Nailing the Mob's Builders

A contractor tells a billion-dollar industry's dirty secrets

The story of just how deeply embedded the Mafia remains in the city's construction industry spilled out last week in a Manhattan courtroom.

The most detailed account was delivered by an immigrant builder who, with mob backing, enjoyed a soaring success before crashing to earth.

James Murray, 45, spoke in a low voice, his black-haired head hanging down. "Move closer to the microphone, please," repeatedly urged Lisa Zornberg, the federal prosecutor pulling the tale out of him.

Morgan Schweitzer

His tale went like this: Jim Murray came here 20 years ago from Ireland. "I was looking for work. I had an argument with my father, and I came to the States."

He had dropped out of school at the age of 13. He confessed to "a little difficulty reading." If so, it didn't prove much of a handicap.

He started as a carpenter, banging nails on any jobs he could get. Next came his own business renovating homes. A fellow countryman wise in the ways of New York's construction trades helped him start a bigger firm, pointing Murray in the right direction. Part of the advice was to become a union contractor. He signed up with the New York City District Council of Carpenters, pledging to build his projects with union labor. This was "to get the bigger jobs," he said. "You can't work unless you're union."

He called his company "On Par Contracting," and he soon had 700 workers on his payroll. They built the city's largest jobs, including the soaring Times Square Tower, Wall Street high-rises, hospital and university projects. "We were everywhere," he said. "We were all over the city, all over the tri-state area." Was this profitable, asked Zornberg? "Very profitable."

The profits were enhanced, he admitted, by ignoring the union agreements he'd signed. Instead, he recruited other young Irishmen just off the boat, most of them here illegally. Instead of the wages and benefits package of some $75 an hour demanded by the contract, he paid his crews $25 to $40. "We didn't pay the benefits," he said. "We paid the guys in cash."

The cheating gave him a winning edge. "You could be the low bidder," he said. Construction expenses, he said, run roughly "one-third materials, two-thirds labor." It was "a big cost savings."

He also bribed every union official he could. Shop stewards were paid "for leaving men off the sheets." Business agents were paid not to come snooping. Top union leaders were paid to keep everyone in line.

More than $100,000 went to District Council chief Michael Forde. "He would help me get the shop stewards," explained Murray. John Greaney, president of Local 608, the city's largest union local, got cash and tickets to the Super Bowl. A business agent, George DiLacio, got a new roof on his house, said Murray. "He put his horses on my farm in Millbrook," the contractor said, referring to the 200-acre estate, complete with pond and creek, he bought himself in Dutchess County.

All of this took place under the approving eyes of the Genovese crime family, which has long considered the city's building trades its exclusive franchise. In Murray's case, his guardian angel was the mob's most recent liaison to the construction business, a man with thinning hair and glasses from the Bronx named Joseph "Rudy" Olivieri. Olivieri's day job was head of the Association of Wall-Ceiling and Carpentry Industries of New York, a combine of the city's largest contractors. His post made him the top management trustee on the council's multi-billion-dollar benefit funds.

The two looked after each other: Murray did favors for Olivieri, including loaning him hundreds of thousands of dollars, and paying him more than $1 million as a subcontractor on a pair of apartment houses in Riverdale that the builder was secretly erecting with nonunion labor.

For his part, Olivieri ran vital interference when a pesky court-appointed investigator of the union named Walter Mack started questioning Murray's phenomenal success. In March 2005, Mack subpoenaed Murray to testify. "What was your reaction to receiving the subpoena?" Murray was asked. " 'Oh, shit,' " he responded.

Rather than answer questions, the builder took the Fifth. Mack, a tough former prosecutor and police-corruption prober, said in that case he would demand that On Par be shut down immediately. "I called Joe Olivieri right away," said Murray. "He said, 'Give me a couple minutes." With Forde's help, a rescue plan, consisting of a down payment toward skipped benefit fund contributions, was cobbled together. The contractor kept working. "Did you continue to cheat?" Zornberg asked him. "Yes," he said.

This type of mob insurance policy is nothing new in the industry. Preceding Murray to the stand was a 53-year-old man named Arthur Johansen. He told how he had been surprised to learn after marrying the daughter of a powerful drywall contractor in 1980 that his new father-in-law also had a secret partner: the Genovese crime family.

The company was called Nastasi-White, and back then it was the city's biggest carpentry contractor, with 1,600 employees. The Queens-based firm built hundreds of projects, including the walls inside the World Trade Center. It was also active in politics, pumping more than $100,000 into former U.S. Senator Al D'Amato's campaigns, steadily denying rumors of mob ties as it did so.

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