U.S. to Seek Court Control, Cleanup of Major Union

In the second such move against a major national labor union, federal authorities will ask the courts to seize control of the 300,000-member organization representing hotel and restaurant workers on grounds that it is heavily influenced by organized crime, according to government sources.

Justice Department lawyers, in a radical step planned for next month, will seek to place the Hotel Employees and Restaurant Employees International Union under the supervision of a court-appointed monitor who would direct a cleanup of the organization.

The hotel and restaurant workers union is one of four labor organizations frequently criticized by presidential and congressional committees for alleged mob infiltration.

“Our purpose is to take control of the union out of the hands of the mobsters who are running it,” a government source said of the action expected in early September. The source cited offenses such as misappropriating union benefit funds and hiring ghost employees associated with organized crime figures.

In the only other similar move, federal courts took over supervision of the 1.4-million-member Teamsters in 1989, imposing a panel of monitors who still oversee anti-corruption efforts.

*

The oversight of the hotel and restaurant workers union, however, may be limited to 18 months before giving way to a “self-governance mechanism,” sources said.

Following nearly two years of behind-the-scenes negotiations, union officials are understood to be willing to accept the arrangement without a court fight.

The action is scheduled to be embodied in a civil complaint under the Racketeer Influenced and Corrupt Organizations Act and a court-approved consent decree signed by the government and the union. Kurt Muellenberg, a former chief of the Justice Department’s organized crime and racketeering section, is expected to be appointed by the court as union monitor.

Robert Rotatori, a Cleveland attorney who represents the union, declined comment on the matter.

In a report nine years ago, the President’s Commission on Organized Crime listed four large unions as the most corrupt in the nation. They were the Teamsters, the hotel-restaurant workers, the Laborers International Union and the International Longshoremen’s Assn.

Earlier this year, under threat of a government takeover, the laborers union created the special post of inspector general and appointed W. Douglas Gow, a retired FBI official, to fill it. No government complaint or consent decree, however, was filed in federal court.

To date, the government has not gone to court with any action directed at the longshoremen’s union headquarters, although a number of union officials have been prosecuted individually. In addition, the government filed civil actions under the racketeering law against six ILA locals in New York and New Jersey in February, 1990.

The presidential commission, basing its final report on months of study and public hearings, said “the union of choice for bartenders, waiters, maids, cooks, porters, busboys and related service workers . . . has a documented relationship with the Chicago outfit of La Cosa Nostra at the international level.” It added that the union is “subject to the influence” of the New York-based Gambino and Colombo crime families as well.

Referring to longtime General President Edward T. Hanley, who still runs the hotel-restaurant workers union, the report said: “The reign of Hanley has been surrounded by allegations of organized crime’s influence in the choice of international union organizers, operation of benefit funds and conduct of union affairs.”

*

In the early 1980s, the permanent investigations subcommittee of the Senate Governmental Affairs Committee looked into alleged mob influence in the hotel and restaurant workers union and subpoenaed Hanley and other top officials. However, they refused to testify, citing the Fifth Amendment protections against self-incrimination.

Eugene H. Methvin, a former member of the presidential commission and now an executive with Reader’s Digest, said of the intended government lawsuit: “I am delighted to know the government is finally getting around to doing something about this union. Its members have been exploited for far too long.”

Government sources said the consent decree is expected to allow Hanley and other officers to remain in place subject to Muellenberg’s supervision. Muellenberg, however, will have the power to seek the ouster of any union official against whom there is persuasive evidence of corruption, including Hanley, they said.

In the case of the Teamsters, an oversight panel headed by former U.S. District Judge Frederick B. Lacey of Newark, N.J., has brought about the removal or resignation of more than 150 union officials since 1989 and has been credited with saving or recovering more than $14 million in misspent funds for union members.