At the final Senate hearing before his confirmation as secretary of labor, Raymond J. Donovan was questioned several times about an obscure firm that had allegedly served as a link between Donovan's New Jersey construction company and organized crime.
The committee chairman, Orrin G. Hatch (R-Utah), it turned out later, didn't have the name of the firm quite right, but he tried to make the question broad enough to cover any variations.
Chairman: "Are you familiar with a company by the name of Moscato Contractors or any similar company having the name Moscato?"
Donovan: "Not until Read that name in the FBI report, I wasn't."
Chairman: "Has SCC [Schiavone Construction Co., Donovan's firm] ever used a company called Moscato Contractors or a company with a similar name as a subcontractor on SCC-related construction contracts?"
Donovan: "We have not, senator."
Moments later, Hatch brought up the matter again, noting reports that a racketeer named Salvatore (Sally Bugs) Bruguglio had once described "Moscato Contaractors" as a firm that was run by "organized crime elements" and that had served as subcontractor to Schiavone "frequently as a means of insuring labor peace."
"Have you ever done business with Mosacto Contractors?" Hatch asked, this time neglecting to broaden the question.
"We have not," Donovan stated emphatically.
That, it seemed, ended the matter. The FBI had already brushed aside the allegation in its supposedly exhaustive investigation of Donovan's background. In a 19-page report made public at the hearing, the bureau made only a brief mention of the individual in question, Phillip Bernard Moscato, and assured the Senate Labor Committee that it had no information showing any connection between Moscato and Schiavone Construction.
Unaccountably, the FBI did not bother to tell the committee just who Moscato was. According to its own files and informers, he was "known to be one of the top loan sharks" in northern New Jersey, a man who worked for the same two mobsters who had alleged been extracting payoffs from Schiavone Construction.
The FBI also failed to discover that Moscato had done some work for Schiavone. In 1971, the company paid "Moscato Brothers Inc." $825 for hauling away some debris from a highway project Schiavone had undertaken.
In 1972, Donovan's company paid City Conctruction, another of Moscato's firm, $2,400 to demolish a two-story frame building on the Schiavone premises that had caught fire. And in 1973, Schiavone rented a front-end loader from City Construction on several occasions for a total of about $3,000.
The 1972 demolition job that Moscato undertook was occasioned by a fire that reportedly started when someone accidentally left a hot plate on. Senate investigators had been concerned that the same fire might have destroyed some relevant business records, but the FBI said it was satisified that only blueprints had been lost.
The transactions with Moscato came to light only after Bruce Locklin, a reporter for The Bergen, N.J., Record, took the trouble to call Moscato. Now living in Florida, he readily acknowledged having done work for Schiavone, "some demolition, some hauling. . . . It was 100 percent legit."
The FBI has refused to comment on the shortcomings of its investigation, which was being widely billed just two weeks ago as "thorough, exhaustive . . . wthe most extensive of any current Cabinet nominee." Top bureau offiicals insisted to the committee that they had carried the investigation as far as it could logically go.
Asked about various omissions that have since become evident, including the failure to interview Moscato, an FBI spokesman would say only, "We are not addressing those questions."
Schiavone Construction's in-house counsel, Morris Levin, said that the $6,200 worth of work with Moscato, discovered just this past week in a special check by company officials, was all the business Schiavone had done with him in the last 15 years.
Through a spokesman, Donovan took the position that he shouldn't have been expected to remember the items.
"We did over $700 million worth of business over a period of years," Donovan said. "I've since been informed by my attorney that we did $825 with the Moscato company. The remainder was with City Construction. Am I, or the company, supposed to remember that amount?
"I have no other comments," Donovan added. "I'ts all behind me."
Neither Moscato nor his erstwhile gangland associates, the late Salvatore Briguglio and the presumably dead Armand (Cokey) Faugnon would appear to be forgettable characters. Moscato became famous in 1975, when the FBI obtained a warrant to search a dump he operated under the Pulaski Skyway in unsuccessful hunt for the body of the missing Teamster leader, Jimmy Hoffa.
Briguglio, a labor racketeer and reputed Mafia hit man, was a prime suspect in Hoffa's disappearance and presumed murder. Once a business agent for the New Jersey Teamsters local headed by Anthony (Tony Pro) Provenzano, Briguglio was identified by one eyewitness as having been in the car with Hoffa outside the Detroit area restaurant where Hoffa was last seen.
Regarded by government investigators as the most likely to talk because of two previous felony convictions, Bruguglio, 48, was killed on a street in New York's Little Italy in 1978 when two men walked up to him and fired five shots into his head and chest.
Faugno was last seen on Dec. 8, 1972, when he left his home in Englewood Cliffs, N.J. Authorities were latter told by an informer that Faugno's body had been stuffed into a tree shredder, and they suspected that the remains might also have been buried in Moscato's Jersey City dump. At the time Faugno disappeared he was facing trial, with Briguglio, on charges of financing a counterfeiting ring.
According to a 1972 FBI memo composed just a few weeks earlier, Faugno and Briguglio had also been financing Moscato's loan-sharking activities, which, the report said, Moscato embellished by "arbitrarily adding an extra tax or sum of interest when a borrower has his loan almost paid."
In any case, Briguglio, Faugno and Moscato are three of the men allegedly involved in extorting payments from Schiavone Construction. The 19-page FBI report on Donovan reflected almost nothing about their backgrounds. It simply described Briguglio and Faugno as "reputed organized crime figures," one of them "killed in a mob slaying" and the other "now believed to be dead."
As for Moscato, the FBI blandly described him as someone who "has been reported to associate with organized crime elements" -- without saying which ones. The bureau also allowed that Moscato "reportedly had operated a dump site in the past."
"The committee had no way of knowing how close he was to Briguglio and Faugno, "exclaimed one exasperated Senate investigator. "They [the FBI] just laid them out there [in the report] as though they were ordinary people."
The allegations of payoffs for "labor peace," which the FBI said it could not corroborate and which Donovan has angrily denied, came from Ralph (Little Ralphie) Picardo, a government-protected witness who first turned into an informer in 1975 while he was serving a 20-year term for murder in Trenton State Prison.
A former truck driver in Tony Pro's Teamster Local 560, Picardo said he was working for Briguglio in the mid-1960s at O.K. Trucking, a company that he said Briguglio secretly owned. He said one of his periodic chores Briguglio gave him was to deliver fake invoices to Schiavone Construction, ask for "Ray," and pick up $500 checks made out either to O.K. Trucking or XYZ Lleasing, a dummy company.
Picardo said he never knew what "Ray's" last name was, but recognized him as Donovan last month from a newspaper photograph.
Picardo also told the FBI that Briguglio once told him "that the original extortion of SCC to obtain 'labor peace' had been started by Armand Faugno."
Some corroboration for Picardo's recollections as a bagman seemed to come from Michael A. Gretchin, who said he worked as a driver for Picardo in the late 1960s and early 1970s. Gretchin told the FBI of chauffeuring Picardo around each Friday to various places from which Picardo would emerge "with an envelope which Gretchin believed contained cash because of the size of the envelopes."
Gretchin said he remembered Picardo saying, "You don't fool around with the Schiavone Company, you leave them alone." But Gretchin said he did not recall ever driving Picardo to Schiavone Construction's offices or any meeting between Picardo and Donovan.
Donovan defended himself strenuously, denouncing Picardo as "murdering slime" and swearing that he never met him. No one at Schiavone, he told the committee, "has ever bought labor peace." The secretary-to-be and his defenders on the panel emphasized apparent discrepancies in Picardo's account, such as his memory that "Ray" wore glasses. Donovan said he wore none in those days.
FBI agents, meanwhile, pored over several hundred thousand old checks, journal entries and invoices dredged up by Donovan's company and said they could find nothing to corroborate Picardo's charges. The bureau's executive assistant director in charge of investigations, Francis M. Mullen Jr., even told the committee in a Jan. 29 letter, two days after the final hearing:
"I stand by the results of this investigation which surfaced no information which would reflect unfavorably upon Mr. Donovan in any manner."
The unusual statement appears to have been provoked in part by Picardo's insistence, in an appearance on NBC-TV's "Today" show that morning, that he was sure of his identification of Donovan. FBI officials tried to discourage Picardo from the broadcast by threatening to pull off his bodyguards during any trip to the studio.
Picardo went ahead anyway. On the show, he also maintained that the investigation has been too hurried and failed to draw on the bureau's own labor racketeering and organized crime specialists.
In fact, the investigation was already beginning to look a bit frayed at that point. Labor Committee Democrats, led by Sen. Edward M. Kennedy (D-Mass.), were charined at the bureau's admitted failure to pursue still other allegations by Patrick Kelly, another government-protected witness with a memory that, some sources say, proved better than FBI records on a number of occasions.
FBI officials took the position that Kelly's allegations -- admittedly heresay chatter by organized crime figures about asserted ties between Schiavone and members of the Genovese crime family and talk of the company's involvement in bid-rigging -- were too vague to pursue. But in an interview with The Washington Post, Kelly made plain that they were much more detailed than the FBI had suggested.
Then came the Bergen Record's disclosures about Mascato and about still another witness, Al Cecchi, the alleged front man at O.K. Trucking years ago. He had told the FBI that Faugno's name wasn't even familiar to him. Reporter Locklin, however, remembered seeing Cecchi's name and unlisted phone number in private phone book the missing mobster had left behind in 1972. Locklin dialed it and Cecchi answered. That jogged his memory. He remembered Faugno after all.
At the behest of the Democratic minority, Hatch has now ordered another staff inquiry into "all the allegations" in an effort to determine whether to press the FBI to work again.