Building Service Industry Abuses
The Commission’s June 1970 public hearing (reported in its 1970 Annual
Report) on restraints of trade and other abusive practices in the
building service industry aroused the interest of the United States
Senate Commerce Committee. The committee invited the SCI to testify at
its 1972 public hearings on organized crime in interstate commerce. As a
result of that testimony, the Antitrust Division of the United States
Justice Department, with assistance from the SCI, began an investigation
into an association which allocated territories and customers to various
member building service maintenance companies in New Jersey. In May
1974, a Federal Grand Jury indicted 12 companies and 17 officials for
conspiring to shut out competition in the industry. The companies were
the same as those involved in the SCI’s public hearings. On Oct. 25,
1977, the defendants agreed to a consent judgment to abandon the
practices alleged against them. Earlier, the government’s criminal
action against the defendants was completed in March 1976, by which time
one company had pleaded guilty to the charges and the other defendants
had pleaded no contest. Fines totaling $233,000 were levied.
Additionally, after the Senate Commerce Committee’s hearings, the U.S.
General Services Administration amended its regulations to bar purchases
of certain cleansing products sold by organized crime figures (as
exposed by the SCI investigation).