"Everything is going well; the fact is we can work it out with the guy," said Gardell. Then the detective added: "How much?"
"Altogether, maybe 50 pounds," answered Labate.
Gardell's role was to arrange for Stephens to win control over a large chunk of annuity funds. Some would go into "stuff that smells like rose petals," as Pokross put it, the rest into wired deals in which the companies would kick back bribes in return for the union's investment.
As the deal progressed, Gardell mentioned "Tom" on several occasions. Scotto is the only "Tom" on the DEA board of trustees.
"You want to talk to Tom first?" asked Labate, at one point in an apparent reference to Scotto. "Yeah," answered Gardell. "I have to talk to Tom."
Meeting with Stephens on March 23, Gardell seemed optimistic. "If everything is acceptable, and it looks pretty good," said Gardell, "we should be able to start July 1. We are starting to liquidate most of these other companies we have."
Again the detective made an apparent reference to Scotto: "Let me bring up something else because Tom brought it up, to have our members have some choice, do you pick all for them, or do they have a choice?"
For his help, Gardell got $1000 from the traders on April 19, 2000, prosecutors allege, and later that month, they say, he and Kilcoin were sent on a free trip to San Francisco to visit Stephens's operation there.
But Gardell was already growing nervous. He was getting warnings, he told his friends. On April 11 he allegedly told Labate that the phones at the Hanover Square office were tapped. A few days later, on April 14, Gardell launched into a long, jittery ramble. He was being investigated by someone, friends had told him, but by whom he couldn't figure out. Someone had told him it was due to something "personal with Scotto."
"It could be fuckin' anything, I mean I'm not his babysitter, but I'm the treasurer, I sign the checks," said the detective. Worried, Gardell said he had gone to see "one of the guys I've known my whole life," a former police expert on organized crime who was "now an agent." That friend had tried to reassure him, Gardell said. He quoted his pal saying: " 'I mean I might not be able to help ya but I'm surely gonna tell you somethin'. . . . There's nothin' goin' on where I am, so I don't what-the-fuck know who's jerkin' your chain off.' "
Gardell said he was sure there was no NYPD investigation since the department would have been obligated to tell him about pending issues after he put in his retirement papers. "[A] red flag comes up. The clock stops until the investigation is finished," he said.
He then raised his union leader's connections. "Scotto is fuckin' tight with . . . Clinton and Gore," said Gardell. " . . . So I'm sayin' to myself, [if] somethin's goin' on with him . . . , he's not gonna get a fuckin' hello from them but someone is gonna tell him. Or if somethin's goin' on, they're gonna say, hey, bury it. We're not goin' anywhere with this thing. Because if they do, who's the one gonna look like assholes?"
"Them," said Pokross.
"Yeah, them," said Gardell.
Prosecutors say they arrested the suspects before the investment scheme could be carried out. Gardell's girlfriend, Sharon Kilcoin, has not been charged. Nor has Scotto been charged with any crimes, and other than his co-conspirator status in the Wall Street case there is no indication of any wrongdoing on his part. But friends say there is no love lost between Scotto and Gardell these days.
So far, 60 defendants, including Lino and Labate, have pled guilty or been convicted. Stephens, Gardell, and three other non-mob defendants are headed for trial in September. "I don't believe there is anything said between Gardell and my client that can even be construed as unethical, much less illegal," said Sarita Kedia, Stephens's attorney.
Tom Scotto broke off his discussion about the DEA and its funds after he was pressed about his dealings with Gardell. "This is all under litigation and it doesn't make sense to discuss it."
His union's members, both active and retired, say they're waiting to see what happens. Gardell's case is heartbreaking, said one former detective who worked with him in Brooklyn. "We were lucky to have had Stevie Gardell in the old six-four precinct," he said. "He looked out for us. He was a cop's cop."
Transcripts from a secret FBI bug that recorded conversations on April 14, 2000, among Stephen Gardell, Jimmy Labate, Sharon Kilcoin, and Jeff Pokross, the FBI's cooperating witness No. 1 (CW-1).
Research assistance: James Wong
