Crime syndicates levy `tax' on citizens of N.Y.

The grip of organized crime extends beyond narcotics traffickers, corrupt politicians, bribed union officials, and unscrupulous businessmen. It extends right into the pockets of practically every American citizen. Anyone who has had garbage picked up in certain areas of the Northeast, bought a candy bar in a vending machine, tried to construct a building in New York City, or dined on filet of sole in a Manhattan restaurant has, to some extent, made a contribution to the coffers of the underworld bosses.

Law enforcement officials say there is no way to gauge accurately the full cost of organized crime to the United States, much less assess how much more Americans pay for goods and services because of Mafia influence and corruption.

``There is a moral decay that occurs and there is no way to put a dollars and cents value on it and there is no way to really know the full extent of these tentacles to truly understand the cost. But it is enormous,'' says Floyd I. Clarke of the Federal Bureau of Investigation (FBI).

``In New York City, a builder cannot construct a building from the ground up without dealing with a union that is controlled by organized crime,'' says James D. Harmon, executive director of the President's Commission on Organized Crime. He adds, ``I can even take it a step further. A builder can't even tear down an existing building before constructing a new building without dealing with a union that's controlled by organized crime.''

Garbage collection, vending machines, the construction industry, and New York's wholesale fish market are but a few of the legitimate industries organized criminals have selectively influenced and looted over the years, according to law enforcement officials.

While organized crime is most heavily concentrated in the Northeast and Midwest, experts say that each state has at least some involvement.

The FBI has identified 24 organized-crime or so-called ``La Cosa Nostra'' families nationwide with roughly 1,700 ``made'' members. Each ``made'' member is estimated to have 10 loyal criminal associates.

Nowhere is the current grip of organized crime stronger than in New York City, where five powerful families are said to control the underworld and its rackets.

Two concrete contractors testifed Tuesday in a Manhattan federal court that they had been forced in recent years to make payoffs to an alleged mob-connected union official in order to prevent labor problems.

A related indictment charges the bosses of New York's five families with controlling six major concrete firms doing business in the city. The indictment says the mob bosses, not wishing to waste time with nickel-and-dime contracts, confined their efforts to concrete projects worth $2 million or more.

The underworld bosses are alleged to have influenced how much each contractor would bid on a given project, thus determining which firm would win the bid while inflating project costs.

After the projects were under way, court documents say, the mob bosses extorted some $1.7 million from the six concrete firms over a three-year period.

According to court documents and testimony, the payoffs were collected by Ralph Scopo, an alleged member of the Colombo crime family in New York, who was also the president and business manager of the cement and concrete workers union. The contractors were informed that if the payoffs were not made, certain ``labor problems'' might begin to hurt business.

The technique is not new. The most frequently observed criminal activities of organized crime groups nationwide are labor racketeering and infiltration of legitimate business, according to a recent organized-crime commission survey of 750 local police agencies and 50 FBI field offices.

``What does it cost the American public in a situation where free enterprise cannot exist? Where you cannot compete because you can't get a contract, and if you get a contract you can't build, because of intimidation, violence, destruction?'' asks the FBI's Mr. Clarke. ``How do you quantify those kinds of costs?''

A labor official and construction manager from New York City, whose identity is being protected, told the President's Organized Crime Commission earlier this year that general contractors cannot enter New York City unless they have the blessing of a Mafia family in New York, or equivalent references from an organized-crime family elsewhere.

According to a commission transcript, the official also said:

The Mafia controls all construction contracts in New York City valued at $500,000 up to $100 million.

Corrupt union officials routinely tell contractors who their suppliers and subcontractors will be and how much they will pay for materials and services.

Roughly 20 percent of the costs of construction projects in the city are pocketed by organized crime.

At least six New York City chapters of the Laborer's International Union of North America are ``owned'' by the Genovese family, the Lucchese family, or the Colombo family -- three of New York's five Mafia families.

``In the business world organized crime calls it `the edge,' '' says Mr. Harmon, who is also a former mob prosecutor in New York. ``[Working with the mob] will give you the edge on everyone else.''

He notes, ``If you look at your business as if all that counts is the bottom line, it doesn't make any difference if you deal with organized crime. Businessmen have told us that. . . . On the other hand, there are some people who don't have much of a choice.''

Harmon stresses: ``The answer to this doesn't rest only with the FBI or with law enforcement, it rests with the private sector, it rests with business, it rests with the labor movement, it rests with financial institutions, and it rests with the public, which really sets the limits on what can and can't be done.''

Second of three articles. Tomorrow: Colombian drug cartels.