The FBI obtained certain incriminating allegations about Secretary of Labor Raymond J. Donovan more than a year ago--before he was confirmed by the Senate--but didn't inform anyone in the Senate about them until two weeks ago.
The most startling charge came from an informer who said Donovan had engaged in a bid-rigging operation on behalf of his New Jersey construction company with the help of inside information from a now dead New Jersey mobster, Salvatore Briguglio.
The informer, described as "always found to be highly credible," made the report to an FBI agent in Newark on Jan. 27, 1981. The details were immediately conveyed by telephone to Washington.
That was two days before the Senate Labor Committee endorsed Donovan's nomination on the grounds that he had emerged unscathed from what was described as an intensive FBI investigation of alleged ties to organized crime.
The following week, on Feb. 3, 1981, Donovan's nomination was confirmed by the Senate.
"It looks like we botched this one up," one FBI official acknowledged.
The report was discovered only recently, in the files of the FBI's Newark field office, by special prosecutor Leon Silverman and his staff.
Reportedly alarmed, Silverman met with FBI Director William H. Webster, who, in his own words, "ordered the extraordinary step of searching all field offices" for any other information on Donovan that might have gone unnoticed and uninvestigated.
That produced five more reports that the FBI says "do not appear to have been disseminated previously." The most notable of these came from an informer for the bureau's New York field office.
According to an FBI account, the informer told a New York agent on Jan. 11, 1981, that Donovan "had business contacts with a number of questionable individuals," including a New York labor racketeer and the reputed head of a New Jersey Mafia family. January 11 was a Sunday, the day before the Senate Labor Committee held its first hearing on the controversial Donovan nomination.
Sources say the FBI agent called his supervisor in the New York field office immediately. The supervisor wrote up the information, but somehow left it out of the report he later sent to Washington.
Webster informed Senate Labor Committee Chairman Orrin G. Hatch (R-Utah) and the panel's ranking minority member, Sen. Edward M. Kennedy (D-Mass.), of the FBI foul-ups on April 15, "with the concurrence of the special prosecutor." The senators made many of the details public in a special supplemental report.
The report had been embargoed for Sunday publication, but the Associated Press reported on it last night, saying the embargo had been broken by a Salt Lake City television station.
A spokesman said Donovan would have no comment.
Silverman was appointed special prosecutor last December to investigate Donovan's alleged involvement in a $2,000 labor union payoff.
The probe has now widened considerably. Among other things, Silverman is sifting through the heretofore undisclosed allegations in an attempt to determine their merit. The FBI, meanwhile, is conducting an internal inquiry to try to nail down what went wrong.
The Newark informer, it was learned, already had been interviewed once by the FBI for its main, Jan. 23, 1981, report to the Labor Committee on the Donovan investigation.
But four days later, according to a summary account designed to protect his identity, he told special agent John Marshal Hersh of the Newark office that Donovan "socialized on a regular basis with Salvatore Briguglio."
In addition, "the informant said that through his contacts with municipal and state agencies in the northern New Jersey area, Briguglio was able to determine the lowest bids which had been received from other construction companies on various jobs." According to the Newark FBI report, Briguglio would then furnish the lowest bid information to Donovan, who would use it to underbid the competition and obtain the contract.
"According to the informant, Briguglio received payoffs from Donovan for his assistance in obtaining the contracts. The informant said that Briguglio's brother, Gabe Briguglio, assisted in picking up payoffs from Donovan."
The same day this interview was taking place in New Jersey--Jan. 27, 1981--Donovan was testifying before the Senate Labor Committee, insisting that the accusations clouding his nomination were "unfounded, scurrilous" and "groundless."
Donovan's chief accuser at the time, Ralph Picardo, a former truck driver in a mob-dominated Teamsters local, had sworn that he periodically picked up $500 checks for Briguglio from Donovan at the offices of Donovan's company, Schiavone Construction. Picardo said he was working at the time for a trucking firm that Briguglio, a labor racketeer and reputed Mafia hit man, secretly owned.
At the Senate hearing, however, Donovan denounced Picardo as "murdering slime."
The FBI's executive assistant director for investigations, Francis M. Mullen Jr., and the FBI official in charge of the Donovan inquiry, Anthony Adamski, testified, too, saying that they had not been able to corroborate Picardo's story or any of the other allegations against Donovan or Schiavone Construction.
But now, according to the FBI's new report to the Senate, it appears that FBI agents in Newark spoke by telephone to Adamski (identified in the report only as "the chief of the special inquiry unit") sometime on Jan. 27 and gave him a rundown on what the Newark informer had just told them.
It amounted to at least partial corroboration of Picardo's story. But the information was not supplied to the Senate until this past month.
Instead, on Jan. 29, 1981, the day the Labor Committee reported out Donovan's nomination, the FBI's Mullen assured the committee that the Donovan investigation had been "thorough and complete."
"I stand by the results of this investigation, which surfaced no information which would reflect unfavorably upon Mr. Donovan in any manner," Mullen added. "No new information has come to my attention since my testimony . . . on Tuesday, Jan. 27, 1981, to mitigate any statements made during my testimony."
The Newark informer was interviewed again by Hersh on Feb. 1, 1981. During the course of the various interviews, the informer also told the FBI that Schiavone Construction generated funds for payoffs to Briguglio by "a procedure for overbilling for several large cranes purchased by the company."
The informer also said Donovan visited Briguglio's home "on numerous occasions," and that the two men were together at a Fort Lee, N.J., restaurant on April 13, 1969.
Donovan was questioned under oath about Briguglio by Hatch at the Jan. 27 hearing.
Donovan: "I never met the man."
Hatch: "Have you ever done any business with him?"
Donovan: "We have not."
The New York informer's allegations, made the week of Jan. 11, dealt with whether Donovan's company was "mobbed up," but the allegations apparently never reached Washington.
In any case, acccording to the new Senate report, this informer said that Donovan associated in the 1960s with Jack McCarthy, and that Donovan introduced McCarthy to a wire and cable company "which McCarthy thereafter represented."
McCarthy was a notorious New York labor consultant whose activities were detailed in 1966 Senate hearings entitled "Labor Racketeering Activities of Jack McCarthy and National Consultants Associated Ltd."