Source: http://fstubb.startlogic.com/scalcrimes.html
Timestamp: 2014-04-18 23:15:23
Document Index: 678637712

Matched Legal Cases: ['in fine', 'in fine', 'art 29', '§ 371', 'art 26', 'art 29']

Scalamandre History of Crimes Against Honest Competitors
The Vanderbilt Group LLC
Vanderbilt Defamed
Tom Murphy - Subpoenaed
DASNY Officials Subpoenaed
DASNY Misconduct and Violations
Scalamandre Crimes
Dematteis Tied to Mob
DASNY in NEWSDAY
DASNY's Failed Court House
DASNY INDICTED
Complaint to NYS Insurance Dept.
Complaint to Dept of Investigation
Letter to Authorities & Commissions
2004, Letter to New York State Controller
Letter to NY Comptroller
Letter to Calvin Butts
Vanderbilt's Opposition Motion
Complete Business Reviews
Frank Joseph Associates
CIS Home Inventory Services
Find Out Info About Anyone
The following information on the criminal activety
of Joseph and Fred Scalamandre was well documentated BEFORE, DURING and AFTER the
Old Westbury Dormitory Project.Is There any doubt as to the MOTIVES of Thomas Murphy,
Douglas VanVleck, Jim Gray, Claudia Hutton and Daljeet Sandu?Their actions can be summed up in two words
- GREED and POWER. Department of InvestigationPress Release U.S. Department of JusticeUnited States Attorney Eastern District of New York One Pierrepont Plaza Brooklyn, New York 11201Mailing
Address:147 Pierrepont StreetBrooklyn, New York 11201 November14, 2001 FOR IMMEDIATE RELEASEContacts: Peggy LongUnited States Attorney's Office (718) 254-6267 Joseph ValiquetteFederal Bureau of Investigation(212) 384-2715
Kevin McKeon Internal Revenue Service (212) 719-6762 Peter NashPostal Inspections Service(212) 330-3844 David Barnes U.S. Department of Transportation/OIG(202) 366-6312Patrick ClarkN.Y.C. Department of
Investigation(212) 825-5931 NEW YORK CONSTRUCTION CONTRACTORS PLEAD GUILTY TO MOB PAYOFFS AND FRAUD SCHEMES TOTALING 40 MILLION
DOLLARSALAN VINEGRAD, United States Attorney for the Eastern District of New York; PAUL L. MACHALEK,
Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York; KENNETH M. MEAD,
Inspector General, U.S. Department of Transportation, Office of Inspector General; GORDON HEDDELL,
Inspector General, U.S. Department of Labor; BARRY W. MAWN, Assistant Director-in-Charge,
Federal Bureau of Investigation, New York; JAY SKIDMORE, Inspector-in-Charge, Postal Inspection Service,
New York; and EDWARD J. KURIANSKY, Commissioner, New York City Department of Investigation, announced today that GUISSEPPE SCALAMANDRE, also known as "Joseph Scalamandre,"
and his brother, FORTUNATO SCALAMANDRE, also known as "Fred Scalamandre," the principals of several major construction
companies on Long Island, including Sea Crest Construction Corp., Peter Scalamandre & Sons, Inc., and Scalco Construction
Corp., pleaded guilty to conspiring to defraud the Internal Revenue Service and conspiring to make payoffs to the Luchese
organized crime family and to officers of various construction trade unions in the New York metropolitan area. The guilty plea proceedings were held today before
United States District Judge Jacob Mishler at the U. S. Courthouse in Central Islip, New York. The
SCALAMANDRES entered guilty pleas to an information charging them each with two counts of conspiracy, in violation of Title
18, United States Code, Section 371. Count One charges the SCALAMANDRES with developing and participating in a tax
fraud scheme between January 1992 and October 1998 in which they issued nearly $1,000,000 in corporate checks to their subcontractors
in payment of fraudulent invoices generated by the subcontractors at the SCALAMANDRES' direction. The subcontractors
converted the corporate checks to cash and then returned the cash to the SCALAMANDRES. The fraudulent invoices, in turn, were
charged by the SCALAMANDRES to public and private contracts, including a federally-funded MTA subway rehabilitation project
on the Brighton Beach Line, in Brooklyn, New York; a construction project at One Penn Plaza, in Manhattan; a federally-funded
roadway improvement project on the Meadowbrook Parkway, on Long Island; a federally-funded Long Island Rail Road project at
the Ronkonkoma Station, on Long Island; and a roadway improvement project on the Long Island Expressway and the Seaford Oyster
Bay Expressway. In pleading guilty today, the SCALAMANDRES admitted that they concealed these funds from the IRS and did not
pay taxes on the funds. In Count Two, the SCALAMANDRES
were charged with conspiring between January 1991 and October 1998 to pay members of the Luchese organized crime family, including
the former acting boss, Alphonse D'Arco, and former underboss, Anthony "Gaspipe" Casso, approximately $40,000
a year from 1991 through 1998, in order to influence the construction trade unions in the New York metropolitan area. Specifically, they are charged with agreeing to pay
officers and employees of Laborers International Union of North America Local 66; Blasters, Miners and Drill Runners Union
Local 29; and Bricklayers Union Local 1 to avoid contributing to union benefit funds and paying union dues on behalf of their
employees, and to unlawfully influence the union officers and employees in other union-related matters affecting their companies.
In pleading guilty today, the SCALAMANDRES admitted the allegations contained in Count Two of the information. The
SCALAMANDRES each face a maximum sentence of ten years imprisonment, three years supervised release, $500,000 in fines, restitution
and the payment of individual and corporate back taxes for the years 1991 through 1998. The defendants must also forfeit to
the government $5,000,000, representing proceeds of their criminal conspiracy to pay-off union officials and members of the
Luchese organized crime family. In addition, as part of their plea agreement with the government, the SCALAMANDRES consented
to a court-appointed monitor to supervise their construction-related companies for the next five years. The monitor will oversee
the daily activities of their companies and ensure that the SCALAMANDRES no longer associate with members or associates of
organized crime. The SCALAMANDRES are scheduled to be sentenced by Judge Mishler on January
18, 2002.In a related development, Mr. VINEGRAD, Special Agent-in-Charge MACHALEK,
Inspector General MEAD, Inspector General HEDDELL, Assistant Director-in-Charge MAWN,
Inspector-in-Charge SKIDMORE, and Commissioner KURIANSKY also announced today the unsealing
of guilty pleas previously entered by MOHAWK INDUSTRIES (on May 24, 2000), and its principal, FRANCIS JUSTIN BUSCHER (on October
5, 2001), and V.V.S.S. COMPANY, INC., and its principal, VIJAY HAVALDAR (both on October 11, 2001). MOHAWK and V.V.S.S. are
minority-owned business enterprises ("MBEs") that the SCALAMANDRES listed as their subcontractors on several public
contracts governed by the Minority Business Enterprise Program ("NY-MBE Program") administered by the State and
City of New York. As a participant in the NY-MBE Program, general contractors, including the SCALAMANDRES, are required to
subcontract a specified percentage of their work to MBEs. The MBEs, in turn, are responsible for directly performing a portion
of the contract, including managing and supervising the work involved, and furnishing all required labor, tools, equipment,
materials and supplies. As part of their guilty pleas before United States District Judge Joanna
Seybert, MOHAWK, BUSCHER, V.V.S.S. and HAVALDAR admitted that they acted as "fronts" for the SCALAMANDRES and other
general contractors in order to qualify for NY-MBE Program public works construction projects, and, in return, received "fees"
from the general contractors of approximately 5 percent of the value of the subcontract. Specifically, BUSCHER and HAVALDAR
admitted that their respective companies served only as a payroll and invoice processing service for the general contractors;
that they prepared and routinely submitted false certified payrolls and other
documents to public contracting agencies, including the New York State Department of Transportation, the New York City Department
of Design and Construction, the New York City Department of Environmental Protection, the New York City Department of Transportation,
the New York State Metropolitan Transportation Authority, and the Port Authority of New York & New Jersey; that they falsified the books, records and tax returns
of their respective companies and submitted false documentation to various unions and union benefit funds to conceal the fact
that the work attributed to their MBEs was actually performed by the general contractors; and that they fraudulently processed
approximately 60 MBE subcontracts valued at over $40 million to give the appearance that the MBEs had actually performed work.
Approximately 18 of the fraudulent subcontracts, which totaled $20 million, were processed for the SCALAMANDRES'
companies. As part of the SCALAMANDRES' plea agreements with the government, the court-appointed monitor will supervise
their implementation of a program to ensure strict compliance by the SCALAMANDRES' companies with all government-regulated
MBE programs. When sentenced on their pleas of guilty to conspiring to defraud the
United States, in violation of Title 18, United States Code, Section 371, BUSCHER and HAVALDAR each face a maximum sentence
of five years in prison, three years supervised release, $250,000 in fines, restitution, and the payment of back taxes (BUSCHER
for the years 1991 through 1999, and HAVALDAR for the years 1993 through 2000). When sentenced on their guilty pleas to money
laundering, in violation of Title 18, United States Code, Section 1956, MOHAWK INDUSTRIES and V.V.S.S. COMPANY each face a
maximum sentence of five years probation and a fine of up to twice the value of the fraudulent contracts. As part of their
plea agreements with the government, V.V.S.S. has agreed to forfeit approximately $21,000,000, and MOHAWK has agreed to forfeit
approximately $2,000,000. In announcing the guilty pleas, United States Attorney VINEGRAD stated: "This case represents law enforcement's
continuing commitment to investigate and prosecute corrupt businessmen who avail themselves of myriad criminal methods to
advance their own competitive aims. The SCALAMANDRES defrauded government
agencies, evaded taxes, paid off organized crime leaders for 'labor peace' and perverted a worthy minority-business
program, all for their own selfish ends. By using both the mob and MBE's to line their pockets, the SCALAMANDRES caused
enormous harm to honest competitors in the construction industry, hardworking
members of industry trade unions, and legitimate minority-owned businesses
seeking to provide their skills and services on public projects in our community." Mr. VINEGRAD emphasized
that the investigation is continuing. Special Agent-In-Charge MACHALEK
stated: "This prosecution is a result of successful team work and cooperation by all the agencies involved. The IRS is
committed to these complex financial investigations that benefit from Criminal Investigation's expertise in forensic accounting,
which facilitates the identification and seizure of the proceeds of illegal activity." Inspector
General MEAD stated: "This investigation, which has revealed the systemic use of minority-owned businesses
as 'fronts' by general contractors in the New York metropolitan area and uncovered one of the largest MBE frauds in
the United States, should stand as a warning that general contractors and MBEs that participate in such conduct will find
themselves vigorously prosecuted." Inspector General HEDDELL stated:
"This investigation is a fine example of the U.S. Department of Labor, Office of Labor Racketeering's commitment
to detect and combat the ongoing control of unions, union benefit funds, and construction contractors by organized crime and
other labor racketeers in the New York metropolitan area." Assistant Director-in-Charge
MAWN stated: "The FBI is committed to maintaining the pressure on organized crime families' attempts to
control the construction industry in New York. Construction companies that find it easier to associate with organized crime,
rather than operate honestly, will find that illegal conduct will be uncovered and prosecuted." Inspector-in-Charge
SKIDMORE stated: "Postal Inspectors remain committed
to keeping the nation's mail system free from criminal misuse. This prosecution should send a
clear message that the Postal Inspection Service and other law enforcement agencies, working
together, will continue to bring associates of organized crime to justice." Commissioner KURIANSKY stated: "This remarkable joint effort has uncovered a MASSIVE fraud on City and Federal contracts that required the use of Minority Business Enterprise companies. For over a decade, these unscrupulous
contractors and their sham MBEs not only deprived legitimate minority firms of many lucrative public works subcontracts, they
also duped numerous City agencies - including DOT, DDC and DEP - into paying tens of millions of dollars to these 'fronts'
for concrete, sidewalk and structural steel work on a host of important street and bridge reconstruction projects in neighborhoods
such as Bayside, Woodside, and Staten Island and at the Owl's Head Water Treatment Plant in Brooklyn. DOI and its law
enforcement partners will continue to aggressively root out this and other insidious scams on government contracts."The
guilty pleas announced today are the result of a joint investigation conducted by the Federal Construction Fraud Task Force(1) organized by the United States Attorney's Office in June 1999 to investigate corruption
and organized crime influence in federally-funded construction projects. These cases were prosecuted by Assistant United States
Attorneys Burton T. Ryan, Jr., and Charles P. Kelly. 1. The members of the Task Force are
the United States Attorney's Office (EDNY), the IRS, the U.S. Department of Transportation, the U.S. Department of Labor,
the FBI, the Postal Inspection Service, and the New York City Department of Investigation. U.S. Departmentof TransportationFederal HighwayAdministrationNotice Subject DEBARMENT FROM FEDERAL NONPROCUREMENT PROGRAMS Classification Code Date OPIN 2000.500June 7, 2002 HCC-30 1. What is the purpose of this Notice? On April 12, 2002, the Federal Highway
Administration (FHWA) issued FHWA Notice N2000.497 suspending and proposing to debar the individuals and companies named and cited in this paragraph
below. This notice cancels FHWA Notice N2000.497 and serves to advise that the FHWA has made decisions concerning their proposed debarments as
stated in paragraphs 2a.a. On April 12, 2002, the Federal Highway Administration (FHWA) issued FHWA Notice N2000.497 suspending
and proposing to debar the individuals and companies named and cited in this paragraph below. This notice cancels FHWA Notice
N2000.497 and serves to advise that the FHWA has made decisions concerning their proposed debarments as stated in paragraphs
2a. Peter Scalamandre & Sons, Inc.157 Albany Ave.Freeport, New York 11520Sea Crest
Construction Corp.157 Albany Ave.Freeport, New York
11520Scalco Construction Corp.157 Albany Ave.Freeport, New York 11520Fortunato "Fred" Scalamandre 157 Albany Ave.Freeport, New York 11520 Guisseppe "Joe" Scalamandre157 Albany Ave.Freeport, New York 115202. What actions have
been taken?a. The FHWA has decided to debar the following companies and
individuals for a period of three (3) years: Peter Scalamandre & Sons, Inc. 157 Albany Ave.Freeport, New York 11520Sea Crest Construction Corp.157
Albany Ave.Freeport, New York 11520 Scalco Construction Corp.157 Albany Ave.Freeport, New York 11520 Fortunato "Fred" Scalamandre157
Albany Ave.Freeport, New York 11520 Guisseppe "Joe" Scalamandre157
Albany Ave.Freeport, New York 11520DEBARMENT
EXPIRES: April 12, 2005b. The individuals and companies cited above have been notified in writing of these decisions.
Upon the signature of this Notice by the debarring official, the suspensions of all the individuals and companies cited in
paragraph 1a shall be terminated, and the debarments of the individuals and companies cited in paragraph 2a shall become effective.
3. What is the scope of these actions?a. The individuals and companies cited in paragraph 2a are prohibited from
being a participant or principal in any primary or lower tier covered transaction, as defined in 49 CFR, Sections 29.105 and
29.110. Generally, these two individuals and company are prohibited from submitting a proposal or entering, or participating
as an officer, director, owner, partner, key employee, or other person with primary management or supervisor responsibilities,
or one who has critical influence on or substantive control over a covered transaction, whether employed by a person who submits
a proposal for, or enters into a covered transaction, including any procurement and nonprocurement transaction between an
agency and a person. The debarments shall be effective throughout the Executive Branch of the Federal Government. The scope
of a debarment is defined in 49 CFR Part 29. b. Also, the Department's regulations for suspensions and debarments at 49 CFR, Section
29.325(b)(1) provides that the fraudulent, criminal, or other seriously improper conduct of any officer may be imputed to
the participant when the conduct occurred in connection with the individual's performance of duties, or with the participant's
knowledge, approval, or acquiescence. c. As stated in 49 CFR, Section 29.115, the debarments are consistent with the Federal Government's
policy of using the discretionary action of debarment to conduct business only with responsible persons and companies, and
to protect the public interest, the Federal Government, and the integrity of Federal programs. 4. What is the cause
for debarment?a. On November 14, 2001, Fortunato and Guisseppe Scalamandre, pled guilty to two counts of
conspiracy to defraud the United States under 18 U.S.C. § 371. Specifically, Fortunato and Guisseppe Scalamandre pled
guilty to: (1) conspiracy to defraud the United States, through impairing and impeding the functions of the Internal Revenue
Service, and (2) conspiracy to make unlawful labor payments. b. Fortunato and Guisseppe
Scalamandre were the principal officers and owners of Sea Crest Construction Corp., Peter Scalamandre & Sons, Inc., and
Scalco Construction Corp. c. Between 1991 and 1995, Sea Crest Construction Corp., Peter Scalamandre
& Sons, Inc., and Scalco Construction Corp., through various joint ventures, were awarded five contracts: (1) Long Island
Railroad Ronkonkoma Station project (LIRR project) in 1991; (2) Northern State-Meadowbrook Parkway project in 1992; (3) Brighton
Beach Line project in 1993; (4) One Penn Plaza project in 1995; and (5) Long Island Expressway and Seaford Oyster Bay Expressway
project (LIE project) in 1995. Of these five construction contracts, four involved funding from the United States Department
of Transportation (hereinafter "USDOT"): Brighton Beach project, Meadowbrook Parkway project, LIRR project, and
the LIE project. d. For the performance of the above contracts, Fortunato and Guisseppe
Scalamandre signed collective bargaining
agreements with various labor organizations. These collective bargaining agreements set forth the terms by which Sea Crest
Construction Corp., Peter Scalamandre & Sons, Inc., and Scalco Construction Corp. were to select, assign, and pay their
employees as well as contribute to their benefit funds. e. Instead of abiding by the terms of the collective bargaining agreements, Fortunato and Guisseppe Scalamandre, on behalf of Sea Crest Construction Corp., Peter Scalamandre
& Sons, Inc., and Scalco Construction Corp., paid the Luchese Family of the La Costa Nostra nationwide criminal organization
to illegally influence these labor organizations through bribes, extortion, threats of force, and violence. Specifically,
Fortunato and Guisseppe Scalamandre paid members of the Lucchese Family $40,000 each year, with the understanding that over $1,000 of these payments would be given
to various officers and employees of these labor organizations. In return for the money, these labor organizations agreed
not to enforce certain provisions of the collective bargaining agreements, and to allow Fortunato and Guisseppe Scalamandre to dictate the selection and assignment of union personnel on their construction
projects. f. Also, in the performance of the above contracts, Fortunato
and Guisseppe Scalamandre developed and participated in a tax fraud scheme in which they issued corporate checks to their subcontractors for payment of fraudulent
invoices and change orders. The subcontractors converted the corporate checks to cash and then returned the money to Fortunato
and Guisseppe Scalamandre. Fortunato and Guisseppe Scalamandre used portions of the money generated by this fraudulent scheme
to pay the members of the Luchese Family to deal with the labor organizations. g. Additionally, in the performance of the contracts, Fortunato Scalamandre, Guisseppe Scalamandre, Sea Crest Construction Corp., Peter Scalamandre &
Sons, Inc., and Scalco Construction Corp. were required to comply with all applicable Federal laws and regulations, including, but not limited to, the Disadvantaged
Business Enterprise (DBE) Program, 49 C.F.R. Part 26. The DBE firms that worked as subcontractors on these contracts operated
as "fronts," whereby they performed all essential work functions for the DBE firms and, in return for using the
DBE firm to meet their contracts' DBE requirements, they gave the DBE firms 5% of the subcontract price. h. Fortunato and Guisseppe
Scalamandre have committed acts which are sufficient cause for debarment under 49 CFR, Sections 29.305(a)(1) and 305(b): conviction
of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement
or transaction, and violation of the terms of a public agreement or transaction so serious as to affect the integrity of an
agency program, such as a willful violation of a statutory or regulatory provision or requirement applicable to a public agreement
or transaction. Additionally, under 49 CFR, Section 29.325(b)(1), Fortunato and Guisseppe Scalamandres' conduct may be
imputed to their companies, Peter Scalamandre & Sons, Inc., Sea Crest Construction Corp., and Scalco Construction Corp.
i. On April 29, 2002, FHWA officials, including the debarring official, met with representatives of the individuals and
companies cited in paragraph 1a. Mitigating information has been presented to the FHWA and considered in this action. After considering the mitigating factors and the seriousness of the causes for debarment, the FHWA
has decided that all individuals and companies identified in paragraph 2a continue to pose a risk to the Federal Government
and that it is in the best interests of the Government that they be debarred for a period of three (3) years. j. These debarments are taken in accordance with 49 CFR Part 29. 5. What actions have been taken? Division Administrators
should ensure that copies of this Notice are provided to State departments of transportation King W. GeeDebarring Official A History
of Job Safety Woes By Graham Rayman and David Eggert. STAFF WRITERS The wife of the Queens construction
worker dragged into a pavingmachine
and killed early Tuesday on a major job site at Kennedy Airportquestioned yesterday whether the machine was properly supervised at thetime of the accident. Meanwhile, records obtained by Newsday yesterday show that the deadman's employer and its affiliates have been fined $87,000 for workplacesafety violations in 11 incidents since 1990. The federal Occupational Health and Safety Administration
recordsshow that three of the incidents occurred on previous
constructionprojects at the airport. Francisco Rodriguez, 45, of Jamaica, was working on the
$1.2-billionInternational Arrivals Terminal project
when the fatal accidentoccurred. He was cleaning the paving machine
with a hose when his shirtcaught in the mechanism and he was
dragged in. "They were cleaning
the machines, and someone should have been thereto make
sure everything was OK," said his wife, Rose Rodriguez, 35. "Whydid they just leave it on and leave? This is not fair." She said the funeral will be in Portugal tomorrow. They
have twochildren. Rodriguez was employed by Peter Scalamandre and Sons,
which hashandled numerous
multimillion-dollar road-building projects. Officialsat the Freeport-based company could not be reached late yesterday. Officials for the project's construction management
firm, MorseDiesel, and the business consortium overseeing
the project did notreturn phone calls. OSHA, the Port Authority Police Department and NYPD detectives
areinvestigating. Tuesday, an official
for Rodriguez' union, Local 1010,described the death as
an accident. OSHA's
records show that a Scalamandre joint venture was fined$2,500 in 1996 for an incident in the construction of an AmericanAirlines terminal. In 1990, Peter Scalamandre Construction Corp. was fined $1,590 forthree violations on another American Airlines terminal job. Also in1990, Peter Scalamandre Concrete Contractors was fined $5,480 for eightviolations on a cargo terminal project for China Airlines. In 1994, the company was fined $62,000 for violations in theconstruction of a Kmart at Bay Plaza, the records show. Most recently, a joint venture involving the company was
fined$2,000 in a settlement involving electrical safety-related violationson a Nassau County road construction project in March, 1998, the recordsshow.
Mobster: Sludge Firm Tied to Crime Family By Kevin Flynn and Tom
Curran. STAFF WRITERS. Kathleen Kerrcontributed to this story. The financial backers of a company with a $166-million contract todispose of city sewage sludge have a history of making regular payoffsto the Luchese crime family, according to testimony from a turncoat mobboss. Former Luchese acting boss Alfonso D'Arco said the mob
had gotten$90,000 a year in
shakedown money from Peter Scalamandre & Sons Inc. andJohn P. Picone Inc., two partners in a sludge consortium known as MercoJoint Venture. D'Arco read from an account sheet in Brooklyn federal court
last weekon which he had listed money coming to the
crime family. The sheetshowed a $25,000 payment from Picone on
Jan. 7, 1991, and two paymentsfrom Scalamandre, an undated entry
for $6,000 and another for $15,000dated Feb. 12, 1991. Two days later, city records show, Merco sent the city a letterstating that Scalamandre and Picone were coming into the sludge ventureas partners and financial backers. The five-company consortium has sincecontracted with the city to ship 100 tons of sewage sludge a day tobarren ranch lands in Texas. Scalamandre and Picone are both major Long Island
constructioncompanies.
Picone would not comment yesterday, but Scalamandre & Sonsdenied the allegations by D'Arco, who estimated the tribute from the twofirms at $90,000 a year during testimony at an unrelated racketeeringcase. "We were as shocked as anyone when we read the allegations,"
saidcompany president Fred Scalamandre. "I don't
know this man from Adam." Councilwoman Carolyn Maloney (D-Manhattan), a critic of
the citysludge program, yesterday
demanded that the Merco contract be canceled."Are these payments to the mob part of the inflated cost of the sludgecontracts?" she asked. City
officials said the contract would be left intact, pending areview by the Department of Investigation. "This is sworn testimony in a court of law," said EnvironmentalProtection Commissioner Albert Appleton, "but speaking as an oldprosecutor, it's just one piece of evidence." The
specter of mob payoffs is the latest disclosure to rock thecity's $1 billion sludge removal program. The Manhattan districtattorney's office, following reports in New York Newsday, already isinvestigating whether influence peddling played a role in the award ofsludge contracts by the Department of Environmental Protection. Among the documents
subpoenaed have been DEP's correspondence withMerco
and its lawyer, Sid Davidoff, a close friend of Mayor David N.Dinkins.
Davidoff, the city's leading lobbyist, was hired by Merco abouta month after the firm notified the city it was taking in new partners. The
city allowed the company to shuffle its corporate partners andawarded it a three-month extension of a critical contract deadline. Cityofficials, who defend these decisions, said the Davidoff law firm playedno role in them. D'Arco's allegations surfaced as DEP faces
a July 1 federal ban onthe ocean dumping of sludge, the
current practice. The city faces finesof up to $250,000 a day
for violating the ban. Merco is one of three contractors hired to dispose
of the sludge onland. As of yesterday, Merco had not begun
operations, and the city isstill dumping 60 percent of the
sludge in the ocean. Picone and Scalamandre were not part of Merco when
it won thecontract through
a competitive process in April, 1990. At the time,Merco consisted of two Oklahoma consulting and engineering firms and aNew Jersey barge company. But in early 1991 the city pressured Merco to drop
the bargecompany because
of a history of environmental violations. Picone,Scalamandre and a third company, RGM Liquid Waste, then joined thepartnership. Although
Merco was a dramatically reshaped company with newpartners and an overhauled method of sludge removal, DEP did notre-evaluate how Merco's proposal compared with competing firms. Appleton said yesterday he would look into why Merco's refashionedproposal was not re-evaluated. Earlier this year, Merco failed to meet a critical
deadline when itcould
not secure a sludge disposal permit in the Southwest by Jan. 1.But the city gave the company a three-month extension, and last March itwon permission to take its sludge to Texas. DEP spokesman Sanford Evans said, "It was better to delay and givethem an extension than to start from scratch and have to relet a newcontract." City officials said that, barring any action to strip
Merco of thecontract, they expect the company to begin
hauling sludge on July 1.Kathleen Kerr contributed to this
story. Back to the Scalamandre's Friend and partner in crime, THOMAS MURPHY
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