TOWERS FELL AND MOB SCHEMES BEGAN. How organized crime civvied up Ground Zero work

This series was reported and written by the Daily News Investigative Team: RUSS BUETTNER, HEIDI EVANS, ROBERT GEARTY, BRIAN KATES, GREG B. SMITH and Assistant Managing Editor RICHARD T. PIENCIAK. Additional research by Ellen Locker

Monday, December 5th 2005, 1:31AM

A four-month Daily News investigation into the $21.4 billion in federal disaster recovery aid has uncovered widespread waste, greed, lax rules and incompetence. Yesterday, in Part 1 of the groundbreaking series, The News Investigative Team detailed how hundreds of millions of dollars were spent on projects that seemingly had nothing to do with 9/11 and lower Manhattan, how millions went to fat cats and firms that were barely hurt and how hundreds of small and less powerful business entities received barely enough to pay a month’s rent.

Today, The News reports on how organized crime moved in on the Ground Zero debris cleanup.

IT’S 11:34 A.M. on Sept. 11, 2001, just an hour after the second twin tower has fallen. Already, the mob is scheming to get its piece.

In a suburban one-family home on Staten Island’s south shore, Allen Monchik, a Luchese crime family associate with two fraud convictions on his résumé, is working the phones.

His first call is to a Port Authority engineer who, investigators will later say, regularly steers jobs at Kennedy Airport to mob-controlled subcontractors in return for bribes.

During the next few hours, as Navy destroyers steam toward New York and fighter jets patrol the sky overhead, Monchik calls the engineer 12 more times.

As the afternoon progresses, Monchik repeatedly phones a Bronx subcontractor connected to a Gambino family associate. He then calls a Jersey City construction company allegedly controlled by a Luchese family soldier. He completes his marathon day of phone conversations with a call to a major contracting executive who’s a reputed Luchese associate.

By the morning of the 12th, the mob is in a feeding frenzy to get in on the massive cleanup job that will inevitably ensue in lower Manhattan.

In fact, organized crime and corrupt subcontractors turned the terrorist attack into a windfall, according to a four-month Daily News investigation of the federal government’s $21.4 billion 9/11 disaster recovery program.

Down at Ground Zero, the Luchese family, the Colombos, the Gambinos and even the New Jersey-based DeCavalcantes all made out, according to court documents, government records and interviews.

They divvied up Ground Zero the way the mob carved up Las Vegas in the old days.

Unbeknown to Monchik and his business associates, all of the calls were being tracked by Manhattan District Attorney Robert Morgenthau’s office.

The DA had been looking into corruption in the asbestos removal industry and happened to run into the blizzard of phone calls in the hours following the terrorist attacks.

In documents obtained by The News, investigator Thomas Coyne described Monchik as an “earner” – a guy who funnels payoff cash to the underworld.

Over the years, Monchik made millions as a consultant scaring up hefty government contracts for mob-connected companies, investigators say.

Monchik made more calls throughout the 12th and 13th, records show – one to another Luchese associate/subcontractor and five more to the major contracting executive he had called on 9/11, including a conference call with an official at one of the New Jersey-based asbestos removal companies that Monchik worked for as a consultant.

He then made what investigators characterize as the most important call of all – to the acting boss of the Luchese crime family, Louis (Louie Bagels) Daidone, a gangster who once held down a suspected informant so he could be shot in both eyes while a dead canary was stuffed into his mouth.

According to Coyne, the series of calls immediately following the Trade Center attacks show that Monchik was helping the mob divide up the work that would soon be available at Ground Zero.

“Monchik coordinated with other Luchese associates who were ‘earners’ … to ensure that Monchik and other Luchese associates received lucrative shares of the Ground Zero cleanup contracts,” Coyne wrote. “Monchik followed organized crime protocol of informing the acting boss, Daidone, of Monchik’s Ground Zero dealings in order to receive Daidone’s approval or rejection.”

The call to Daidone, Coyne charged, was related to “the division of work between individuals and corporations associated with the Luchese organized crime family.”

Sources close to the investigation say Monchik is cooperating with prosecutors on the construction corruption but is not spilling about the mob.

Although it is not known precisely what Monchik and his gangster associates discussed, it appears that his phone activity paid off handsomely.

At least four of the companies Monchik called in those crucial first hours wound up with millions of dollars in taxpayer-funded work related to the 9/11 cleanup.

All told, The News investigation found that at least $63.2 million of the $458 million FEMA-funded Ground Zero cleanup went to companies accused of mob ties.

Like the rats that infested the ruins of Ground Zero for a time, gangster-related companies were prevalent removing debris from inside the cleanup zone, wiping toxic dust off Trade Center artifacts and decontaminating apartments at Battery Park City.

The News has documented that an alleged mob associate wound up as general superintendent for one of the four major contractors hired to supervise the cleanup, a powerful position that investigators say allowed him to steer work to gangster pals.

Several firms were later accused of paying off corrupt officials of a union infiltrated by the Mafia to let them use cheaper nonunion help.

Investigators found mob figures visiting Ground Zero, too.

Tommy Cappa, a Colombo crime family associate, was put on the payroll of an asbestos removal company doing Sept. 11 cleanup while still on probation for his role in a 1991 mob war murder conspiracy.

Documents show he was paid $200 a week on the books, but he proclaimed on tape that he pocketed 20% of every job the company won.

At one point, investigators watched Cappa meet with Monchik at Ground Zero, then drive off in a white 2002 Jaguar registered to Cappa’s wife. At another point, Cappa recounted that he’d met with another gangster, prohibited by probation rules requiring that he avoid organized crime figures.

Allegations also surfaced that steel from Ground Zero was being illegally diverted to a New Jersey transfer station. City investigators wound up buying Global Positioning System units for debris removal trucks to make sure they were going where they were supposed to go.

- LOOSENING THE RULES -

Many subcontractors did exemplary work, sacrificing a great deal in a community-spirited moment. But the emergency nature of the Ground Zero cleanup prompted the same disregard for customary business practices that The News investigation has uncovered in other aspects of the 9/11 recovery aid program.

The need for speed determined policy.

Government traditionally tries to protect taxpayers by making subcontractors compete for jobs with secret bids.

Because of the urgency of the Ground Zero cleanup, the city invoked emergency powers, exempting the Department of Design & Construction from competitive bidding, except where it was practical. Because it was never feasible, it never occurred.

“That was really seat-of-pants sort of stuff,” said one city official involved in the process.

Michael Richman, a vice president for one of the subcontractors hired to haul debris, stated in an affidavit filed as part of a related civil lawsuit: “There were no written contracts on this job. Due to the emergency, people began working first and discussed billing later.”

Referring to a 30-day lull in registration rules for trucking companies, another official who wished to remain anonymous explained: “The licensing regulations went by the board on Sept. 11 because we wanted to get that stuff out of there.”

rpienciak@nydailynews.com

SIDEBAR ELEVATOR HERO WENT DOWNHILL.

For a while, Port Authority engineer Mark Jakubek was a Sept. 11 hero, recognized for helping rescue people trapped in a 1 World Trade Center elevator.

The euphoria didn’t last long.

Jakubek knew that thousands of contract documents stored in the Port Authority’s 77th floor offices had been vaporized in the building’s collapse.

Destroyed documents meant subcontractors would have to wait months to get paid.

In early 2002, one asbestos removal subcontractor approached Jakubek to inquire about the $200,000 he was owed.

Jakubek was blunt: $7,000 cash upfront and $1,000 more once the check cleared, plus four tickets for an upcoming Rolling Stones concert in New Jersey. In return, he said, he’d expedite payment.

The subcontractor agreed and coughed up the first bribe.

Soon after, the subcontractor got caught in an unrelated investigation and decided to cooperate with the PA’s inspector general.

Driving a PA vehicle, an unsuspecting Jakubek met the subcontractor at a Kennedy Airport parking lot on Nov. 1, 2002.

With a frigid wind blowing outside, the subcontractor – wired up by investigators – got in the car and handed over $1,000 cash in an envelope. Jakubek then took him on a tour of a JFK hangar containing WTC artifacts.

Jakubek was later caught accepting $13,000 more for another expedited payment.

He never got his Stones tickets, settling for cash instead.

Meanwhile, prosecutors say he demanded Bon Jovi tickets to help another subcontractor win 9/11 cleanup work.

His feeble attempt to hide this corrupt demand was recorded on tape, with Jakubek calling the tickets “pencils.”

“I was wondering if four pencils would have been possible?” Jakubek queried.

Allen Monchik, a consultant for several asbestos removal firms, promised only two, but assured his buddy that his pencils were “right off the stage.”

“What are you talking about?” Jakubek asked.

“What are you talking about?”

“Wait, we might have the wrong thing,” Jakubek laughed.

“We’re talking Bon Jovi” Monchik clarified,

Jakubek also was extremely security conscious, asking one subcontractor if he was alone during their conversation. The subcontractor replied, “It’s just me, my dog and my parrot.”

“Can your parrot say VENDEX check?” Jakubek asked, letting the subcontractor know he’d learned investigators were using the city’s anti-corruption VENDEX database to look at the subcontractor’s firm.

Caught by the PA inspector general, Jakubek agreed to plead guilty to taking bribes to expedite payments. In March 2004, he told a judge that 9/11 had driven him to the other side of the law.

Prosecutors pointed out that he’d taken many documented bribes long before the day he behaved heroically. Jakubek got a year and a day in prison.

Jakubek has since been indicted by the Manhattan district attorney on charges of helping another corrupt subcontractor inflate costs on a job cleaning debris recovered from Ground Zero. Those charges are pending.

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