New York Foils Mob Influence With Rules, Regulations

Long before the sun comes up, thousands of crates of bananas, apples, oranges, grapes, and cherries start rolling out of the Hunts Point Produce Market in the Bronx, destined for stores and fruit carts around New York. With more than $1.5 billion in gross revenues annually, Hunts Point is the biggest wholesale produce market in the country. It is also, reputedly, under the thumb of the Mob.

But not for long.

This spring Mayor Rudolph Giuliani, the former federal prosecutor who hasn't lost his zeal for fighting organized crime, announced his intentions to root the Mafia out of the market.

"It's no secret organized crime has been heavily involved in the wholesale food markets ... for too long," says Mayor Giuliani.

That control let Mafia-dominated groups squeeze out competition, fix prices, and run up extra costs to consumers of hundreds of millions of dollars a year, experts say.

The mayor calls it the "Mob tax." And he's determined to lift it by going after the weaknesses in the system that allowed the Mafia to get its talons into such industries in the first place. He's attacking the Mob with simple, straightforward government regulation. City Hall is taking control of the city's wholesale food markets, and everyone who works in the market will now have to be licensed and undergo a background check. If there's any taint of organized crime, they're out.

"We're checking to be sure that everyone who works there has good character, honesty, and integrity," says Deputy Mayor Randy Mastro, who's heading up the mayor's regulatory attack on the Mafia.

Both Mr. Mastro and Giuliani are confident they'll be successful, primarily because they've done it before. Similar tactics were used to ease mobsters out of the Fulton Fish Market, the city's wholesale fish market, and the commercial carting industry. But each time, it took both guts and muscle.

Success at the fish market

For more than 60 years, the Genovese crime family reportedly ran the Fulton Fish Market. Prosecutors say mobsters routinely extracted bribes, threatened violence, and set up shadow companies that would run up huge bills with suppliers, then disappear. While individual mobsters were successfully convicted time and again, they'd simply be replaced by more-junior thugs.

Giuliani's solution: Take control of the administration of the market, regulate everything from parking to the hiring and firing of workers, and investigate every firm and individual involved for any hint of mob ties.

The private association that ran the market insisted organized crime was not involved and called the new measures unnecessary. But in 1995, just days after Giuliani announced his plans, one of the oldest buildings at the market went up in flames - the work of arsonists. For weeks, police had to stand guard at dawn as former employees harassed the new companies the city brought in to load and unload the thousands of pounds of fish that come into the market every morning.

But after several months, the harassment dissipated. In the past two years, competition has brought down the price of fish an average of 5 percent, while prices were on the rise in the rest of the country.

"Nobody ever thought you could use civil tools to combat organized crime," says Robert Stewart, the former chief of the organized-crime strike force in Buffalo, N.Y., and Newark, N.J.

Taking out the trash

For years, it was also "understood" the Mob ran the city's commercial trash-hauling business. Locally, they're called "carters." Four business groups virtually controlled the entire industry.

Prosecutors contend the groups were run by the Genovese and Gambino families. Trash haulers either belonged and played by their rules - which set prices artificially high and forbade competing for customers - or they were "outlaws." As noncartel members, "outlaws" were intimidated, threatened, and beaten for daring to offer businesses a better deal than cartel members did, according to prosecutors.

After an extensive undercover investigation, all four carting associations, 23 trash-hauling companies, and 17 people were indicted in 1995. Nine people have already pleaded guilty to charges, and the remaining eight now sit in a courtroom facing charges that range from restraining competition to attempted murder and arson.

But the indictments were just the beginning. To ensure organized crime will be kept out of the trash business in the future, the Giuliani administration created the Trade Waste Commission. Now all commercial trash businesses must undergo licensing and background checks. The commission also assigned 35 full-time police and has a network of undercover operators.

"Customers are going to save more than $300 million over the next year alone," says Mastro.