RICHARD W. STEVENSON
July 26, 1996

The Justice Department said today that White House officials had exerted no influence over its handling of a case involving a union leader with reputed ties to organized crime who has been a major Democratic campaign contributor.

John C. Keeney, the acting head of the Justice Department's criminal division, told a House subcommittee that the labor leader, Arthur A. Coia, president of the Laborers International Union of North America, had not received what the witness termed a "sweetheart deal" in negotiating an agreement that allowed him to retain his post even though the Government believed that he was under the control of the Mafia.

Documents issued at hearings of the subcommittee today and on Wednesday suggested that the White House had been made aware of the Justice Department's investigation of Mr. Coia as early as January 1994, more than a year before the department struck its deal with him.

Hillary Rodham Clinton subsequently made at least one speech to the union, and President Clinton met with Mr. Coia in the Oval Office late in 1994, presenting a golf club to him as a gift.

The department's investigators concluded in 1994 that the union had been dominated by the Mafia for decades and that Mr. Coia was a "puppet" of the mob. Although the department drafted a civil racketeering suit naming Mr. Coia as a defendant, the suit was never filed, and the department agreed to a settlement that, while requiring sweeping changes within the union, allowed Mr. Coia to stay in office. Similar actions against other unions in the past had led to the ouster of their leaders.

"I state flatly that neither the White House nor anyone associated with the White House has exerted any influence whatsoever over our decisions and actions in this case," Mr. Keeney said today in testimony to the House panel, the Judiciary Subcommittee on Crime.

As for why Mr. Coia had been allowed to retain his job as part of the settlement, Mr. Keeney said that "the answer is that no other union requested such an opportunity nor agreed to the conditions" that the laborers' union accepted, including strict outside oversight of its activities.

Leaders of other unions have termed the House hearings a politically motivated response by Republicans to the labor movement's strong opposition to Republican Congressional candidates this year.

Since 1993, when Mr. Coia took control, the union has given more than $2 million to Democratic candidates and has become a major source of "soft money" for party activities.

In a memorandum to Mr. Keeney on Jan. 11, 1994, Paul Coffey, chief of the Justice Department's organized crime and racketeering section, said Mrs. Clinton and Labor Secretary Robert B. Reich were scheduled to speak several weeks later to a conference sponsored by the union.

Noting that a decision to take legal action against the union and Mr. Coia was near, Mr. Coffey wrote, "It is our understanding that Mrs. Clinton's staff has already been alerted by the Labor Department" that the union and some of its officials would be targets of the suit.

White House officials said today that no one on the First Lady's staff could remember having been so informed by the Labor Department, and the White House has previously said that it was not involved with or informed about the subsequent negotiations between the Justice Department and Mr. Coia.

But "regardless of any information that may or may not have been conveyed to the President and First Lady," Michael D. McCurry, the White House press secretary, said today, "Mr. Coia was and is the leader of a major organization representing working Americans, and exchanging views with him and his organization would be appropriate in any event."

As events turned out, said Marsha Berry, a spokeswoman for Mrs. Clinton, the First Lady declined the invitation to speak to the union conference, which took place in early February 1994. Ms. Berry would not make any further comment.

Mrs. Clinton did address the union a year later, about the time that Mr. Coia was finalizing his agreement with the Justice Department.