How Robert Morgenthau Cleaned Up New York
As U.S. Attorney for the Southern District of Manhattan in the 1960s, Robert Morgenthau cast his eye on mob influence in key New York industries, including the city’s garment businesses. He approached David Dubinsky, legendary head of the International Ladies Garment Workers Union, for help in an investigation, who told him that he would cooperate only if then-Attorney General Robert Kennedy asked him to do so. “But when I got Kennedy to ask, [Dubinsky] still refused,” Morgenthau once told me. When Morgenthau, who died earlier this week at 99, later became Manhattan District Attorney, he was determined to break the mob’s grip on a host of New York industries—no small task, given the ties between New York politicians and the city’s mob-controlled unions. Many companies considered dealing with organized crime a cost of doing business in New York.
During his 34 years as Manhattan DA, Morgenthau led an office that pursued some 3.5 million cases. He prosecuted bad-boy celebrities like Tupac Shakur and banks that laundered money for drug cartels and rogue nations. He handled internationally noteworthy cases like the killing of John Lennon by Mark David Chapman and helped wage the war on street crime that made Manhattan a safer place. But one of his most notable, if underrated achievements, was to help break the grip that organized-crime families like the Gambinos had on legitimate businesses in Manhattan, where thugs extracted a “mob tax” that drove up the cost of operating in New York. In pursuit of the Mafiosi, Morgenthau challenged New York’s complacent political culture, and he even provoked criticisms from some business owners, who complained that their industries worked “better” with the mob in control. Morgenthau persisted, he once said, because mob influence was a factor in making city industries increasingly uncompetitive in an era when jobs were fleeing elsewhere.
That influence was substantial. “With the unions behind us, we could shut down the city, or the country, for that matter, if we needed to get our way,” mobster Vincent “The Fish” Cafaro said in 1988. “We got power over every businessman in New York. With the unions behind us, we could make or break the construction industry, the garment business, to name a few.”
The garment district had been under mafia sway since the 1920s, when Brooklyn mobster Louis Lepke and his crew worked as enforcers for garment unions. The mob gradually took over the unions themselves and other essential labor groups, including drivers of trucking companies. “Every industry I’ve ever seen the mob take control of started with their influence in the union,” Morgenthau’s chief of investigations, Dan Castelman, once told me. Control of the trucking industry passed in the 1930s to Albert Anastasia of Murder, Inc., and then in the 1950s to Carlo Gambino and his crime family. With a stranglehold on the business, the mob racked up big profits. By the time Morgenthau launched his probes in the mid-1980s, records would eventually show, the mob trucking companies were generating $22 million in profits on just $50 million in revenues—a 44 percent profit margin, possible only because there was no competition on pricing. That kind of added cost is an unacknowledged reason why, from the 1920s, when the mob moved in, until the late 1980s, some 225,000 garment-center jobs fled New York.
Morgenthau went after the biggest players. His investigators bugged the offices of trucking firms controlled by Thomas and Joseph Gambino, who described on tape how they had locked up the marketplace, distributing business among a handful of mob companies and keeping others out with threats. Morgenthau’s team even bought a small apparel company and staffed it with investigators and undercover cops, who then recorded Gambino foot soldiers explaining what they would do to the company if it didn’t ship its goods using their trucks. So entrenched were the Gambinos that, even after Morgenthau busted them, apparel firms were reluctant to ship with anyone else and competitors wouldn’t enter the market. It took two years to persuade everyone that the mob was gone; eventually, dozens of small, independent truckers—many owned by Chinese immigrants—flooded into the market.
Mob-controlled unions even dominated state-owned operations, like the Jacob Javits Convention Center. The facility’s $350 million construction was riddled with corruption and overbilling. A construction-company cartel controlled by Anthony “Fat Tony” Salerno won the contract for providing concrete by scaring off the competition and overcharging the state some $12 million. After Javits opened, state managers allowed mob-controlled unions representing carpenters, electricians, and other workers to earn salaries as much as two to three times higher than what workers took home in competing facilities in places like Chicago. Not surprisingly, the center, built on the assumption that it would turn New York into a major convention destination, foundered. From 1992 through 1995, for instance, it didn’t win a single new convention for the city. The turning point came in the mid-1990s, when new governor George Pataki appointed as inspector general a Morgenthau investigator, who began running background checks on workers, kicking mobbed-up union guys out of the building, and reforming onerous work rules in contracts to make the Javits competitive. “It’s clear that some work rules are just negotiated by unions as a way of encouraging bribery,” Morgenthau said. The DA’s office also indicted ten officials of a key union at the center that controlled the facility’s exposition floor. Within two years, costs to operate in the center dropped by 40 percent.
Another turning point came when Mayor Rudy Giuliani’s administration teamed up with Morgenthau to drive the mob out of the carting business—commercial trash disposal—an industry so notorious and closely associated with organized crime that fictional TV mafioso Tony Soprano introduced himself as a “waste management consultant.” By the 1990s, private carting in New York was a $1 billion industry serving some 250,000 firms. Organized crime seized control starting in the 1950s, when it infiltrated carting unions. In an industry where several national players operated in most other big cities, there was little competition in New York, thanks to the mob.
Finally, in the late 1980s, Houston-based Browning-Ferris Industries, headed by former U.S. Deputy Attorney General William Ruckelshaus, decided to break into New York. As in the garment district, New York office towers that generated huge amounts of trash were reluctant to cross the mob. Ruckelshaus and his deputies met with a big property owner to pitch him the BFI business. The magnate told BFI that hotelier Harry Helmsley had tried to have his own trucks pick up trash at his properties, only to have the trucks burned. “He told us the company was satisfied with its carting contract, and that was the end of the meeting,” one of BFI’s top executives told me years ago.
That seemed like the end of the tale—until Morgenthau stepped in. He and Ruckelshaus crafted a strategy to break the mob carters, including having a Manhattan DA/undercover cop manage a downtown office building. To keep the contract, which was yielding the mob carters some $100,000 a month (when BFI said that it could service the building for $120,000 a year), mob representatives bribed the undercover cop. Bugs in carting offices yielded more evidence, leading to a widespread takedown of mob companies. Even so, as in the apparel district, firms were reluctant to consider bids by outside firms. Morgenthau personally asked big building owners to consider using BFI and others. It wasn’t until Giuliani got the city council to create a carting commission to screen firms and oversee the industry that mob influence began melting away.
‘‘Some law enforcement agencies didn’t have a clue how to deal with the mob in the city,’’ a BFI executive once told me. ‘‘Morgenthau made the difference.’’
Not all this work was widely celebrated, in part because of the myth of mafia efficiency. After the Giuliani administration took over the mob-controlled Fulton Fish Market, for instance, the Village Voice complained that the city monitor wasn’t running the market with the same “ruthless efficiency” as the mobbed-up managers did. Morgenthau knew that wasn’t what the mob was really doing in New York; its influence was far more pernicious. “I had a friend who owned a company that worked on the renovation of the Rainbow Room in the 1980s, and he told me that he had been shaken down every step of the way,” Morgenthau once told me. “He said he would never work in New York City again.” Morgenthau took that personally, and he spent decades trying to change it—with considerable success.
