Special prosecutor Leon Silverman closed out his investigation of Labor Secretary Raymond J. Donovan today, saying he had investigated 14 new allegations against the secretary and concluded once again that there was "insufficient credible evidence" to support any criminal charges.
New York authorities and FBI agents are still investigating the gangland murder of one of Silverman's witnesses, Nat Masselli, but Silverman said that "to date" there was no evidence of any connection between the Aug. 25 slaying and the Donovan inquiry.
Silverman announced his findings at a news conference in his law offices here and quickly turned in a notice of resignation to Attorney General William French Smith.
In it, Silverman certified that "the investigation of all matters within my prosecutorial jurisdiction has been completed."
At the same time, the special prosecutor, who was appointed last December, said he had "no reason to feel less disturbed" than he was in June about the large number of allegations linking Donovan to organized-crime figures that had cropped up, allegations, "albeit unproved," that now remain on public record.
As he did in June, when he issued a 1,025-page compendium that he thought was his final report, Silverman refused to say he had "exonerated" the labor secretary or was giving him "a clean bill of health."
"It would be fair to say that I have been unable to corroborate the allegations made against him with sufficient credible evidence," Silverman declared. He would not go further.
At the White House, spokesman Larry Speakes said of the Silverman report, "It was not unexpected and we are pleased with it."
At a Labor Department news conference Donovan read a statement saying: "It is tempting -- and probably politically orthodox -- for me to say how pleased and gratified I am. But . . . I am angry. Angry that I have had to endure months and months of relentless press coverage of groundless charges made by nameless accusers; angry that my wife and children have suffered as only a family can suffer; angry that my former business associates have been unfairly maligned."
Regarding Silverman's disclosure that one witness had admitted that all 17 of his charges against the labor secretary were deliberate lies, Donovan added, "This does not come as news to me."
The secretary then left without taking questions.
Silverman said that if -- and he told reporters it was "a big 'if' " -- the Masselli murder investigation turns up evidence of a connection to Donovan, and if a special prosecutor is once again needed to pursue that, "I will be willing to accept such an appointment."
He made clear, however, that he did not consider it his province to pursue any allegations concerning Donovan's New Jersey construction company, Schiavone Construction Co. of Secaucus, or Mafia figures unless there was supposed to be, at the outset, some clear connection with Donovan himself.
"I am not an ombudsman for the construction industry -- or for any company in the construction industry -- or for organized crime," Silverman declared. "My mandate was to investigate the secretary."
The heavily censored report that Silverman issued today consisted of 111 pages, 66 of them deleted. Most of the exhibits were also deleted from the public version, including, apparently, a letter from the FBI asking Silverman not to pursue a new tape recording that came to his attention only last week.
Silverman agreed. He said the conversation in question, which was first brought to his attention last Wednesday, "was recorded in the course of a major organized-crime investigation" and contained a reference to Secretary Donovan.
But Silverman said his review of the transcript showed the mention was "casual and non-incriminating in nature." Silverman said he decided to drop the matter in light of the FBI's fears that it could endanger "the source of the conversation and the ongoing FBI investigation."
The FBI offered similar reasons for deciding last year not to inform the Senate Labor Committee at Donovan's confirmation hearings of a reference to Donovan on a wiretap of Nat Masselli's father, William Masselli, a reputed member of the Genovese family of the Mafia.
Among the new allegations that came to Silverman's attention after he filed his June report were reports that one of William Masselli's associates, Albert DiTraglia, could put Donovan at the 1979 Super Bowl in Miami with Masselli. The prosecutor was also told there were subsequent meetings in New York following the Super Bowl that included Masselli and Donovan among others.
Donovan had denied any meetings with organized-crime figures at the Super Bowl and said his only contacts with Masselli, whose trucking company was a subcontractor for Donovan's firm on a series of New York City subway projects, were always on the job site. Donovan said he had not been aware of Masselli's organized-crime connections until they were mentioned at the Senate confirmation hearings.
The report showed that Silverman did question DiTraglia, who had eluded him in the first phase of the investigation, as well as other reported witnesses about the so-called "Super Bowl" and "post-Super Bowl" allegations. But there were no indications in the report that those who were interrogated on this issue included either William Masselli himself or other reputed members of the Genovese crime family who are currently suspects in the killing of his son.
Bronx District Attorney Mario Merola has secured the indictment of one reputed Mafia "soldier" in the Nat Masselli murder and is seeking evidence against two others. A spokesman for Merola agreed today that investigators have no evidence at this point of a link to the Donovan inquiry, but emphasized that they are still trying to find out "who killed Nat and why."
Among the other allegations that Silverman said he investigated this summer, and could not corroborate, were:
* A charge from an unidentified FBI source that Donovan helped funnel $20 million in Teamster Union contributions to the 1980 Reagan presidential campaign through various legitimate unions and other contributors. The informant, however, refused to take a polygraph test and finally "recanted" after investigation had proved the charge to be groundless.
* Reports, from the notes of FBI Director William H. Webster, that Donovan's company had cropped up "a number of times in reports" of the FBI's investigation of the disappearance of Teamsters leader James R. Hoffa. Webster communicated this to Pendleton James, personnel chief for the Reagan transition, on Dec. 12, 1980, but the FBI director told Silverman recently that the information was simply incorrect.
According to Silverman's report Webster said he had been given the erroneous information by a subordinate, but couldn't recall who that was. In any case, the FBI director said, the Hoffa files had been checked recently and "there were no references to SCC Schiavone Construction Co. therein."
During the news conference, Silverman also said that one informant during the early phase of the investigation, a man who had made 17 allegations about Donovan, had also recanted, just last Wednesday in an interview with the FBI. Silverman would not identify that informant, or any of the allegations he had made, beyond stating that it was not Mario Montuoro, the ousted New York labor official whose charges against Donovan triggered the entire investigation.
Silverman also said he was confident that other informants he dealt with told him what "they believed to be true."
Still, he said, it all added up to "insufficient credible evidence." At one point, Silverman was asked whether this meant that he didn't have "credible witnesses, that their backgrounds were questionable."
"It's hard to elaborate, except to say that independent corroboration was found wanting with respect to the allegations that were made," he replied.