Seems Dispirited as He Awaits Trial : Embittered Donovan Back Working at His Old Firm

One year after becoming the first Cabinet secretary indicted in office, former Labor Secretary Raymond J. Donovan has resumed working at his former New Jersey construction company, bitter about the scandal that wrecked his Washington career and increasingly frustrated as his criminal case moves slowly toward trial.

In his first interview since resigning from the Reagan Administration on March 15, the once-buoyant Donovan appeared subdued and dispirited as he discussed the physical and emotional toll that the 137-count indictment and lengthy legal wrangling have taken on him, his family and his colleagues.

Donovan said, for example, that he grew “weak-kneed” recently when he looked up the newspaper clippings on his own name and company for the first time. He had accompanied his 18-year-old son Keith, youngest of his three children, to the public library in Millburn, N.J., near the family home in Short Hills.

“I went weak-kneed to read the crap and trash again and to realize those things are going to be there for generations,” said Donovan, 55, during a three-hour interview at his lawyer’s office here. “That’s what people will read forever. That’s what they’ll remember. That’s what ruining your reputation means.”

Although Donovan said he is still often greeted “from Wall Street to the Bronx” by well-wishers and union officials who remember his four years as one of President Reagan’s most fervent supporters and most controversial advisers, he is shunned by others.

“Sometimes they’ll recognize you with their eyes and look away,” Donovan said quietly. “That’s the guy who thinks you’re a bastard or a bum or a Mafia hood.”

Donovan, along with nine business associates and two construction companies, pleaded not guilty after they were indicted last Sept. 25 by a state grand jury in the Bronx, N.Y., for allegedly defrauding the New York Transit Authority of $7.4 million between 1979 and 1984 in the construction of a problem-plagued Manhattan subway tunnel.

Case Bogged Down

Although defense lawyers initially asked for expedited hearings, the case has bogged down in lengthy pretrial motions. Defense and prosecution lawyers now say they do not expect a trial before next year.

After 11 weeks of hearings this summer, Bronx Supreme Court Judge John P. Collins has scheduled Oct. 30 to hear final arguments on defense motions to suppress hundreds of FBI wiretap tapes obtained in a separate 1979 investigation into organized crime and political corruption in New York.

Defense lawyers said that without the tapes, the case against Donovan, his company and other defendants is considerably weakened. But Stephen R. Bookin, the Bronx assistant district attorney who has worked two years full time on the Donovan case, said the tapes are not crucial for prosecution.

“We have enough evidence to convict all the defendants with or without the tapes,” Bookin said in a telephone interview. “We will definitely go to trial.”

Walked Out in Anger

Donovan attended most of the pretrial hearings. But he walked out in anger on July 31 when Michael Orlando, a former FBI gangland informer and confessed mob hit man who first alleged to the FBI that Donovan had ties to organized crime, invoked the Fifth Amendment 146 times to avoid self-incrimination about his own role with the Mafia. “It was the first time I laid eyes on him,” Donovan said of his chief accuser. “I was disgusted.”

In August, the Justice Department warned Orlando, who is serving a four-year prison term for truck hijacking, that he may be dropped from the government’s witness protection program unless he cooperates with Donovan’s lawyers. But Orlando’s attorney, David S. Gould, said that “he has no obligation to cooperate with defendants. That’s a joke.”

In recent weeks, Donovan said he has returned to Schiavone Construction Co. in Secaucus, N.J., as “trouble-shooter” and executive vice president, the position he held before joining the Administration in 1981. He now shares a small office with the company chairman, longtime friend and co-defendant Ronald A. Schiavone.

No Pictures on Display

“Compared to my office in Washington, it’s the size of the men’s room,” Donovan said with a smile. He has displayed none of the hundreds of pictures or mementos from Washington. Indeed, he only brought the boxes from his home in McLean, Va., in the last month.

“The whole thing is too fresh in my mind to put up pictures,” Donovan said bitterly. He called Washington a “vicious place” and said he does not “pine for” the pomp and power that comes with a Cabinet post. “I miss the people, not the job,” he said.

In the interview, Donovan wore a trim tweed jacket, striped tie and dark trousers. The strain of the last year was evident. Gone was the commanding presence, powerful voice and hair-trigger temper that marked his contentious appearances before Senate investigators and batteries of TV cameras. His shoulders appear to sag, his hair is graying, his voice low and anxious. He smiled little and laughed less.

Employees Affected

“Frustrated isn’t the word,” Donovan said. “It’s affecting everyone’s health. All our employees, the company, all of us.”

“Your family, your children--Christ, it’s terrible,” added Schiavone, who also took part in the interview.

Blaming the pending indictment, New York City officials last month ruled that the Schiavone company was “not a responsible bidder” and rejected the company’s $15.9-million low bid for a water tunnel project. The New York Department of Transportation previously had rejected two low bids by Schiavone totaling $99 million for repairs on the Harlem River and Queens Borough bridges.

In New Jersey, however, a state administrative law judge ruled on July 2 that the Schiavone company should not be barred from bidding on state transit contracts. The ruling by Robert S. Miller called the Bronx indictment “debatable,” noting that “the chances of a successful prosecution are dubious.”

Hearings Planned

New troubles may be brewing, however. Sen. Alfonse M. D’Amato (R-N.Y.) has called for congressional hearings next month into the New York Transit Authority’s supervision of two multimillion-dollar Manhattan subway projects where the Schiavone company was general contractor.

In one project, the U.S. Department of Transportation inspector general reported in July that documentation could not be found for 48,000 cubic yards of concrete at the 63rd Street Tunnel, and questioned the “structural integrity” of the tunnel. A separate consultant’s preliminary report last week found that structural problems, including water leaks, were minor, however, and Schiavone company officials have denied any misdeeds on either job.

“If the concrete is in patios in Long Island, what’s holding up the tunnel?” Donovan asked angrily. “ . . . You would think we were such avaricious bastards as to build a raw tunnel and let it fill with water.”

Donovan said he is determined to clear his name. Schiavone has fought back by suing Time and Fortune magazines for libel, suing four FBI informants for defamation and suing Bronx Dist. Atty. Mario Merola for improper professional conduct. The suits, like the criminal indictment, remain unresolved.

“Every day we get behind us is another day closer to getting this nightmare behind us,” Donovan said wearily. “I take it a day at a time as best we can.”