Donovan, Raymond J. – Investigation

SCOPE NOTE

This topic includes material regarding any and all investigations of Secretary of Labor Raymond Donovan in addition to any and all references to the Secretary found within the Library’s records.

Background Information on The Investigation of the Nomination Procedures for Raymond Donovan, Secretary of Labor

During January 1981, the FBI conducted a standard background investigation of Secretary of Labor designate Raymond J. Donovan. Summaries of the investigation were furnished through the Assistant Attorney General's Office of Legislative Affairs, Department of Justice, to the U.S. Senate Committee on Labor and Human Resources, the President Elect’s Transition Office and later to the White House Counsel’s Office. This first report contained some allegations regarding Donovan’s ties to organized crime. Based on this information, his confirmation was held up for several weeks in which Donovan testified in Congress multiple times and vigorously maintained his innocence. He was confirmed as Secretary of Labor on February 4, 1981.

Throughout 1981, the Senate Committee on Labor and Human Resources continued to refer allegations of corruption against Donovan and his former employee, Schiavone Construction Co, including ties to organized crime, bribery and pay-offs to the FBI investigation unit. Witnesses came forward with further accusations long after his confirmation but the official background investigation was completed on January 27, 1981

On December 29, 1981, a federal court panel appointed Leon Silverman, a New York City attorney, as a Special Prosecutor to investigate allegations of corruption against Donovan, specifically that Donovan was present when Schiavone Construction was making a payoff. It should be noted Donovan requested the appointment of a special prosecutor presumably to stop the continued speculation regarding corruption. Silverman was to conduct an investigation of Donovan, in accordance with provisions of the Ethics in Government Act on behalf of the U.S. Senate Committee on Labor and Human Resources.

Silverman filed a report with the United States Court of Appeals, District of Columbia on June 28, 1982 focused on the charge that Donovan had participated in an illegal payoff by his New Jersey construction firm to a corrupt labor union official. Silverman found there was “insufficient credible evidence on which to base a prosecution” of Donovan on charges involving labor corruption and links to organized crime.

Silverman filed a supplemental report after a nine-month investigation on September 13, 1982 and repeated the conclusions of the June 28 report that there was “insufficient credible evidence” to support charges.

In 1985 an additional investigation by Special Prosecutor Silverman was opened on the question of whether Donovan had given false testimony to Congress in 1982. This investigation was suspended pending the 1987 trial of Donovan on corruption charges. Its findings were the same as earlier investigations – “insufficient credible evidence.”

Raymond Donovan left the Reagan Administration on March 15, 1985 and returned to his construction firm in New Jersey where he eventually acquired 50% ownership in the company. In a highly publicized 1987 case, Donovan and six other defendants were indicted by a Bronx County, New York, grand jury for larceny and fraud in connection with a project to construct a new line for the New York City subway. The alleged scheme involved a Genovese crime family associate and a minority-owned subcontractor. Schiavone Construction was obligated to subcontract part of the work to a minority-owned enterprise. The essence of the charge was that because the minority owned firm (Jo-Pel Contracting and Trucking Corp) leased equipment from Schiavone, that it was not truly independent of Schiavone.

On May 25, 1987, Donovan (and all of the other defendants) was acquitted, after which Donovan was famously quoted as asking, "Which office do I go to to get my reputation back?”

As a result of the Silverman investigation, other discrepancies regarding the initial FBI background investigation were uncovered. It was disclosed the FBI had damaging information that it provided to the White House but withheld from the January 1981 Senate Labor Committee hearings on Donovan’s nomination. As stated, the FBI continued to receive further information on Donovan which was not passed to Congress. Congress conducted an investigation and hearings regarding the FBI Investigation of Raymond Donovan and possible “Executive interference” in August 1982. FBI Unit Chief of Financial Crimes, Anthony Adamski, Jr. and Francis M. Mullen, Jr., FBI Executive Assistant Director for Investigations testified to the Committee on Labor. The Committee subpoenaed the White House Counsel, Fred Fielding, but he did not testify. Congress continued to request further information from the FBI up until early 1983. Their Committee final report was released on May 1983.

The majority of the material listed for this topic regarding the Donovan investigation focuses almost exclusively on the 1982 Congressional inquiry regarding FBI “timeliness and completeness” reporting information to the Senate Committee on Labor and Human Resources in the confirmation of Labor Secretary Raymond Donovan. It includes requests from Congress to the FBI, Department of Justice and the White House Counsel’s Office on this matter; copies of documents provided; FBI and White House statements on the process followed in the investigation of nominee Raymond Donovan; summaries of events; reports from the Committee and the Special Prosecutor Leon Sullivan and news clippings surrounding the investigation. There is little material related to the actual investigation by Sullivan other than his final reports.