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Mob probes hit a hurdle

- The Washington Times - Friday, June 6, 2008

Months after announcing criminal charges against dozens of reputed Gambino crime family members and associates, Labor Department investigators fear a Bush administration legal opinion could make it harder to investigate organized crime.

The department's inspector general, Gordon S. Heddell, is questioning Labor Department lawyers over a legal opinion saying his office doesn't have "exclusive authority" to investigate organized crime and racketeering, according to Labor Department documents.

"OIG investigations may be subject to interference by the department and clear congressional intent ... will be undercut," Mr. Heddell said in a newly disclosed report to Congress, adding that his office has had "a unique programmatic responsibility to investigate labor racketeering and organized crime" since 1978.

"Congress recognized the need to place the labor racketeering investigative function in an independent law-enforcement office, free from political interference and competing priorities," he said.

But the department's top attorney, Solicitor of Labor Gregory F. Jacob, called Mr. Heddell's report "at best highly misleading" in a recent memo to Labor Secretary Elaine L. Chao.

Mr. Jacob, nominated to the post in September by President Bush, said the law gives the Labor Department - not just the Office of the Inspector General (OIG) - the authority to conduct organized-crime investigations.

The dispute is raising concerns in Congress.

"We have been in contact with the inspector general and the Department of Labor on the concerns that the IG has raised," said Aaron Albright, spokesman for the House Education and Labor Committee. "Labor racketeering investigations should be conducted in an independent manner and be removed from any appearance of being politicized.

"We will continue to monitor the situation," he said.

Experts say the situation suggests a possible "turf battle" between the Labor Department and Mr. Heddell's office, which has investigated numerous high-profile mob cases in recent years. Neither side would comment on the disagreement.

"It sounds to me like a tempest in a teapot," said Frank C. Razzano, civil editor for the RICO LAW Reporter and a white-collar criminal defense lawyer. "Federal agencies often have overlapping jurisdictions to investigate. It may not always be a very effective system, and it's certainly very onerous on the people who get investigated."

Ethan S. Burger, an adjunct professor at Georgetown University Law Center and a corporate crime scholar, said the inspector general's office could be concerned about outside leaks if too many people are involved in its investigations.

"It's hard to know what's going on without anybody on the inside talking, but if the OIG is concerned about things being leaked or communicated to different parties, then you've got a concern," Mr. Burger said.

An independent watchdog arm of the Labor Department, Mr. Heddell's office played a major role in several high-profile mafia prosecutions over the past year.

The biggest case, also investigated by the FBI, the Internal Revenue Service and other federal and state agencies, resulted in charges against more than 60 reputed members and associates of the Gambino crime family in New York. The investigation uncovered loan sharking, embezzlement and killings spanning more than 30 years, officials said.

In another big mob case, Mr. Heddell's office helped investigate Salvatore "Hot Dogs" Battaglia. Tied to the Genovese family, Battaglia pleaded guilty in January to extortion charges in connection to his job as president of the Amalgamated Transit Union in New York City.

And James Delio, a reputed Genovese crime family soldier, was sentenced in February to nearly three years in federal prison after a corruption probe of the New York City drywall industry.

Labor Department officials say the dispute won't curtail organized crime and racketeering investigations. In a letter last week to House Speaker Nancy Pelosi, California Democrat, on Friday, Mrs. Chao said the disagreement "has absolutely no impact on the operational effectiveness of the OIG."

"Please be assured that the department does not question the authority of the OIG to conduct such investigations," Mrs. Chao wrote, adding that she recently issued a departmental order telling employees to notify the inspector general about any evidence of possible organized crime or racketeering so Mr. Heddell's office can decide whether to "assume the lead in further investigative activities. ..."

However, Mrs. Chao also noted that Mr. Jacob "disagreed with the inspector general's legal position."

Mr. Jacob said in a memo last week to Mrs. Chao that concerns about interference in OIG investigations are unfounded.

The Inspector General Act of 1978 transferred the Labor Department's special investigations office to the newly created inspector general - "nothing more, and nothing less," Mr. Jacob wrote. But, he argued, that doesn't mean the inspector general's office now has "exclusive authority overall in matters involving organized crime and racketeering."