Opinion ID: 509534
Heading Depth: 2
Heading Rank: 1

Heading: Biaggi's Actions on Behalf of Coastal; the Vacations

Text: 4 Coastal, whose operations were located in the Brooklyn Navy Yard (Yard) owned by New York City (the City), was in the business of repairing and refurbishing vessels of the United States Navy and other departments of the federal government. During the pertinent period, Coastal was SVR's second or third largest client, usually paying SVR more than $200,000 per year in insurance commissions. In general, the more work Coastal had, the larger its insurance premiums and thus the higher the commissions paid to SVR. 5 In the early 1980s, Coastal began to experience financial difficulties resulting largely from high fixed costs. It paid substantial rent to the Brooklyn Navy Yard Development Corporation (BNYDC), a not-for-profit corporation chartered by the City to run the Yard. Coastal also was required to purchase its electricity, steam, and water from BNYDC at rates higher than those it would have been charged had it purchased directly from the utility companies. In 1983, Coastal's utility rates rose, it lost three bids on Navy contracts, and important rent credits expired. Beginning in March of that year, Esposito met with the chairman of BNYDC several times and with the City's deputy mayor to express concern about Coastal's situation; by September 1983, Coastal was a half-million dollars behind in its payments to BNYDC, and the BNYDC chairman threatened to complain to the Navy. 6 In March 1984, Esposito provided Biaggi with a round-trip airline ticket and a four-day vacation at a villa owned by Beaumont on the island of St. Maarten. Also present on the trip were Esposito and Esposito's partners in SVR and Beaumont. On May 9, 1984, Coastal's executive vice-president Vincent Montanti wrote Biaggi, urging him to assist Coastal in its dispute with BNYDC. 7 Shortly thereafter, Biaggi called Deputy Mayor Kenneth Lipper to express concern about Coastal's difficulties. In addition, in June 1984, Biaggi wrote Mayor Edward Koch a letter, on House of Representatives (House) stationery, on behalf of Coastal, urging the City to work out some accomodations [sic ] with regard to Coastal's dispute with BNYDC. Actions by Biaggi's staff on behalf of Coastal were supervised by his congressional administrative assistant. 8 Biaggi wrote Mayor Koch again in September 1984, this time on the stationery of the House Committee on Merchant Marine and Fisheries. He noted that high utility costs were causing Coastal to lose Navy contracts and stated that he was eager to be of any assistance in dealing with the Navy. He also suggested, as he had been asked to do by Coastal, that my presence or the presence of a member of my staff during meetings between the City and Navy might be helpful in demonstrating Congressional interest. 9 Despite these efforts, Coastal's problems persisted. In October 1984, SVR had to lend Coastal $110,000 to pay overdue insurance premiums. 10 In mid-1984, Barbara Barlow, Biaggi's friend, had expressed a wish that she and Biaggi spend a Christmas holiday vacation at the Bonaventure Spa, a health resort near Fort Lauderdale, Florida. The couple planned to stay at the apartment of another friend of Biaggi, and Barlow informed Biaggi that they would need a sponsor to enable them to use the spa's facilities. Biaggi arranged through Esposito to have sponsorship provided by James LaRossa, an attorney who represented Esposito and Beaumont. Biaggi and Barlow participated in the spa's programs, she from December 22, 1984 through January 2, 1985, and he from December 27, 1984 through January 2. Their spa bill totaled $3,228, which was charged to the LaRossa account. LaRossa's law firm paid the bill and was reimbursed by Beaumont. Biaggi's air fare to Florida was paid by the House Committee on Aging. 11 In July 1985, Deputy Mayor Alair Townsend, Lipper's successor, warned Coastal that she would shut off its lights if it did not begin to pay its rent and utility arrears to BNYDC. A few days later, Biaggi called her to express concern about Coastal's situation. Biaggi called Townsend again in September 1985 to repeat his concerns and to urge the City to help Coastal. 12 While Coastal's difficulties with BNYDC continued through late 1985, a new problem arose. The FBI began investigating the company, causing the Navy to scrutinize claims for compensation more closely and to disallow many such claims. This led to a cash flow problem which in turn made Coastal even less competitive for new Navy contracts. In November 1985, these hardships forced Coastal to cancel substantial amounts of insurance previously purchased through SVR. 13 On the day Coastal canceled those policies, Esposito, who sought to help Coastal by working all angles, met with Biaggi and Coastal's Vincent Montanti. Within days, Biaggi sought to assist Coastal with the Navy. He called Alphonse D'Amato, United States Senator from New York, told him that Coastal was being treated unfairly, and asked him to meet with Coastal officials. 14 On December 2, 1985, Biaggi met with Esposito and Coastal's chairman Charles Montanti. The next day, he attended a meeting at Senator D'Amato's office with the Senator and Vincent Montanti, during which the Senator attempted to call Secretary of the Navy John Lehman. In the following weeks, Biaggi had many conversations with Senator D'Amato, in which he encouraged the Senator to help lobby Deputy Mayor Townsend and asked the Senator about any progress with Secretary Lehman. 15 Throughout 1985, Barbara Barlow had pressed Biaggi for a repeat of their previous year's winter vacation at the Bonaventure Spa. Biaggi asked Esposito to make the arrangements. On December 17, he telephoned Esposito, providing him with Barlow's name and indicating that she would be at the spa from December 22, 1985, through January 3, 1986, and that Biaggi would arrive on December 27. Immediately after the vacation details were dealt with, Esposito asked, What else is doin'? and Biaggi said, By the way, we've been doin' wonders for Montanti. Biaggi reported that, on the city side, we've been workin' very hard with them and on the ... federal side, uh ... we've been getting them money. He said, I've been bird-dogging it right along. Esposito replied, Okay. That's all I want to know. 16 Esposito immediately made arrangements with LaRossa for Biaggi and Barlow to stay at the spa and for the expense to be passed on to Beaumont. Esposito then telephoned Charles Montanti and assured him, Mario's doin' his best. Later that day, Biaggi made additional calls to both Senator D'Amato and Deputy Mayor Townsend about Coastal. 17 On December 19, 1985, Esposito informed Biaggi that the spa arrangements were set, saying, I got it all confirmed for you.... Relax. (As in 1984, Biaggi's air fare was to be paid by the House Committee on Aging.) On December 20, Esposito spoke with his SVR partner Joseph Martuscello and told him that Biaggi was going to be a guest at the spa, saying, hey, that's good money invested. Martuscello said, That's good; Esposito replied, Yeah, I did it last year too. 18 After Biaggi returned from this second Florida trip, he continued his efforts on behalf of Coastal. He told Esposito he planned to introduce a bill in Congress to spend $800 million on smaller craft, stuff [Coastal] can handle. He also met with Senator D'Amato and Charles Montanti to prepare the Senator for a meeting with the Secretary of the Navy. He promised to, and did, call the Commandant of the Coast Guard in an attempt to get more work for Coastal. Biaggi continued his efforts until, in May 1986, Coastal went bankrupt.