The UNIRAC Investigation12/19/2008
Mr. Schiff: Hello, I’m Neal Schiff and welcome to Inside the FBI, a weekly podcast about news, cases, and operations. Today, as the FBI continues celebrating its first 100 years, we take a look at a case from the 1970s. Dockworkers and shipping companies were getting squeezed by unions and the La Cosa Nostra, commonly known as the mob. The FBI began a case called Operation UNIRAC.
Director Freeh: “ It was actually an acronym for union racketeering, and it was one of the first RICO [racketeering] enterprise investigations that the FBI undertook and ultimately resulted in a series of prosecutions, RICO prosecutions.”
Mr. Schiff: That’s former FBI Director Louis Freeh. Back in the early ‘70s, he was an FBI agent, and in UNIRAC he went undercover. And Freeh says there were docks in quite a few cities where racketeering was going on.
Director Freeh: “At issue here was the International Longshoreman’s Association [ILA]. Cases were ultimately brought in most of the seaports where they are active, such as Boston, Savannah, Miami, New Orleans, Baltimore, Newark, etc. And the purpose of it really was to go after the illicit control over this labor organization by La Cosa Nostra elements, and it turned out there were several families, different families, that controlled different locals. And then on the international level there was also some control.”
Mr. Schiff: And how was this happening?
Director Freeh : “Through that coercive control, corrupt control, you know, they were able to extort large amounts of money from the shipping companies. So that was the basically the scheme, and the objective was to remove the organized crime control and influence from a major and important labor organization.”
Mr. Schiff: How much money was changing hands?
Director Freeh: “Well, the cash amounts were quite substantial. I’ll give you one example. We had a subject, ultimately convicted, Mike Clemente. He was a captain in the Genovese organized crime family—controlled some of the East River dock facilities, again through the union here in New York City. And his cash payments were hundreds of thousands of dollars per month. People would make payments of $50,000, $25,000 amounts, and these were, you have to imagine, many different companies or different ship operators or different terminal operators or different stevedore operators [editor’s note: stevedores unload ship cargo]. So the ability to extract cash was very robust, and you know we’re talking about millions and millions of dollars in cash on an annual basis.”
Mr. Schiff: While working undercover were you scared about your cover being blown?
Director Freeh: “Well, yeah, there were times that were concerned about that. We were more concerned about two of our major cooperating witnesses. One was a stevedore in the Port of Miami, and he was cooperating with us very closely, ultimately testified in the case. But there were moments, information that we received from time to time that made us very concerned about his safety because of the clandestine manner in which he was working with us. He was in the typical fashion, recording conversations with very high placed subjects, some of them very powerful organized crime members. He would work with them, travel with them, socialize with them, and of course, we always had agents there who would be his point of contact. But there’s always that very uneasy feeling when a high-placed witness like that is working directly with people who could harm him if they wish.”
Mr. Schiff: Director Freeh says there was another person working with the FBI—Sonny Montella, a ship’s carpenter. Freeh and a partner talked Montella into being a cooperating witness, and he worked at the Brooklyn docks.
Director Freeh : “He was paying some very senior and powerful labor officials, including Tony Scotto. Scotto was not only the president of the local in Brooklyn, but an international vice president, and according to Mr. Clemente, was a captain in the organized crime family himself. So, again, his interactions and transactions and travel and socialization with them became very sensitive, and it was a source of continue monitoring but also anxiety for us because these were people working with very highly placed subjects. There were times we might lose contact for a day. There were times his transmitter failed at a particular meeting so we lost contact with him. Luckily we didn’t have any witnesses or informants, during the course of this very long case harmed, or even identified prematurely, but it’s something you always worry about when you’re out there.”
Mr. Schiff: During the time the future FBI Director was undercover, he ended up in a gym where meetings involving some mobsters were held.
Director Freeh : “One of our subjects, I mentioned him, Mike Clemente, now deceased, was a captain in the Genovese family. And again, he extracted a lot of cash payments from these shipping company-type officials, based on his corrupt control of the local, the ILA local. So, Big Mike, as we called him, in his late 70s, had been burned a couple of times in FBI investigations since he was surreptitiously recorded and people testified against him, and he got convicted and went to jail. So at 75 or 76 he decided he was going to take some countermeasures. The countermeasures were pretty effective, also a little bit humorous. He would only take the cash from the people he was shaking down, standing naked with them in the middle of the sauna at the Shelton Health Club in Brooklyn on the notion that they couldn’t obviously be recording because he was looking at them. My job was, my only undercover assignment, was to hang around the locker room and try to identify people who would come in, you know, in business suits, take all their clothes off and walk into the sauna with a white envelope and give it to him. I would try to relay that information to guys on my squad outside who would then try to put him in a car to identify him. So, it was a very interesting and somewhat awkward undercover operation.”
Mr. Schiff: Was it a scary situation for you?
Director Freeh : “You know, at 25-years old, it wasn’t scary. It was just more awkward, right? I mean I’m hanging around a men’s locker staring at this guy for a couple of hours every day. Once I got past that part, I was not in any kind of danger or anything. Actually it’s a funny story. He came up to me at one point and said, ‘Kid, what’ya doing here?’ I didn’t realize you could lie when you’re undercover. So I said, ‘Why, I’m a lawyer, Mr. Clemente.’ He said, ‘Well, where do you work?’ I said, ‘I don’t have a job as a lawyer,’ which was true. He said, ‘Well,’ and pointed across the locker room, ‘I’ll get one of those judges to hire you,’ which was a pretty funny statement.”
Mr. Schiff: What took place later did make that comment kind of humorous…
Director Freeh : “So he got arrested, and we brought him into court, and we’re in the courthouse in Foley Square. Actually the courtroom I later sat in as a judge. And he was in the back of the courtroom trying to make contact with me. I could see he was agitated, and I wouldn’t acknowledge him; I was sitting up with the prosecutor. So his lawyer comes up at some point, dispatched by him and his says, ‘Can I ask you a question?’ I said, ‘Yeah.’ He said, ‘Are you an FBI agent?’ I said, ‘Yes sir, I am.’ He shook his head and said, ‘I’ve been telling Mr. Clemente all morning that you’re probably an FBI agent, and he insisted I come up and tell the judge to let the kid go ‘cause he had nothing to do with this.’”
Mr. Schiff: The evidence collected during Operation UNIRAC was key to prosecuting the labor and mob leaders. Tape recordings were key, says Freeh.
Director Freeh: “A lot of them were court-authorized Title III interceptions. And we had microphones, for instance, in Mr. Scotto’s office at 17 Battery Place, which was the headquarters of the international union. We had wiretaps on a number of telephones. I think we put a couple in automobiles, which, in those days with the technology, were hard to maintain. But the most effective tapes, as any investigator will tell you, were not the thousands and thousands of hours of minimized conversations, some of which are worthwhile. But our strongest evidence was when Mr. Montella, for instance, started to record multiple conversations with multiple defendants and actually recording the payments and the discussion of the payments and in some cases complaints and demands for more cash and descriptions—as I mentioned, Mr. Clemente described Scotto as a member, a captain, in the organized crime family. And a lot of these guys, wise guys, quote-unquote, as we called them, would make lots of incriminating statements on these tapes, not only about them but about some of the higher-ups and colleagues, and those gave us the leverage to get them to cooperate, ultimately, when they knew what they said on the tapes.”
Mr. Schiff: Freeh says it was ‘a tape recording case’…
Director Freeh: “We got many of the shipping executives to testify, some of them under immunity. Some of them we had to protect, and they had to relocate. But the testimonial evidence, as in any case, was really strengthened and presented in the context of tape recordings, and that was great. Defense lawyers once said, ‘How can I cross-examine a tape recording?’ That was really the heart of the case.”
Mr. Schiff: Freeh, who later served eight years as Director of the FBI, says that this case, UNIRAC, the battle of good vs. bad, the law against corrupt union officials and the La Cosa Nostra, was the “first major labor racketeering case the FBI had made.”
Director Freeh: “In those days, particularly in New York, you know, the organized crime problem was dealt with by the FBI, not ineffectively, but really sort of on a one-on-one basis. In other words, we would make a loan sharking case. We’d make an illegal gambling business case. We’d make an ITAR [ International Traffic in Arms Regulations] murder case, but these were generally the lower hanging fruit, the guys in the family who were the most vulnerable and consequently the least important. The notion of UNIRAC was that we would look at the entire enterprise—in other words, the longshoreman’s union, juxtaposed to the La Cosa Nostra groups that were controlling them and look at the enterprise as the target as opposed to individuals and therefore get both substantially higher targets but also be able to take power and resources away from the enterprise and to basically cleanse it and make it an honest organization again.”
Mr. Schiff: What changes in the FBI’s Criminal Investigative Division came after Operation UNIRAC?
Director Freeh: “Director Webster in Washington established, for the first time in the Organized Crime Unit, a labor racketeering desk. And the Bureau went on to look at cases, not just on the East Coast, but the central states, Teamster cases, and really started to look at organized crime as an enterprise target as opposed to an individual target. And that was very, very significant, and I think really was responsible for acceleration of the anti-LCN program and really the substantial weakening and attenuation of that organization over the next 20 years. It was a new approach to dealing with this.”
Mr. Schiff: More than a hundred individuals, including labor and mob leaders, were convicted on charges of embezzlement, taking kickbacks, and other illegal activities. Racketeering is illegal, and if you know of any wrongdoing going on, call the FBI. There’s much more on UNIRAC on the Internet at www.fbi.gov. That concludes our show. Thanks for listening. Have a wonderful holiday season. I’m Neal Schiff of the FBI’s Office of Public Affairs.