FBI's Venture Into Film Business Less Than Boffo : Crime: Undercover company set up to snare mobsters in the industry didn't get many--but it almost made a movie.

TIMES STAFF WRITER

Barely one minute into his stint on the witness stand, FBI Agent Garland Schweickhardt was asked how he prepared to pose as a movie producer.

Well, he recalled, he spent two weeks in "undercover school" at the FBI Academy in Quantico, Va.

And 12 weeks at UCLA studying film production.

Then there were the sessions with a cooperating movie industry veteran who served as his private tutor. And consultations with producers, screenwriters and the like, "to teach me about the trade"--most totally unaware that he was being groomed for one of the most glamorous undercover assignments ever given an agent.

Schweickhardt was the point man in Dramex--for "Drama Expose"--the FBI's five-year effort to smoke out organized crime influence over labor unions in the film industry.

After setting up phony offices in Santa Monica--with a Rolls-Royce at the ready to give him credibility--he crisscrossed the country armed with scripts that demanded location shooting in such target cities as Dallas, New Orleans and Las Vegas. At each stop, he waved envelopes of cash before reputed mob figures and union leaders, bribes designed to buy "sweetheart" labor agreements allowing him to film with cheaper non-union workers.

All of which culminated in one trial, now under way in federal court in Boston, with just two defendants facing mere two-year sentences.

To be sure, three reputed New England mob associates were originally set to be defendants as well. But then "Champagne" Dennis Lepore was allowed to plead out to an 18-month term. And his fancy-dressing partner in crime, Tommy Hillary, was accepted into the Witness Protection Program in return for his insider testimony.

So when illness incapacitated the No. 1 defendant, Frank Salemme Jr.--son of New England's reputed Mafia boss--that left only a pair of gray-haired former Teamsters officials at the defendants' table.

It's hardly a boffo Hollywood climax to the risky sting in which Schweickhardt came within a hair of being exposed--and also came within a hair of actually making a movie in Providence, R.I.

"It was a pretty good script too," the gangly agent recalled wistfully in the federal courthouse here, where he has been recounting, for the first time in public, how the FBI got into the movie business.

To this day, federal law enforcement officials insist the elaborate ruse was well worth the small fortune spent on it. They note how it snared an associate of the one-time president of the Teamsters, and cite its "deterrent value" on other union leaders. And they cite potential "future prosecutions" that may result from the flipping of Hillary--who was almost a second son to the late Raymond L. S. Patriarca, the leader of the New England Mafia family.

Yet even before the trial, some questioned whether the government got much bang for its buck. They wondered whether the FBI's Los Angeles office may have gotten so caught up in the novelty of the sting--whose props included limos, yachts and champagne dinners--that they did not see potential shortfalls; how unsubtle offers of cash may have been a tip-off to all but the dumbest hoods, or how Schweickhardt, for all his training, may not have been the most convincing Hollywood dude.

"It created a lot of animosity in the bureau," recalled former federal prosecutor Richard A. Stavin. "(Some thought) these agents were basically on a holiday for the better part of four years . . . bumbling to the end."

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No one disputes that there is a long history of organized crime infiltration of unions, or that Hollywood has felt its sting.

So it did not seem outlandish when, in 1985, a member of Los Angeles' "Mickey Mouse Mafia" was overheard boasting to an FBI informant how he could "secure labor peace in the motion picture industry," according to a Justice Department memo. "Money talks and bull---- walks," the man declared.

The money would be used to bribe a Teamster friend so he would not insist that a film project use $1,300-per-week union drivers on the set and on location.

FBI officials decided an agent should check out the boast--and "Gar" Schweickhardt, a 20-year-veteran, got the nod. A Virginia native trained as a lawyer, he was 6-foot-4 with thinning blond hair and a craggy face that made him a ringer for actor Richard Widmark. Though a bit stiff, he had the advantage of being new to the Los Angeles office; there was little risk he would be recognized in the field.

He posed as Garland Hoffner, "an investment counselor for wealthy individuals who desired to produce a non-union film," and paid several thousand dollars to the mob braggart and his teamster friend--only to discover that the El Monte union in question did not work on movies; its members trucked fruits and vegetables.

Still, the charade itself had worked, and there was no shortage of other leads out there--mob guys were always bragging about their influence. So, said former prosecutor Stavin, "Dramex was born."

The FBI was intent on doing it right this time. Schweickhardt now took the name David Rudder, got his schooling in the biz, then rented offices on Wilshire Boulevard in Santa Monica. A waiting area was staffed by a female agent posing as his secretary, and past her was a conference room, "Rudder's" office and a locked storage area crammed with electronic gear--the camera-in-the-ceiling variety.

"If somebody came into the office," Schweickhardt testified, "we could record their conversations and also have a videotape."

Though no one who encountered "Rudder" confused him for one of the hip crowd--one mob guy called him a "geek"--his lack of polish was considered a plus, a law enforcement official insisted, because "if he was too smooth it might have been more suspicious."

And to his credit, Schweickhardt even years later was able to lapse into character, as they say, rattling off projects Rudder Productions hoped to make--giving the pithy pitches expected in a field where attention spans are short.

"To give us credibility, we had several scripts," he explained when he first took the stand last month. Four actually: "The Knockdown," "Cartunes," "The Convention" and "Love at Second Bite."

OK, so maybe "The Knockdown" wasn't likely to get a thumbs-up from Siskel and Ebert. "It was about a building being torn down," he related, "and the efforts of preservationists to save it."

But "The Convention" had possibilities, a mystery "to take place in Las Vegas, being a convention city, in which a group of record makers were coming (and) . . . a chemical was killing people off and they didn't know whether it was murder, accidental or what."

"And the script (for) 'Cartunes'?" asked Assistant U.S. Atty. Fred M. Wyshak Jr.

" 'Cartunes' was kind of a romantic comedy involving a road show, a musical group that was traveling throughout New England with bookings managed by a girl."

And "Love at Second Bite"?

"That was a sequel to 'Love at First Bite,' which was about the vampire--comedy about the vampire Dracula."

Schweickhardt never said what the FBI paid for scripts, but officials have not disputed a $25,000 price tag for the vampire sequel.

The make-believe company's films had budgets from $1 million to $3 million, except the Vegas project, because "Rudder" promised name actors in that one--he floated Angie Dickinson and Roy Scheider--and "you have to pay for the stars."

The agent has only hinted at the frustrating early stages of Dramex because his first efforts are beyond the scope of this trial. But by all accounts, he visited a series of cities without finding takers for his bribes.

"They just threw the net out there. A very wide net," said former prosecutor Stavin, now in private practice.

Stavin saw the problem as the cash-bribe approach. He suspected real corruption was more refined--a union official might insist a film hire his relatives, or his own catering company. In return, his men would not picket film sites for using non-union crews.

"We were going to recommend that the plug be pulled," Stavin said. "But the agents would always come up with a remarkable (mob) conversation, pull some rabbit out of the hat."

The rabbits they finally snared were served up on a platter by the remarkable Robert Franchi. He was a thick-necked Bostonian who had fled to California--to escape loan sharks, he said--then walked into FBI offices and volunteered his services. Soon he was carrying a recorder in a wad of bills while making the rounds of Los Angeles' mob hangouts--and the FBI was paying him $5,000 a month, plus expenses.

Franchi's tapes generated dozens of drug and robbery cases. Then a trio of old homeboys came visiting and seemed infatuated with the Hollywood crowd--prime fodder, in other words, for a particular FBI sting.

Indeed, the moment Franchi mentioned in March, 1989, that he knew some producers looking for help with the Teamsters, Thomas L. Hillary chomped at the bit to meet them. "Any union is no problem," Hillary said.

Hillary was a con artist and cocaine dealer always looking over his shoulder for hints of surveillance while making the bar scene in his Armani suits. "Looked like Johnny Gotti!" was his greatest compliment to himself.

Hillary's best buddy was Dennis D. (Champagne) Lepore, a Patriarca Family soldier who was paranoid about germs and once used a health food store as his base in Boston's North End.

Then there was swaggering Frank Salemme Jr., whose father, "Cadillac Frank," was said to have taken over the New England crime family after spending 15 years in jail for planting a bomb under a lawyer's car. "I'm going to gangsterize the movie industry!" Salemme Jr. vowed in one taped conversation.

Things moved fast after Franchi made the introductions. The FBI decided it was time for some scripts with New England scenes, and soon "Rudder" was off to meet the trio on their own turf.

Phone recordings caught Hillary boasting how they took him cruising on a yacht in Boston Harbor, drinking Cristalle champagne.

"We got him bombed. He was out of his mind," Hillary reported. "(We) had to send him home in the limousine. . . . He was in la la land."

On the witness stand, though, Schweickhardt made clear it was not exactly a party for him.

He told how he was hustled into a bathroom at a first meeting, "and searched from head to toe."

There was another close call at a Cambridge, Mass., hotel, when Hillary spotted a surveillence van, and a man with a camera, clicking away "like I was f------ Johnny Gotti." But Hillary and his friends let greed overcome caution and continued to deal with "Rudder."

Over the next year, he paid $65,000 in bribes to the trio, who in turn introduced him to two leaders of New England's largest Teamsters local. William Winn was Local 25's transportation captain, and James Moar its vice president--and an associate of the president, William J. McCarthy, who from 1988 to 1991 also headed the entire 1.6-million-member International Brotherhood of Teamsters.

Salemme Jr. also led "Rudder" on trips to Las Vegas and New York, promising to use his father's mob contacts to set up meetings with officials of the Teamsters and the International Alliance of Theatrical Stage Employees (IATSE). But the sit-downs fell through in both places.

In the government's opening statement, Assistant U.S. Atty. Brian T. Kelly theorized that the failure in Nevada was because "Rudder's" new friends, "didn't have the clout . . . (and) the union officials out there correctly believed he wasn't a movie producer."

But the agent could not be faulted in his efforts to make the operation look real in New England.

Like a good producer, he spoke to the Massachusetts and Rhode Island film bureaus, seeking advice, then set up a field office in the latter state.

"We actually hired location scouts to look for locations to film," Schweickhardt told jurors. "We hired production managers in order to hire people . . . to work for us, individuals such as technicians and cameramen and so forth."

He was asked, "And did these people know that you were in reality an undercover agent?"

"No, they didn't."

It was so authentic, they once had to halt the operation because "we didn't have a completed script," Schweickhardt explained. "There was a writers' strike.

"We intended to do a movie at that time. We had all the hopes and intentions to do a movie," he said.

One of the defense attorneys, Miriam Conrad, asked him, "You didn't say, 'Wouldn't it be fun for the FBI to make a movie?' "

"The idea was to get concessions," Schweickhardt said.

Some law enforcement officials still believe the Feds should have gone all the way and made the film. But "Rudder" phoned Salemme Jr. in June, 1990, and, in effect, fired him. There had been enough of those costly road trips with no results.

"If the FBI had made that damn movie in Providence," one official insisted, "we would have gotten a lot more (arrests)."

Instead, officials patiently waited for informant Franchi to complete his secret taping in other investigations, then unsealed the Dramex indictment in 1992, with only four defendants: Hillary, Lepore, Salemme Jr. and Winn. Later, Moar was added to the case, which alleged a conspiracy to bribe labor officials.

Still, it promised to be a blockbuster trial, especially after Hillary, 49, was tracked to Florida--where he was broke and in hiding--and agreed to cooperate.

But Lepore also was in no mood to fight. Already serving a 14-year term on an unrelated racketeering conviction, he took a plea bargain.

Then, this summer, Salemme Jr., just 38, was reported "gravely ill" with an undisclosed ailment. Prosecutors, by nature skeptical of such claims, were convinced this diagnosis was real--and suggested the trial be held without him.

So the show had to go on without its star performers, though that did not prevent prosecutor Kelly from putting his own best Hollywood pitch on the proceedings. "This is a case," he began his Oct. 20 opening statement to jurors, "about organized crime, the movie industry and two corrupt Teamsters . . . "

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FBI officials say they cannot comment on the Dramex investigation until after the trial, which still has weeks to go. Until then, many details remain unknown, including the overall cost. Salemme Jr.'s lawyer once alleged that the government spent "millions."

"They could write a book about it, 'How the Mafia scammed the government,' " quipped Albert C. Bielitz Jr., who represents Winn.

Defense attorneys portray the case as idle puffing by mob guys squeezing money from a free-spending mark--"Rudder." They concede that the Teamsters eventually agreed to filming with non-union labor, but say they gave in only because he was so persuasive as a producer trying to hold down costs.

Along these lines, defense attorney Conrad has had Schweickhardt lead the jury through the minutiae of film production: shooting with "second units" to take "external shots," for instance, or how "above the line" costs work.

Conrad's argument is that his films were so small that the Teamsters had little to gain, but hoped he would be successful and return to New England with bigger projects--able to afford union crews.

Conrad pestered the agent about how he kept pleading poverty as a producer, saying he couldn't risk "going over the money you had from your investors."

"No, we didn't have any investors," Schweickhardt retorted. "We were the government."

Government operation or not, real film or not, he seemed offended when Conrad suggested that the FBI's movie was going to be so "super low budget" that it would go straight to cable.

How dare she.

"You put it out in the theaters (first)," he lectured, "then you sell it to the cable . . . HBO, Showtime . . . foreign . . . the airlines."

Then the court took a break and he retreated to a corridor and a hard wooden bench. A 29-year FBI veteran now, he was nearing the time when a pension becomes attractive and he could consider getting into "the biz" for real.

Gar Schweickhardt laughed at that prospect.

"No, I don't think so," he said. "Not in the film industry."

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