Atlantic City

HEREIU Local 54, which is located in the Atlantic City, New Jersey area, came to prominence in 1978 after the opening of Atlantic City casinos and the concomitant rise in the demand for waitresses, waiters, and bartenders. With the increase in potential union members came a struggle for control between factions of the Philadelphia family of La Cosa Nostra. Department of Labor Special Agent Ron Chance testified before the Commission about Local 54 and its influence in Atlantic City:

Local 54, in Atlantic City, is a classic case study in organized crime and labor racketeering. Several of the officers of this union and its predecessor unions boast convictions for murder, arson, extortion, drugs, bribes, kickbacks and racketeering. Next to the ownership of the casino itself, the control of Local 54 is the most important prize in the Atlantic City sweepstakes. . . . In 1978, when the casinos opened, Local 54 began to rise in stature and importance. Prior to the casino gambling, they only had about 2,500 members and most of them were employed in seasonal jobs in the hotel and restaurant industry in the seashore. The opening of each casino, though, brought between 1,500 and 2,000 new members into the local, and they now have about 15,000 members.l4

Indeed, the stakes were high for this "most important prize." Membership increases contributed so substantially to total dues collection that the local's annual income swelled from $269,000 in 1979 to $1,389,000 in 1982, and permitted the local to contribute more than $15 million a year to the international's Health and Welfare Fund.

On December 15, 1980, John McCullough, the president of Philadelphia Roofers Union Local 30, was shot to death at his home by Willard E. Moran, allegedly due to his attempts to organize the Bartenders in Atlantic City away from HEREIU Local 54.15 After his conviction, Moran decided to cooperate with prosecutors and testified that he was recruited, employed, and trained to kill McCullough, an associate of Philadelphia LCN boss Angelo Bruno by former HEREIU Local 54 vice-president Albert Diadone and Raymond "Long John" Martorano, an associate of Atlantic City LCN boss Nicodemo Scarfo. Moran testified that these two actually escorted him to McCullough's home and drove him home after the murder. Both Diadone and Martorano have been convicted and sentenced to life imprisonment.

In 1979 Frank Gerace was appointed president of Local 54 after the previous president, Ralph Natale (another Bruno associate) was convicted and sentenced to 30 years' imprisonment for a variety of offenses, including narcotics trafficking.

Local 54, under the presidency of Frank Gerace, has been the focus of several investigations by law enforcement agencies, as well as the U.S. Congress. Gerace has been named in Senate testimony as a significant criminal associate of the Scarfo crime family. The investigations have focused on Local 54's benefit funds, mob ties, and corruption of public officials. In 1980 the New Jersey Commission of Investigation reported that Larry Smith, head of Rittenhouse Consulting Enterprises, Inc. in Cherry Hill, New Jersey, profited handsomely from Rittenhouse's consulting work to arrange dental care services for HEREIU Local 33. Ultimately, HEREIU Local 33 was absorbed into Local 54 of Atlantic City. In tracing Rittenhouse's and Local 54's disbursements, New Jersey commission investigators determined that $153,000 in cash from the Local's fund could not be accounted for.

After a three-year inquiry, the Senate Permanent Subcommittee on Investigations said that Smith had controlled Local 54's dental plan almost since its inception, for the benefit of Philadelphia organized crime interests, and that the nature of "consulting" services rendered by Rittenhouse for substantial fees could not be determined.16 Subsequently Larry Smith was one of 41 individuals or entities named in a Department of Labor civil suit. It charges that past and present Local 54 trustees and the corporations formed to administer the $1.2 million dental plan violated the Employee Retirement Income Security Act (ERISA) by failing to solicit bids for a dental plan contract in 1980.17 Neither Local 54 itself nor its current officers are named in the suit, which asks that the defendants pay all losses resulting from their alleged actions and that new arrangements be made to provide Local 54 employees with dental care.

Local 54 and Corruption of Public Officials
Frank Lentino, a former business agent for Local 54, recently pled guilty to one count of Hobbs Act conspiracy and one count of obstruction of justice. During that investigation Lentino bragged that he controlled labor for Nicodemo Scarfo, the current head of the LCN faction in Atlantic City and Philadelphia. Lentino also claimed that Local 54 officials helped the Scarfo group exercise a corrupt influence over former Atlantic City Mayor Michael Matthews. Before his election as mayor of Atlantic City, Matthews solicited an illegal campaign contribution of $125,000 cash from Local 54's Frank Gerace, Albert Diadone, and Frank Lentino. Matthews received the cash in several installments with at least one payment being picked up at the union hall. Matthews was ultimately convicted of receiving bribes from a federal undercover agent.

When he was questioned about the $125,000 cash contribution, Matthews admitted that he approached the Local 54 officers to obtain money from the Scarfo La Cosa Nostra group. In return Matthews agreed to assist the Scarfo family obtain a tract of land partially owned by the city, where the Scarfo's group would build a casino. Lentino described the meetings and the purchasing of the election in conversations intercepted by the FBI and DEA. Lentino stated:

[[W]e had Mike Matthews in here, the last time I ate here with Gerace and Al Daidone . . . He [Matthews] had his eyes on that uh, mayor's, mayor's job
...

If he wins it uh, you get favors. Some guys put up a lot of money. . .[a] hundred and twenty five [thousand]... That's a lot of money for an election down here. 18