Bus Drivers' Union Is Under Scrutiny
By STEVEN GREENHOUSE, NY TIMES

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More than 90 elected officials are so concerned about corruption charges involving the main union representing New York City school bus drivers that they are asking the union's parent to hold hearings on how the local organization is being run.

The lawmakers say that public hearings are needed because little has changed at the union - Local 1181 of the Amalgamated Transit Union - since last July when its top three officials were indicted on charges that they were under the influence of the Genovese crime family.

The lawmakers, including Representatives Charles B. Rangel, Carolyn B. Maloney, Jerrold L. Nadler, José E. Serrano and Major R. Owens, have scheduled a news conference at City Hall tomorrow to discuss their request for hearings.

"There are so many things wrong in this union that they deserve a forum to hear the grievances of the members, especially since the union hierarchy, which is supposed to deal with these matters, is refusing to act," Representative Owens said. "There's a necessity to do something."

Elected officials rarely interfere in internal union matters, but several lawmakers said they decided to seek hearings after bus drivers complained to them that Local 1181's leadership had rebuffed requests for change from the rank and file. Several union members say that they were threatened physically and that local leaders have urged bus companies to fire dissidents.

Based in Ozone Park, Queens, Local 1181 represents more than 15,000 drivers of school buses, express buses and special vans that transport the disabled and handicapped.

Union members asked the lawmakers to intervene because they believe that money is missing from their pension and strike funds based on their calculations of how much they have contributed over the years. The union's leaders say those claims are false.

"I think that any time that many folks in an organization are raising these types of very serious allegations they should be looked into," said Hiram Monserrate, a City Councilman from Queens.

Last July, federal officials arrested Salvatore Battaglia, the president of Local 1181; Julius Bernstein, the secretary-treasurer; and Ann Chiarovano, the director of its pension fund. Prosecutors asserted that Mr. Bernstein had close ties to Matthew (Matty the Horse) Ianniello, the acting boss of the Genovese crime family.

The three union leaders pleaded not guilty, and their trial is scheduled to begin in the fall.

Mr. Bernstein faces 133 years in prison on charges of obstructing justice and conspiring with Mr. Ianniello and others to extort $100,000 from a medical center that rented office space from the union. Mr. Battaglia faces 40 years and Ms. Chiarovano 45 years on charges of obstructing justice and making false statements to the F.B.I. and grand jury about the Genovese family's influence over the union.

Government prosecutors have tape recordings of conversations showing that the union's leaders met repeatedly with Ciro Perrone, a top Ianniello lieutenant, at Don Peppe's, a restaurant near the union's headquarters.

The indictment describes Mr. Bernstein, the secretary-treasurer, as a "longtime associate" of Mr. Ianniello and Mr. Perrone, and says that Mr. Bernstein and other local officials took direction from the two mobsters.

As a result of the indictment, dozens of union members have asked Warren George, the president of the parent union in Washington, to place Local 1181 in trusteeship. But Mr. George has refused, saying that the union leaders have not been proved guilty of anything.

An assistant to Mr. George said he was unavailable for comment yesterday.

Marc Clergeau, a school bus driver in the Bronx, said: "The international union should step in before they go away with all the money. Our union, there's no representation for the people. They don't represent the members."

Several union members said they thought officials at the parent union were fearful of moving against a local that has been accused of having ties to the mob. "I personally feel they're afraid," said Tommy Nero, a school bus driver in Manhattan.

Steve Mangione, a spokesman for Local 1181, said that criticism of the leadership was part of a power struggle by members trying to win control of the union.

"These people are just throwing everything out there and hope something will stick," Mr. Mangione said. "I would hardly think that this is an example of a union that doesn't fight for its members, including its dissident members."

Critics of the union leadership assert that money appears to be missing from the union's strike fund, for which the union has collected $2 a week from most members for more than two decades.

According to Local 1181's filings, the fund has $9 million. But many union members say it should have at least $20 million because most union members have contributed at least $80 a year.

Mr. Mangione said that $400,000 of the money was spent on benefits during two short walkouts and some on organizing drives.

"If there was even a dollar missing from the pension fund or the defense fund, it would have been detected by the Labor Department or I.R.S.," Mr. Mangione said. The Labor Department is already carrying out a separate investigation of the finances of Local 1181 and its benefit funds, but several lawmakers voiced concern that the investigations were moving too slowly.

Many dissidents also say that last year's union election was unfair. Mr. Battaglia's slate won, but his critics say they faced intimidation and several members said that when they went to vote they found that someone had already voted in their name.

Mr. Nero, who ran against Mr. Battaglia, said that at a nominating meeting at John Adams High School in Ozone Park, Queens, someone whispered to him, "If you win this election, you'll never make it home alive."

Representative Owens said that for the good of the labor movement, changes were needed at Local 1181. "These guys are dug in in an old-fashioned way," he said. "They think they can use influence and make deals and wait this one out. I think we have to escalate the pressure in order to make sure that doesn't happen."

UNION CORRUPTION UPDATE

TRANSIT WORKERS (ATU)
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Members of Bus Drivers Local Seek a National Union Takeover
Local 1181 of the Amalgamated Transit Union, in Queens, N.Y., consulted for years with New York's Genovese crime family. Unfortunately, it didn't consult with its own 13,000 members. Now, in the wake of federal prosecutions of the local's leaders, the union's national headquarters are getting an earful from local rank and file, which consist of drivers of school buses, private buses, and vans.

On July 28, federal agents and local police arrested 20 alleged mob members and associates, including Local 1181's president, treasurer and pension director. The latter three persons are, respectively, Salvatore Battaglia, 58, Julius "Spike" Bernstein, 82, and Ann Chiarovano, 64. The indictment leading to the arrests charged, among other things, that Bernstein conspired with top Genovese mobster Matty "the Horse" Ianniello to extort cash payments from a medical center that rented space from the local. Some local members aren't too happy about this turn of events. "We do not feel comfortable with this situation at all," said Simon Jean-Baptiste, 50, a school bus driver. For their part, leaders of the 180,000-member national union do not feel comfortable having to respond. ATU lawyer Ronald Straci declined to comment, while defense attorneys for Battaglia, Bernstein and Chiarovano could not be reached.

Dissent in Local 1181 is a risky enough proposition. This June, an anticorruption slate challenged Battaglia, whose annual salary exceeds $200,000, and his slate in the union's first open election in more than a decade. The dissidents were defeated soundly, but maintain, with ample evidence, that the election was a sham. Battaglia's people at various points allegedly physically intimidated opponents and crossed off their names from voting rosters before balloting began. "I was approached by a former shop steward of mine...and told if I continued with this, I would get a bullet in my belly," said Warren Zaugg, 62, a bus driver from Medford, who ran for a delegate position. Six dissidents currently are challenging the results. (Newsday, N.Y., 8/15).

FOR IMMEDIATE RELEASE
July 28, 2005 CONTACT: U.S. ATTORNEY'S OFFICE
HERBERT HADAD, MEGAN GAFFNEY
HEATHER TASKER, BRIDGET KELLY
PUBLIC INFORMATION OFFICE
(212) 637-2600
FBI
JAMES M. MARGOLIN,
MATTHEW BERTRON
(212) 384-2720,2715

NYPD
PAUL BROWNE
(646) 610-6700

U.S. INDICTS NUMEROUS GENOVESE FAMILY MEMBERS AND ASSOCIATES, INCLUDING AN ACTING BOSS OF THE FAMILY
DAVID N. KELLEY, the United States Attorney for the Southern District of New York, MARK J. MERSHON, the Assistant Director in Charge of the New York Office of the FBI, and RAYMOND W. KELLY, the Commissioner of the New York City Police Department, announced today the unsealing of a wide-ranging racketeering Indictment in Manhattan federal court charging 20 individuals on charges relating to criminal activity by the Genovese Organized Crime Family, including obstruction of justice, extortion, loansharking, labor racketeering, and the operation of illegal gambling businesses.

Among the members and associates of the Genovese Family who were arrested today and charged with racketeering were MATTHEW IANNIELLO, a/k/a "Matty the Horse," an Acting Boss of the Family, and CIRO PERRONE, a capo in the Family who supervised IANNIELLO's former crew. The other Genovese Family members and associates arrested today on racketeering charges were: JOHN YANNUCCI, an associate of the Genovese Family, SALVATORE ESPOSITO, a/k/a "Zookie" a soldier in the Genovese Family, MICHAEL DELUCA, an associate and proposed member of the Genovese Family, STEVE BUSCEMI, an associate of the Genovese Family, LEONARD CHETTI, an associate of the Genovese Family, and JULIUS BERNSTEIN, a/k/a "Spike," an associate of the Genovese Family and an official at Local 1181 of the Amalgamated Transit Union, according to the Indictment. In addition, 13 other individuals were charged with various offenses related to the criminal activities of the Genovese Family, including two other officials of Local 1181, ANN CHIAROVANO and SALVATORE BATTAGLIA. The attached chart details the charges and maximum sentences faced by each defendant.

Background
According to the Indictment, IANNIELLO was elevated from his position as capo in the Genovese Family to serve as one of the Acting Bosses of the Family after the indictment and subsequent imprisonment of VINCENT "The Chin" GIGANTE, the long-time Boss of the Family. IANNIELLO was one of several high-ranking members of the Genovese Family to serve as Acting Boss of the Family following GIGANTE's incarceration. Upon IANNIELLO's ascension to the Family's leadership, PERRONE became a capo and took over IANNIELLO's crew, which was comprised of numerous soldiers (or members of the Family) and associates, it was charged. Among the crew's alleged criminal activities were labor racketeering, extortion, a large-scale loansharking operation, and the operation of illegal gambling businesses.

Labor Racketeering, Extortion, and Obstruction of Justice
The Indictment alleges that the Genovese Family infiltrated and influenced the activities of Local 1181 of the Amalgamated Transit Union and its Pension and Welfare Fund (collectively, "Local 1181"). One of the alleged criminal schemes executed by the Family was the extortion of a medical center that rented office space from Local 1181. According to the Indictment, in or about 1997, with IANNIELLO"s backing and the assistance of MAURICE NAPOLI, BERNSTEIN demanded and collected $100,000 in cash to renew the medical center's lease. In addition, from in or about 1997 through the present, it is alleged that, again with IANNIELLO's backing and with NAPOLI's assistance, BERNSTEIN extorted regular cash payments from the medical center.

When a federal grand jury began investigating the Genovese Family's involvement in the affairs of Local 1181, several defendants allegedly worked together to obstruct the investigation. Following the issuance of several grand jury subpoenas, members and associates of the Genovese Family, including IANNIELLO, PERRONE, JOHN YANNUCCI, ESPOSITO, and DANIEL CILENTI, and officials of Local 1181, namely, BERNSTEIN, CHIAROVANO, and BATTAGLIA, allegedly communicated with each other to ensure that federal authorities did not discover their joint criminal activity. For example, at one point, before a meeting with federal investigators, BERNSTEIN allegedly assured PERRONE that he would not become a "rat." In furtherance of this conspiracy to obstruct justice, BERNSTEIN and CHIAROVANO made numerous false statements in separate interviews with federal investigators, it was charged.

Loansharking
The Indictment further alleges that from at least in or about 2000 through the present, PERRONE, on behalf of the Genovese Family, oversaw a large-scale loansharking operation in which the following defendants also participated: JOHN YANNUCCI, BUSCEMI, DELUCA, CHETTI, FRANK AMBROSIO, a/k/a "Twinny," JOHN VITALE, PAUL KAHL, JOHN AMBROSIO, and JOSEPH YANNUCCI, a/k/a "Augie." The Indictment charges that, as part of this loansharking operation, the defendants made loans at extortionate rates of interest and participated in the use or threatened use of force to collect repayment on those loans.

Operation of Illegal Gambling Businesses
The Indictment further alleges that PERRONE, JOHN YANNUCCI, ESPOSITO, JOSEPH QUARANTA, JOSEPH PICATAGGIO, and JOSEPH YANNUCCI, a/k/a "Augie," operated illegal gambling businesses, including a large-scale card game that violated New York state law, for the Genovese Family from in or about late 2004 through the present.

All defendants are scheduled to appear this afternoon before United States Magistrate Judge DOUGLAS F. EATON in Manhattan federal court. The case has been assigned to United States District Judge KIMBA M. WOOD for further proceedings.

Mr. KELLEY praised the efforts of the Federal Bureau of Investigation and the New York City Police Department for their assistance in the investigation.

Assistant United States Attorneys TIMOTHY J. TREANOR, STEPHEN A. MILLER, and CHRISTINA BISCHOFF are in charge of this prosecution.

The charges in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

05-164

United States v. Matthew Ianniello, et al.
SUMMARY OF CHARGES
Defendant
No. of Counts, Charges, Maximum Sentence
Matthew Ianniello
8
Count One:RICO 128 yrs.
Count Two: RICO Conspiracy
Count Three: Conspiracy to Obstruct Justice
Count Four: Obstruction of Justice
Count Seven: Consp. to Commit Extortion
Count Eight: Extortion
Count Nine: Consp. to Influence Union Official
Count Ten: Influencing Union Official

Ciro Perrone
8
Count One: RICO 125 yrs.
Count Two: RICO Conspiracy
Count Three: Conspiracy to Obstruct Justice
Count Four: Obstruction of Justice
Count Twelve: Conspiracy/Illegal Gambling
Count Thirteen: Loansharking consp. (§892)
Count Fourteen: Loansharking consp. (§894)

John Yannucci
7
Count One: RICO 125 yrs.
Count Two: RICO Conspiracy
Count Three: Conspiracy to Obstruct Justice
Count Four: Obstruction of Justice
Count Twelve: Conspiracy/Illegal Gambling
Count Thirteen: Loansharking consp. (§892)
Count Fourteen: Loansharking consp. (§894)

Salvatore Esposito
5
Count One: RICO 85 yrs.
Count Two: RICO Conspiracy
Count Three: Conspiracy to Obstruct Justice
Count Four: Obstruction of Justice
Count Twelve: Conspiracy/Illegal Gambling

Steve Buscemi
4
Count One: RICO 80 yrs.
Count Two: RICO Conspiracy
Count Thirteen: Loansharking consp. (§892)
Count Fourteen: Loansharking consp. (§894)

Michael Deluca
4
Count One: RICO 80 yrs.
Count Two: RICO Conspiracy
Count Thirteen: Loansharking consp. (§892)
Count Fourteen: Loansharking consp. (§894)

Leonard Chetti
4
Count One:RICO 60 yrs.
Count Two: RICO Conspiracy
Count Thirteen: Loansharking consp. (§892)
Count Fourteen: Loansharking consp. (§894)

Julius Bernstein
9
Count One: RICO 133 yrs.
Count Two: RICO Conspiracy
Count Three: Conspiracy to Obstruct Justice
Count Four: Obstruction of Justice
Count Six: False Statements
Count Seven: Consp. to Commit Extortion
Count Eight: Extortion
Count Nine: Labor Racketeering Conspiracy
Count Ten: Labor Racketeering

Ann Chiarovano
3
Count Three:Conspiracy to Obstruct Justice 45 yrs.
Count Four: Obstruction of Justice
Count Five: False Statements

Salvatore Battaglia
2
Count Three: Conspiracy to Obstruct Justice 40 yrs.
Count Four: Obstruction of Justice

Daniel Cilenti
2
Count Three: Conspiracy to Obstruct Justice 40 yrs.
Count Four: Obstruction of Justice

Maurice Napoli
5
Count Seven: Conspiracy to Commit Extortion 53 yrs.
Count Eight: Extortion
Count Nine: Consp. to Influence Union Official
Count Ten: Influencing Union Official
Count Eleven: False Statements

Joseph Quaranta
1
Count Twelve: Conspiracy/Illegal Gambling 5 yrs.

Joseph Picataggio
1
Count Twelve: Conspiracy/Illegal Gambling 5 yrs.

Joseph Yannucci
3
Count Twelve: Conspiracy/Illegal Gambling 45 yrs.
Count Thirteen: Loansharking consp. (§892)
Count Fourteen: Loansharking consp. (§894)

Ralph Scopo, Jr.
2
Count Thirteen: Loansharking consp. (§892) 40 yrs.
Count Fourteen: Loansharking consp. (§894)

Frank Ambrosio
2
Count Thirteen: Loansharking consp. (§892) 40 yrs.
Count Fourteen: Loansharking consp. (§894)

John Vitale
2
Count Thirteen: Loansharking consp. (§892) 40 yrs.
Count Fourteen: Loansharking consp. (§894)

Paul Kahl
2
Count Thirteen: Loansharking consp. (§892) 40 yrs.
Count Fourteen: Loansharking consp. (§894)

John Ambrosio
2
Count Thirteen: Loansharking consp. (§892) 40 yrs.
Count Fourteen: Loansharking consp. (§894)

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