Inside Ocean County Government

10th Legislative District, Ocean County

John Russo’s FBI File: Docs Show How Late State Sen. Was Tangled Up in 90’s Corruption Probe of Newark Airport Contracts

New Jersey State Senator John F. Russo, Sr. (D – 10th Dist.), a longtime Ocean County political power broker who passed away just over a year ago, had a lengthy FBI file detailing investigations into Russo’s involvement with Port Authority contracts and late New York State Senator Joseph Galiber (D – Bronx), according to newly made public documents.

Former New Jersey State Senator John F. Russo, Sr. built a legacy as one of Ocean County’s past political power brokers and most successful Democratic politicians, projecting statewide influence & political power well after his term in the legislature ended.

The late Senator Russo – who at the peak of his career held the position of New Jersey state senate president and even explored running for governor– did not get to the top of the political food chain without drawing the scrutiny of the Federal Bureau of Investigation.

Newly made public documents from the FBI are shedding light on how the agency became interested in the former New Jersey state senator a part of their probe of potential fraud in Port Authority contracts in the 1990’s.

AirTrain, the monorail system providing transportation at Newark Liberty Airport was completed over two decades ago and is now in a state of disrepair. The system has since outlived its design life and a replacement is currently in the works.

“The allegations involve the possible misuse of PA funds in connection with a construction project at Newark Airport.”

Unknown FBI special agent

But during the construction of the original monorail system, then-State Senator Russo drew the interest of federal investigators, who acting on tips from informants, a cooperating witness and the Port Authority Inspector General, began investigating Russo and a New York state senator for fraud relative to the multi-million dollar construction contracts at the airport financed by the Port Authority. 

In response to a request made under the federal Freedom of Information Act (FOIA), the FBI provided Ocean County Politics with a set of heavily redacted documents detailing an investigation involving Russo and his connection to contractors that did work on AirTrain during the early 90’s.

While the documents do not tell the full story of the federal fraud investigation – since the FBI released only 21 pages of the late state senator’s 48-page file, just under half of it – they show how the elder Russo came on their radar for his involvement with one of the contractors.

Because Russo is no longer living, privacy provisions of the FOIA law that otherwise would have normally exempted the files from disclosure under the federal transparency statute no longer applied, allowing portions to be released publicly.

The primary subject of the federal probe involving Russo was late New York State Senator Joseph Galiber. Galiber was a Bronx Democrat who held political power for nearly three decades in New York politics, serving in the state senate from 1969 until his death at the age of 71 in 1995, according to a New York Times report.

Senator Galiber faced a string of legal woes during his tenure in office. In 1977 he was indicted for fraud while serving as the director of a drug rehabilitation program.

The Bronx state senator faced the fraud charges along with mob enforcer William “Billy the Butcher” Masselli and other executives in the 1980’s.  New York Magazine reported at the time that Galiber and Masselli were accused of operating   “… a phony minority trucking firm that allowed a company run by former secretary of labor Raymond Donovan to qualify for the $186 million 63rd Street tunnel contract.”

For his part, Galiber and others were ultimately acquitted of the unrelated fraud charges after a lengthy criminal trial. Galiber would later be indicted again in 1984 on similar allegations that he and other defendants, and subesequently win an acquittal.  His obituary in the New York Times said that some jurors believed the fraud prosecution to be “politically motivated.”

While this article centers on Russo’s involvement with the Port Authority contract investigation, it should be noted that the earliest he came on the radar of the FBI was in the year 1991 over allegations that he “pressured” a judge handling the foreclosure action against the Dover Car Wash, which was owned by Anthony & John Russo, two year prior to the FBI taking interest in his role with the Newark Airport monorail project. Russo ceased being a member of the New Jersey State Senate in 1992, just about a year after first coming on the radar of the FBI.

Port Authority Monorail Contract, Russo Legal Fees Get Attention of Feds

Omni Construction Corp formed a joint venture with Vanessa Construction Corporation. The newly created entity was to serve as the prime contractor for terminals and stations built as a part of the monorail project, according to an FBI document.

Relations between joint venture partners Vanessa and Omni soured, however. Vanessa officials told the FBI that they alleged Omni cut them out of any meaningful work in the project, and provided additional information to investigators.

Who Helped Them Get The Contract?

Special agents wrote that previous Port Authority investigations revealed that an individual was alleged to have helped the Omni-Vanessa joint venture receive the lucrative Newark Airport contract.

The feds redacted the name of the male that was the subject of the allegations, citing personal privacy and law enforcement exemptions.

The FBI also took interest in Senator Russo’s appearance at a June, 1993 meeting that Senator Russo appeared at, apparently in the capacity of legal counsel to Omni Construction Corporation.

Vanessa Corporation executives were skeptical of the legal fees that Russo was receiving in connection with his representation of the company, according to the FBI documents. Company officials told the FBI that they “…knew of no legal work by Russo which would justify such a large fee.”

The FBI coded the investigation involving Russo, Galiber and the Port Authority contracts as involving possible mail fraud and “CSLPO” which is an acronym for “Corruption of State & Local Public Officials” 

FBI: Senator Russo Was Concerned About “Heat” From Investigation

Russo later became concerned about the “heat” being generated by the federal investigation, FBI agents of the Newark Division wrote in a document dated 1994, paying close attention to Russo’s attendance record at Port Authority meetings.

Russo and Galiber’s Phone Records Were Seized By Investigators

As part of the federal probe, agents received authorization to seize telephone toll records of Senators Russo and Galiber in beginning in 1993, according to the FBI files

Telephone toll records differ from traditional wiretaps in the sense that they only reveal metadata about a subject’s phone activity. Toll records obtained by investigators show who the subject was talking to and when they were talking to them, but not the actual content of the calls and can be useful to prosecutors building a case.

Lorin L. Reisner (misspelled as Loren in the FBI documents), then an assistant United States Attorney of the Southern District of New York, advised FBI agents working the case that the information they provided regarding the project may have warranted criminal charges of Mail Fraud and Fraud Against the Government.

What happened with the potential criminal case against Russo, Galiber & Port Authority employees after the information was provided to Reisner and the U.S. Attorney’s office remains an open question, given the extent of the redactions on the case files. As some names were redacted under exemption b(6) to the FOIA law, which covers personal privacy, it’s very likely that those subjects are still living.

Reisner, who is now in private practice with the firm Paul Weiss, did not respond to an email seeking comment about the case and its outcome.

It is possible that the allegations were presented to a federal grand jury and they returned a “no bill” and no indictment was ever returned. Or, the case could have fallen apart in other ways. Federal law enforcement officials may have dropped the case, fearing it would result in an acquittal, going down in flames for the prosecution as past fraud trials of the New York state senator and his associates. 

Since Galiber died in 1995, had there been another criminal trial, it’s very likely that the timing of his death would make prosecuting the case particularly difficult.

Read The Full Documents:


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