March 3, 2006

F.B.I., in Bid-Rigging Inquiry, Raids Offices of Labor Leader

The F.B.I. raided the offices of the New York City Central Labor Council at dawn yesterday, carting out boxes of papers as part of an investigation of Brian M. McLaughlin, the council's president, law enforcement officials said.

The officials said they were looking at whether Mr. McLaughlin, who also is a Democratic state assemblyman from Queens, had received improper payments from electrical contractors and had played a role in a suspected scheme to rig bids on a multimillion-dollar city contract for streetlights.

As one of the most powerful union leaders in the city, Mr. McLaughlin provided high-profile support for Mayor Michael R. Bloomberg's re-election last fall and was a prominent proponent of the mayor's unsuccessful plan to build a football stadium on the West Side of Manhattan. Not long ago, Mr. McLaughlin publicly entertained the notion of running for mayor.

Investigators also raided Mr. McLaughlin's Assembly district office in Queens, as well as the headquarters of the Petrocelli Electric Company, a streetlight and traffic-light company based in Queens.

The law enforcement officials said they were investigating whether Mr. McLaughlin had been given use of an American Express card by electrical contractors.

Several federal and local law enforcement officials interviewed for this article would speak only if given anonymity, because the investigation is continuing.

For the past 10 years, Mr. McLaughlin has led the labor council, a federation of more than 400 union locals representing more than one million workers in the city. Mr. McLaughlin, 53, once worked as an electrician and has remained the director of the street lamps division of New York City's main union of electrical workers.

The Central Labor Council issued a statement acknowledging that investigators had taken numerous items from its offices. It added that there were "currently no charges or allegations against the Central Labor Council or any of its officers, directors or employees." The council said it was cooperating with the investigation.

Carolyn Daly, a spokeswoman for Mr. McLaughlin, said he was not available for comment. "We are not aware of any specific allegations or charges," she said. In January, Mr. McLaughlin, a seven-term assemblyman, announced he was not running for re-election, saying he wanted to devote his full attention to the labor movement.

More than 20 F.B.I agents raided the labor council's office, on West 15th Street in Manhattan, spending hours reviewing records before they carted away computers, books and records. "Anything," one law enforcement official said, "that could leave a paper trail."

The raids were a result of an investigation that was started before the Sept. 11 terrorist attacks and was delayed in part by the demands the attacks placed on the F.B.I., law enforcement officials said.

The investigation, by the F.B.I., the United States Department of Labor and the city's Department of Investigation, has focused on what law enforcement officials described as a broad bid-rigging scheme in which contractors were thought to have divvied up the lucrative work putting up street lamps and traffic lights around the city.

"We executed search warrants in connection with an ongoing investigation," said James M. Margolin, a spokesman in New York for the F.B.I.

The investigators have relied on a variety of tools, including wiretaps and subpoenas.

One investigator who has been involved in the case said that bids were rigged through an association of electrical contractors, and that Mr. McLaughlin carried a credit card from the association for his personal use.

Another investigator said the bid-rigging allegations could pose a far more serious legal threat to Mr. McLaughlin than the use of the credit card.

A law enforcement official said that contracts involving streetlights were bid on every three years and that the same companies, including Petrocelli Electric, would win the contracts.

The city has spent more than $150 million on street lamps and traffic lights since 1999, and Petrocelli alone has won more than $90 million in such contracts, according to a review of city records.

A receptionist who answered the phone at Petrocelli Electric yesterday afternoon said no one else was there. Company officials did not respond to a request for comment.

When asked about the raid on the Central Labor Council's offices, Mayor Bloomberg said, "It is a federal investigation," and added, "We'll see where it goes and what it's about."

Kay Sarlin, a spokeswoman for the Department of Transportation, said: "From what we've been told, no D.O.T. employees are targets of this investigation."

"This is a longstanding investigation that D.O.I. has been involved in from its inception, including today's search warrants," said a spokeswoman for the city agency, Emily Gest. "This investigation is ongoing and D.O.I. has no further comment at this time."

Several New York labor leaders have been convicted of corruption charges in recent years, including Frederick Devine, the head of the carpenters' union, for embezzling more than $50,000; the president of the police transit union, Ron Reale; and the presidents of several locals that are part of District Council 37, the city's largest municipal union.

Last week, Martin Ludlow resigned as top official of the Los Angeles County Federation of Labor after federal investigators accused him of receiving more than $53,000 in secret union campaign assistance when he served on the City Council.

Mr. McLaughlin, in announcing his decision not to run for re-election to the Assembly, said: "I want to focus on the needs of the labor movement without any distraction. There have been lots of distractions — going to Albany, electioneering, fund-raising, helping other candidates. My focus needs to be 100 percent on the labor council."

Mr. McLaughlin has received tens of thousands of dollars in campaign contributions from large electrical contractors in recent years.

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