because of illness and because he and his family thought it was time for him to step down. Officials with the Laborers' International Union of North America, one of the nation's largest building trades unions, insisted that his retirement had nothing to do with a deal with federal prosecutors.

Justice department officials declined to comment.

In October, Coia angrily accused the department of leaking incriminating information about him. Those attacks came after newspapers reported that he would soon resign and would plead guilty shortly afterward to charges involving his purchase of a $450,000 Ferrari from a supplier to the 750,000-member union.

In October, a government official and a union official said the plea would not result in a prison term but would bar Coia from future contacts with the union, which a president's commission described in 1985 as one of the nation's most corrupt.

In its announcement Monday, the union said Coia would become president emeritus. He would stop serving on the union's board, but would receive part of his salary.

In March, after a five-year investigation, an officer of the independent union hearing cleared Coia on charges that he had ties to organized crime. But the officer fined Coia $100,000 for an ethics violation concerning his purchase of the Ferrari.

In a statement, Coia said, "For too many years, my position in the union has caused me to be investigated nonstop, top to bottom and inside out. For far too many years, my entire life has been scrutinized -- every action reviewed, every motive analyzed, every decision questioned, every good deed doubted."

Coia, who has largely recovered after grueling bouts of Hodgkin's disease and prostate cancer, said it was time to retire rather than continue to put his family in a secondary role.

Coia was a co-chairman of several fund-raisers for Clinton, and Republicans pushed for a federal investigation of whether the president asked prosecutors to go easy on Coia and his union. Administration officials have denied that Clinton asked any such favors or that they went easy on Coia.

Coia has long been one of the nation's most flamboyant union officials. He drove a Ferrari and other luxury cars, he had a large seaside home in his native Rhode Island, and he loves to golf. His office just two blocks from the White House resembled a golf pro's shop.

At the same time, he modernized his union, making it concentrate more on organizing additional members and improving health and safety programs. In 1995, he provided a pivotal vote to John Sweeney when he was running for president of the AFL-CIO.

Coia's father was once secretary-treasurer of the union and, prosecutors said, associated closely with Raymond Patriarca Jr., New England's longtime crime boss.

The union said Monday that its board had elected Terence M. O'Sullivan, 44, to replace Coia. O'Sullivan was a union vice president, mid-Atlantic regional manager and assistant to the president.

Several union officials said O'Sullivan was chosen only after government officials rejected other candidates backed by Coia.

Like Coia's father, O'Sullivan's father once served as the union's secretary-treasurer. His father was indicted in 1981 in a kickback scheme but was acquitted.

Jim McGough, director of Laborers for Justice, a dissidents' group, said, "It's good news that Coia is getting out of the union. Unfortunately, O'Sullivan is not the kind of reformer that the reformers want."

The deal said to have been reached between Coia and the government follows an anticorruption investigation that the union conducted under an earlier agreement with the government. The government dropped a planned a civil racketeering suit intended to install federal supervision. Instead, the Justice Department took the unusual step of allowing an elaborate group of union investigators and hearing officers to carry out an internal housecleaning.

Since 1994, Coia has been a target of that internal investigation.

Last March, the union's hearing officer, Peter Vaira, fined Coia $100,000 for a conflict of interest regarding the Ferrari. The union's in-house prosecutor, Robert D. Luskin, discovered that Coia had bought the sports car with the help of a Rhode Island company that leased cars to the union.

Coia has repeatedly denied any wrongdoing regarding the car. "At all times, in all ways, I have acted with the good of the union and its members foremost on my mind and in my heart," he said.

Copyright 1999 The New York Times Company