On the waterfront: the political fight over organised crime at the Port of New York

In 1948 the investigative journalist Malcolm Johnson published a 24-part series in the New York Sun detailing the festering underside of the city’s port, where crime bosses preyed on downtrodden longshoremen, loan sharks prowled the docks and freight was routinely pilfered.

Johnson’s Pulitzer Prize-winning work spawned Congressional hearings as well as the 1954 film On the Waterfront, in which a young Marlon Brando famously cried: “I coulda been a contender!”

More than 70 years after Johnson’s investigation, technology and global trade have transformed the busiest port on America’s eastern seaboard from a place of burlap sacks and cr hooks to one of computer-tracked containers borne on ships of once unimaginable dimensions.

Yet organised crime’s barnacle-like presence is still a problem. It has sparked a fight between the two states that straddle the port, New York and New Jersey, over to what degree it still persists and how best to police it.

In 1953, the states entered a compact to create a unique agency, the Waterfront Commission of New York Harbor, with the express goal of stamping out organised crime at the port. It is led by two commissioners — one appointed by each state’s governor — and boasts a staff of about 100, including police and auditors. The commission has the authority to operate in both states, and to remove any worker it believes constitutes a danger to the port or “lacks the requisite good character”.

Longshoremen in New York in 1951 © Sam Falk/New York Times/Redux/eyevine

As Alfred Driscoll, New Jersey’s then-governor, observed at the commission’s birth: “It recognises that organised crime does not respect state boundaries.”

But in recent years New Jersey has been trying to get rid of the commission. Chris Christie, the former Republican governor, signed legislation on his last day in office in 2018 to withdraw New Jersey from the compact, effectively killing it. His Democratic successor, Phil Murphy, took up the cause in March, filing a brief at the US Supreme Court.

“The compact made sense in 1953,” Murphy says. “It makes no sense now.”

Technology, New Jersey argues, has culled most of the jobs the commission was created to police. A port that employed 36,000 workers in 1958 had just 5,801 as of June 2020.

The filing described the commission as an unaccountable bureaucracy with its own chequered past, which has needlessly hindered the port’s economic development as it has searched for a mission to “justify its continued existence” — and protect jobs for its leaders. New Jersey’s state police, Murphy believes, would do the job better.

“There is a good reason why New Jersey has been diligently trying to withdraw from the compact for four years: the commission has become ineffectual,” the court filing stated. The state has won the backing of the shipping companies that use the port.

Map showing Manhattan, Port Newark and Staten Island in the US

But New York disagrees — as does the commission itself. They have argued that a state cannot unilaterally withdraw from the compact. In response, the Supreme Court has temporarily barred New Jersey from doing so before it makes a formal ruling, expected early next year.

All these years later, New York state and commission officials still describe the port in terms Johnson might have recognised — as a waterfront in the “ironclad grip” of a corrupt union and organised crime, where kickbacks and crooked labour contracts are commonplace.

In the commission’s 2019-20 annual report it claimed that $147mn in excessive wages were paid to 590 union workers, many of whom were not required to actually be at the port. To illustrate the point, it also featured mugshots of six men with alleged ties to the Genovese family — one of the five Italian families that have dominated organised crime in and around New York — who were sentenced to prison terms that same year for illegal loan-sharking, money-laundering and gambling at the port.

“Despite the commission’s notable successes, organised crime still very much continues to exist on the waterfront,” Walter Arsenault, the commission’s executive director, stated in a court filing earlier this year, objecting to New Jersey’s move.

Arsenault was more colourful at a legislative hearing when responding to New Jersey’s first attempt to kill the commission in 2018. “You can’t throw a stone at the port without hitting the son, the daughter, the son-in-law, the nephew, the cousin, the godson of a ‘made’ guy,” he declared.

Vincent Gigante, centre, the boss of the Genovese crime family, in 1990
Vincent Gigante, centre, the boss of the Genovese crime family, in 1990 © John Sotomayor/New York Times/Redux/eyevine

The fight is an intensely bitter and often personal one being waged by former prosecutors and union bosses who have done battle for years.

“The Waterfront Commission and the [longshoremen’s union] have a problem: They don’t like each other,” says John Nardi, the president of the New York Shipping Association, which represents the companies that own cargo vessels and operate terminals. “We get stuck in the middle.” Another port executive calls the situation “a hot mess”.

Keep the ship moving

All the while, the freight continues to flow. For its 2020 fiscal year, the port handled nearly 5mn containers, up from 3mn in 2000, and 538,000 vehicles.

On a recent morning, hardly a person was in sight as a gargantuan Panama-registered ship disgorged its containers at Port Jersey in Bayonne, New Jersey. Towering gantry cranes slid over piles of containers as if they were Lego blocks. On the tarmac, rows of trucks, laden with containers, crawled like worker ants. The towers of Manhattan and the Statue of Liberty were visible in the near distance.

The modern containership first sailed from the Port of Newark in 1956. Among the many profound changes the container era has wrought is the shifting of the port area’s centre of gravity from New York to New Jersey, where the waters are deeper and there is more space to accommodate them. New Jersey now claims about 90 per cent of the port’s activity. (In a shortsighted decision, the Brooklyn-based Gambino family failed years ago to appreciate the rise of containers and ceded much of the Jersey side of the port to the Genoveses).

For a state that is often the butt of New Yorkers’ jokes, there is a sense that the tables have turned when it comes to the port, and who should hold sway over such a valuable asset.

The Port Jersey container terminal in Bayonne
The Port Jersey container terminal in Bayonne © Pascal Perich/FT

For the mafia, meanwhile, the port has loomed larger in recent years as law enforcement beat back its traditional rackets in garbage collection, the fish market and scrap metal, according to Ronald Goldstock, a former New York waterfront commissioner who previously led the state’s organised crime task force.

Its lever of control, according to the commission, is the International Longshoremen’s Association. The union’s leadership has the power to slow work to a crawl when it pleases, effectively choking one of the vital nodes of global commerce.

Major shipping companies, Goldstock argues, tolerate the status quo because they have few alternatives. “The reason the ILA is so powerful is that the ships are incredibly costly. And they can only produce returns if they’re moving — loading, unloading or moving on the seas,” he explains. “You stop a ship and the investment in the ship, which could cost a hundred million dollars or more, all of a sudden is brought to a halt. So they will do anything to pay to keep the ship moving.”

Not long ago, the commission itself was plagued by corruption and dysfunction. A 2009 New York inspector general’s report lambasted it as a place of patronage and cronyism, where officials mismanaged funds and sometimes helped felons conceal their activities.

“It would not be an exaggeration to state that fiscal year 2008-2009 has been a tumultuous one for the Waterfront Commission,” its annual report from that period sheepishly stated.

Goldstock was appointed in 2008 as the state’s commissioner with a mandate to clean house. He recruited Arsenault, a veteran prosecutor, to run the commission. The tensions with the ILA spiked, he argues, when law enforcement, at last, started doing its job.

“The minute we ensured that criminals couldn’t go on the waterfront, that there had to be fair hiring . . . New Jersey was up in arms,” Goldstock says.

Kickbacks and hiring feuds

One of the watchdog’s first salvos was to publicise the many instances of longshoremen earning more than $400,000 a year for what it said was little or no work. Thanks to an antiquated union contract, some lucky dock workers were, miraculously, paid for 27 hours of work a day. Some beneficiaries were the kin of men like Vincent “the Chin” Gigante, the late head of the Genovese crime family. In 2012, Gigante had nine well-paid relatives employed at the port.

“That’s what this is all about,” a commission official explains. “It’s about who controls hiring.”

Chris Christie, right, signed legislation on his last day in office in 2018 to withdraw New Jersey from the compact,
Chris Christie, right, signed legislation on his last day in office in 2018 to withdraw New Jersey from the compact © Julio Cortez/AP

The commission has the authority to vet potential hires to determine their suitability. In 2019-20, it rejected 18 per cent of the candidates the ILA referred for port jobs because of what it claimed were suspected mafia ties.

Increasingly, it has taken a different approach to try to loosen the ILA’s grip: promoting diversity. The commission began publishing racial and gender breakdowns of the port’s workforce and then pressuring the ILA to give more jobs to candidates from the predominantly black and Hispanic neighbourhoods that surround the port.

The theory, according to Arsenault, was that changing the composition of the workforce would break longstanding ties that he says have allowed the mafia to control the union leadership — and therefore the union itself. The new faces, they reckoned, would be less likely to support union leaders in cahoots with the mafia. They would not so readily hand over a share of their Christmas bonuses as tribute or pay kickbacks in exchange for choice work assignments.

“It’s remarkable that diversity and fair hiring — which are critically important in our world today — are actually powerful anti-corruption tools,” Arsenault says, describing the union’s pushback as proof that the initiative posed “an existential threat” to organised crime’s foothold in the port.

Shipping containers on a cargo ship at Bayonne Terminal in June last year
Shipping containers on a cargo ship at Bayonne Terminal in June last year © Victor J Blue/Bloomberg

Like others who have dealt with the port, he had lost faith in the notion that aggressive law enforcement alone could solve the whack-a-mole problem of organised crime. “As a former prosecutor, I’d love to think you could prosecute your way out of this,” he says. “You can’t.”

But in the towns that ring the port, many regard the commission as an occupying army — one that is perpetually fighting an old war. Vincent Sanzone, a lawyer in Elizabeth, New Jersey, who has represented workers in disputes with the commission, says it is stuck “in a time-warp. There is no organised crime on the port. Of course, there are people who commit crimes.”

Like other critics, Sanzone complains that the commission makes it impossibly cumbersome to hire workers. He also accuses it of “anti-Italian animus” for using supposedly thin evidence of associations with alleged criminals to bar people from the industry. “I’ve had countless cases in which qualified young men who went to college with stellar records were denied registration because their father or uncle went to jail,” he says.

A longshoreman with a past

Harold Daggett, the ILA’s president — and the commission’s bête noire — declined to comment. The union said Daggett would not the discuss the issue while the case was going through the courts. In March, after New York sued to prevent New Jersey from exiting the compact, Daggett issued a blistering statement, in which he defended his members’ pay and decried the commission’s “reign of terror”.

“We in the ILA will no longer remain silent. We are going to expose the disgraceful practices of the Waterfront Commission, who have never had to answer to anyone. They need to go. I am so tired of hearing them crying about my union,” he said. “I would challenge anyone from the Waterfront Commission . . . to leave their cozy offices, and come to the docks on the waterfront, scale a four-story ladder in 10-degree temperature, with the wind blowing, and biting your face, and walk atop the roofs of icy containers.”

Daggett, a fourth-generation longshoreman, has a colourful past. In 2004, he was indicted with three other men on conspiracy to commit extortion and mail and wire-fraud. New York’s current commissioner, Paul Weinstein, was one of the prosecutors.

During the trial in 2005, an admitted mafia enforcer, George Barone, testified that he arranged for Daggett, then an ILA official earning $480,000 a year, to become president of the union to do the Genovese family’s bidding. This included doling out lucrative jobs or sending union contracts to mafia-controlled companies that would pay kickbacks.

New Jersey Governor Phil Murphy: ‘The compact made sense in 1953. It makes no sense now’
New Jersey Governor Phil Murphy: ‘The compact made sense in 1953. It makes no sense now’ © Bebeto Matthews/AP
Harold Daggett, the ILA’s president, claims the commission has held back development of the Port of New York
Harold Daggett, the ILA’s president, claims the commission has held back development of the Port of New York © YouTube

In court Daggett portrayed himself as a victim of mob violence and intimidation and denied the charges. In a statement, the ILA criticised prosecutors for promoting an “outdated image” of the union and ignoring its leadership’s efforts “to eradicate any unlawful conduct.”

In the midst of the trial, one of the defendants disappeared. His body was found weeks later in the trunk of a car parked outside a New Jersey diner. Daggett and his co-defendants were all found not guilty. “What door do I have to go through to get my reputation back?” Daggett reportedly said as he left the court.

Not only did Daggett go on to lead the ILA, he has forged powerful political ties. In 2018, the ILA persuaded Christie to sign the legislation to abolish the commission three years after he vetoed a similar bill.

Murphy, a close ally of organised labour, called Daggett a “dear friend” and “one of my partners in growing [the New Jersey] economy” in a tribute video shown at a 2019 awards ceremony. He also appointed Daggett’s son, Dennis, another ILA official, to his transition committee.

“Phil Murphy is a guy who believes in loyalty towards those who have helped him. ‘You dance with who brung you,’” says Micah Rasmussen, director of the Rebovich Institute for New Jersey Politics at Rider University. The optics were not ideal, Rasumussen noted. Still, he said: “If he didn’t believe the state police could do the job, he wouldn’t turn it over to them.” Murphy’s office did not respond to a request for comment.

Nardi, who became president of the New York Shipping Association in 2012, takes a philosophical view of the situation. Every six years, he negotiates a new labour agreement with Daggett. His members then pay a per-container fee to fund it. There are, he allows, baroque arrangements in these contracts that are the legacy of decades-old agreements. Over time, he expects to phase them out. In the meantime, he says, his overriding objective is to push more containers through the port, lowering the per-container labour cost for his members.

Nardi has complained in the past about absenteeism by ILA workers and productivity issues. Still, his group has consistently stood with the ILA and publicly endorsed New Jersey’s move to replace the commission.

Does he worry about organised crime at the port? “I don’t personally see it,” he says, then adds: “Now, I’d be crazy to say it doesn’t exist.”

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