Ronald Goldstock is regarded as the father of the independent private sector inspector general. As head of the New York State Organized Crime Task Force in the early 1990s, he pioneered use of monitors for corruption-prone unions and companies.
Now on the Waterfront Commission of New York Harbor, Goldstock sees such inspectors general as a tool to help rid the New York-New Jersey port of mob influence. The commission wants monitors to oversee port businesses that don’t meet its license standards for integrity and good character.
Port businesses are pushing back. The New York Shipping Association argues in a federal court lawsuit the commission lacks legal authority to impose IPSIGs. The NYSA also contends the commission can’t require affected companies to pay the monitors’ costs in addition to their 2 percent payroll assessment that funds the agency’s $11.5 million budget.
The International Longshoremen’s Association, meanwhile, is lobbying New Jersey lawmakers to support state Sen. Ray Lesniak’s bill to abolish the agency. Lesniak introduced his bill in September after the commission scheduled hearings on port hiring and pay and announced plans for IPSIGs.
The ILA and NYSA jointly are pushing New York legislators to follow New Jersey in voting to repeal the commission’s control over the size of the port’s longshore work force. The union and employers say they need flexibility. The commission says an oversupply of labor invites job-selling and other mob schemes.
Goldstock said the recent hearings achieved their objective of shining light on practices such as terminals paying salaries up to $462,000 for 24 hours or more of daily pay to “a privileged few” ILA shop stewards and timekeepers, including some with family links to Genovese crime family members.
The hearings also displayed industry resentment of the commission’s newfound aggressiveness. A New York state inspector general’s report last year described the commission as corrupt and dysfunctional. The agency’s top leadership has been replaced, and Goldstock said he’s determined to oust the mob and make the waterfront “unrecognizable” within five years.
Terminal executives bristled at what they saw as inferences that they tolerate organized crime. “I’m no mobster,” Sabado Catucci, CEO of American Stevedoring in Brooklyn, said after testifying at the hearing. “They need to keep out the element, but I don’t want them running my business.”
Harold Daggett, executive vice president of the International Longshoremen’s Association, said the commission is stuck in the 1950s, when it was created as a bi-state agency to combat abuses that inspired the movie “On the Waterfront.”
“Their days are over,” Daggett said in an interview. “We don’t need these people any more. They just keep building this bunch of baloney up over and over again so they can get paid.”
Goldstock said it defies coincidence that relatives of the late Genovese mob boss Vincent “Chin” Gigante hold lucrative shop steward jobs at the three largest port terminals and that 11 Gigante relatives are employed in waterfront jobs averaging $175,000 in annual pay. None of those relatives have been accused of any crime.
He also noted employers seemed surprised when he asked whether lucrative off-contract deals for shop stewards might violate the Taft-Hartley Act’s prohibition on company payments to union representatives.
Industry criticism of the Waterfront Commission has intensified as the agency has started evaluating port businesses for permanent operating licenses. For years, the commission issued and routinely renewed six-month temporary licenses that didn’t require extensive background checks.
Arsenault said the commission has issued a handful of licenses and is working through the rest of some 50 port businesses it regulates. He expects the work to be completed within six months.
A company failing the licensing check will be allowed to hire an IPSIG in order to stay in business under a monitor’s oversight. Widespread use of the monitors is unlikely, Arsenault indicated. “It’s going to be very few, if any,” he said.
IPSIGs are unfamiliar to the port industry but have been used for two decades to fight or prevent corruption in industries such as New York City construction. An independent private sector inspector general oversaw the cleanup of mob-ridden Teamsters Local 560 in New Jersey in the 1990s.
Goldstock said such monitors could produce systemic change without disrupting commerce. He has written extensively about IPSIGs, which he said can serve as “an aggressive organizational change agent as well as an aggressive investigator.”
Such talk is discomfiting to waterfront employers, who worry the program will be abused. Arsenault said companies could appeal license denials to an administrative law judge and to the courts, and request an IPSIG at any stage.
The NYSA contends the Waterfront Commission needs legislative approval from New York and New Jersey before proceeding with the monitors. Arsenault disagrees.
“We have no doubt we will succeed in court,” he said. “Our enabling legislation is very broad. Over the years the courts have consistently upheld the commission’s authority to do what’s right for the port.”
Contact Joseph Bonney at email@example.com.