By Jerry Capeci
School Bus Magnate Pegged As Labor Racketeer in 1989
Gangland News

Eighteen years ago, law enforcement officials pegged the current owner of New York city’s largest school bus company as a labor racketeer with ties to the mob and a corrupt bus drivers union executive, according to sealed court documents obtained by Gang Land.

Domenic F. Gatto, whose company now earns more than $200 million a year busing city school kids, was linked to bid-rigging and illegal activities with Julius (Spike) Bernstein, the late secretary-treasurer of Local 1181 of the Amalgamated Transit Union, according to the documents.

Gatto, whose company, Atlantic Express Transportation Corp., of Staten Island, is the country’s third largest provider of student transportation, was not charged with any crimes as a result of two separate probes that targeted Bernstein, Gatto and other mob-connected bus company owners back in the early 1990s.

In recent months, however, under pressure from the feds, sources say Gatto admitted making illegal labor payoffs and agreed to be a government witness at the upcoming labor racketeering trial of the union’s former president, Salvatore (Hotdogs) Battaglia.

As Gang Land disclosed last week, Gatto will testify, sources say, that he gave thousands of dollars in bribes to Battaglia from 2002 to 2005, when Hotdogs, a reputed Genovese associate, was president of Local 1181. In addition to bribery, the bus driver-turned union leader is charged with obstruction of justice, extortion, and accepting illegal gratuities from Gatto and three other bus company owners. Trial is set for January 14 before Manhattan Federal Court Judge Kimba Wood.

Sources say Gatto, 58, agreed to testify against Battaglia after learning that Bernstein, who died at age 86 two months ago, had begun cooperating with the feds and had implicated Gatto in payoff schemes. In August, 2006, Bernstein secretly pleaded guilty to 40 years worth of labor crimes in a criminal career that spanned six decades.

Back in 1979, Gatto helped eight mob-connected owners secure new bus routes for special education kids outside Staten Island in return for an agreement by the group to refrain from bidding for routes in Gatto’s home base of Staten Island, according to an affidavit by an investigator with the Manhattan District Attorney’s office.

The initial allegations about Gatto’s involvement in the bid-rigging came from Robert Bering, a former Transit Cop who operated several bus companies from 1966 until 1987, when he pleaded guilty to three murders, and began cooperating with authorities. He died in prison in the mid 1990s.

Bering reported that Gatto had secretly met with three major bus company owners to discuss bids they would make for the new routes, and then shared that information with Bering for use by him and his partners. Gatto told Bering that the meeting with the three owners was arranged by Gatto’s father, a Gambino associate also named Domenic, the affidavit said.

Bering’s partners, the affidavit said, included Bonanno mobster Frank Coppa. In 2003, Coppa, the first Bonanno member to break his vow of omerta, detailed his partnership with Bering and disputes his family had with Spike Bernstein “in attempting to assist bus companies that could not afford Local 1181 labor,” according to FBI reports obtained by Gang Land.

In 1989, based on then-current Board of Education records, phone records and details from two confidential informants, the DA’s office suspected that Bernstein and Gatto had formed “an unholy alliance” that enabled Gatto and two others to “buy out” rival bus company owners “at artificially low prices,” the affidavit said.

This was accomplished by moving on two fronts to increase labor and other costs of their targeted rivals, and push them to the brink of bankruptcy, the affidavit said.

Corrupt Board of Ed inspectors were enlisted to deluge the targeted companies with “costly safety violation summonses,” while at the same time, Bernstein began an aggressive drive to recruit the workforce into Local 1811, thereby raising salaries and benefits and increasing company costs.

The double barreled assault often succeeded – as many as 12 owners succumbed, the affidavit said – because once drivers were organized, Bernstein opted to enforce "the collective bargaining agreement to the letter” instead of his usual policy of taking cash payoffs to overlook the more costly company expenses mandated by the new union contract.

The affidavit was used to secure several wiretaps, including one on Bernstein’s home phone, but eight months of electronic surveillance by the DA’s office – as well as a follow up probe by federal prosecutors in Brooklyn – failed to generate enough evidence to prosecute any suspects.

Citing the failed probes, and the violent background of Bering, Gatto’s lawyer Peter Silverman ripped Gang Land for raising the 1989 allegations. Even though Gatto will testify that he made payments to Battaglia, and Bernstein has pleaded guilty to accepting labor bribes since the 1970s, Silverman said he was considering legal action against Gang Land for “doing a hatchet job” on his client.

Few specifics of Bernstein’s labor racketeering activities are public. Prosecutors Elie Honig and Benjamin Gruenstein declined to discuss them, or Gatto’s expected testimony.

Silverman denied that Gatto paid Battaglia any bribes, but declined to detail his expected testimony. The lawyer did not dispute that the elder Gatto was a mob associate who met with late Gambino boss Paul Castellano (right) in the 1980s, but said it was a “low blow to bring up his father’s history that goes back more than a quarter of a century.”

In addition to crediting Gatto’s father with arranging his son’s 1979 meeting with three bus company owners, the affidavit states that during a 1983 meeting at Castellano’s home, the elder Gatto and the late Mafia boss were tape-recorded “discussing Castellano’s dealings with, and payments to, an unidentified union.”

Last Week In Gang Land December 20, 2007
Top NYC School Bus Owner Allegedly Paid Bribes To Union Officials
By Jerry Capeci

The owner of the largest provider of buses for New York city public school children has told the feds that he’s paid thousands of dollars in bribes to officials of a mob-connected union that represents school bus drivers, Gang Land has learned.

Domenic F. Gatto, whose Staten Island-based company grosses about $400 million a year, will publicly detail years of payoffs at the labor racketeering trial next month of former bus drivers’ union president Salvatore Battaglia sources told Gang Land.

Sources say that Gatto, President and CEO of Atlantic Express Transportation Corp., is one of four bus company owners set to take the stand against Battaglia, who is charged with receiving “tens of thousands of dollars” in bribes from 2002 through 2005.

Atlantic Express, which also provides Access-A-Ride services for seniors and physically impaired residents throughout the five boroughs, has 5600 vehicles and contracts with 116 school districts in seven states from New York to California, according to its filings with the SEC. It promotes itself as the largest American-owned provider of student transportation in the country, and the third largest overall.

A Vietnam vet who hails from Bensonhurst, Brooklyn, Gatto, 58, began working for the company in 1973, and bought it a year later, according to the most recent SEC filing. More than half of Atlantic’s $428 million in revenues this fiscal year came from its contracts with the city’s Department of Education, according to the filings.

Atlantic is by far the largest of the 50 bus companies that carry about 160,000 city kids to and from school each day. It has 1736 routes, including 853 of the city’s 2000 larger routes that carry 80,000 general education students, according to a DOE spokeswoman.

Gatto’s father, also named Domenic, ran a non-union bus company in the late 1970s and early 1980s and was an associate of Paul Castellano, according to investigative sources. The elder Gatto was tape-recorded in meetings with the then-Gambino boss at his Staten Island home in 1983.

Until his connection to this wide-ranging indictment alleging the Genovese family has controlled Local 1181 of Amalgamated Transit Workers Union for decades, the younger Gatto has never been linked to organized crime.

Gatto did not return repeated calls for comment.

His attorney, Peter Silverman, told Gang Land that “neither Dom Gatto nor Atlantic Express is a target” of the ongoing federal investigation into corruption in the school bus industry. “He has cooperated and will cooperate with the authorities regarding any questions that they have. I emphasize that he is neither a target nor a subject of any investigation. Mr. Gatto may be called as a witness, if he is, he’ll tell the truth.”

Sources say Gatto was implicated in the payoff scheme by former union Secretary Treasurer, Julius (Spike) Bernstein. An 1181 official for 35 years, Bernstein died two months ago, a year after he began cooperating.

Bernstein, a close pal of legendary Genovese capo Matthew (Matty The Horse) Ianniello – the mobster was best man at Spike’s wedding – was tape recorded stating that he got $1000 a year for each bus route over five that any one company received, according to a 2006 arrest complaint by FBI agent Michael Gaeta.

In a complaint charging a Department of Education supervisor with bribe receiving last week, Gaeta wrote that during a wide ranging investigation, four bus company owners have told him they have been paying bribes to DOE officials for decades.

It could not be determined whether Gatto was also one of the four bus company owners cited in last week’s arrest complaint of the supervisor, Geoffrey Berger.

Gaeta, and Manhattan federal prosecutors Benjamin Gruenstein and Elie Honig, declined to comment about Berger’s arrest, or the upcoming Battaglia trial, except to state that it’s scheduled to begin January 14.

Battaglia’s attorney, Joseph Benfante, ripped the allegations as “horribly untrue. Sal (right) has worked his whole life as a bus driver, and later as a union leader. He never took one dime from anyone. He worked tirelessly for the rank and file, and after becoming president in 2002, he won the best contract the workers have achieved in decades. They’re making him a scapegoat for years of corruption by others.”

School bus violations soar after probe
BY GREG B. SMITH, DAILY NEWS STAFF WRITER, Sunday, January 6th 2008, 4:00 AM
LINK

Safety violations on school buses have skyrocketed since the Daily News revealed bus companies were routinely receiving tips ahead of time about "surprise" inspections.

The number of violations is on track to reach 30,000 this school year, triple the violations Department of Education inspectors found on school buses in each of the past two school years.

The dramatic jump follows the DOE's decision in June to stop giving its inspectors a heads-up about checks - a change made after The News revealed private bus companies used by the department were warned about supposedly unannounced inspections.

The News also exposed major problems in the unit that investigates incidents of physical and sexual abuse aboard buses. Chancellor Joel Klein fired a top official and revamped the entire department.

The school bus inspection unit is now the target of a growing FBI investigation spurred in part by The News' "School Bus Disgrace" series.

In June, The News revealed bus companies were tipped to inspections. Days later, the DOE stopped notifying its inspectors about them until 5:30 a.m. the day of the spot check.

"We have revised our procedures for both announced and unannounced inspections," DOE spokesman David Cantor said.

Before the policy change, department inspectors doing basic safety checks on things like emergency doors, brake pedals and lights found far fewer violations.

In the 2005-06 school year, DOE inspectors found 9,633 violations. In 2006-07, they found 10,089, records show.

In just the first four months of this school year - after the DOE changed the policy - inspectors have hit bus companies with 12,021 violations.

If that trend continues, the department is on track to tag buses for 30,000 violations by June dismissal.

"Just in this fiscal year's year-to-date numbers, we are already ahead of all of the last two years' counts," Cantor said. "I attribute this to better and more aggressive management."

After The News' report in June, the FBI expanded its ongoing investigation of the mob-controlled Local 1181 of the Amalgamated Transport Union, which represents school bus drivers. They began looking at the DOE's inspection unit.

The head of the unit, Dino Winkler, and another unidentified inspector have pleaded guilty to bribery-related charges and are cooperating with the FBI. A third employee, a supervisor, has been charged and pleaded not guilty.

Winkler has described a scheme that dates from the early 1980s in which bus inspectors took bribes to tip off bus companies about surprise inspections.

He also described a longrunning scheme in which inspectors took cash to assign fictional route extensions to bus companies so they could inflate their bills.

Officials concede the extensions resulted in millions of dollars in false billing to taxpayers.

Cantor said the city is "looking at our legal options" to recover that money from the companies.

At least four bus company presidents have told the FBI they bribed Local 1181, and at least two have described bribing inspectors.

Education officials have hired private school bus companies to transport students for years. Most of the contracts have not been competitively bid since the 1970s.

Peter Silverman, a lawyer for several of the school bus companies, conceded there has been a jump in the number of citations, but said none of his clients is involved in the FBI investigation.

gsmith@nydailynews.com

November 6, 2006
School Bus Drivers Angered by Corruption in Union
By STEVEN GREENHOUSE, NY TIMES

Many of New York City’s school bus drivers say their union local is so awash in corruption problems that they want the parent union to appoint a trustee to run it.

And some drivers say they are angry and baffled that the parent union has done so little to address their concerns that their union, Local 1181 of the Amalgamated Transit Union, has been sullied by guilty pleas and indictments among its leaders.

The president of the 15,000-member local is facing trial this month on federal charges of obstructing justice, accused of hiding Mafia involvement in the union. Its longtime secretary-treasurer is to be sentenced next month on federal racketeering charges, while the woman who manages the local’s pension fund continues to run it even though she pleaded guilty in August to obstructing justice.

And in perhaps the most embarrassing development, Matthew Ianniello, who the authorities say is the acting boss of the Genovese crime family, admitted in September that he had helped arrange for bus companies to make payoffs to Local 1181 officials. Mr. Ianniello, known as Matty the Horse, made the admission as he pleaded guilty in Federal District Court in Manhattan to obstructing justice.

“It’s a disgrace,” said Gloria Flaherty, a bus driver for nine years. “The union local is all run to the leaders’ benefit. They don’t represent the members. The major problem now is the international union. They’re aware of what’s going on and they just don’t care.”

But officials with the parent union noted that they appointed an outside lawyer to examine Local 1181’s affairs after Mr. Ianniello pleaded guilty and pointed an accusing finger at the local’s officials.

Leo Wetzel, the parent union’s general counsel, said, “We have retained an independent counsel to review, to ferret out as best he can, what’s in the public record and to recommend appropriate action.”

Drivers aligned with a dissident group within the union local, Members for Change, called the move too little, too late, coming 15 months after the local’s president, secretary-treasurer and pension fund director were indicted. These critics assert that money is missing from the local’s pension and strike funds.

But a review of the local’s finances by the parent union did not find any money missing, Mr. Wetzel said. “There’s no question that the members of the local are being serviced,” he added.

Mr. Wetzel said the parent union could not oust the pension fund director, Ann Chiarovano, despite her guilty plea, because she is not an officer of the local union, which is based in Ozone Park, Queens.

“The international doesn’t have any authority over whether or not she’s removed,” Mr. Wetzel said.

The secretary-treasurer, Julius Bernstein, was forced by federal prosecutors to give up his post in June, when he was indicted a second time. The union’s president, Salvatore Battaglia, continues in his position despite his indictment.

Tensions escalated at a recent meeting at John Adams High School in Queens where drivers voted on whether to uphold a challenge to Local 1181’s election last year. The slate headed by Mr. Battaglia won, but several drivers said that they had faced intimidation and that when they went to vote, they found that someone had already done so in their name.

At the meeting, Mr. Battaglia asked bus drivers to stand up to show whether they supported or opposed the challenge, which would result in a new election, according to people who attended. Afterward, a union spokesman said the challenge had been rejected, 1,100 to 72, but several Battaglia critics said the margin was much narrower, with about 60 percent opposing the challenge and 40 percent favoring it. They also said it was unfair to require the drivers to vote by standing because many were scared to be seen as opposing the local’s leadership.

Several dissidents said that before the meeting they approached three union vice presidents from other cities who had been sent to monitor it.

“We went up to talk to them to ask whether a secret ballot was in order,” said one driver, Warren Zaugg. “They got up from their chairs and literally turned their back on us.”

Rodney Richmond, a union international vice president from New Orleans who observed the meeting, said he did not recall any drivers requesting a secret ballot. “I don’t think anybody turned their backs on anyone,” he said. “Our backs were already turned.”

John Bisbano, a driver for 13 years, said Mr. Battaglia dominated the meeting, not letting anyone else speak. “You have the American flag flying here, and you can’t even ask questions,” Mr. Bisbano said. “It’s like having a meeting in Red China.”

Asked about the drivers’ allegations, Steve Mangione, a spokesman for Local 1181, said, “Everything was conducted according to the way the meeting was supposed to be run.”

Mr. Bernstein, the secretary-treasurer, was charged with obstructing justice, extorting money from a bus company and conspiring with Mr. Ianniello and others to extort $100,000 from a medical center that rented office space from the union.

Government prosecutors say they have tape recordings of conversations showing that the indicted Local 1181 leaders met repeatedly with Ciro Perrone, a top Ianniello lieutenant, at Don Peppe’s, a restaurant near the local’s headquarters.

Mr. Wetzel said the parent union could find no public record that Mr. Bernstein had pleaded guilty. But the dissidents’ main lawyer, Carl Levine, said officials in the United States attorney’s office in Manhattan had told him that Mr. Bernstein had pleaded guilty. Mr. Bernstein’s lawyer, Michele Bonsignore, did not return phone calls requesting comment.

Officials with the United States attorney’s office said documents in Mr. Bernstein’s case were sealed, but Judge Kimba M. Wood of Federal District Court has issued an order scheduling his sentencing for Dec. 29.

Mr. Mangione said the local was in good condition. “The union and its leadership have never been stronger,” he said. “Salvatore Battaglia and the executive board recently negotiated the best contract in the industry.”

William K. Rashbaum contributed reporting.

Sex & secrecy in back of the bus
NEWS uncovers history of abuse
LINK

This Daily News Investigative Team series was reported and written by Staff Writers GREG B. SMITH, ROBERT GEARTY and BENJAMIN LESSER, and Assistant Managing Editor RICHARD T. PIENCIAK
Posted Thursday, March 22nd 2007, 1:15 AM

According to legal papers and limited Department of Education data, victims of school bus sexual abuse were male and female and ranged in age from 5 to 19.

CASE HISTORY
JAN. 13, 2005

On an unusually warm winter morning, an 8-year-old girl was riding her school bus to Public School 369 in Boerum Hill, Brooklyn.

A few seats away sat a monitor, hired to watch over the special-needs students.

In the back of the bus sat an eighth-grade teenage boy headed to a different school, PS 141.

The older boy told the girl that she had to perform oral sex or he would bring in a knife and cut her, according to a Department of Education occurrence report on file in an ongoing negligence lawsuit.

The girl told her teacher she had done what she was told - twice.

An investigator for the Department of Education's Office of Pupil Transportation questioned other students on the bus, who stated, "the incident did happen, and that the weapon was a black-and-silver knife," according to the report.

The report continued: "Another student stated that they told the matron on the bus, and the matron moved that student to the front of the bus."

Neither the school superintendent nor the NYPD was notified until the next day, the report noted.

The boy was put on another bus.

The lawsuit, filed by the girl's mother, accuses the city, the Department of Education and the bus company of negligence for failing to "provide proper supervision for the pupils on the bus."

The occurrence report also makes reference to two other possible female victims on the same bus, but the Department of Education declined to respond to that specific question and said it could not comment on a pending lawsuit.

Also see:

Mom's nightmare
Teen charged; bus firm, ed dept. sued
Bus attacks spark outrage

Part 5: Time to protect the children
Part 4: Dropped off lost and abandoned
Part 3: The bad guys behind the wheel
Part 1: Shame of city's school buses

The graphic scenes contained in legal and bureaucratic paperwork are difficult to comprehend under any circumstance: little children, still learning how to read and write, being forced by older students to commit unthinkable sex acts aboard New York City's school buses.

The molestations include the "rubbing of private parts," "oral sex and sodomy," and rape - almost always committed within the presence and supposed supervision of drivers and bus monitors hired to protect school-children.

A four-month Daily News investigation into the troubled network that transports 142,000 New York City public and private school students daily has documented a secret history of physical and emotional abuse, from broken bones to shattered psyches.

But the most gutwrenching, nauseating behavior uncovered has been sexual in nature.

On many occasions, the sexual abuse victims have been especially vulnerable special-needs students, mercilessly violated within a transportation system designed to protect those most at risk.

"Automatically I think, 'It's a school bus.' I expect whatever children are on the bus to be safe," said the mother of a 10-year-old girl who was sexually abused on her way to school in Boro Park, Brooklyn. "I don't think a 10-year-old should have a sexual experience on a school bus."

The victims have ranged in age from 5 to 19, male and female.

According to settled and pending lawsuits, notices of intent to sue and limited Department of Education records obtained by The News under the Freedom of Information Law, there have been at least 22 complaints of serious sexual abuse on school buses in the past decade, 10 since July 2003. All but two were discovered independently by The News.

Nineteen of the incidents involved accusations of students molesting other students in the presence of drivers and/or monitors. Two other cases implicated drivers; a third involved a bus monitor.

A lawsuit against one driver and his bus company was settled in September 2004 for $1 million. The Brooklyn district attorney's office investigated but declined to prosecute.

A settlement in the other bus driver lawsuit has been sealed. The driver was charged with sexual abuse, unlawful imprisonment and harassment, and pleaded guilty to harassment, according to state court records.

Of the remaining completed cases, one involved a jury award of $150,000; another victim won a $210,000 settlement in November 2005.

The family of a 19-year-old Down syndrome woman from Public School 721 in Elmhurst, Queens, has notified the city it intends to sue for a July 2006 sexual abuse allegation involving a male bus monitor. The family of a 12-year-old girl who says she was molested on her way home from Public School 109 in East Flat-bush, Brooklyn, last May also plans to sue.

Fourteen of the cases are the subjects of pending lawsuits, while the final two were internal complaints, from October 2005 and last February, that were substantiated by the Department of Education.

Because all of the student offenders were juveniles, The News could not ascertain the outcome of any criminal prosecutions. A law enforcement source said the bus monitor is under investigation, but has not been arrested.

Whatever the statistical tabulation, the numbers are outrageous by their mere existence - children being sexually assaulted within the cramped confines of school buses while they are supposedly being protected by one or two adults who are specifically charged with super-vising and maintaining order on the buses.

"Anyone whose child is involved doesn't think any level is acceptable," said Matthew Lenaghan, deputy director of Advocates for Children of New York. "If they say there's millions of kids on buses and there are only two incidents, well, talk to someone's parent, and see how they feel."

That's precisely the outrage and insecurity such incidents provoke in victims and their families.

"When I put him on the bus, I felt safe. I trusted the whole system," said the mother of a 5-year-old boy who was sexually abused on a bus in July 2003 and whose lawsuit is still pending. "I never thought something like that would happen."

The full extent of the problem is uncertain because the Department of Education has resisted and delayed in providing The News all of the pertinent documents that it has requested under the Freedom of Information Law.

Still, in lawsuit after lawsuit, The News learned of claims that bus monitors, who are required on all buses for special-needs students, had seen nothing, heard nothing or were not even on the bus when serious acts of sexual abuse were committed. Many of the case files also contained claims from drivers that they, too, had been oblivious to the behavior taking place aboard their vehicles.

As part of its investigation, The News noticed that the two 2006 cases where families say they intend to sue the city were not included in the package of 2006 substantiated complaints handed over under the Freedom of Information Law.

The Department of Education contended that those two cases had been found to be "either unsubstantiated, unfounded or not in violation of rules and regulations."

The Department of Education's Law Department has specifically ruled that it will provide no specific information about unsubstantiated complaints, citing privacy concerns.

For 2006 and 2005, the department has produced only partial records from 337 of 604 substantiated complaints. No records have been produced for 2001 to 2004.

Overall, The News is missing at least 1,218 substantiated complaints for the six years requested under FOIL.

As a result, The News could not determine if any of the missing complaints pertain to sexual abuse or if incidents involved in most of the sexual abuse lawsuits found by The News have ever been investigated by school authorities.

Plus, The News has uncovered serious questions about the accuracy of Department of Education recordkeeping, suggesting that the overall number of abuse complaints could have been underreported. the slow pace of sexual abuse civil lawsuits through the court system was particularly striking, with case after case dragging on for years. Compensation for victims can take a long time to come as well. the News found older case after older case still pending - from October 2000, December 2000, May 2001 and November 2001. the $1 million driver lawsuit, filed in 1998, took six years to settle; the $210,000 settlement took seven years, records show. several lawyers involved in longrunning cases say the Department of Education often refuses to turn over documents, shifting the blame to the private bus companies, who employ the drivers and monitors.

"Getting documents from the city is very difficult, especially the Department of Education," said attorney David Kapelman, who has several pending school bus sexual abuse lawsuits dating to 2003. He noted that all major city cases take longer because "there's a much longer backlog in the city part for trials." attorney Ruth Bernstein, who won the $1 million settlement, recalled her six-year court fight on behalf of a female teen with a disability similar to cerebral palsy who had been sexually abused repeatedly by a driver.

Ultimately, the lawyer said, the settlement was paid by the city government and the bus company's insurer.

During that time, Bernstein said, "the city kept saying 'we're not in the case,' and they never provided us any documents or witnesses."

rpienciak@nydailynews.com

Tom Robbins In NYC: Rao's Restaurant and the Gangster-run School Bus Drivers' Union Have Alot in Common