NYC crackdowns on labor shakedown artists

updated 5:50 p.m. ET March 4, 2008

NEW YORK - The builder was an out-of-towner, but was well-schooled in the ways that business sometimes gets done in New York.

So when a group of burly men turned up at his Queens construction site in 2005 and threatened to shut the place down unless he hired someone from their crew, he quickly made peace. He put one of them on the payroll for a no-show job that paid $15 per hour.

The arrangement may have looked like a traditional Mafia shakedown, but it wasn't. The men lining their pockets were leaders of a "minority labor coalition," ostensibly set up to help blacks land jobs in an industry still dominated by whites.

The difference may have been lost on the contractor. When he cut the checks, he wrote the word "extortion" on the stub.

Prosecutors say these kinds of shakedowns keep happening in New York, despite an intensive effort to rid the construction industry of a brand of corruption with roots in the civil rights movement.

Over the past year, Manhattan District Attorney Robert Morgenthau has obtained a string of indictments against the leaders of minority labor coalitions.

Labor coalitions have existed in the city since the late 1960s, and their rallies and pickets at construction sites were originally aimed at integrating trades once notoriously closed to minorities. But in later years, authorities said, legitimate groups became outnumbered by intimidation squads looking for payoffs.

"They keep popping back, because there is a lot of money to be made," said Daniel Castleman, the district attorney's chief of investigations.

These days, Castleman said, the few gangs working the extortion racket mostly prey on small, immigrant-owned companies doing work in New York City outside of Manhattan.

Louis Coletti, president of the Building Trades Employers Association, said tough law enforcement has largely driven the labor gangs away from bigger projects.

And while some gangs engaged in brawls and gun battles in the early 1990s, outright violence over jobs is rare these days, in part because some crews have found they don't need to play rough to get paid.

Problem payoff?
An indictment filed last week accused a pair of men calling themselves the "Committee on Contract Compliance" of threatening to report dozens of builders for safety violations unless they forked over cash. Many contractors grudgingly complied. An indictment said at least 16 made payoffs as high as $10,000 to make the pair go away.

"As we've been able to prosecute them, they've changed their tactics to some degree," Castleman said. "They've become a bit more sophisticated, and they've learned what the definition of extortion is. They try to step right up to that line but not cross it."

That isn't to say that violence is no longer part of the picture.

The list of the recently indicted includes two leaders of a group called Family Construction who prosecutors say threatened to burn equipment and beat up workers if they weren't hired to provide "security" at job sites.

Two men who ran a Brooklyn coalition supposedly dedicated to improving the lot of minority construction workers, Akbar's Community Services, pleaded guilty last year after investigators caught them threatening to hurt contractors who didn't pay kickbacks or provide no-show jobs.

Intimidation a factor
In an offshoot of the same investigation, two ex-convicts, Reginald Rabb and Steven Mason, pleaded guilty to using their coalition, P & D Construction Workers, to extort money from contractors, including the builder who provided the $15-per-hour no-show job in Queens. Mason was sentenced in November to 7 1/2 to 15 years in prison. Rabb got 8 1/2 to 17 years.

And while prosecutors said the two men who ran the "Committee on Contract Compliance" did not resort to violence, they say intimidation was still a factor.

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