I am Neil Getnick, managing partner of the New York City law firm Getnick & Getnick LLP. We practice in the areas of commercial counselling and litigation, with a particular focus on civil prosecution, the use of civil remedies to combat commercial fraud and related criminal conduct.
Since 1991, I have chaired the New York State Bar Association Commercial and Federal Litigation Section Civil Prosecution Committee. Since 1994, I have served as the President of the International Association of Independent Private Sector Inspectors General. I am speaking to you today in an individual, not representative, capacity.
The proposed New York City legislation setting forth a comprehensive plan to regulate and reform the Fulton Fish Market deserves the strong support of the City Council. Seen in a larger context, this plan is the logical next step in the innovative war on business corruption that has been fought by our local, state and federal prosecutors over the past decade. Currently, our City is the beneficiary of the most enlightened mob-busting campaign anywhere at any time in our nation’s history.
Traditional criminal prosecutions have successfully targeted the leadership of organized crime, for example, the prosecution and conviction after trial of John Gotti, head of the Gambino crime family. Our prosecutors have recognized, however, that a different approach is needed when attempting to eradicate organized crime influence from mainstream business. Thus, for example, a month before the Gotti conviction, Thomas and Joseph Gambino, the white collar side of the Gambino crime family, pled guilty in Manhattan state court as the result of one of a series of industry-wide prosecutions by the Manhattan District Attorney’s Office. The Gambino plea agreement did not impose jail sentences. Instead, it required the dismantling of the family’s operational hold on the garment center trucking industry under the supervision of a court appointed special master.
Removing mob influence from legitimate industry requires more than jailing organized crime leaders. Divestiture, disengagement and dissolution have become the tools by which prosecutors seek structural reform of corrupted organizations and industries. Structural reform is a strategy that has its conceptual roots in the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”). That strategy has been developed and applied by U.S. Attorneys in the Southern and Eastern Districts of New York, the New York State Organized Crime Task Force, the Manhattan District Attorney’s Office, the New York City School Construction Authority, and the New York State Department of Environmental Conservation.
Monitors have been appointed to oversee the activities of corrupt unions and of companies operating in mob-dominated industries such as commercial carting on Long Island and trucking in the New York City garment center. This approach seeks to rid legitimate industry of organized crime domination by refashioning and monitoring organizations and industries in an effort to eliminate corruption and create a legitimate business environment.
The proposed legislation goes beyond the purview of the prosecutor, enlisting an all-out commitment by our City administration to reform the structure of the Fulton Fish Market. A similar approach to another infiltrated industry was proposed last year in legislation calling for the creation of experimental City-administered commercial carting districts.
These proposals go beyond judicially created trusteeships and monitorships. They bring to bear the full weight and resources of the City to restore and maintain honest business practices in industries infiltrated by corruption. Ultimately, their success will be measured by whether they rid these markets of corruption and improve the bottom line for business and consumers. The twin guiding principles of these efforts must be a zero tolerance for corruption and an emphasis on profitable management.
To define the problem, we are not simply dealing with corrupt businesses, but with a corrupted business environment. To define the solution, we are therefore faced with both a law enforcement challenge and an administrative challenge. Law enforcement must respond with both reactive and proactive investigation. Administrative management must prevent corrupt business activity, prequalifying firms seeking to do business, and monitoring their ongoing activity to guard against the encroachment of corruption. Criminal prosecution must be used to target those who engage in corrupt activity. Civil prosecution must be used to take the profit out of corrupt activity and return that money to honest operations.
The full panoply of weapons from the war on the mob waged during the past decade in our City should be brought to bear in making the reform and regulation of the Fulton Fish Market a paradigm of what City government can achieve in ridding our business environment of corruption and maximizing profitability. The proposed legislation, by requiring licensing and registration of the Market’s businesses and by using background investigations to help the Department of Business Services (“DBS”) Commissioner to screen out corrupt businesses and individuals, gives the City the tools necessary to reform this historically corrupt market. An additional tool that the DBS Commissioner could use within the oversight structure of the current proposed legislation is the Independent Private Sector Inspector General, a highly developed monitoring mechanism. That approach has been encouraged already in connection with proposed legislation aimed at reforming the City’s commercial carting industry both by the sponsor of that legislation and by the New York State Bar Association Commercial and Federal Litigation Section.
The Independent Private Sector Inspector General (“IPSIG”) is a state-of-the-art monitoring mechanism that was developed by a working group of public and private sector attorneys, investigators and accountants in New York. An IPSIG is an independent, private sector firm with legal, auditing, investigative, and loss prevention skills, employed by an organization to ensure compliance with relevant laws and regulations and to deter, prevent, uncover, and report unethical and illegal conduct by, within and against the organization. The DBS Commissioner could use an IPSIG monitoring program at the Fulton Fish Market to complement the proposed licensing, registration and prequalification system.
To achieve what needs to be done in ridding our City business environment of corrupting influences in general, and in the Fulton Fish Market in particular, will take vigilance, talent and independence. Never has there been a more propitious time or a more qualified administration to accomplish these goals. The relentless war on the mob fought during the past decade by our local, state and federal prosecutors has stripped organized crime of its top leadership and brought it under attack, industry by industry, union by union.
Our current City administration, starting with the Mayor, reads like a virtual Who’s Who among the most talented former prosecutors to occupy municipal government posts anywhere at any time. Our local, state and federal prosecutors have the experience, the ability and the proven will to reinforce these legislative and administrative initiatives. The lawyers, investigators and accountants who have pioneered the Independent Private Sector Inspector General mechanism are a private talent bank that the DBS Commissioner could draw upon for special monitoring against the insidious tendency of corruption to return and take over anew.
Now is the time to take the next logical step in the war against business corruption in our City. The proposed regulation and reform of the Fulton Fish Market deserves the full and immediate support of the City Council. This effort will take us beyond prosecutorial responses towards a fully committed City governmental approach aimed at insuring an honest and profitable business environment.