Laborers Union Agrees to Root Out Mafia : Corruption: U.S. attorney announces pact following three-year probe of mob ties. A federal takeover, Teamsters-style, would be the next step.

A 700,000-member union representing construction, service and public-sector workers has agreed to move against organized-crime corruption of its activities or face a federal takeover similar to that of the Teamsters Union, the U.S. attorney here announced Wednesday.

If prosecutors are not satisfied with internal reform efforts by the Laborers International Union of North America, the union says it will permit federal court appointments of independent administrators to investigate union officers and remove those found to be linked to the Mafia, U.S. Atty. James B. Burns said at a press conference.

The agreement resulted from a three-year investigation of Mafia influence in Chicago over the union, which represents employees who remove asbestos, dig tunnels, pour cement, load sacks of mail and guard work sites, among other jobs.

The negotiations leading to the agreement began three months ago after the government notified the Laborers Union that the U.S. Department of Justice intended to file a civil racketeering lawsuit against it, Burns said.

The Laborers stronghold is the Midwest, but reputed members of the Genovese crime family in New York City were charged in 1990 with trying to control locals there. A source close to investigations of the union said members in Santa Ana, Sacramento and San Francisco have also complained about corruption in their locals.

The union agreed to give the federal government the right to step in at any time through Feb. 11, 1998, with the power to hold new elections if necessary. The government will review the union’s progress in 90 days, Burns said.

“We are not going to dictate what the union must do,” Burns said. “We’re going to have to be satisfied structural changes are being made. We have not given them any names. We have not given them any kind of a hit list.”

In recent weeks, the Laborers executive board has punished two directors: John Serpico, a politically connected leader here who also chairs the Illinois International Port Authority, and Samuel Caivano of the New York/New Jersey region. Both were suspended from their positions as international vice presidents. Serpico was removed as head of the international’s grievance committee and Caivano from his regional manager’s post.

The union has appointed an inspector general, an executive board attorney and a hearing officer and plans to “aggressively continue to root out wrongdoing,” according to a statement issued from its Washington headquarters.

The union is one of four that a 1986 report of the President’s Commission on Organized Crime described as tied to mobsters. The others were the Teamsters, the International Longshoremen’s Assn. and the Hotel and Restaurant Employees and Bartenders International Union.

“Organized crime has used its influence over the Laborers’ Union to obtain workers’ benefit funds, provide no-show jobs for (La Cosa Nostra) members, pay the personal expenses of union officials, gain access to the political process and . . . manipulate the construction market,” the report says.

At the time, the union responded that the report was filled with “false accusations of an unprecedented character.”

Times staff writer Ronald J. Ostrow contributed to this story from Washington.