The Magician's Nephew
In the spring of 2003, Charles Gargano, who served as George Pataki's economic development czar, made a visit to the embattled operator of the marine container port that sprawls for 80 acres along the docks in Brooklyn's Red Hook. Much of the region's cocoa, coffee, and lumber is handled here, along with tens of thousands of huge shipping containers from around the world loaded with everything from beer to appliances. All told, an estimated $4.5 billion in goods move through the port every year, and some $36 million in wages are generated there. As Sal Catucci, president of American Stevedoring Inc., which operates the container terminal, recalls it, Gargano had phonedseemingly out of the blueto say he wanted to come by to see his operation.
Catucci was elated. He had been trying for years to get the Port Authority, where Gargano still serves as vice chairman, to agree to a long-term lease deal. Such a lease would let Catucci bring in additional shipping customers, expand his business, and add to the 600 workers already employed on the docks. That's what the local community board and politicians such as Congressman Jerrold Nadler and City Councilman David Yassky have been pushing to happen, arguing that Brooklyn's deepwater container port is a vital economic engine that cuts environmental woes by using waterborne cargo transport instead of air-fouling trucks.
In recent years, however, there's been little official interest in that plan. Under the Pataki administration, the bi-state Port Authority gave it the cold shoulder, saying it wanted to limit shipping to Staten Island's container port at Howland Hook on the narrow Arthur Kill waterway and the huge freight hubs on the New Jersey side of the harbor. Even stiffer opposition has come from the Bloomberg administration, which has been pressing to replace the gritty containers with cruise ships and a Sausalito-like waterfront offering glittering views of the Statue of Liberty and the towers of lower Manhattan.
The container port's current lease runs out at the end of March, and the Port Authority has moved to transfer the land to the city for what would be a "mixed-use development"likely to include market-rate housing. Those who want to see Brooklyn hold on to a marine freight terminal capable of handling ocean-going vessels are frantically trying to win the attention of the incoming Spitzer administration.
The dispute over its fate has become one of those basic "Which Way for New York?" debates, one that pits a handful of blue-collar job advocates against a seemingly invincible army marching under the flag of Condos With River View.
Which is why Gargano's sudden interest in the terminal back in 2003 was received as such good news. "When Charlie Gargano's call came in, I thought, 'Wow. They're finally paying attention. Now he's showing interest,' " Catucci recalled.
Indeed he was. Within a few weeks, a newly optimistic Sal Catucci had a new attorney under retainer: Charlie Gargano's nephew. And not long after that, the waterfront executive was finally getting the attention from state decision-makers that he'd long sought. But when those meetings produced little more than kind words, and when he was back again fighting just to stay in business, Catucci wondered exactly what had prompted that unexpected phone call. Whatever made him pick up the phone, Charles Gargano wasn't saying, refusing to respond to requests for comment. His nephew, Frank Gargano, also didn't want to talk about his involvement, acknowledging only that he had represented Catucci's company. Exactly how that came to pass is one more disturbing tale from New York's waterfront.
At 72, Charles Gargano still cuts a suave figure. He wears expensively tailored suits and French cuffs and prefers to be addressed as "ambassador" in deference to his service in the Reagan administration as envoy to Trinidad and Tobago. A successful Long Island construction contractor, he won his economic development post after serving as a key fundraiser for Pataki and his ally, former senator Alfonse D'Amato. The position has allowed him to hobnob with the glitterati, and he's appeared in five movies since taking office, including the Robert De Niro mob comedy Analyze That and, most recently, Oliver Stone's World Trade Center, in which he plays himself. The job takes him to ordinary places as well, and he arrived on the Red Hook docks that spring in a dark, chauffeured limousine with official plates and a radio antenna jutting from the trunk. Catucci greeted Gargano effusively, packed him into his "pier car," and proceeded to give him the full tour of his operations. But he said the ambassador didn't seem very interested.
"He didn't say much until we got back to my office," said Catucci. "Then he sat on the couch and asked some questions about what contractors we worked with, what lawyers we used." Sitting there, one of the things that struck Catucci was that while city and Port Authority bureaucrats had been burying him for months in extensive policy objections to the Red Hook port, the state's top economic development official didn't seem fazed by them. Instead, Gargano gave the impression that those were minor obstacles that could be overcome. The bigger problem, Catucci said the ambassador suggested, was the expense of the fight. "He said, 'You're fighting the city; you're fighting the state. This is going to cost you many hundreds of thousands of dollars for consultants and lawyers and all.' " Catucci said Gargano then added, "Maybe there's another way," and suggested that Catucci could cut his costs to "about $300,000" if he used the right approach. Shortly afterward, Gargano got back in his limo and drove away. Catucci watched him go, wondering what the hell that was all about.
Not that anyone would ever call Sal Catucci naive. He is 68, and like Gargano, keeps himself in trim shape. But while the ambassador exudes boardroom polish, Catucci is a scrappy, salty-talking businessman given to wearing black turtlenecks and a wide-brimmed black hat with a colored band that makes him look like an aging Zorro. After 40 years of making his living around the piers, he has fielded most everything that rough-and-tumble world throws at its denizens. The Red Hook terminal was virtually defunct when he took it over in the early 1990s, and he has turned it into a thriving port that handles more than 50,000 containers a year. Along the way, he acknowledges, disputes with the mob-ridden International Longshoremen's Association, which represents many of his workers, led to angry pushes and shoves.
Law enforcement officials have claimed that Sabato "Sal" Catucci owes his survival and success on the docks to his status as an associate of the Gambino crime family. Mob informants have also described him in familiar terms, and a business partner, also dubbed a mob ally, pled guilty to tax evasion in 2004. Given the mob's longtime hammerlock on the waterfront, such ties are hardly a stretch. But Catucci angrily denies them, citing his antagonistic relationship with the Mafia-friendly ILA, which has never gone to bat for him in his fight to remain in Red Hook. And authorities acknowledge that unlike many others who do business on the docks, Catucci has a clean record, and he hasn't personally shown up in their many surveillances of mob social clubs or wiretaps.
Whatever his associations, Catucci's name would instantly pop up on the radar of anyone checking big political campaign donors. Between 1995 and 2004, when he angrily stopped giving to anyone connected to then governor Pataki, Catucci and his businesses pumped more than $240,000 into the state's Conservative Party, making him the party's biggest single giver. The contributions started after party chairman Mike Long, arguing that the city needed more blue-collar jobs, began championing Catucci's efforts to win a long-term lease from the Port Authority. Catucci also was one of the largest givers to Pataki's push for a new environmental bond act in 1996, donating more than $50,000. In addition, he's doled out generous contributions to Nadler, Yassky, and other pols.
Given the overall heft of those campaign gifts, someone might reasonably conclude thatwaterfront wiseguy or nothere was a man who could well be a soft touch.
A few weeks after the ambassador's visit, Catucci got a call from another man named Gargano who introduced himself as "Charlie's nephew." Frank Gargano said he was an attorney who also ran a public relations office. "Maybe I can help you," Catucci remembers him saying.
Maybe he could, Catucci thought.
Frank Gargano, 36, soon appeared on the Red Hook waterfront in a sporty Mercedes-Benz coupe, ready for a tour of his own. He wore a wide grin and offered a steady salesman's patter about what he'd done and who he knew. He also brought along a pair of men he introduced as business associates, saying they could vouch for his talents and expertise. One was a Queens-based newspaper publisher from El Salvador named Rafael Flores who said he was trying to get the senior Gargano interested in Central American trade possibilities. The other was an aspiring Republican politician from Long Island named Robert Cornicelli. Catucci thought they made for an odd entourage, since the two business associates spent most of their time during the visit joking and laughing, so much so that Catucci later dubbed them "the two clowns." Still, the pair assured Catucci that the nephew was highly capable, that he had helped them, and, most important, could help deal with Charles Gargano.
"Frank's entire pitch was, 'I can handle my uncle,' " said Catucci.
Starting in June 2003, and over the next 10 months, Catucci's American Stevedoring Inc. paid the law offices of Frank Gargano in Melville, Long Island, an $8,500-a-month retainer. The work assignment was never clearly spelled out: The younger Gargano was asked to help with some minor legal mattersan arbitration, a default judgment from a creditorbut most of his efforts, Catucci said, went into trying to persuade his uncle and the Port Authority to extend American Stevedoring's lease.
No reports were filed that the nephew of the state's most powerful economic development official was seeking to influence his uncle's decisions. But then, no reports were required. The Port Authority, along with many of New York's quasi-public agencies over which Charles Gargano held sway throughout the Pataki administration, has long been a kind of free-fire zone for lobbyists with little disclosure. In a notorious instance that sparked reform efforts in Albany, former senator Alfonse D'Amato acknowledged a few years ago that he'd been paid $500,000 by a client just for making a call to Pataki's chief of the Metropolitan Transportation Authoritya fee that also didn't have to be disclosed.
New governor Eliot Spitzer has vowed to change all that, bringing oversight of the authorities into line with strict laws already covering the state's legislature where lobbyists are obligated to file regular disclosure reports. But at the time he signed on with American Stevedoring, Frank Gargano was free to come and go as he pleased among his uncle's agencies. And apparently he did.
"I remember seeing him coming in to see Charlie every now and again," said a former state aide who worked at one of Gargano's agencies. "No one knew exactly what he was doing, only that his uncle was helping him somehow."
According to Catucci and others with business interests on the Red Hook piers, Frank Gargano quickly arranged meetings with his uncle for Catucci and other waterfront businessmen. One meeting was at Charles Gargano's state office on Third Avenue, where the ambassador ruled the powerful Empire State Development Corporation, which oversees New York's economic development agenda, doling out funds and approving projects. There, the men from Red Hook laid out a plan for expanding freight work on the piers. "This is great, great. We're going to do this," one of the businessmen recalled Gargano saying.
The nephew also obtained sit-downs with another high-level Pataki appointee, Port Authority commissioner Bruce Blakeman, the former majority leader of the Nassau County legislature and the Republican Party's candidate for state controller in 1998.
According to Catucci and others who were at the meetings, Blakeman was sympathetic when he met in his Long Island office with Frank Gargano and Catucci. "Oh, this is ridiculous," Blakeman allegedly exclaimed after Gargano described the problems American Stevedoring was having with the port agency. "This can be worked out," the commissioner was said to have told them.
Catucci said he got a second chance to pre-sent his case to Blakeman when Frank Gargano arranged for the three men to meet for a drink at a fashionable bar on the West Side. This time, according to Catucci, Blakeman had just one question: "He asked, 'Is the ambassador happy?' "
Blakeman told the Voice that he didn't recall the specifics of the conversations, or a meeting at his Long Island office. "I really don't recall that one. I could check my records," he said. But he did remember sitting down with Catucci and Frank Garganowhom he knew from "Long Island politics"somewhere in Manhattan at one point.
"My recollection is that Frank Gargano said that he would like me to meet a fellow by the name of Catucci from American Stevedoring, that there were a number of jobs at stake, and he wanted to talk about continuing his lease with the Port Authority. That was pretty much it," said the commissioner. "He asked would I give him 10 minutes of my time, and I gave him 10 minutes of my time. It didn't change or affect my decision in any way."
Blakeman said it was the only occasion he could remember Frank Gargano having approached him about Port Authority business but that he'd never pressed the lawyer about his connection to the matter. Nor was he bothered that the vice chairman's nephew was reaching out to him. "Basically, I thought it was legitimate," he said.
The nephew also opened a political front in his lobbying efforts. Like his uncle, Frank Gargano actively raised campaign funds for the Republican presidential ticket of 2004 (the Bush campaign listed both men as "Pioneers"those who helped raise $100,000 or more in contributions). When the Bush-Cheney team held a fundraiser at the Sheraton New York Hotel on Seventh Avenue in June 2003, Catucci said that Frank Gargano persuaded him that it would be helpful to buy a pair of $2,000 tickets, saying his uncle would also be there. At the event, the younger Gargano showed up with his pals Flores and Cornicelli, Catucci said. When Frank brought them over to see his uncle, the ambassador greeted his nephew and his friends with hugs and kisses. Catucci got a warm handshake. The ambassador also made a point of noting the company Catucci was keeping. "He said to me, 'I see you are with my nephew here,' " Catucci said. "It was like he was telling me, 'Everything is going to be all right now.' "
There was a social front to the lobbying push as well. On several occasions, Frank Gargano brought Catucci along on trips to Upper East Side restaurants favored by his uncle. Catucci said he joined Frank Gargano at two upscale Italian bistros within a block of each other on First AvenueNino's and Campagnolawhere the ambassador regularly holds court amid a well-heeled crowd that includes real estate tycoons, entertainment figures, glamorous women, and more than a few bona fide mobsters. There, the pair sat at the economic development czar's tables, swapping stories as Catucci recalls. The specific subject of leases didn't come up, but Frank Gargano assured him later, Catucci said, that they were making headway.
If so, it was hard to see where. While Frank Gargano was allegedly pressing Catucci's cause, the Port Authority, together with the city's economic development office, paid $400,000 for a widely publicized private consultant's study on the future of the Red Hook docks. Although the study was never officially released, the consultant wasted no time letting the South Brooklyn community know he believed maritime freight on the 80 waterfront acres was a waste of space and resources.
Government officials also told shipping-line owners who used the piers that they'd be better off taking their business elsewhere since American Stevedoring's days were numbered. A backup plan to eventually shift the freight operations to another deepwater port in Sunset Park, a move that had originally been endorsed by the Giuliani administration, also failed to get traction with the Port Authority or Bloomberg's City Hall. During those months, Catucci estimated, his business fell by almost half.
According to Catucci, Frank Gargano's response to these setbacks was to ask for more money. He said the nephew urged Catucci and other businessmen on the docks to chip in together for a joint lobbying push that would include his public relations firm, Gargano Associates, as well. "He was going to be our lobbyist, attorney, public relations, everything rolled into one," said one of the port businessmen who heard the new pitch.
The fee that Frank Gargano said he would require for this enhanced effort, said Catucci, was $300,000. "I thought, 'Isn't that interesting. That's the same number his uncle came up with.' "
Others were already highly skeptical. A former waterfront business executive said he got "a terrible vibe" after dining with Catucci and Frank Gargano. "It was all, 'I can get Charlie to do this,' then hitting Sal on the arm. And 'We can work on Charlie for this.' It was one step short of being illegal. The guy was creepy. I told Sal to stay away from him."
Mike Long, the influential Conservative Party leader who had tried to help Catucci, also had a negative reaction when he learned that Charlie Gargano's nephew was representing American Stevedoring. "That clearly was a mistake," Long told the Voice, adding that Gargano's hiring sent "the wrong message."
But Catucci said that Frank Gargano insisted that the stevedoring company needed his services more than ever. The nephew called him several times a day, ostensibly updating him about events within the Port Authority. "He seemed to know what was going on there, knew what was going to be brought up at board meetings," said Catucci. "He would say, 'You stay away from Charlie. Let me handle everything.' Over and over, he'd tell me, 'Don't worry about it, it's being worked on.' "
Sal Catucci, however, started to believe he was being had. Despite Charles Gargano's friendly words to them, Catucci and the other businessmen from Red Hook saw no apparent effort on the ambassador's part to change the agency's position on ending the marine container terminal in Red Hook, or, for that matter, helping to launch a new port in Sunset Park. In fact, the word that got back to them from inside the giant agency was that when the subject came up internally of what to do about Red Hook, the elder Gargano was their biggest opponent.
Nor, Catucci maintained, was Frank Gargano much help as a lawyer. He failed to show up at one court hearing, Catucci said, and had also failed to submit court filings required for another minor legal chore the nephew had agreed to handle.
For a while, Catucci said he simply put off Frank Gargano's demands for a higher retainer. Then, in late 2003, he informed him that he would be dropping the $8,500 a month altogether early in 2004. The younger Gargano was irate, Catucci said. He left a 7:30 a.m. message with Catucci's office. "I don't know how my uncle is going to take this," he said in the message.
As it happened, Frank Gargano wouldn't have had much time for lobbying over the next year anyway. A few months after he was dropped by American Stevedoring, he declared his candidacy for a seat on Suffolk County's legislature, the body that decides most local spending. A win in that race would be a stepping-stone to higher office. He was considered a sure thing since he brought a well-known last name to the race, and Republicans had held the seat he soughtrepresenting Deer Park, Melville, and Dix Hillsfor more than 25 years. He also had four separate ballot lines to run on: GOP, Conservative, Independence, even the Working Families Party.
And he also had the support of many of his uncle's friends and business associates who donated generously to his campaign. Port Authority commissioner Bruce Blakeman gave $750 for the race. Michael Koffler, the successful private schools entrepreneur whose MetSchools received a $500,000 grant from the Empire State Development Corporation, gave $1,000. Pataki transit chief and real estate baron Peter Kalikow also gave $1,000. Steve Witkoff, whose properties include the landmarked Woolworth building, and who has also received aid from ESDC, kicked in $500. Steven Ross, CEO of Related Development, which won ESDC's backing to build the new $800 million Moynihan rail station, gave $500 as well.
Even a wealthy chiropractor who is a regular dining companion of the ambassador chipped in. Dr. Joseph Mirto, who helped persuade the Pataki administration to mandate insurance coverage for chiropractic services, gave $1,250 for the campaign.
But in the midst of the race, Newsday reported that Frank Gargano had received 18 months of free rent at his Melville office, courtesy of a local chamber of commercewhich was funded by grants from his uncle's agency (the misspending has since become the subject of a scorching audit by the state comptroller's office that demanded the agency repay more than $100,000 to the state). The candidate got more bad ink when he mailed out a pre-election flyer claiming several endorsements, including those of the Suffolk County district attorney and the head of the county's ethics commission, both of whom angrily denied making any such endorsements. On election day, Frank Gargano was defeated by his Democratic opponent by more than 10 percentage points.
The loss of the Republican seat helped put the Suffolk legislature in Democratic control for the first time in 30 years. "It was incredible," said a Suffolk political leader. "He should have won without a problem. And he lost to a guy with zero name recognition."
None of these events were things that Frank Gargano was anxious to discuss. He ducked a month's worth of detailed phone messages at his Melville office saying, through an assistant, that he was traveling. He finally picked up the phone in late January. "Can you tell me what this is all about?" he asked. So informed, he insisted he had nothing to sayabout the fallout from his ill-fated electoral campaign or about his work on behalf of American Stevedoring.
"They were recommended to me; I did legal work for them. That is the end of the story," he said before hanging up the phone.
There were hard times as well for Frank Gargano's friend, Rafael Flores, one of the "two clowns"as Catucci had dubbed themwho accompanied the nephew on his first visit to the Red Hook piers. He was arrested in November 2004, and later pled guilty to a felony for having helped run a ring of schemers who sold confiden tial medical records from a Nassau County hospital to lawyers. Flores couldn't be reached, but his pal, Robert Cornicelli, said, in a brief phone conversation, that he'd gone along with Gargano at Flores's request. "I was interested in that entire area," said Cornicelli. "I knew Bloomberg at the time wanted to turn the area into condos."
In late 2006, during the waning days of Pataki's administration, Charles Gargano received a new six-year reappointment as a Port Authority commissioner, a move that keeps him at the center of the agency's decision-making, even in a Spitzer administration. But after questions were relayed to him through Port Authority officials, Gargano refused to discuss his dealings with Catucci.
Spokesmen at the Port Authority said they were unaware that the nephew of the agency's vice chairman had represented clients seeking help there, but noted that there were no set rules against it. Still, with two new governors in New York and New Jerseyboth of whom have pledged ethics reformsthe agency is anxious to shed its image as a place where anything goes when it comes to influence-peddling. In response to the Voice's questions, the agency issued a statement from spokesman Steve Sigmund:
"The Port Authority demands the highest ethical standards, and we expect that anyone who represents the agency disclose any potential conflict of interest. We will continue to strengthen our policies going forward, including tightening disclosure requirements for commissioners and employees alike."
And although the agency hasn't officially altered its position on the future of the Red Hook container port, it has pointedly left the door open for further discussion.
"What's important to us is economic viability and growth of the waterfront," said spokesman Sigmund. "We are taking a close look at the issue before the lease runs out."
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