Labour Racketeering

Can someone detail how labour racketeering works. I know the mob can make money several ways by using the unions but how do they actually do it? What does the mob control nowadays apart from construction and the waterfront? Or nothing apart from those two things?

Controlling a union is an extremely lucrative business. Corrupted union officials can easily put the squeeze on companies and require payments for "labor peace".
If the Mafia has influence over a labor union, it can allow a Mafia-controlled business to operate without a union contract, while forcing unions to enforce the union contract against non-Mafia controlled businesses. It´s all about creating a "monopoly" in the field where ever the Mafia is involved. Or trying to gain an upper hand against the competitors.

But there are legitimate ways to use the union as well.
Placing a Mafia member in a legitimate job in the union; placing a Mafia member in an official position in the union; or having a member in a "ghost payroll," or "no-show" job on a construction site for example.
A "no-show" job is when a Mafia member recieves payment, salary,
without actually doing any work, not showing up at work at all.

But let´s not forget the Big-Daddy-o way of extracting financial means from unions and it´s members; controlling the various worker´s pension funds connected to big, powerful, strong in numbers unions.
A pension fund is supposed to pay out to retirees and/or to former workers who suffered disabilities connected to their work. The trick, however, is that the pay outs always are held far below than what it should be.
Complainers who are victimized often find several technicalities in the fund´s regulations that give the fund the right to withhold parts of the payments. The fund uses loopholes to keep as much money as possible.
The Mafia often has control over these funds and uses the money in investments. For example, a lot of money from Teamster´s pension funds were used for hotel and casino investments in Las Vegas or other real estate investments. And money from the funds are used as loans to Mafia members or its cronies and put into fully legit enterprises. But of course, when it´s time to repay the loan, the enterprise file bankruptcy or is out of business.

with the fund and investing. is that a type of money laundering? can it be seen like that? whats the other way of making money when you pocket the difference of non union and union. i really dont understand that method!? and thanks for the info!

A non union business will always be able to produce goods and services cheaper than a competitor who are forced to hire union workers. Any reduced cost contributes to higher profits.
Non union workers can be paid minimum wages.

Any venture into legitimate enterprises could be used as a way to launder money, I guess. But keep in mind that all loans from the union´s pension funds to the Mafia were (still are?) siphoned through "proper", and in many cases, "respectable" channels.

1. Concessions to favored, mob-connected companies allowing them advantages in bidding or allowing them to hire nonunion workers to avoid paying overtime or benefits

2. Allowing a favored contractor to form a new company with a different name with the understanding that there will be no strikes or organizing campaigns at the new company

3. Contracts steered to mob-owned businesses

4. Mob-connected employers paying off union officials to avoid signing a collective bargaining agreement

5. Organized crime figures, with the help of compliant union officials and workers, slowing down work or delivery of supplies to extort money from disfavored contractors

6. Organized crime members and associates, or their relatives, being put on union payrolls without having to work

7. Pension and health and welfare fund trustees being influenced to favor mob interests

8. Mob-controlled unions making campaign contributions to ingratiate themselves with politicians

9. Mob-controlled unions using construction and other work sites to promote illegal gambling and loansharking activities

thnks hairy and ivy! so what is the most common way of making money of lsbour rscketeering in new york today?

Today the most common way is sweetheart deals. A construction company will make a deal with a mobbed up union where they don't have to use more expensive union labor. That means their costs are lower, which gives them an advantage in winning a contract bid. In return for not having to use union labor, they hire mob members and associates on the books, but in reality they are no show jobs. This gives the mobsters and their cronies a legitimate source of income, health benefits, etc. It's a win-win deal for both sides, except of course for the honest dues-paying members of the union get screwed.

I understand now. and on top of that do they always extort the contractors for the mob tax?

A deal where both sides benefit in the form of sweetheart deals and bid rigging is more common, and can be charged as extortion, but straight up shakedowns of construction companies still go on. For example, the Genovese family was charged back in 2004 with extorting over $2 million from contractors, through their control of Roofers Union Local 8, in exchange for using non-union labor. The contractors who balked would have their projects "loaded up" with more costly union workers; which could lead to them going under.

So for an example a building contract worth 100 mil. The mob will charge the 2% mob tax which is 2 mil of the contract. And if the contractors want 100 union men the mobbed up union will hand them like 80 and the rest of the 20 would be no show jobs and non union workers?

It varies depending on any number of factors - the union, the contractor, the project size, etc. 2% has been an often quoted figure and I think it originally stemmed from the "Concrete Club" that was part of the Commission case. Under that arrangement, there were 7 concrete companies (X.L.O Concrete Corp., Technical Concrete Construction Corp., Century-Maxim Construction Corp., Cedar Park Concrete Corp., North Berry Concrete Corp., G&G Concrete Corp., S&A Concrete Company, Inc.) that were allowed to bid on projects where the value of the concrete contract was $2 million to $15 million. In order to get the bid, the contractor had to kickback 2% of the contract, which was split between the 4 NY families involved. Any project where the concrete was over $15 million went to Fat Tony's company, S&A Concrete. Other companies outside the club were allowed to bid on projects under $2 million but they had to make a $50,000 payoff to the Colombos.

Ah nice info ivy thanks. Is ny families involved in most construction contracts nowadays cos they say they have firm hold in construction

I don't know about most construction contracts but the construction industry certainly has the most LCN involvement still. And that's due to the diversity of the businesses involved - excavation, paving, concrete, windows, plumbing, demolition, trucking, etc. - as well as the Giuliani administration not being able to institute reforms there like it did in the waste hauling industry and food markets.

One of the New York papers did a 3-part piece back in 2005 that talked about how, over a decade from 1995 to 2005, numerous LCN -connected contractors, who had been banned from receiving state contracts, had nevertheless received $1.2 billion in over 100 public contracts involving projects like city schools, playgrounds, bridges, roads, etc. In December of 2005, it was reported that LCN-connecte4d companies had receieved $74 million of the $458 million in contracts involving the World Trade Center clean up.

and they had like fifty no show jobs ranging from 100k to 400k as well right?

You may be referring to the Operating Engineers Locals that the Genovese and Colombo families were involved in. "No show," "low show," or "no work" jobs are found wherever you have the mob and a corrupt union making sweetheart deals. In construction through unions like the Operating Engineers, Carpenters, Laborers, etc. on the waterfront through the ILA, etc.

Does anybody know: Did these mechanisms work in Europe too? England, Italy or Germany?

Anywhere you have labor unions you could, theoretically, have labor racketeering. But we haven't seen the exact same thing with the Italian syndicates. It's more political corruption, bid-rigging, and business racketeering involving state contracts.

in uk we have unions but not powerful ones in usa. construction companys obviously go straight to unions because its cost effective but i dont think its that kinda scale in the uk

In the US less than 20% of all workers are unionized today, compared to over 50% back in the day when we used to manufacture tons of stuff

Another racket for Mob-dominated unions is "rulebook slowdowns":

A contractor must finish a big office building within a specified time period. If he's late, he has to pay huge penalties for each day behind schedule. So, if he refuses to cooperate with the Mob (not doing business with their suppliers, not providing no-show jobs, etc.), Mob guys will demand that every little-bitty rule of safety, procedure, seniority, etc., must be followed at the construction site. For example:
--The Mobbed-up union rep will insist that every truck entering the site be minutely inspected for "safety," so as not to "endanger" the workers;
--Ordinarily, workers will jump at the chance to work overtime because they're paid more per hour. But, the Mobbed-up union will insist that workers not accept overtime assignments; or that overtime be offered only to workers with maximum seniority.

You get the idea...

Another big source of union/Mob corruption is contributions to political campaigns from union treasuries, and turning out union members to work for, and vote for, political candidates. Then they call in the favors.

Ahh with the delays that might add more days on ie more money from the penalty? Is that what your saying?

Exactly. As Raab pointed out in Five Families, one day delay on a $100 million project can add up to and extra $75,000 in interests costs alone. If you're a contractor, it's very tempting to make a one-time payment of, say, $50,000, rather than risking more than that each day.

But even more than that, it's tempting for the contractors to form sweetheart deals with the mobbed up union. Union-scale workers can make 4 times as much as non-union workers. The mobbed up union will allow the contractor to use the cheaper non-union workers in return for a kickback and/or no-show jobs. Through this the contractor can save a lot of money.

That's where it really becomes the problem - when the racketeering becomes institutionalized. And that means, as Raab explained in his book, as long as contractors could pass along the price of kickbacks to their customers, and that they'd only have to pay off once, they would actually prefer to deal with the mob rather than honest union leaders who have the ability to disrupt their schedules by exercising their collective bargaining agreements.

Ivy, Short was responding to me, and I would have liked the opportunity to answer him. Next time, kindly show me the courtesy of allowing me to respond to posts aimed at me.

A thousand apologies.

A thousand acceptances...

As a corollary to that: Construction contractors and garbage collection companies that were forced into Mob-run "associations" or "cartels" not only were able to pass along those costs to their customers, but also were protected from competition. The Mob simply assigned them contracts or routes and kept out anyone else. It took a lot of courage and integrity for some to fight that system because the rewards of going along with the Mob were pretty substantial.

I remember reading that drivers of the dump trucks were being paid to take the scrap metal from the cleanup to mob connected junk yards, want to say Crea was involved.

Hey short, these guys have answered your questions but i figured i would help out with a link if you want to go a little bit deeper into the subject:
http://americanmafia.com/Crime_And_Labor.html
This is from the guy who wrote To Kill the Irishman's site, it has a lot of into. Also i would suggest, i know it would take a lot of time but you would get the most info, go over old cases with labor racketeering that had with informants, find testimony transcripts and it will be a step by step tell all of how labor racketeering works. Also i would go over Lepke's fbi file and the case against him, most people create him with creating labor racketeering. Hope this helps,
Daniel Perrygin

you all been helpful pals! much appreciate it. does the mob usually do the sweetheart deals? because it'll make sense for the mob to do that way because if contractors prefer to go the mob it would create more chances for the mob amd contractor to make more money on a new project?

They do whatever it takes to maximize profits from situation to situation.

Well, from what I can tell, sweetheart deals are the most common form of labor racketeering the mob uses nowadays. A sweetheart deal was among the charges in the Genovese indictment yesterday. Non-union workers were used at the Paramount Hotel project in Manhattan, thereby avoiding payments to the pension and benefit funds of Bricklayers & Allied Craftworkers Union Local 7. Not to mention avoiding the higher union wages.

It's really a more "sophisticated" form of racketeering, as opposed to just outright extortion. Because both the mobbed up union officials and the contractor are in on it together. It's a win-win situation for all involved. Of course, the rank-and-file union guys get screwed over.

Raab wrote a good article relating this back in 1999. You can read it at the link below.

http://www.nytimes.com/1999/08/08/nyregi...=all&src=pm

If anyone on this board doesn't have Selwyn Raab's "The Five Families," you should--it's the bible on NY Mafia.

It is a great book, my grandma got it for me for Christmas when i was in college.

Yep, it was the first mob book I ever got. The second was Underboss about Sammy Gravano, I thought that one was good as well.

im getting it. but going to get it for my holiday in portugal in august. does it talk about all the schemes alot and give examples etc? 3 things interesting there. One is that the mob decided to switch to the sweetheart deals. Two that they preferred going into the ten million instead of fifty mill projects. And three that bambino joined with nj family like sopranos!

found an article.could be interesting for some of you.but its very long(34 pages).

Mob Influence at Its Worst: The Case of Local 560

https://rapidshare.com/files/706236306/local531.pdf

Teamsters Local 560, run by Tony Pro back in the day, was probably one of - if not the most - notorious of mob controlled union locals.