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Sunday, October 09, 2011

RICO and Labor Racketeering

I am blogging about my new book, BREAKING THE DEVIL's PACT, DOJ's  1988 civil RICO lawsuit that sought to purge organized crime influence from the (at the time) nation's most populous and most powerful labor union. The lawsuit was settled in 1989 and then litigated in hundreds of cases during the remedialhse which lasted from 1989 to the present. 

Passed in 1970, RICO has proved to be the government's prime statutory weapon in the war on organized crime.  To say the least, RICO is a complex statute. It established four new "enterprise-type" crimes. In addition to providing draconian punishments (including forfeiture of profits) for those convicted of RICO, the statute provided two civil remedies. First, the victims of a RICO violation could recover treble damages against the perpetrator. However, for obvious reasons, organized crime victims have never tried to recover damages from organized crime figures. Second, RICO authorized the U.S. attorney general to bring suit to restrain future RICO violations and authorized the federal courts to exercise their full equitable powers to make such restraint effective. It is this government- initiated RICO provision that has proved to be so effective in reforming systemically corrupted organizations like the Teamsters. (After U.S. v. IBT was filed, DOJ brought similar suits against three other international unions -- the Laborers International Union of North America, the Hotel and Restaurant Workers International Union and the International Longshoreman's Union.)

The first civil RICO lawsuit against a union was brought in 1982 by the federal organized crime strike force in New Jersey against Teamsters Local 560, perhaps the most "mobbed-up" union local in the country. After a year-long trial, Judge Ackerman gave the DOJ a resounding victory. He appointed a trustee to run and reform the union. That lawsuit was the trail blazer. U.S. attorneys, including Rudy Giuliani (SDNY) brought civil RICO suits against several other union locals in the next five years.  Then Giuliani decided to use civil RICO against the the entire leadership of an international union, the International Brotherhood of Teamsters.

BREAKING THE DEVIL's PACT provides a close examination and analysis of DOJ's, the judges' and the court-appointed officers' 22 year struggle to reform the IBT. Today, I simply want to stress the importance of switching to a civil remedy to attack systemic  corruption and racketeering in a formal organization. Scores of criminal prosecutions over three decades had sent many mobsters and corrupt IBT officials (including general presidents) to prison without in any way changing the underlying "devil's pact" between Cosa Nostra and the IBT. The labor racketeers who were sent to prison were simply replaced with equally corrupt individuals. Criminal prosecutions could not change reality on the ground. 

Civil RICO provided a fresh approach. It allowed the federal courts to exercise on-going supervision of unions to enforce remedial decrees. Court-appointed monitors were tasked with finding strategies of organizational-change including expelling corrupt officers, recruiting and training new leaders, and making union governance democratic and transparent. Even then, success was not guaranteed. Of the approximately 22 civil RICO suits brought by the government, perhaps half could be declared successful and perhaps a quarter possibly successful. Success or failure has turned on the determination and skills of the federal judge and the court-appointed oficers. The international Teamsters case will clearly count as success.

To return to a theme that I raised last week, given the revolutionary employment of this civil rememdy to attack entrenched organized crime in core societal institutions, including the nation's largest and most powerful private sector trade union, it is beyond curious that legal academia (criminal law and labor law profs) has not seen this as a topic for research and analysis. Moreover, neither the National Institue of Justice nor any other federal funder has ever sought to sponsor research on these civil RICO union cases in order to identify best practices. How can this be explained?

                             James B. Jacobs

                             NYU School of Law


Posted by Jim Jacobs on October 9, 2011 at 05:31 PM | Permalink


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