City Money to the Mob? Manhattan D.A. Targets Giuliani’s Garbage Guy

A high-ranking figure in Mayor Rudolph Giuliani’s administration whose office is playing a key role in the closing of the Fresh Kills landfill is being investigated by the Manhattan District Attorney for his alleged contacts with mob-connected garbage companies, sources have told The Observer .

Adam Barsky, director of the Mayor’s Office of Operations, is under investigation in connection with his dealings both on Long Island and in the city. Investigators are looking into his possible role in a controversial 1994 plan to expand a garbage transfer station in Williamsburg, Brooklyn, sources said.

Sources familiar with the inquiry said District Attorney Robert Morgenthau is asking questions about whether Mr. Barsky attempted to steer $11 million in New York City Industrial Development Agency funding to the transfer firm, which was run by a key player in a mob cartel that controlled the city’s commercial trash business.

Mr. Morgenthau is also scrutinizing Mr. Barsky’s activities in Babylon, L.I., where he was comptroller until 1992 and has remained close to the town’s Democratic leadership. Sources told The Observer that investigators believe Mr. Barsky was present at the alleged bribery in 1994 of his successor, Douglas Jacob. At the time, Mr. Barsky worked for the city’s Economic Development Corporation.

Mr. Jacob has since been convicted of eight misdemeanor counts of filing false documents with the state and was indicted last July in connection with the alleged bribery. A third case is also pending against him.

Mr. Barsky, a 36-year-old fitness buff who is rarely seen without a coat and tie, oversaw the E.D.C.’s low-interest industrial financing program. The Mayor’s Office of Operations, of which Mr. Barsky is the director, oversees city agencies and under previous administrations was a tremendously powerful post. In recent months, he has been mentioned as a contender to replace Charles Millard as E.D.C. president.

But it is his current position that makes the investigation such a sensitive matter for the Giuliani administration. The Mayor’s Office of Operations is in the midst of developing a plan with the Department of Sanitation to close the Staten Island landfill by 2001 and export as many as 12,900 tons of garbage a day to other states. The plan has spawned a feud between the Mayor and officials in Virginia and four other mid-Atlantic states.

Private garbage haulers will undoubtedly be clamoring to transport the city’s waste and the city will be under considerable pressure to make sure such contracts do not fall into the hands of companies with mob links.

Mr. Morgenthau’s investigation could also prove to be very embarrassing for Mr. Giuliani, who is eyeing Senator Daniel Patrick Moynihan’s seat. If the Mayor decides to run, he will undoubtedly boast of his mob-busting activities both as a former U.S. attorney and as mayor.

But if his own operations director has indeed been involved in a bid-rigging scheme on Long Island or attempted to funnel city financing to a mob associate, it may severely undercut Mr. Giuliani’s organized-crime fighting legacy.

That’s not to say, however, that the Mayor hasn’t been warned. Mr. Barsky was first accused of participating in the Babylon bribery two years ago, in a civil suit filed by five local businesses alleging that town officials violated the Racketeer Influenced and Corrupt Organizations Act. At the time, the Mayor told reporters: “The allegations you’re talking about are in a civil lawsuit, not in any way supported by any kind of government investigation or charge.”

The Mayor’s press office did not respond to questions about the District Attorney’s investigation of Mr. Barsky. The District Attorney’s office declined to comment.

Mr. Barsky’s office referred calls about the inquiry to his lawyer, Howard Wilson, the Mayor’s former commissioner of investigations.

Mr. Wilson would not discuss Mr. Barsky’s possible dealings with the Williamsburg recycling plant. But he noted that the charges against his client had been dropped from the civil suit, which is continuing. “All allegations against him are gone,” Mr. Wilson told The Observer . “Similarly, there have never been any charges filed against him by any district attorney.”

But Kevin Maldonado, an attorney for the plantiffs in the civil suit, said he hoped to restore the charges against Mr. Barsky. “The decision to let him out was in no way a vindication of Mr. Barsky,” he said. “When discovery is concluded in this matter, I hope to have enough facts to bring him back into the lawsuit.”

Mr. Morgenthau’s interest in Mr. Barsky’s activities both in New York and Babylon would also seem to indicate that the allegations may not be so easy to shake.

Perhaps that’s not surprising, considering that Mr. Barsky came to the administration from a Long Island town that has been overrun with investigators, and awash with subpoenas, because of a garbage scandal of epic proportions.

Mr. Barsky, a certified public accountant, became Babylon’s comptroller in 1989 after working as an analyst for Kidder Peabody and Company. During his four years in Babylon, according to a 1997 Newsday profile, he helped create a residential garbage district. The hauling contract was awarded to a firm affiliated with one owned by Joseph (Mooney) Petrizzo, a garbage industry figure linked to organized crime.

Newsday has cited court records filed by Federal authorities identifying Mr. Petrizzo as an associate of the Gambino organized crime family. The paper also reported that Mr. Petrizzo has acknowledged a close friendship with Aniello Mancuso, a reputed organized-crime figure who has been described by law enforcement officials as a top Long Island racketeer.

Mr. Barsky left the town in 1992 after his college friend, Richard Schaffer, was elected supervisor. But before he departed, Mr. Barsky recommended Mr. Jacob as his successor.

Mr. Barsky got involved in Herman Badillo’s campaign for city comptroller in 1993. Mr. Badillo lost. But his running mate, Mr. Giuliani, won and Mr. Badillo became one of his close advisers. The following year, Mr. Barsky landed a job in the Economic Development Corporation.

But even with his new duties, Mr. Barsky still turned up in Babylon for political events. Investigators believe he also kept his hand in the town’s garbage business.

According to sources, investigators believe Mr. Barsky was present in an unidentified restaurant in Westchester County when Mr. Jacob was allegedly bribed to steer Babylon’s commercial garbage hauling business to Babylon Source Separation Commercial Inc., a company owned by Mr. Petrizzo.

Last July, Mr. Jacob was indicted by the Suffolk County District Attorney for allegedly accepting a cash bribe of more than $10,000 for manipulating the town’s public bidding process.

Mr. Petrizzo and Sidney Fenster, the company’s president, were also indicted. All three have pleaded not guilty and are awaiting trial.

It wasn’t long afterward that Mr. Barsky had his brush with Nekboh Recycling Inc., a Williamsburg garbage transfer station owned by Philip Barretti Sr. Mr. Barretti, another alleged Gambino family associate, was later convicted for his involvement in the mob cartel that controlled the city’s commercial waste hauling operation.

Nekboh, incorporated in 1986, received Industrial Development Agency funding under the administration of Mayor David Dinkins and at one time held a contract with the city to provide dirt covering for the Fresh Kills landfill.

For years, residents of Williamsburg complained of the putrid smells emanating from the transfer station and the rats it seemed to spawn in droves.

In December 1994, the E.D.C. considered steering $11 million in I.D.A. funds to Nekboh to expand his business with a garbage barge to be built on the Williamsburg waterfront. Sources said Mr. Barsky went as far as to authorize a background check of Mr. Barretti and his outfit, a development that would seem to indicate he was trying to move the deal along.

When neighborhood activists found out about the plan, they went ballistic. “We were obviously opposed to it,” said Peter Gillespie, a member of Neighbors Against Garbage. “This money was going to be used to expand this notorious garbage transfer station on our waterfront.”

But when City Council member Kenneth Fisher of Brooklyn protested directly to the E.D.C., he said he was largely ignored and it wasn’t until he contacted others in the administration that the deal ultimately died.

Mr. Barretti later pleaded guilty to his involvement in the mob-dominated garbage cartel and to dumping petroleum-tainted soil at the Williamsburg transfer station. After his 1995 indictment, it was revealed that he had operated Nekboh for many years without an official permit.

Not long after, Mr. Barretti sold the facility along with a number of his other companies to USA Waste Services Inc.

“The E.D.C. wasn’t very happy at having their apple cart upset,” Mr. Fisher told The Observer . “Given the way Barretti conducted himself, it was certainly not surprising to find out that he was a kingpin in the mob carting cartel. But what I was never able to find out was why so many public agencies bent over backwards to work with him.”

City Money to the Mob? Manhattan D.A. Targets Giuliani’s Garbage Guy