Rudy's Bus Pal Admits Paying Mob

As mob-fighting mayor, Giuliani did nothing but help the guy—and get helped in return

Nowhere was the post-Rudy letdown more severe last week than on Staten Island. Back in 1993, it was this little borough that showered Giuliani with enough votes and love to first put him over the top as mayor. It went on to provide many of his most loyal stalwarts.

Among the disappointed was Staten Island transportation mogul Domenic Gatto, the king of the city's school-bus operators. Gatto topped out in donations to Giuliani's presidential bid ($3,000), just as he did back in 1999 ($2,000) when Giuliani thought he wanted to be a U.S. senator. For Giuliani's re-election drive in 1997, Gatto provided a gleaming white school bus. The bus had a specially designed open platform at the rear so politicians could stand there and wave. It drove around the borough toting a huge banner with Giuliani's picture, alongside a couple of local pols, under a headline: "Reelect the Winning Team." Not to miss an advertising opportunity, Gatto put a nice plug for his own company on the back. "Atlantic Express," it read. "Your children's safety is our business."

At the time, Gatto was trying to land a city franchise—and accompanying subsidies—to let him run express buses from Staten Island to Manhattan. Under the city charter, such deals must be approved by the City Council. To Giuliani's people, this was another example of the old way of thinking. They promptly went ahead and cut the contracts with Gatto's company on their own.

When Giuliani appeared at a town-hall meeting in Staten Island in June 2001, several dozen members of a union representing MTA bus drivers showed up to tell him they thought the mayor was a little out of line on this matter. When union leader Larry Hanley got the mic, he told Giuliani that this backdoor contract was something out of Boss Tweed's playbook.

Oh, the outrage! On YouTube, you can watch the mayor's reaction. "Immature idiots!" he yells. "You all look too irresponsible to be bus drivers." Police detectives try to haul Hanley out of his seat. The drivers rise and walk out in protest. Giuliani can be heard yelling at their backs: "I know the kindergarten does a lot better than these morons."

With Giuliani's exit from the presidential race, we now bid farewell to such scenes. That scolding he longed to give to those other Romper Room pests over at the United Nations? Sadly, it's not to be. President Giuliani in the Rose Garden clucking over "really, really stupid questions" from the White House press corps? He is denied that joy as well.

Supporters like Gatto must now soldier on without him, and already the going has gotten tough.

For decades, the talk was that the Mafia had a hammerlock on the city's school-bus business. This seemed unlikely, however, since Giuliani, the veteran mob-buster, never cast a withering glance in the industry's direction. Fishmongers on Fulton Street? Yes, the place was rotten with gangland influence. The mayor promptly stamped it out. Ditto for the goons hauling private waste.

But those who conveyed the city's most precious cargo to and from school? If they were a problem, you never heard about it from Giuliani. Instead, Gatto, holding the largest school-bus contracts, was seen with all the right people. He hired the lobbying firm of Ray Harding, the mayor's political mentor, to help with a zoning matter. Problem solved. He sought Giuliani's support for the special express-bus contracts. Contracts signed and delivered.

Gatto's Atlantic Express company blossomed. Today, it earns more than $200 million shepherding city schoolkids around town. It has the city's only privately owned express bus lines. It transports the elderly and the disabled under other contracts. And that's just New York. The company shuttles kids to school in seven states, from California to New Jersey. It posted $428 million in revenues last year.

After Rudy Giuliani's rigorous vetting of mob-tied businesses here, could a company that still supped with the Mafia possibly achieve such success?

Amazingly, the answer seems to be . . . yes.

Last month in Manhattan federal court, prosecutors informed a judge that Gatto was one of several bus operators who for years had made secret payments—up to $50,000 a year— to the mob. The statements came during the guilty plea of Salvatore Battaglia, a Genovese crime-family figure and ex-leader of Local 1181 of the Amalgamated Transit Union, which represents most of the city's school-bus drivers.

Battaglia's local is separate and distinct from the MTA workers who gave Giuliani such a tough time back in 2001. In fact, as near as anyone could tell, Battaglia's union never had a major gripe with the Giuliani-era City Hall. The ex-mayor was never heard calling them "morons." Then again, they never loused up one of his town-hall meetings.

They were busy elsewhere: According to a federal investigation still underway, Battaglia and a handful of bus operators succeeded in carving up the city's school-bus industry like a fat turkey.

Prosecutors at Battaglia's session in front of Judge Andrew Peck last month were careful to couch Gatto's participation in this racket as that of an extortion victim. He had made the payoffs because "he feared for the personal safety of himself and his family," Assistant United States Attorney Benjamin Gruenstein told the court.

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