Construction Sweatshops, Developers, Contractors and Organized Crime

Historically, sweatshop employees have received low wages and skimpy or no benefits, and are forced to work long hours, usually in dangerous and unhealthy working conditions. They fear being fired or suffering other retaliation if they complain. Sweatshop conditions do not exist only in factories; they can also exist in service industries such as construction.

Partnering with TIAA-CREF on a construction sweatshop in Long Island City are developer O'Connor Capital Partners and its general contractor McGowan Builders. McGowan subcontracts to firms that do not provide their workers with retirement plans or health care benefits and pay far less than the area standard wage. Responsible contractors cannot compete with such exploitative conditions, which lead to a race to the bottom.

McGowan Builders has subcontracted much of its work on the building project to DeGraw Construction, whose owner Anthony Scibelli was described in a Daily News article on February 6, 2011, entitled, "Gambino crime family quietly made millions building high-rise condos across the city," as a "mob associate" of members of the notorious Gambino crime family.

Developer: O'Connor Capital Partners

In 2005, O'Connor Capital Partners and Richard Kalikow purchased the huge Manhattan House apartment complex on Manhattan's Upper East Side with the intention of converting it to condominiums. The new owners were accused of using high-pressure tactics to force out tenants who did not want to purchase their apartments. O'Connor bought out Kalikow in 2007, and in 2009 the company faced more disputes with remaining tenants and buyers after it experienced problems with its financing and fell behind on making extensive renovations. Among the tenants were seniors in rent-stabilized apartments who did not want to be displaced.

In April 2012, three men working on the exterior of Manhattan House had to be rescued when their scaffold collapsed. As of September 2012, according to the New York City Department of Buildings website, Manhattan House had 125 complaints and 197 violations.

In August 2012, New York's Joint Commission on Public Ethics announced that O'Connor Capital Partners would pay a fine of $2,500 for failing to file a required lobbying disclosure report.

General Contractor: McGowan Builders

The Occupational Safety and Health Administration (OSHA) fined McGowan Builders in 2009 and 2011 for multiple serious violations in connection with workers falling from heights at nonunion sites in Manhattan. After being sued for negligence in its role as construction manager at a site in New Jersey where a steel structure collapsed in 2006, McGowan and other parties resolved the case out of court. In 2008, McGowan and other parties also settled out of court after being sued over water damage caused to the French-Japanese Educational Institute in New York during a rooftop project supervised by McGowan.

Sub-Contractor: DeGraw Construction

In January 2011 Anthony Scibelli, owner of DeGraw Construction Group Inc. as well as VMS Consulting Inc. and Hunter-Atlantic Inc., was indicted along with seven other individuals in federal court in Brooklyn (Read Indictment). They were alleged to be members of the Gambino organized crime family and were charged with racketeering conspiracy and extortion conspiracy. Scibelli was specifically charged conspiring to extort cash payments from a condo developer in Brooklyn.

In February 2012 Scibelli agreed to plead guilty to racketeering conspiracy. Sentencing was originally scheduled for June 2012, but the matter has apparently not been resolved. In November 2012 Scibelli's lawyers submitted a memorandum to the court (Read Memorandum in Aid of Sentencing) arguing that he should be sentenced to five years of probation. The memorandum mentions that this case is actually the second time in the past five years that Scibelli has pleaded guilty to a serious federal felony.

TIAA-CREF Roger Ferguson Campaign to Stop Construction Sweatshops Campaign to Stop Construction Sweatshops Campaign to Stop Construction Sweatshops Campaign to Stop Construction Sweatshops Campaign to Stop Construction Sweatshops