Federal Judge Throws Out RICO Suit; Questions Remain

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The leaders of the International Longshoremen’s Association might not have uncorked any champagne at their Lower Manhattan headquarters, but it’s unlikely they had seen happier times.  On November 1, U.S. District Judge I. Leo Glasser announced his dismissal of the Justice Department’s civil racketeering suit against them.  In a 109-page decision, Judge Glasser stated that the government’s complaint failed to “sufficiently specify” its rationale for applying the Racketeer Influenced and Corrupt Organizations (RICO) Act to the alleged crimes.  He wrote:  “This court will not abet the government’s effort to stretch the concept of a racketeering enterprise beyond all recognition in order to bring various otherwise disinterested parties within its scope, even for the worthwhile purpose of combating the influence of organized crime on the waterfront.” 

 

The ruling dealt a severe blow to prosecutors, who had filed the suit on July 6, 2005 in Brooklyn, N.Y. federal court.  If there was any consolation, it was that the opinion made clear the problem lay with the choice of RICO as the tool for prosecution rather than the absence of evidence of wrongdoing.  The complaint maintained that the union for decades knowingly provided New York’s Genovese and Gambino crime families reign over certain of the nation’s Atlantic seaports for purposes of financial gain.  Prosecutors named longtime (and recently retired) ILA President John Bowers, Sr. and other top union officials in the suit, plus about 30 “nominal defendants” not formally accused of wrongdoing, but who had held positions enabling them to facilitate illegal activity.  The suit alleged that during the period 1995-2002, union leaders participated in or covered up extortion, bid-rigging, money laundering and mail fraud.  The evidence was more than circumstantial.    

 

For decades, it was common knowledge among law enforcement officials, prosecutors, and the Waterfront Commission of New York Harbor that the Gambino and Genovese crime families had a tacit agreement to control key ports hiring union labor.  The Gambinos ran the docks in Brooklyn and Staten Island; the Genoveses took care of the docks in Manhattan, New Jersey and Miami.  It strains the limits of credibility to assert that the international union had been unaware of the pact, the consequences of which have been documented in Union Corruption Update.  In March 2003, then-Gambino boss Peter Gotti and six other persons were convicted by a federal jury of using ILA Locals 1 and 1814 for racketeering and extortion.  Former Local 1814 President Frank “Red” Scollo had pleaded guilty several months earlier.  One of the principal witnesses against Gotti and the other defendants, Genovese mob enforcer George Barone, testified that he and ILA President Bowers conspired with the Genovese family to “have our man as president” of the union.  The inevitable Genovese trial over two years later produced results more to the Mafia’s liking.  Although ILA Newark chieftain Albert Cernadas had pleaded guilty to benefit fraud on the eve of the trial, Longshoremen assistant chief organizer Harold Daggett and Miami boss Arthur Coffey each were found not guilty by a federal jury in November 2005.  Another exonerated defendant, Lawrence Ricci, a reputed Genovese capo, “disappeared” after giving initial testimony; a few weeks after his acquittal in absentia, his corpse was found in a car trunk on the parking lot of a New Jersey diner.     

 

The 65,000-member ILA from the start has insisted it had no involvement in or knowledge of these or other crimes.  The charges against its officials, the union said, were the result of “outdated stereotypes of the ILA.”  But the union did benefit from the RICO law’s setting of a high standard of proof of a racketeering conspiracy.  The RICO law, enacted by Congress in 1970, has several key requirements to secure a conviction, all of which must be satisfied.  First, the plaintiff, whether it is government or private, must prove the existence of a “criminal enterprise.”  Second, the defendant(s) must have one of four specified relationships with the enterprise that prove a “pattern of racketeering”:  investment of the proceeds of fraudulent activity into the enterprise; acquisition or maintenance of an interest in or control over a legitimate enterprise through a pattern of racketeering; participation in the affairs of the enterprise through a pattern of racketeering; and conspiring to violate any other RICO provisions.  Third and finally, the plaintiff must prove the defendant committed at least two of 35 listed “predicate” crimes – 27 federal and eight state – within a 10-year period.  Predicate acts, as defined in the statutes and affirmed by the U.S. Supreme Court in H.J. Inc. v. Northwestern Bell Telephone [492 U.S. 229 (1989)], “have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events.”  Though Judge Glasser might have agreed with the U.S. Attorney that the union participated in crime, he did not see its actions as rising to the level of a criminal enterprise.         

 

The case isn’t necessarily one for the history books just yet.  The court did allow the Justice Department leeway to file an amended complaint within 60 days.  It’s unclear at this point whether the feds are going to use that opportunity, especially since they had filed an amended complaint earlier.  “We will carefully review Judge Glasser’s decision before determining how the government will proceed in this case,” said Robert Nardoza, spokesman for the U.S. Attorney’s Office in Brooklyn.  The ILA obviously thinks further action would be futile.  “We hope that the government will realize on reflection that the public interest is not served by further litigation,” the union said.  Family members of the late Lawrence Ricci might have a different opinion.  (Associated Press, 11/3/07; Journal of Commerce, 11/1/07; New York Sun, 11/2/07).