Labor Racketeering

The FBI defines "labor racketeering" as the domination, manipulation, and control of a labor movement which affects related businesses and industries. This domination may result in the denial of workers' rights and sometimes inflicts economic loss on the worker, business, industry, insurer, or consumer.

The historical involvement of the La Cosa Nostra (LCN) in Labor Racketeering has been thoroughly documented. More than one-third of the 58 LCN members arrested in 1957 at the Apalachin conference listed their employment as "labor" or "labor-management relations." Three major United States Senate investigations have documented LCN involvement in Labor Racketeering. One of these, the McClellan Committee, in the late-1950s found systemic racketeering in both the International Brotherhood of Teamsters (Teamsters) and the Hotel Employees and Restaurant Employees International Union (HEREIU). In 1986, the President's Council on Organized Crime reported that the Independent Laborers Association (ILA), the Teamsters, HEREIU, and the Laborers International Union of North America (LIUNA) were dominated by organized crime. In the early-1980s, former Gambino Family Boss Paul Castellano was overheard saying, "Our job is to run the unions." Labor Racketeering has become one of the LCN's fundamental sources of profit, national power, and influence.

FBI investigations over the years have clearly demonstrated that labor racketeering costs the American public millions of dollars each year through increased labor costs that are eventually passed on to consumers. These investigations have shown that labor racketeers attempt to control of health, welfare and pension plans by offering "sweetheart" contracts, peaceful labor relations, and relaxed work rules to companies, or by rigging union elections. These funds represent an enormous opportunity for labor racketeers. There are approximately 75,000 union locals in the United States and many of these locals maintain more than one benefit fund. For example, in the mid-1980s, the International Brotherhood of Teamsters controlled more than 1,000 funds, with total assets of more than nine billion dollars.

FBI investigations of labor law violations occur primarily in cities that traditionally possess a strong industrial base and strong labor unions, e.g., New York, Buffalo, Chicago, Cleveland, Detroit, and Philadelphia. This is due to the increased opportunities for organized crime to infiltrate unions, and the large presence of organized crime figures in these areas.

The FBI utilizes all of its investigative techniques to investigate labor law violations. We continue to gather evidence of labor violations through electronic surveillance, undercover operations, confidential sources, and victim interviews. Also, in addition to the criminal provisions of the Racketeer Influenced and Corrupt Organization (RICO) Statute, the FBI utilizes various other criminal labor statutes and the civil provisions of the RICO statute to combat Labor Racketeering.

The civil provisions of the RICO statute have proven to be very powerful weapons against LCN involvement in labor unions. Consent decrees under these provisions are often more productive because they attack the entire corrupt entity instead of imprisoning individuals who can easily be replaced with other organized crime members or associates. This is most effective when there is long-term, systemic corruption at virtually every level of a labor union by criminal organizations. A civil RICO complaint and subsequent consent decree can restore democracy to a corrupt union by imposing civil remedies designed to eliminate such corruption and deter its re-emergence.

The best example of the efficiency of the civil RICO process is found in the case of the International Brotherhood of Teamsters, which, for the past several decades, has been substantially controlled by the LCN. Four of the past eight Teamster presidents have been criminally indicted. However, the historic LCN control persisted. With the initiation of the "Liberatus" Teamsters civil RICO case in 1988, the civil process has been largely successful at removing the extensive LCN influence from this 1.4 million member union.

The FBI works closely with the Department of Labor, Office of Labor Racketeering and with the U.S. Attorney's offices in investigating violations of labor law.