Two New York labor union officials who allegedly received favors from Secretary of Labor Raymond J. Donovan's former construction company were both found by a federal judge this year to be "involved in organized crime."
The two union officials, Louis Sanzo, president of Laborers International Local 29, and Amadio Petito, Local 29's secretary-treasurer, were named in a special federal court hearing earlier this year dealing with the union's ties to the Mafia.
At his Senate confirmation hearings last January, Donovan denied that his company had ever made a labor union payoff. He also disclaimed any knowledge of the company's being "mobbed up," as several FBI informants had alleged.
At the special court hearing last August, government prosecutors presented evidence that Samuel Cavalieri, a member of the Luchese family of the Mafia, was the real boss of Local 29. According to one witness, former Local 29 bookkeeper Joyce Cole, Sanzo once referred to Cavalieri as "the godfather of the union."
The court found that Sanzo, Petito and Cavalieri were all "involved in organized crime."
All three men are appealing prison sentences imposed on them this year following their convictions in related cases.
Donovan's old firm, the Schiavone Construction Co. of Secaucus, N.J., has used members of Local 29, also known as the Blasters Union, on a series of multimillion-dollar subway construction projects in New York. The FBI is currently investigating allegations that one Schiavone executive handed Sanzo an envelope containing $2,000 in cash at a 1977 luncheon at which Donovan was present.
Schiavone Construction, according to two sources, also continued turning out paychecks for Petito in 1978 for several weeks after he left a subway job where he had been foreman to start full-time work at the union as secretary-treasurer and assistant administrator of Local 29's pension fund.
According to former Local 29 secretary-treasurer Mario Montuoro, a self-described gadfly and reformer who was ousted from his union job on May 12, 1978, and has been opposing Sanzo in various ways ever since, Schiavone kept Petito on the company payroll until about the third week in June.
Meanwhile, according to former bookkeeper Cole, who was fired from Local 29 in 1979 after testifying before a federal grand jury, Petito started "getting union pay" in mid-May. She said in an interview she was sure of this "because I was making out the checks."
Petito also held onto a Schiavone pickup truck he used on the subway job as foreman, both Montuoro and Cole said.
Other favors allegedly provided by Schiavone included paychecks and other benefits nominally earned by "ghost employes" but actually kept by union officials; lumber for a garage at Sanzo's home in Queens, and the labor for a chimney and fireplace at Petito's home in Port Washington.
Union president Sanzo, according to Montuoro and Cole, also used to go around the union offices boasting that he could always quit his union post and get a job with Schiavone Construction at $1,000 a week.
"Many times, he would tell me that," Montuoro recalled in an interview. "I used to tell Joyce Cole , 'Who's he b---s----ing?' He was making more at the local."
Sanzo has been almost steadily unavailable for comment, but Newsweek magazine quoted him in this week's editions as calling Montuoro "sick, sick, sick" and drawing attention to Montuoro's criminal convictions for heroin possession and illegal possession of a handgun.
Allegations of ties to organized crime have dogged Donovan and his company since last winter. At a Senate hearing last January, Sen. Orrin G. Hatch (R-Utah) told the secretary-designate that "there has been a generalized allegation that you, through your position in Schiavone , had social and business ties with organized crime figures. Is that true or not true? "
"That's not true," Donovan replied.
The August court hearing in Brooklyn, held by U.S. District Court Judge Mark A. Costantino, was a presentencing session to determine whether Sanzo, Petito and Cavalieri were members of or had strong ties to organized crime. Sanzo had just been convicted on income tax evasion and conspiracy charges stemming from construction company payoffs unrelated to Schiavone. Cavalieri, whose son was administrator of Local 29's pension fund, and Petito were convicted of contempt for refusing to testify before a grand jury in the Sanzo case. Petito was also found guilty of perjury.
After hearing from several witnesses, including detectives who spotted Cavalieri at a number of wakes for organized crime bosses about town since 1967, Judge Costantino held that "there is little doubt that Cavalieri is heavily involved in organized crime. As for Sanzo and Petito, their own conversations exhibit an in-depth involvement with Cavalieri as an organized crime figure."