A federal grand jury in New Orleans indicted reputed underworld boss Carlos Marcello yesterday on political corruption chages involving state and local insurance contracts in Louisiana.
Marcello and three other men, including Washingon lobbyist I. Irving Davidson, long a friend of Marcello, were accused of fraud, conspiracy and racketeering in a scheme to win the contracts by bribing public officials.
The 12-count indictment stemmed from a year-long FBI investigation called Operation Brilab (for bribery-labor) which used a fake California-based insurance business to spread its net.
The grand jury said that the 70-year-old Marcello planned to share commissions on the contracts with Davidson and Joseph Hauser, a convicted insurance swindler who was operating under cover for the FBI. Davidson, a self-described "door opener and arranger," first introduced Hauser to Marcello in 1976 and then put the two men together again last year, after Hauser had started working secretly with the government.
The other two named in the indictment were Louisiana's former state commissioner of administration, Charles E. Roemer II, and New Orleans lawyer Vincent A. Marinello.
Roemer allegedly took $25,000 and was promised monthly commissions to arrange the award of a state employes' life insurance contract to Fidelity Financial Consultants of Beverly Hills, Calif. Actually, Fidelity Financial was an FBI front set up by two undercover agents purporting to represent the Prudential Insurance Co.
Marinello, a political supporter of former Lt. Gov. James E. Fitzmorris Jr., was accused of taking $10,000 to secure Fitzmorris' help in obtaining other insurance contracts from the state, the city of New Orleans, labor unions and Avondale Shipyards. Fitzmorris was not indicted.
All four defendants were accused of conspiring to violate a federal antiracketeering law, of racketeering under that same law, and of seven counts of wire and mail fraud. Marcello and Davidson also were indicted on one count of interstate travel in aid of racketeering and, along with Roemer, on two more counts of wire fraud.
The racketeering charges, which combine violations of various state and federal criminal laws under a single statute, carry a maximum penalty of 20 years in prison and a $25,000 fine. The other charges are punishable by five years in prison and fines ranging from $1,000 to $10,000.
Long regarded by law enforcement authorities as one of the most powerful Mafia bosses in the country, Marcello has been accused, officially and unofficially, over the years of virtually every crime in the book, even complicity in the 1963 assassination of President Kennedy. But he has prevailed against almost every federal effort to prosecute him in the past 20 years.
When he suffered a rare conviction, in Houston, for punching an FBI agent at the New Orleans airport in 1966, more than 30 leading Louisianans wrote the trial judge to urge clemency and attest to his fine character.
Yesterday's charges were evidently based on widespread use of electronic listening devices, apparently including a bug in Marcello's office behind his Town & Country Restaurant in Jefferson Parish.
According to the grand jury, the conspiracy began in February 1979 (which is when Davidson has said the FBI started bugging his phone), but the first overt act set out in the indictment involved a meeting last June 28 at Marcello's office.
There, the grand jury charged, Marcello and Davidson "agreed that, among other things, they would have to bribe public officials in the city of New Orleans and Jefferson Parish in order to obtain insurance contracts and would split the commissions earned on such contracts three ways among Marcello, Davidson and Joseph Hauser."
Four days later, Marcello allegedly obtained a list of insurance companies carrying group policies for Jefferson Parish employes and, last July 3, told Davidson by phone that he had already made arrangements in that parish and was now "going to 'straighten New Orleans out.'"
The indictment also alleged these details:
Hauser submitted a rundown of the information he needed to prepare an insurance proposal. Davidson forwarded it to Marcello, who sent back word telling Hauser to "sit tight."
Then, last Aug. 28, Marcello met with Roemer at the St. Ann's Hotel in New Orleans. Two days later, the reputed Mafia boss spoke to Davidson about introducing Hauser to "the top man."
(As commissioner of administration, Roemer and his division had set up a health, accident and life insurance program for state employes, but it was undergoing changes as the result of a state leagislative investigation into charges of "ripoffs" and mismanagement.)
On Sept. 10, Marcello, Davidson, Hauser and the two FBI undercover agents behind Fidelity Financial met Roemer in the St. Ann Hotel. Before Roemer arrived, Marcello told the others that no money should be given him "until Roemer produced some results." In a discussion with one of the FBI men in the men's room, Roemer agreed to arrange the award of the state employes' life insurance contract in return for a share of the monthly commissions. Marcello told the others that Roemer would get $50,000 a month and "they would split the rest of the money."
At subsequent meetings at a Baton Rouge hotel, Hauser gave Roemer $25,000 in cash in two installments, and Roemer told Marcello in a Nov. 7 phone call that he had talked to state officials directly in charge of the insurance program.
Meanwhile, according to the grand jury, Hauser, acting on Marcello's instructions, also gave $10,000 to Marinello for Fitmorris' help on insurance with "the city of New Orleans," "the riverfront," and "the big shipyard." Marinello told both Hauser and Marcello in separate Sept. 27 phone calls that he had just given the money to Fitzmorris.
(At a news conference in New Orleans yesterday afternoon, Fitzmorris denied any wrongdoing.)
"We got two, two good big shots, man . . . two big shots," Marcello allegedly told Davidson in an Oct. 4 phone call.