After Two Years, Donovan Trial Opens Next Week

Posted: September 06, 1986

NEW YORK — Now that a last-minute roadblock is out of the way, the long-delayed fraud and larceny trial of President Reagan's former labor secretary, Raymond J. Donovan, and eight others is scheduled to begin Tuesday morning in the Bronx County Courthouse.

State Supreme Court Justice John P. Collins yesterday agreed to a defense motion to remove co-defendant Ronald A. Schiavone from the trial. Schiavone, who suffered a mild heart attack June 25, asked to be removed for medical reasons. He was scheduled for trial Jan. 12.

Donovan and the others were indicted by a Bronx grand jury in September 1984 on 125 counts of falsifying business records, 11 counts of "submitting a false instrument for filing" and one count of grand larceny.

Donovan became the first sitting cabinet member ever to be indicted on felony charges, and resigned from the Reagan administration six months later. Hundreds of hearings involving 94 pretrial motions have delayed the start of the trial for almost two years.

But now, said a spokesman for Bronx District Attorney Mario Merola, "it's really going to begin."

Donovan was an official in the New Jersey-based Schiavone Construction Co. in 1979 - before becoming labor secretary - when the firm was awarded a $186 million contract by the New York City Transit Authority to build a subway tunnel under the East River. Under the terms of the contract, 10 percent of the money was to go to minority-owned construction firms.

The fraud and larceny charges stem from an alleged scheme in which Schiavone Construction hired Bronx-based Jopel Contracting & Trucking Corp. as its minority contractor even though, prosecutors contend, the firm was actually controlled by William P. Masselli, a Bronx meat-packer and reputed soldier in the Genovese crime family. State Sen. Joseph L. Galiber, a black Democrat from the Bronx, was listed as the prime owner of the firm.

In addition, prosecutors charge, more than $7 million of Jopel's initial $12 million contract was improperly funneled back to Schiavone Construction via an improper leasing arrangement.

Donovan's co-defendants are Masselli, Galiber and six others associated with Schiavone Construction. The ailing Schiavone, who was forced to appear in court Thursday and undergo a physical exam by a state-hired cardiologist, was president of the company at the time.

Jury selection is expected to last between two and three weeks, with the whole trial running anywhere from two to four months.

Donovan has contended all along that the charges were politically motivated by Merola, a Democrat, to embarrass Reagan.

"These people are not guilty of any crime because no crime was committed," one defense attorney said yesterday.

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