More Troubles for Donovan

Figures in Silverman 's probe turn up in a new investigation

When he was investigating Labor Secretary Raymond Donovan last spring, Special Prosecutor Leon Silverman summoned a pair of mobsters to testify before a grand jury about their alleged past links with the Reagan Cabinet member. One of them, Philip Buono, reportedly denied even knowing Donovan; the other, Joseph ("Joe Hooks") Verlezza, claimed he was too ill to talk and never showed up. The names of both men have resurfaced: federal authorities consider them prime suspects in the slaying last month of Nat Masselli, 31, a Silverman informant and son of a mobster who has been a central figure in the Donovan investigation.

Nat Masselli was murdered the night before his father William ("Billy the Butcher") Masselli, 55, was to appear before a New York grand jury investigating new charges against Donovan. The Massellis were embroiled in a financial dispute with some Mob-connected business associates, and conceivably that could have been the reason for the rubout. But some law enforcement sources thought it was more likely that Nat Masselli was killed in retaliation for cooperating with Silverman or as a warning to the elder Masselli to keep his mouth shut.

Masselli's murder and the reopening of the Donovan investigation have heightened White House anxiety over allegations that a Cabinet Secretary was linked with the Mafia. Earlier this year, Silverman investigated reports that in January 1979, Donovan, then part owner of New Jersey's Schiavone Construction Co., had met in Miami with William Masselli, a member of the Genovese Mafia family and head of an excavation firm that did business with Schiavone. Donovan heatedly denied the charge, and Silverman decided that the Miami meeting could not be corroborated. Then, last May, the special prosecutor persuaded Masselli's son Nat to allow the FBI to tap his telephone conversations with a Schiavone lawyer. The taps turned up no evidence of criminal activities.

In late June, Silverman announced that there was "insufficient credible evidence" to prosecute Donovan. But in a 1,025-page report, the special prosecutor disclosed that the elder Masselli, now serving a seven-year sentence for hijacking, had tried to peddle information about Donovan in an effort to cut his prison term and that Nat had permitted the FBI to bug his phones. Although these details were largely overlooked by the press, they were apparently noted with extreme interest by mobsters.

As Silverman was packing up his records, he received fresh allegations from the Justice Department that Donovan had met in Miami with William Masselli and Albert ("Chink") Facchiano, a convicted loan shark and former captain in the Genovese clan, to set up no-show jobs for mobsters on Schiavone construction sites. In mid-July, Silverman reopened his investigation, determined to dig deeper into the alleged links between the Genovese family and Schiavone. In his first probe, he had questioned the elder Masselli and Buono, who is reputed to be a Genovese captain; Silverman decided to interrogate them again, and also to grill Facchiano, now serving a 20-year prison term in Alabama, and the supposedly ailing Verlezza, a close associate of Buono's.

On Aug. 24, Silverman had Masselli transferred from a prison near Lake Placid, N.Y., to a Manhattan jail cell in preparation for his appearance before the grand jury. The next day, Nat visited his father at the jail. Later that night, police say, the younger Masselli drove up to Van Cortlandt Park in The Bronx to meet with Buono, Verlezza and Salvatore Odierno, 67, a Genovese loan shark. Masselli parked his 1977 Lincoln Continental in back of Odierno's red Pontiac. According to federal authorities, Odierno slid into the front seat of the Lincoln, next to Masselli, while Buono clambered into the back seat; Verlezza remained behind in Odierno's car.

After talking briefly with the two men, Nat turned his key in the ignition and started to drive away. Suddenly, a shot was fired, and the Continental, engine roaring, smashed into a parked car. Masselli, shot once behind the right ear with a .38-cal. pistol, slumped dead behind the wheel.

As scores of people watched from a playground across the well-lit street, Odierno jumped out of the car and ran to his Pontiac. The chunky Buono, police say, had some trouble extricating himself from the back seat of the two-door Continental. "Hey, wait!" he yelled to Odierno as the Pontiac began to pull away. Buono eventually got into the other car, but not before the man whose parked auto had been smashed by the Continental noticed what had happened. The angry owner gave chase on foot and managed to whack the trunk of Odierno's car with a tire iron as the mobsters sped away.

Several witnesses jotted down the license-plate number of the Pontiac.

Tracing the car to Odierno, police staked out his home in Valley Stream, N.Y., for two days; Odierno then surrendered to the Bronx District Attorney. After a witness picked out Odierno from a police line-up last week, he was charged with second-degree murder. He pleaded not guilty. A Bronx grand jury indicted him on Friday. Meanwhile, authorities were investigating Buono and Verlezza but were gathering more evidence before making other arrests.

Since the hit was so clumsily executed, investigators believe that the mobsters discovered something so alarming during their brief talk with Masselli that they decided he had to be murdered. One line of speculation was that he had somehow indicated that he was cooperating with Silverman. Another was that the aging hitmen had discovered a recording device in the car.

According to police sources, Nat Masselli had let investigators wire him with a body mike in the past.

Masselli is the second Silverman witness to be murdered. Last June, the body of Fred Furino, a Mafia bagman who allegedly received payoffs from Schiavone and flunked lie-detector tests on his denials that he knew Donovan, was found stuffed into the trunk of a car in Manhattan. The Masselli killing touched off grumbling among experienced federal prosecutors about the way the Donovan probe has been conducted. By revealing in his report the aid both Massellis had given him, they say, Silverman in effect fingered them for execution by the Mob. At least one other witness named in the report is receiving federal protection. Some prosecutors contend that Silverman, 61, a partner in a Manhattan corporate law firm, is ill equipped to investigate the grimy dealings of organized crime. "That's primarily a game of the streets, like stickball," said one federal official. "Silverman can't play it."

For his part, Silverman contends that the testimony of Government informants tends to be unreliable and self-serving. He has exhaustively checked the charges made by informants, frequently rejecting the testimony of witnesses the Government has considered trustworthy in the past. The special prosecutor, moreover, has concentrated solely on charges that Donovan is linked to mobsters; he does not consider it his responsibility to pursue allegations that other Schiavone officials might have dealt with the Mob. "That would have made us an ombudsman for the Schiavone Co., and that was not our function," said Silverman.

The reports of a meeting in Miami, along with other alleged contacts between Donovan and the elder Masselli, remain the focus of the new Silverman probe. During his Senate confirmation hearings in early 1981, Donovan testified that he had never socialized with the mobster and had bumped into him only "three times," always on job sites. But, in an interview with New York Daily News Columnist Jimmy Breslin last week, Masselli recalled a slightly different relationship. "We know each other by name," he said. "Hello. Goodbye." Then Masselli related that he had been a guest of Donovan's at a couple of football games in New Jersey, and had met the future Labor Secretary at a contractors' dinner and at a Schiavone Christmas party. "Even if I did know him personally, so what?" asked Masselli with a straight face. "I'm not Mob connected."

Silverman expects to wrap up his new probe by late September. Even if he again clears Donovan of criminal wrongdoing, it may not be enough to save the Labor Secretary's job. Already, the appearance of impropriety has diminished Donovan's effectiveness as a member of the Reagan Cabinet. Donovan, who was grilled by Silverman for two hours last week, remains outwardly unconcerned. "I will be fully cleared of these newest allegations," he declared. "There is absolutely no substance to these charges, and that is the way the final chapter will be written." Why is Donovan so optimistic? "You got me," replied Silverman. "I don't know what basis he has for being confident."

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