In Racketeering Case

Bus Union Officer Takes Guilty Plea

By RICHARD STEIER

An officer of the union representing school bus drivers has pleaded guilty to obstruction of justice charges in a racketeering case in which the organization's three top officials were accused of allowing its operations to be controlled by the Genovese Crime Family.

EDDIE KAY: Dissidents press their case.

Ann Chiarovano, who had been the recording secretary of Amalgamated Transit Union Local 1181, pleaded guilty Aug. 11 to having attempted to conceal the takeover of the local by organized crime, according to a spokeswoman for the U.S. Attorney's Office in Manhattan. The spokeswoman declined to discuss whether an agreement had been reached on the sentence she would receive or whether Ms. Chiarovano would be a witness in the upcoming trials.

Allege 30-Year Reign

The primary defendant in the case is Matthew "Matty the Horse" Ianniello, the boss of the Genovese family. The Federal Government has charged that he has exerted control over Local 1181 and its benefit funds dating back to the 1970s through a union associate, Julius "Spike" Bernstein.

Mr. Bernstein, who is Ms. Chiarovano's boyfriend, was Local 1181's longtime secretary-treasurer until he was forced to take a leave of absence earlier this summer as a condition for bail in a second case alleging that he extorted hundreds of thousands of dollars from a bus company owner since the early 1980s to ensure that there was no attempt to unionize his drivers.

The president of Local 1181, Salvatore Battaglia, is also under indictment on obstruction of justice charges in the racketeering case, but he has been granted a separate trial from his co-defendants, most of whom have been identified by Federal investigators as Genovese family members and associates.

The U.S. Attorney's spokeswoman said that while the trial involving Mr. Ianniello and the other co-defendants would begin Sept. 5, the trial for Mr. Battaglia is scheduled to start Oct. 16.

Separate Trial for Spike?

Eddie Kay, a veteran union organizer who is working with a dissident group at Local 1181 to challenge its leadership as corrupt, said it was his understanding that Mr. Bernstein had also been granted a separate trial under the initial racketeering indictment. This could not be confirmed with the U.S. Attorney's Office by presstime.

Mr. Kay said that a half-dozen other defendants, including at least one member of the Genovese family, have also entered guilty pleas.

The union dissidents have claimed that in addition to the local being under the thumb of organized crime, its leadership has failed to present a proper financial accounting, and there is concern that money is missing from both the Local 1181 pension plan and its welfare fund. Local 1181 spokesman Steve Mangione, who did not return calls last week, previously insisted that there were no financial irregularities affecting the funds and that all 15,000 union members were receiving the appropriate benefits.

Contract Subterfuge

In mid-July, at a meeting to ratify a new wage contract, Mr. Battaglia told those in attendance that there would be an increase in their pension benefits next March. He did not allow the dissidents to make statements regarding the contract prior to the vote, however, and it was subsequently learned that, contrary to his claim that the pact featured no givebacks, one clause of the agreement puts a cap on management's health-care obligations. If union members exceed the cap, either benefits would have to be reduced or member co-pays increased.

Mr. Kay said that on Oct. 10, the dissidents will go to the ATU convention in Florida to make a final appeal to the international union's executive board to overturn the results of last year's officers election, based on alleged irregularities in the voting.