Abusive Labor Practices Used by Organized Crime in the Construction Industry in New York City

T-OSI-88-7: Published: Aug 29, 1988. Publicly Released: Aug 29, 1988.

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GAO discussed organized crime's use of abusive labor practices in the New York City (NYC) construction industry. GAO found that: (1) organized crime significantly inflated public and private building projects' construction costs; (2) there was substantial evidence that important unions in NYC have or had a documented relationship with organized crime; (3) construction contractors clubs, which are alliances of contractors, labor leaders, and organized crime figures, agree to rig bids for most major construction projects, and the inflated bids provide tribute payments to organized crime figures and union officials; (4) organized crime families enforce club agreements and hamper the efforts of contractors that attempt to compete against rigged bids; (5) organized crime often uses featherbedding and superfluous labor, materials, and equipment, to increase construction costs; (6) a local office of a labor union, which controls the progress of work at NYC construction sites, has a history of corruption among its officers; and (7) abusive labor practices have occurred at the Environmental Protection Agency's North River Wastewater Treatment Plant.

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