School Drivers' Union President Linked to Mob; Feds Allege Battaglia Extorted Bus Cos., Medical Provider

By RICHARD STEIER

The organized crime-dominated union representing school bus drivers was placed in trusteeship by its international union Nov. 21 after its president was indicted on extortion and labor racketeering charges and accused of being an associate of the Genovese Crime Family.

SIMON JEAN-BAPTISTE: Union embarrassed.

The broadened indictment of Salvatore Battaglia - he had been charged 17 months earlier with obstruction of justice by Federal prosecutors - was handed up a few months after the union's other two top officers pleaded guilty to charges related to the racketeering case against Local 1181 of the Amalgamated Transit Union.

Cohort Cooperating?

One of those officials, longtime Secretary-Treasurer Julius "Spike" Bernstein, had his plea agreement sealed and is reportedly cooperating with prosecutors. He has been identified by Federal investigators as the conduit between Local 1181 and the Genovese family through his friendship with one of its bosses, Matthew "Matty the Horse" Ianniello.

The shadow over the union became particularly large when Mr. Ianniello, as part of his own plea agreement Sept. 14, admitted that he "assisted persons connected to Local 1181 of the Amalgamated Transit Union to receive illegal payments from the owners of certain school bus companies whose employees Local 1181 either represented, sought to represent or would admit to membership."

EDDIE KAY: What took so long?

Dissidents within Local 1181 have claimed that in addition to that extortion scheme and another one in which Mr. Battaglia and others were accused of shaking down a medical provider for payoffs to allow it to retain the union's business, the local's pension and strike funds have been looted. Prosecutors have not made any allegations of such improprieties, however.

Companies Tap Monitor

But on the day after the new indictment of Mr. Battaglia, the attorney representing a coalition of school bus companies said the employer trustees of the Local 1181 pension and welfare funds had retained an outside monitor "to oversee auditing of all financial records and ensure that reforms are implemented in an effective and timely manner."

LARRY HANLEY: High crimes against labor.

The monitor, Bart M. Schwartz, is a former Federal prosecutor who was Chief of the Criminal Division of the U.S. Attorney's Office in Manhattan when it was headed by Rudy Giuliani.

The International ATU, which had been criticized by the Local 1181 dissidents for not acting earlier, said it was imposing the trusteeship because as one condition of his being granted bail, Mr. Battaglia was required to take a leave from his job as president. Mr. Bernstein stepped down under similar circumstances prior to his guilty plea after he was indicted for a second time in June.

With Mr. Battaglia removed, at least temporarily, from office, International ATU President Warren George said in a statement, "I have determined that the local union must be trusteed in order to assure that the members of Local 1181 continue to be provided with the best possible representation."

He appointed as co-trustees International Vice Presidents Tommy Mullins, who is from Virginia, and Bob Baker, a Cincinnati ATU local official who is a confidant of Mr. George's.

One leader of the dissident group known as Members for Change, Simon Jean-Baptiste, said of the trusteeship, "We do not have a problem with that. But they were not willing to do that until they couldn't cover up any more."

Eddie Kay, a veteran union organizer who has been assisting the dissidents, was even harsher in his assessment of the International's leadership.

'Let Union Be Fleeced'

"These guys waited a year and a half as the union continued to be fleeced and disgraced and Battaglia signed a contract clause that could take away medical benefits and hid it from members," he said.

He was referring to part of the wage agreement reached in July between Local 1181 and the bus company owners under which, if health-benefit usage exceeds a certain level, union members will either have to pay more for health coverage or see the benefits reduced. Mr. Battaglia concealed that detail at a contract ratification meeting by telling those in attendance that there were no increases in employee deductibles "as of this day."

Mr. Kay also noted that the third Local 1181 official implicated, Ann Chiarovano, has continued "handling the pension monies" despite her own guilty plea this summer to obstruction of justice.

Prior to the trusteeship being imposed, the International ATU's general counsel, Leo Wetzel, had told the New York Times that it could not remove Ms. Chiarovano from her job as director of the pension and welfare funds because she was not an officer of the local. The trusteeship carries with it sweeping powers, but at presstime it was not known whether Ms. Chiarovano, who is Mr. Bernstein's girlfriend, had been removed.

Calls to Mr. Wetzel and to Mr. Battaglia's criminal defense lawyer, David Lewis, were not returned.

Multiple Shakedowns

The indictment charged Mr. Battaglia, whom it identified by the nickname "Hot Dogs," with a conspiracy in which he and others "collected money from owners of bus companies that contract with the New York City Department of Education in exchange for, among other things, agreeing to not organize those companies' bus drivers as members of Local 1181."

It also accused him of "conspiring to obtain money and property from ... the owners of a medical center located in Jamaica, New York, which consent would have been and was induced by the wrongful use of actual and threatened force, violence, and fear ..."

He was further charged with having "demanded and received per capita cash payments from the owners and operators of the medical center in exchange for Local 1181's agreement to increase per capita reimbursements for services provided to union members by the medical center and for Local 1181's agreement to make prompt payment for those services."

The indictment also accused Mr. Battaglia and his co-conspirators of having "received money from various individuals who provided services for Local 1181 ... in exchange for those individuals receiving contracts to provide those services." It also repeats the charge made in the first indictment against him in June 2005 that he "attempted to and did obstruct, influence, and impede an investigation of a federal grand jury in the Southern District of New York by, among other things, providing false, misleading, and incorrect information regarding the involvement of the Genovese Organized Crime Family in the affairs of Local 1181."

Mr. Jean-Baptiste called Mr. Battaglia's indictment on such serious charges "a vindication of what we believed from the start. It's also an embarrassment. Especially with the non-union stuff where the leaders who were supposed to represent us were taking money from companies not to organize people who are doing exactly the same job that I'm doing."

'Shocking and Serious'

That view was shared by Larry Hanley, a former president of ATU Local 726 in Staten Island who is an International ATU vice president. Calling the latest charges against Mr. Battaglia "shocking," he noted that if they were proven, it would mean that "the president of that union was taking bribes to suppress wages and to suppress union organizing. And, [that] they were also skimming money from the members' health-benefit fund.

"I can't," Mr. Hanley concluded, "think of a higher crime against the labor movement."