How Organized Crime Skims Money from Construction Projects

The Mechanics of Construction Projects

Large construction projects are complex undertakings that require the coordination of numerous specialized contractors. These projects involve a variety of tasks, such as leveling land, pouring foundations, and installing essential systems like electricity and plumbing. Each of these tasks necessitates the hiring of different construction contract companies, each with its own expertise. However, this intricate web of contractors also provides fertile ground for organized crime to infiltrate and exploit the system.

Organized crime groups, particularly the mob, have historically controlled some of these unions and contractor companies involved in construction projects. This control allows them to manipulate various aspects of the construction process, often through schemes like no-show and no-work jobs. These scams not only siphon money from the projects but also undermine the integrity of the entire construction industry.

Understanding No-Show and No-Work Jobs

A no-show job is a fraudulent arrangement where an employee is listed on the company's payroll, receives a paycheck and benefits, but is not expected to show up for work. This type of job allows organized crime members to collect salaries without contributing any labor. In contrast, a no-work job requires the employee to be present at the job site but not perform any actual work. Often, these employees hold made-up titles like "safety inspector" or "logistics coordinator," which sound legitimate but involve no real responsibilities.

These employment-based scams are highly effective for organized crime groups. No-show and no-work jobs enable them to siphon money directly from construction budgets. While a few no-show jobs might go unnoticed, excessive numbers can lead to questions about the lack of progress in construction, potentially exposing the scam. Nonetheless, these schemes remain a popular method for the mob to extract money from large-scale projects.

Additional Methods of Exploitation

Beyond no-show and no-work jobs, organized crime employs other tactics to skim money from construction projects. One common method is the theft of equipment and supplies from job sites. By stealing valuable materials, the mob can either sell them for profit or use them in other projects, further increasing their illicit earnings.

Another powerful tool in the mob's arsenal is their control over unions. By gaining control of key union members, organized crime can pressure construction companies for under-the-table concessions. This control allows them to extort builders for higher payments by threatening worker strikes, thereby ensuring compliance with their demands. Average union members often suffer as a result, receiving less compensation than they should due to the mafia's exploitation of union leadership.

Historical Context and Modern Implications

The influence of organized crime on construction projects is not a new phenomenon. For instance, the Colombo family controlled all concrete use in New York City from the 1960s to the 1980s. During this period, any concrete poured in NYC buildings required a tax to be paid to the family, showcasing the extent of their control over the industry.

Both union leadership and construction company leadership can be complicit in these schemes, further complicating efforts to eradicate organized crime from the construction sector. No-show jobs, in particular, provide mafiosos with legal income to report for tax purposes. This income allows them to make major purchases legally, thereby justifying their lavish lifestyles to authorities. A notable example is Tony Soprano's arrangement with Barone Sanitation in the TV series "The Sopranos," where he claims legal health insurance and a mansion as a "waste management consultant."

Wider Implications Beyond the Mafia

It's important to note that no-show jobs are not exclusive to the mafia. Politicians and other influential individuals have also used these schemes to receive indirect bribes or kickbacks. For example, an Alaskan politician's husband received a no-show job worth around $300,000 a year from a major oil company as a favor. Similarly, a pharmaceutical company founder gave a no-show job to an investor to repay a debt.

These examples highlight the widespread nature of no-show jobs and their potential for abuse across various sectors. The mafia’s control over unions further exacerbates the issue, allowing them to force union compliance with their demands, including drawing paychecks for doing nothing. This control not only undermines the construction industry but also erodes trust in legitimate labor practices.

Organized crime's infiltration of construction projects through no-show and no-work jobs, theft, and union manipulation represents a significant challenge. Addressing this issue requires a concerted effort from law enforcement, industry leaders, and policymakers to ensure the integrity of construction projects and protect the interests of honest workers and contractors.