Jerry Seper
January 21, 2000

The Justice Department and the Laborers Union, after more than four years of negotiations, have signed an agreement to end government oversight of the beleaguered union and eliminate the threat of a takeover by court-appointed officers.

The agreement, effective Feb. 1, was hailed yesterday by union officials as "historic and precedent-setting" and described as a "clear acknowledgment" by the government that the "union's internal reforms have been effective in ridding the influence of organized crime and corruption."

Terence M. O'Sullivan, the union's new president, said the agreement would help the union build an organization "that is more open and responsive to its members."

Assistant Attorney General James Robinson, who heads the Justice Department's criminal division, said the new agreement is designed to guarantee that an internal reform program approved by the department will continue through September 2006.

Mr. Robinson said union officials will be required to keep internal anti-corruption programs intact through the union's scheduled elections in 2001 and the government has reserved the right to challenge any changes in the programs in court.

During a Justice Department press conference, Mr. Robinson noted the reform program had accounted for the ouster of 220 union officials, including 127 who were identified as members or associates of organized crime. He also said the union had imposed trusteeships or supervision on 42 locals in an effort to combat the influence of organized crime.

He said the internal reform program had been so effective that none of the people identified by the Justice Department in a proposed 1995 lawsuit against the union as members or associates of organized crime now held any position within the union, including its former president, Arthur A. Coia, who resigned Dec. 31.

While giving credit to what he said was the overall success of the union's reform program, Mr. Robinson acknowledged that a "major development" in the negotiations was "significant changes" in the union's leadership.

Under the 1995 consent decree, the Justice Department retained the right to prosecute union officials and seize control of the union if dissatisfied with the internal cleanup promised by Mr. Coia. The decree allowed the union to avoid having a racketeering complaint filed, which named Mr. Coia in a conspiracy to embezzle funds from union locals in New York and accused him of seeking to control the union "through a pattern of racketeering activity."

The 1994 Racketeering Influenced and Corrupt Organizations Act complaint said Mr. Coia was tied to members of a New England crime family and used "force, violence and fear of physical and economic injury to create a climate of intimidation and fear" within the union. The complaint accused Mr. Coia of a conspiracy to embezzle funds from locals in New York.

Mr. Coia had been the focus of an extensive investigation by Washington lawyer Robert D. Luskin, a former Justice Department prosecutor, who was hired by the union in 1997 as part of a 1995 consent decree to head the cleanup of the Laborers Union.

Mr. Luskin - asked to pursue accusations that Mr. Coia was tied to organized crime, allowed mobsters to control the union, and received favors from companies that received union business - eventually brought 16 charges against Mr. Coia. All but one were overturned by a hearing officer, Peter Vaira, who said there was not enough evidence to prove the accusations.

The one remaining charge was related to Mr. Coia's purchase of a $450,000 Ferrari. The title was held by the car agency, allowing Mr. Coia to avoid $40,000 in luxury taxes and to sell the vehicle as new three years later. The union boss was fined $100,000 by Mr. Vaira in the purchase, although the matter later was turned over to the U.S. Attorney's Office in Boston.

The Laborers International Union of North America has more than 800,000 members, mostly in the construction, environmental cleanup and maintenance industries.