Early in January 1979, a team of FBI agents, guided by an ex-convict code-named Smitty, stole into a fortress-like warehouse in the south Bronx to install a set of court-approved listening devices.
A tap was placed on the telephones in the building, headquarters of reputed Mafia "soldier" William Masselli, several weeks later, again with court approval. The FBI kept its listening machines running for more than six months.
It was, by most accounts, an extraordinarily productive surveillance, churning up allegations and conversations of literally dozens of crimes: murder, hijacking, kickbacks on government contracts, extortion, bribery and political corruption, fencing, narcotics-trafficking, gambling, perjury and more.
Yet not one of the 857 tape recordings compiled during the long vigil has ever been played in an open courtroom. The FBI has guarded them closely, saying their disclosure could jeopardize continuing investigations, or compromise a confidential source, or invade the privacy of various individuals and officials to whom unproved improper conduct had been ascribed.
By now, prosecutors for Bronx District Attorney Mario Merola have said in court proceedings, the tapes have been kept secret for so long that the five-year statute of limitations has almost run out on some of the activities they mention, including those concerning Masselli's dealings as a subcontractor with Secretary of Labor Raymond J. Donovan's New Jersey construction company.
Bronx authorities said they became involved in the case last year when they happened upon information concerning the unsolved 1978 murder of mobster Salvatore Frascone -- a gangland killing that, they were told, also was discussed on the tapes.
After months of backstage bickering with the FBI, obtaining seven sealed court orders, and peripheral arguments with special prosecutors who investigated Donovan's activities in 1982, they finally obtained access to the original recordings and other material. But at one point last winter, their frustration was so great that one of Merola's prosecutors drafted an affidavit -- which was never filed -- contending that the head of the FBI's New York office should be held in contempt of court.
According to Merola's prosecutors, the homicide -- in which Masselli allegedly participated -- led them to explore Masselli's takeover of a trucking company over Frascone's objections, and Masselli's subsequent multimillion-dollar dealings with Donovan's company on a big New York City subway project.
Lawyers for Donovan's firm, the Schiavone Construction Co. of Secaucus, N.J., have said in court proceedings that they fear that an indictment of the company and perhaps some of its officers is "imminent."
Whatever happens, the sequence raises a number of questions about the FBI's handling of the original investigation and all the criminal evidence, leads and allegations that it reportedly produced. Aside from the allegations that have dogged Donovan, sources said there is talk on the tapes indicating political corruption among New York politicians, but the "biggest fish" ever sent to jail was Masselli, for hijacking and narcotics trafficking.
He pleaded guilty to sharply reduced charges in the fall of 1981. Courthouse reporters in Manhattan learned about those hearings only by spotting a sentencing date on one of the judges' daily calendars.
The tapes were put back under seal. Evidently, no one in the FBI ever told Bronx authorities about the evidence on the recordings of the 1978 murder that eventually led them into the thicket.
The FBI has repeatedly stated over the years that it also was investigating Masselli's formation of the trucking company, Jopel Contracting, which he put forth as a minority business enterprise entitled to special considerations under federal law. The Justice Department told the Senate Labor and Human Resources Committee as recently as March 1983 that "the circumstances surrounding the takeover . . . by Jopel are still under investigation by the FBI so comment about this matter would be inappropriate."
There is, however, little sign that much effort was expended after an initial burst of activity in 1979-80. Stacks of documents recently found in Masselli's family basement, sources said, still carried tickets indicating that they were last inspected by a federal grand jury in February 1980.
The lid appears to have slammed down on what the bureau called "Operation Tumcon" later that year, reportedly over the protests of some of the agents assigned to the case.
Merola's men got into the act in the summer of 1983 after a phone call from Ed McDonald, head of the Justice Department's Organized Crime Strike Force in Brooklyn. He had a man in the Witness Protection Program who had knowledge of an unsolved gangland killing in the Bronx in 1978 and was willing to talk about it so long as what he said would not be used against him.
It was Smitty -- real name Michael Orlando -- the informant who had led the FBI into Masselli's warehouse. He had been Masselli's right-hand man and, he disclosed, his "hit man" as well.
According to one federal official, the hierarchy in the FBI's New York bureau decided in 1980 that he had "gone bad" because of other crimes and "discontinued" him as an informer that September. He was prosecuted in the Southern District in Manhattan in 1981 along with Masselli and sent to prison on the hijacking charges that he himself had made possible.
Apparently regarded as more useful by Strike Force prosecutors in Brooklyn, Orlando entered the witness program in January 1983 after passing a polygraph test about the killing of Frascone, another reputed Mafia "soldier" who had been complaining loudly about the manner in which Masselli had become a subcontractor for Schiavone Construction. According to law enforcement sources, Masselli had muscled aside a friend of Frascone, Louis Nargi, on a subway job in Queens.
Still serving a federal prison term, Orlando told authorities that Masselli enlisted him for the Frascone killing one evening after dinner at a Bronx restaurant. According to informed sources, Orlando said Masselli gave him a .38-cal. snub-nose revolver to use, drove him to the vicinity of a Bronx social club to wait for Frascone to emerge, and then served as the getaway driver following the Sept. 22, 1978, murder.
Granted immunity from prosecution, reportedly on the grounds that the killing would never have been solved in any other fashion, Orlando was made available to two New York detectives assigned to Merola's office, Michael Geary and Lawrence Doherty. They had been instrumental in solving the 1982 murder of Masselli's son, Nat, allegedly to keep him from cooperating in special prosecutor Leon Silverman's investigation of alleged ties between Donovan and organized crime.
Silverman concluded his investigation three weeks after Nat Masselli's murder, saying there was "insufficient credible evidence" to warrant Donovan's prosecution for any federal offense. Once again the tapes, which were made available to Silverman, were put back under seal.
At his last news conference in September 1982, Silverman also said there was no evidence "to date" of any connection between the killing and the Donovan inquiry. As it turned out, another witness in the inquiry, Philip Buono, a reputed "capo" in the Genovese crime family, was convicted of shooting the younger Masselli.
The Bronx investigators and FBI agents first locked horns in the Nat Masselli investigation, sources on both sides said. Recriminations reportedly reached a high point after Nat Masselli's fiance, Jo Anne Sarno, told the two Bronx detectives of Masselli's claims to have been working for "the feds" and being "wired" by them in an effort to gather evidence in the Donovan inquiry.
Despite the FBI's denials, she and Nat Masselli's two sisters blamed the bureau for his death.
Pressed on whether anyone in the bureau had been using Nat Masselli, FBI headquarters officials, sources said, finally sent two agents from Washington to interview the women at a Dec. 20, 1982, meeting in the 48th Precinct station house in the Bronx.
According to these sources, the session produced a shouting match that could be heard in the squad room involving complaints that the FBI men were, in effect, intimidating Sarno by warning her she would have to come to Washington and testify if her reports about Nat Masselli's being "wired" seemed to have any substance.
Geary and Doherty declined to comment on the incident. FBI officials in Washington had no immediate comment.
The inquiry into the Frascone killing produced still more frustrations. According to a paper prepared within the Bronx prosecutor's office, the head of Merola's homicide bureau, Stephen Bookin, obtained a sealed federal court order last Dec. 15 granting him access to all the original tapes and accompanying logs and indices, but it took him weeks to get FBI officials in New York, where the recordings were kept, to comply with it.
At first, according to this chronology, FBI officials offered a set of duplicate tapes, then a second set of originals that had never been sealed, then withdrew an offer of agents to help with high-speed duplicating, then withdrew an offer to let Bronx officials use the FBI's high-speed machines, and then suggested that the duplicating be done in "real time," a process that would have taken some six months.
At length, according to this account, Jane Parver, then head of the major crimes unit for the U.S. Attorney's office in Manhattan, informed Bookin in late January that she had learned, from someone in FBI headquarters in Washington, that the U.S. Attorney's office "had entered into certain secret agreements with congressmen and other public persons that the Tumcon tapes would never be released."
Parver was quoted as saying that the tapes contained allegations of criminal activity committed by these persons, that the FBI had investigated them and found "insufficient evidence," and that "the secret agreements were reached on behalf of those persons so that the allegations would not be revealed."
Bookin declined to comment. Parver recalled speaking with him but denied making any such statements. She said, however, that she had gotten a call from an FBI agent in Washington who had worked on the case while stationed in New York, and "he just asked me to check on whether there were any agreements with the bureau, or anyone else, that this office had entered into."
Parver said she spoke with Bookin before she had a chance to check with Michael Ross, the former prosecutor in charge of the Masselli investigation, and got his assurance that there were no such agreements.
Parver said she could not remember the name of the FBI agent who seems to have raised the specter, but it apparently was James Moody, who, the FBI said, served as both "the case agent" and "supervisor" of the case agent in the Masselli investigation, a highly unusual double hat.
According to the Justice Department, "this type of assignment is relatively uncommon" but there are no rules against it. The department said Moody was first the supervisor of the Tumcon squad and then decided that "effective management control was best ensured" if he made himself the case agent as well.
Subsequently promoted to FBI headquarters, Moody declined to comment on whether he spoke with Parver. He also declined to comment on the status of another investigation to which he has reportedly been assigned in recent months: the FBI inquiry into the activities of various private investigators hired by representatives of the Schiavone Construction Co. during the Donovan inquiries. There has been no sign of any extensive interviews on that matter.
The FBI was asked for comment more than two weeks ago on whether anyone from FBI headquarters had raised the specter of "secret agreements" concerning the Masselli tapes. It was asked for comment on the status of the "investigation of the investigators" almost two weeks ago. A spokesman said the inquiries would be taken "to the top." So far there has been no response.
At court hearings in New York this month dealing with unsuccessful petitions by Schiavone Construction to block the Bronx investigation, lawyers for the company charged that it was politically motivated and timed to embarrass the Reagan administration in the upcoming elections.
Bookin denied it, saying that "this investigation has taken this long precisely because it has been very difficult to obtain these [tapes and other] materials."