Raymond Donovan: Reagan labour secretary haunted by corruption scandals

Although the series of high-profile allegations against him were eventually thrown out, Donovan’s reputation was in tatters

Donovan at the height of his legal ordeals in 1982 (AP)

Raymond J Donovan, president Ronald Reagan's labour secretary whose pointed lament following his acquittal on corruption charges – “Which office do I go to to get my reputation back?” – resonated with generations of public and private figures seeking redress in the court of public opinion, has died aged 90.

Donovan, a New Jersey construction company executive, was an early supporter of Reagan's presidential ambitions, including his short-lived 1976 bid for the Republican Party nomination. “I truly believed in the man and his philosophy,” he later said. He raised $600,000 for Reagan's successful 1980 presidential bid, almost one-third coming from a fundraiser featuring singer Frank Sinatra at Donovan's country club.

For his loyalty, Reagan named Donovan his campaign chairman in New Jersey and, after his victory, labour secretary.

Carrying out Reagan's conservative agenda, Donovan eased regulations for business, including occupational safety and health administration rules disliked by industry. He withdrew a rule requiring the labelling of hazardous chemicals in the workplace and postponed federal employment and training programmes, equal opportunity employment measures, and a minimum wage rise for service workers. His tenure also oversaw drastic cuts in the department's budget and staff.

“The best social programmes are jobs, and I will trade pushing paper in this department for jobs any day of the week,” he told The New York Times in 1981.

Labour advocates were insulted that Reagan brought in a relative unknown to a cabinet-level position. Democrats and workers' rights groups criticised Donovan for slashing workplace protections. Even some of his own staff grew concerned that he relied too heavily on a small group of aides with little government experience.

The law enforcement community became his most dogged nemesis during his four-year tenure. Officials repeatedly tried to tie him and his construction company, Schiavone Construction, to organised crime. Donovan vehemently denied the allegations.

A string of high-profile investigations shadowed his every step in office, but it was an indictment on charges of fraud and grand larceny in New York that finally led Donovan to resign his post in 1985. The first cabinet member indicted while in office, Donovan won acquittal in 1987 but saw his reputation in tatters.

“Just an unproven charge can handicap someone for life,” political scientist Larry Sabato, who has written about media feeding frenzies, said in a 2018 interview. “Donovan raised a question that reminded everyone true justice extends beyond a court verdict, and the accused's reputation can be permanently damaged by the very process designed to indict, render a verdict and determine guilt or innocence.”

It began with a simple background check following Donovan's nomination in 1980. An informant claimed Donovan, as a Schiavone executive, had bribed him to secure a labour accord for his company. The confirmation was delayed while the FBI investigated. After the inquiry found no evidence of wrongdoing, Donovan was confirmed in February 1981.

Later that year, another man claimed Donovan had witnessed a Schiavone employee bribe a union official, and claimed Donovan had links to underworld figures. Donovan denied the new accusations and requested a special prosecutor be appointed to put the matter to rest.

At the behest of a panel of federal judges, noted New York lawyer Leon Silverman began a federal investigation. In 1982, Silverman said he found “insufficient credible evidence” to prosecute Donovan on federal charges, but he noted at a court hearing that September, in response to a defence lawyer's claim, that it was “wrong to imply” that he had cleared Donovan of any allegations.

“I never made a determination whether Mr Donovan was guilty or not guilty of any federal crime,” he said.

In September 1984, Bronx district attorney Mario Merola indicted Donovan and seven co-defendants on state charges of fraud and grand larceny in a completely separate matter: He claimed they stole $7.4m from a New York City subway project Schiavone won in 1978. Donovan, who called the accusation a “witch hunt”, resigned from the Reagan administration in March 1985, went back to his company and prepared for what would be an eight-month trial.

At the heart of the indictment, which was heard in a Bronx court in 1986, was whether Donovan set out to cheat the New York City Transit Authority (NYCTA) by misrepresenting a subcontractor in the subway project.

The contract stipulated that 10 per cent of the value be awarded to minority-run businesses. Donovan's company awarded most of that work to a company owned by New York State senator Joseph Galiber (D), who was black, and William “Billy the Butcher” Masselli, a Bronx meat wholesaler and reputedly a top-ranking boss in the Genovese crime family.

The prosecution argued that Galiber and Masselli's company was a front to steal money earmarked for minority contractors, but the defence argued the money was never stolen – it was credited to Schiavone for construction equipment leased to the subcontractor. The defence maintained the case was politically motivated by Merola, a fixture in Bronx Democratic politics.

“If you're in the construction business in this country, you're suspect,” Donovan told The Washington Post shortly before his indictment. “If you're from New Jersey, you're indictable. And if you're Italian, you're convicted.”

The subway charges stemmed from two homicide investigations in the Bronx dating back to 1978. While investigators were looking into those cases, they came across wiretaps that they said implicated Donovan in the subway theft.

The tapes became the centrepiece of the prosecution's case. Obtained through the help of an FBI informant who worked for Masselli, they included conversations between Masselli and Galiber discussing how to profit from the subway contract. Donovan was not heard on the recordings.

After 10 hours of deliberation, the jury issued a not-guilty verdict on 25 May 1987, acquitting all the defendants. “When you listen to the tapes, they kind of make you wonder,” juror Patrick Sullivan told The Post. “But when you sift through the hard facts, there's nothing there.”

Holding a news conference as he left the court, Donovan declaimed, “The question is, should this indictment have ever been brought? Which office do I go to to get my reputation back? Who will reimburse my company for the economic jail it has been in for two and a half years?”

Reagan stuck by him through his legal ordeals and, in a statement following the acquittal, said he had “always known Ray Donovan as a man of integrity” and “never lost confidence in him”.

Raymond James Donovan was born in New Jersey on 31 August 1930 and was the seventh of 12 children. He graduated in 1952 from Notre Dame Seminary in New Orleans but didn't pursue the priesthood because he had to take care of his siblings after his parents died. He returned to New Jersey and worked as a unionised labourer unloading Ballantine beer trucks.

A few years later, as an assistant bond manager with American Insurance, he met construction company owner Ronald Schiavone and decided to use his savings ($5,600) to buy into the business. In 1959, he joined as vice-president in charge of labour relations, finance, bonding, insurance and real estate, and helped build the company into a major highway, bridge and tunnel builder in the New York metropolitan area.

Donovan married Catherine Sblendorio in 1957. Survivors include his wife, of New Vernon, and three children, Ken Donovan, Mary Ellen Stewart and Keith Donovan; nine grandchildren; and a great-grandson.

Raymond J Donovan, politician and business executive, born 31 August 1930, died 2 June 2021

©The Washington Post