Stevedoring company American Maritime Services of Brooklyn has become the first company to accept monitoring by an independent private sector inspector general under an anti-racketeering program authorized by the Waterfront Commission of New York Harbor.
American accepted the monitor under a settlement agreement in order to avoid a potential license challenge by the Waterfront Commission, an agency created 60 years ago to combat crime on the New York-New Jersey docks.
The company agreed to have its affairs monitored by the Chicago law firm of Pugh, Jones & Johnson, one of three firms pre-qualified by the commission. American will pay all costs of the independent private sector inspector general.
IPSIGs are new to the maritime industry, but have been used for more than two decades to combat racketeering in industries such as New York City construction and garbage hauling. They allow a company to continue operating under an outside monitor that ensures compliance with the law.
Ronald Goldstock, currently the Waterfront Commission’s New York Commissioner, pioneered use of the monitors when he headed the New York State Organized Crime Task Force.
The New York Shipping Association in 2010 unsuccessfully sued to block the IPSIG program on grounds the monitor program exceeded the commission’s legal authority. A federal judge dismissed the lawsuit, saying the lawsuit was premature because the IPSIG program had not yet been used. An appeals court affirmed the judge’s decision.
The Waterfront Commission’s settlement agreement with American was signed last December but did not become widely known until Pugh, Jones & Johnson noted it on the firm’s Web site. It was first reported by the New York Daily News.
The commission’s settlement agreement cited the 2008 hiring by Joseph Perez, then American’s director of operations and sales, of Robert Santoro, who had been convicted of mail fraud, wire fraud, conspiracy, money laundering, false statements, and perjury in connection with a check-cashing operation.
The agreement also noted that Perez had pleaded guilty to income tax evasion in 2004. Waterfront Commission Director Walter Arsenault said Perez no longer has a commission license but previously was licensed as a hiring agent and pier superintendent for another company.
The Waterfront Commission has been evaluating the port businesses it regulates to determine if they qualify for permanent licenses. For years until the commission’s top leadership and staff were replaced four years ago, the agency issued temporary licenses that didn’t require background checks.
Commission Executive Director Walter Arsenault said 18 companies in the port are operating with permanent stevedore licenses and that 24 remain on temporary licenses.
At a 2010 Waterfront Commission hearing, American CEO Sabato Catucci was among terminal operators who criticized the commission for suggesting that port companies tolerate organized crime. “I’m no mobster,” Catucci said after the hearing. “They need to keep out the element, but I don’t want them running my business.”
Separately from its Waterfront Commission agreement, American filed a wide-ranging civil racketeering lawsuit in February, accusing the International Longshoremen’s Association, the ILA’s president and several others of forcing the company to sell its operations in 2001. That case is in U.S. District Court in Manhattan.