Now, a New Probe of Donovan

Did the FBI withhold evidence at his confirmation hearings?

When Raymond J. Donovan was confirmed as Secretary of Labor by the Senate last February, Utah Senator Orrin Hatch called his nomination "one of the most rigorously scrutinized in our country's history." Perhaps so, but the information given to Hatch's Labor and Human Resources Committee by the FBI and the Justice Department is turning out to be curiously incomplete. Indeed, the Justice Department last week opened a new investigation into old charges that Donovan was present when officers of the New Jersey construction company that he partly owned allegedly paid a bribe to a union leader. The new probe, launched by Attorney General William French Smith at the urging of Brooklyn Prosecutor Thomas P. Puccio, is the first step required under the 1978 Ethics in Government Act to determine whether the Justice Department must appoint a special prosecutor to examine the evidence against Donovan.

Under scrutiny is an allegation by Mario Montuoro, a former official of New York City's Local 29 of the Blasters, Drillers and Miners Union, many of whose 400 members work for Schiavone Construction Co., where Donovan was an executive vice president in charge of labor relations. In the autumn of 1977, Montuoro contends, Donovan was present at a New York restaurant when another Schiavone official gave $2,000 to the local's president, Louis Sanzo, in a successful effort to prevent trouble with the union.

The accuser, Montuoro, has obvious credibility problems. He has been convicted of possession of heroin and firearms. He has worked near explosives on tunnel-digging jobs for so long that he does not hear well. But jurors tend to believe him. He was a principal Government witness when Sanzo was convicted last June of income tax evasion for failing to report bribes received from another construction company. Claims one federal prosecutor about Montuoro: "What he says turns out to be true."

Through a Labor Department spokesman, Donovan last week told TIME: "I will not discuss any aspect of this investigation while it is in progress." The spokesman also said that Donovan "has no direct knowledge of these allegations. He will obviously cooperate with the appropriate Government officials in this matter, and is anxious to put this whole thing to rest."

Even if the allegation involving Donovan is ultimately discounted, the fact that the details of Montuoro's account of the alleged payoff were not presented at his confirmation hearings indicates a disturbing lapse by federal investigators. Corruption in Local 29 had been under multiple investigations, beginning as early as 1978, by the FBI, the Department of Justice, the Internal Revenue Service and even by the Labor Department that Donovan now heads. Yet none of those agencies had informed the Senate that Donovan's name had turned up in these probes.