Wednesday, August 5, 2009

Carpenters’ Union Chief and 9 Others Indicted in Corruption Inquiry

By William K. Rashbaum

Nearly two decades after the federal authorities moved against New York City’s carpenters’ union to loosen the mob’s grip and end a culture of contractor bribery, they have leveled corruption charges against the union’s leader and nine other union officials and contractors. The charges, announced on Wednesday, include racketeering, bribery, fraud and perjury.

The men were named in a 90-page indictment [pdf] that alleges crimes similar to some set out in a civil racketeering lawsuit that Manhattan prosecutors brought against the union, the New York District Council of Carpenters and Joiners of America, in 1990. That case led to a 1994 consent decree and, years later, a court-appointed corruption monitor; both are still in place, and the charges seem to raise questions about the effectiveness of the current monitor.

The 29-count indictment was unsealed in Federal District Court in Manhattan hours after a predawn roundup in which many of the officials were arrested on their way to work. It charges that in exchange for bribes valued at about $1 million, they helped corrupt contractors steal millions of dollars more from the union and its benefit funds by allowing contractors to pay members cash wages below union scale without benefits, hire illegal aliens and nonunion workers and skip contributions to the union’s benefit funds.

The 21,000-member district council, which oversees 11 locals unions around New York City, has remained not only a major player in the city’s labor movement but also a major force in its politics, despite a history of mob influence, labor racketeering and bribery.

Indeed, just six weeks ago, Mayor Michael R. Bloomberg’s re-election campaign put out a news release announcing that the union had endorsed his bid for a third term.

The release included a video clip showing Michael J. Forde, the district council’s executive secretary-treasurer, who is now indicted, giving the mayor a rousing introduction at a union event and sealing his support for Mr. Bloomberg with a hug.

The federal charges unsealed on Wednesday, a result of a lengthy investigation by Manhattan prosecutors, the F.B.I. and the Department of Labor Inspector General’s Office of Labor Racketeering and Fraud Investigations, were not Mr. Forde’s first brush with such accusations. He and another district council official went to trial on bribery charges involving the union in state court in Manhattan twice in recent years, with the first case ending in a conviction that was later overturned, and the second in acquittal.

Lev. L. Dassin, the acting United States attorney, who announced the charges in a news release, said that the union’s leaders had failed to protect the rank-and-file members they were sworn to represent.

“Instead of protecting the financial interests of union members and their families, corrupt union officials and the contractors who bribed them are charged with betraying the carpenters’ union and its benefit funds to enrich themselves,” he said.

Among the others charged in the new indictment with Mr. Forde and the other union officials was Joseph Olivieri, a benefit funds trustee and executive director of the Association of Wall, Ceiling and Carpentry Industries of New York. F.B.I. reports and law enforcement officials say Mr. Olivieri has a long history of ties to the Genovese crime family, the powerful Mafia clan that for generations has held sway over the union.

But while the indictment makes only passing mention of another Genovese family figure, it does not charge that organized crime wielded any influence over the district council. But several law enforcement officials said the investigation was continuing.

Seven of the 10 defendants were arrested on Wednesday morning, and two remain at large, officials said. Mr. Forde, who several people briefed on the case said was attending a conference in Canada, was said to be returning and was expected to surrender to the federal authorities Wednesday.

“Rather than doing what they were elected to do — safeguarding wages and benefits for union members — they took cash and other bribes to turn a blind eye on contractors’ schemes to cheat the rank and file,” Joseph M. Demarest Jr., the head of the New York F.B.I. office, said in the news release.

Gary Rothman, a lawyer for the District Council, said he was reviewing the indictment. “We understand that the charges are serious, but we also believe in the presumption of innocence and we will have a further statement as the situation becomes clearer,” he said in a brief statement.

The conduct charged in the indictment seems to give credence to criticism expressed by federal prosecutors in recent yeas about the effectiveness of the current court-appointed corruption monitor, known as the independent investigator, who is paid by the union.

Indeed, the Manhattan United States attorney’s office sought to oust the monitor, William P. Callahan, in 2007, saying he investigated fewer corruption cases than his predecessor and calling his work “superficial and incomplete.” But the federal judge overseeing the consent decree, Charles S. Haight Jr., ordered him kept him in place.

In contrast, the work of his predecessor, Walter Mack, a former federal prosecutor who specialized in organized crime cases and later headed the New York Police Department’s Internal Affairs Bureau, won widespread praise for his aggressive approach. Several enforcement officials acknowledge that his work led to some of the charges in Wednesday’s indictment.

But the union, exeercising its option under the consent decree, fired Mr. Mack in 2005, after his two-year term ran out, a decision that was upheld by Judge Haight.

Among other things, the consent decree, which was signed in 1994, barred union officials from associating with organized crime figures and imposed job referral rules, Mr. Mack was appointed under the consent decree in 2002 to investigate wrongdoing in the union, including bribery and off-the-books payment of wages.

In addition to Mr. Forde and Mr. Olivieri, also charged were: John Greaney, the business manager and president of Local 608, the largest local in the district council, and a benefits funds trustee; Brian Hayes, a business agent and officer of Local 608; and Michael Brennan, Brian Carson, Joseph Ruocco, John Stamberger, and Michael Vivenzio, union shop stewards.

Also charged was a contractor, Finbar O’Neill, who is accused of helping to deliver illegal cash payments to Mr. Forde.

Mr. Forde, Mr. Greaney, Mr. Hayes and Mr. Brennan were all charged with racketeering and racketeering conspiracy and other crimes. Mr. O’Neill was charged with racketeering conspiracy, wire fraud and other charges.

Lawyers for the men could not immediately be reached for comment.

Press release issued by United States Attorney's Office.

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