Metro

Inquiry nearing end on unions’ ties to City Hall

Keith Bedford/Globe Staff/File

Prosecutors are nearing the conclusion of a sweeping federal investigation into whether organized labor used its influence with local governments to extort developers for construction jobs in Greater Boston, according to people with knowledge of the investigation and defense documents viewed by the Globe.

Two labor leaders who served together on the Boston Zoning Board of Appeal testified before a grand jury in October under protection of immunity.

The grand jury has also heard from construction executives, a former member of the Everett Board of Appeals , and at least one other union official, according to the people familiar with the inquiry and the documents.

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One key focus of prosecutors is whether labor leaders threatened to delay or block a planned Boston high-rise in 2012 unless the developer, AvalonBay Communities, added union labor on its Assembly Row project in Somerville, the Globe first reported in April.

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The documents offer fresh insight into an investigation that has progressed over the past six months and reveal significant new facts about the case, including a chronology of the events in question, more wiretapped conversations, and prosecutors’ assertion that AvalonBay ultimately agreed to use $1.2 million in union labor.

The defense documents also reveal that a secret wiretap in 2012 recorded at least three conversations involving Martin J. Walsh, at the time the head of the Boston Building Trades and a state representative. He would be elected mayor of Boston a year later.

The Globe reported in April that Walsh had been heard on at least one wiretap. In the conversations, Walsh talks about getting an AvalonBay project “thrown off the docket” of the Boston Zoning Board of Appeal, according to excerpts included in the documents, which were prepared by private lawyers representing people involved in the investigation.

The documents, which summarize testimony, phone records, and other evidence, were shown to the Globe by a person on the condition of anonymity. The material does not provide a complete view of the investigation because it does not contain the defense’s entire case or all the evidence reviewed by the grand jury, which has not yet decided whether charges are warranted.

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Walsh has strongly denied wrongdoing, and has guaranteed he will not be indicted. He has said that as mayor he has made the development approval process “more open and inclusive,” and has described his union roots as a badge of honor earned in a career spent fighting for working families.

Some builders have praised the development environment under Walsh, saying the city has been more flexible than previous administrations about the use of some nonunion labor, especially in outlying neighborhoods, to create more affordable housing. The Globe reported in April that a set of developments monitored by the city showed that the number of new buildings with some nonunion jobs doubled from 2013 to 2015.

Since April, Walsh has declined to say whether he or any of his staff have testified before a grand jury and last week would not discuss developments in the investigation.

“The mayor has already answered these questions and he does not have any further comment,” said Laura K. Oggeri , Walsh’s chief communications officer.

The inquiry is part of a broader investigation of organized labor’s influence on development and permits in Greater Boston, a region plagued by high construction costs that help drive up rents and home prices.

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The Globe in April reported that US Attorney Carmen M. Ortiz’s office was investigating whether developers were coerced into using union labor. Soon after, in May and June, federal prosecutors indicted two Walsh aides for allegedly withholding permits from a music festival until organizers hired union stagehands. It is unclear whether the City Hall arrests are connected to the development inquiry.

Don Harney/City of Boston
Mayor Martin J. Walsh offered remarks and presented the “Caring Hearts Award” to the leadership and members of the Sprinkler Fitters and Apprentices of Local 550 at the Gavin Foundation’s Open Hearts Open Homes event. Mark Fortune is in center.

The investigation has rekindled debate about the distinction between the legal promotion of union labor, even through aggressive means, and extortion. Prosecutors must ultimately determine where the line is between permissible advocacy on behalf of working people and unlawful coercion.

A key Supreme Court ruling recognized the right of organized labor to protest for better pay, but the court did not protect union members who seek to exact jobs for what the court described as “imposed, unwanted, superfluous, and fictitious services.”

The documents offer a behind-the-scenes view of Boston labor leaders and tactics used to win construction jobs for their members. A central figure in the investigation appears to be Anthony Perrone, who in 2012 was a leader of the Laborers’ union, Local 22, in Malden. Laborers’ tasks include demolition, cleanup, and other labor on job sites.

It was in conversations with Perrone that Walsh is heard on the wiretap discussing AvalonBay, according to the documents.

On a call recorded in February 2012, Perrone speaks about blocking a proposed AvalonBay high-rise on Stuart Street in Boston, though the documents do not say why. In response, Walsh tells Perrone that to delay the project they would need Local 22’s business manager, Louis Mandarini , to call then-Mayor Thomas M. Menino.

Mandarini said he did not call Menino, the documents say. Mandarini recently testified before the grand jury with immunity, according to the people familiar with the case. Mandarini did not respond to phone and e-mail messages seeking comment. Menino did not run for reelection in 2013, the year Walsh won the job; Menino died in 2014.

The documents show that the effort to persuade AvalonBay to use union labor in Somerville continued in the autumn of 2012, when Perrone organized a lunch with Chris Berardi, president of JDC Demolition Company Inc.

Berardi knew AvalonBay senior vice president Scott Kinter, and Perrone hoped he could help arrange a meeting with Kinter.

Berardi has testified before the grand jury with immunity, according to the documents and people with knowledge of the investigation. He declined to speak with reporters who visited his Gerard Street office, and has not responded to phone messages.

Berardi, Perrone, and Walsh subsequently met at Santarpio’s Pizza to discuss speaking to Kinter about using union labor in Somerville, according to the documents. Berardi said Kinter later “agreed to put two or three union guys on” in Somerville.

On Oct. 1, 2012, the Avalon project on Stuart Street was scheduled to come before the Boston Zoning Board of Appeal. The day before the vote, Walsh and Perrone discussed strategy again, in a second call recorded by investigators. Perrone refers to Kinter with a crude term and says, “He thinks everybody is stupid.”

Walsh responds: “Tomorrow, do me a favor and have Lou [Mandarini] call the mayor’s office because AvalonBay is on the docket for 45 Stuart Street. We want him to get it thrown off the docket at the ZBA.”

Walsh also says that he told Kinter that if he didn’t go union in Somerville they would knock his project off the zoning board’s docket in Boston, the documents say. Walsh does not specify who “they” refers to.

Last month, labor leader Mark Fortune — a member of the Boston Zoning Board of Appeal and, at the time, Walsh’s second-in-command at the building trades — testified with immunity before the grand jury, according to the documents and people familiar with the case.

A Globe reporter saw Fortune on the day of his testimony, Oct. 20, at the John Joseph Moakley federal courthouse, where the grand jury sits.

Fortune referred questions to his lawyer, Tracy A. Miner , who did not respond to several phone messages. Miner said in April that Fortune “absolutely denies ever using his position on the Zoning Board of Appeal inappropriately.”

That same day at federal court, a Globe reporter also saw Michael P. Monahan, an international vice president of the International Brotherhood of Electrical Workers. Monahan, who served on the zoning board in 2012, was there to testify with immunity, according to the documents and people familiar with the case.

According to an audio recording of the Oct. 2, 2012, zoning board meeting, Monahan asked AvalonBay if it had selected a general contractor for its Stuart Street project. Not yet, an AvalonBay representative said, but the workforce would be “100 percent union labor.”

Monahan then said, “It doesn’t tie into this project, but while I have you here, how about Somerville?”

His answer: “There are some union and some nonunion subcontractors.”

Moments later, Monahan made a motion in favor of the Stuart Street project and the zoning board voted to approve the permit.

Prosecutors are investigating whether Monahan’s question about Somerville was part of the effort to pressure AvalonBay, according to the documents. Monahan’s lawyer, George C. McMahon , said his client wanted insight into staffing projections and never pressured AvalonBay.

“He didn’t ask them whether it was a union project,” McMahon said. “He asked him who was the general contractor. The representative of the company — he chose to answer the question about how union people were going to be involved.”

Monahan currently sits on the board of the Boston Planning & Development Agency, formerly known as the Boston Redevelopment Authority.

Phone records show that on the day of the zoning board vote, Fortune and Walsh spoke twice before the meeting, and four times after, the documents say, but those calls were not recorded.

Fortune told the grand jury last month he could not remember what Walsh and he discussed in those calls, according to the documents.

The zoning board vote came up in conversations again nearly two months later, when investigators recorded a call between Fortune and Perrone on Nov. 28, the documents say.

On that call, Fortune says that he and Monahan “put it to Avalon” at the zoning board meeting, that the Stuart Street project in Boston would be all-union, and that union ironworkers, electricians, and laborers were on at Assembly Row in Somerville. Fortune, of the Sprinkler Fitters, Local 550, says that he “is looking for 30,000 man hours on Assembly [Row].”

Fortune on the call referenced another Avalon project in the West End: “We are going to hold them up too, on the BRA, on the BRA [sic] of the Zoning Board. I’m gonna let him know in a nice way that, you know, we want to work with you, we want to get the job done, but you need to be out front and honest with us and tell us what the hell is going on.”

Last month, Fortune told the grand jury that his remarks to Perrone were just “tough talk,” and that he never took any action against AvalonBay, the documents say. He testified that it would be wrong for the zoning board to deny a variance based on whether a project employs union or nonunion workers and, as far as he knew, the board never did that.

Fortune’s union ultimately did not work on the Somerville project, the documents say.

Kinter, of AvalonBay, told the Globe by e-mail that the company “is aware that there is a government investigation related to development activity in the Boston area. Unfortunately, we don’t comment on ongoing investigations or litigation.”

Perrone declined to speak to Globe reporters who visited his home in Revere. His attorney, Robert S. Sinsheimer , said Perrone has done nothing wrong. “As far as I know, my client has spent his life trying to get jobs for other people,” he said. “That’s what a union is supposed to do.”

While the documents seen by the Globe focus primarily on Assembly Row, it is not the only project under scrutiny. Last November, the Globe reported that federal prosecutors were investigating whether Mayor Carlo DeMaria of Everett strong-armed a developer to use union workers while converting the old Charleston Chew factory into a luxury apartment complex. DeMaria has declined to discuss the investigation.

In an appearance before the grand jury, former Everett zoning board member Mario Cornelio was asked about a decision by the panel to delay the project two weeks, in 2012, over traffic concerns, according to his lawyer, Joseph J. Machera.

“Tabling the project was completely innocent,” Machera said. “They needed more paperwork. He testified that he was instructed by the city to table it because they needed more information.”

Walsh led the Building Trades from 2011 to 2013, when he left the post to run for mayor. Organized labor fueled Walsh’s victory in a crowded mayoral race in 2013, spending more than $3 million to elect him. After taking office, Walsh successfully pushed construction unions to lower their wages to help make new housing more affordable.

State records show that in March, Walsh’s campaign account began making monthly $10,000 payments, now totaling $90,000, to the law firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. Walsh’s campaign spokeswoman, Rachel Goldstein, said the money was for fund-raising compliance work and had nothing to do with the federal investigation.

According to the documents, prosecutors said they were nearing the end of their investigation. The US attorney’s office declined to comment for this article.

Milton J. Valencia and Andrea Estes of the Globe staff contributed to this report. Mark Arsenault can be reached at mark.arsenault@globe.com. Follow him on Twitter @BostonGlobeMark. Andrew Ryan can be reached at andrew.ryan@globe.com. Follow him on Twitter @GlobeAndrewRyan.