A sweeping FBI investigation of alleged waterfront corruption on the East Coast yesterday led to the indictment of Anthony M. Scotto, a prominent leader of the International Longshoremen's Association.
A federal grand jury in New York charged Scotto with 49 counts of racketeering, mail fraud, income tax evasion and receiving illegal payments of more than $300,000 from waterfront businessmen.
Besides being president of the largest longshoremen's local in the nation, Scotto, 44, is renowned for his political connections, including Gov. Hugh L. Carey of New York and President Carter. He is also considered by law enforcement officials to be a leader in the Gambino organized crime family in New York.
"The indictment is significant because he's one of the most important organized crime figures in New York and because of his influence in an important industry [shipping]," one high FBI official said yesterday.
Scotto's attorney, James LaRossa, issued a statement denying and condemning the charges. "I consider this indictment the finale of a 15-year Justice Department vendetta against Mr. Scotto which has undoubtedly cost the taxpayers untold millions of dollars. It is a total abuse of governmental power... which makes a mockery of our system of justice."
Also indicted yesterday were Anthony Anastasio, another longshoremen local official who is Scotto's brother-in-law, and two other relatives, Vincent Marino and Joseph Lacqua, who are shipping company officials.
According to the indictment released by Robert B. Fiske Jr., U.S. attorney for the Southern District of New York, the government has evidence -- an electronic "bug" in Scotto's office -- that the waterfront labor leader counted out illegal cash and referred to setting money aside for the "kitty."
A spokesman for Scotto acknowledged yesterday that the ILA executive had been notified by federal authorities that his office had been bugged.
The 3-year-old waterfront investigation also has made extensive use of other electronic surveillance, informers and undercover FBI agents who have worked their way into jobs on the waterfront.
Last June, a dozen shipping company officials and 10 ILA officials in the southeast were indicted in Miami on similar charges of trading cash for labor peace on the waterfront. They are scheduled to go on trial later this month.
The New York investigation also is continuing, Fiske said yesterday.
The investigation -- called UNIRAC, for union racketeering -- was touted then as an example of the FBI's new emphasis on "quality" cases. More than 150 special agents have taken part in more than a dozen cities on the East Coast and in Gulf ports.
"It's an effort to clean up an entire industry, not just pick off a few lowlevel thugs," one prosecutor involved in the investigation has said.
The 125,000-member longshoremen's union has had a reputation for corruption dating back to the late 1940s, when reporter Malcolm Johnson wrote a series of exposes about gangsterism on the New York docks that won the Pulitzer Prize and triggered what has become a periodic series of investigations.
Johnson's series became the basis for the award-winning Marlon Brando film, "On, the Waterfront." One FBI official said yesterday: "It doesn't look like things have changed all that much on the New York docks."
The longshoremen's union has lost strength because shippers have switched to containers to transport goods. But the ILA has negotiated contracts which pay its members whether or not they work each day.
According to yesterday's indictment, Scotto was paid more than $300,000 by six different firms between 1974 and 1978 to reduce the number of "fraudulent and exaggerated" accident claims filed by ILA members and to gain -- or prevent the loss of -- business.
Alan Levine, the assistant U.S. attorney who presented the case to the grand jury, said the mail fraud count involves a deal whereby Scotto and Anastasio -- and unidentified others -- would receive cash payments of $20,000 if. Prudential Lines Inc. of New York would sign a 10-year lease for a Brooklyn warehouse "on terms acceptable to its owner."
Scotto also faces six criminal tax charges, one charge each of racketeering and racketeering conspiracy and 40 counts of receiving illegal labor payments in violation of the Taft-Hartley Act.
Some $180,000 in cash was paid to Scotto by the John W. McGrath Corp. between August 1975 and last Sept. 22, the indictment charged. The labor leader got another $75,000 in cash, as well as a $20,000 cabana, and $4,000 worth of thermo-insulated windows from Quin Marine Services Inc., according to the indictment.
In the racketeering conspiracy count, the indictment describes a Dec. 21, 1977, meeting in Scotto's union office, where he and Anastasio allegedly discussed $38,000 in illegal cash payments, and Scotto reportedly handed his brother-in-law $5,000 as an "extra."
At the same meeting, Scotto allegedly counted $15,000 in cash from an ILA employer, which he described as "over the lease."
Scotto's father-in-law was "Tough Tony" Anastasio, an early leader of the ILA. His brother-in-law and codefendant is the nephew of Albert Anastasia, the proprietor of Murder Inc. who was gunned down in a hotel barber shop during gang warfare in the 1950s.
A 1977 New York magazine article on Scotto called him "Mr. Lucky," and attributed his highly visible movement in political circles as an attempt to shake off the old mob associations.
He told the interviewer, "My power is based first on the union, then the labor movement, then politics."
Scotto served years ago on Republican Mayor John V. Lindsay's election committee, and more recently as an adviser to Carey.He also was host to a waterfront rally on Oct. 28, 1976, for candidate Jimmy Carter's final preelection campaign appearance.