Contini cooperates with investigators.

Frederick Contini, named 1999's Developer of the Year by the National Association of Corporate Real Estate Executives for his work at the MTA headquarters, is cooperating with the US Attorney's Office in a fraud and racketeering case against reputed mobster Edward Garafola.

According to documents released by the US Attorney's office, Garafola and Contini masterminded a scheme in which non-union elevator operators were used in place of their much higher paid union equivalents at the MTA headquarters construction site at 2 Broadway.

The non-union workers were billed at union rates and Contini and Garafola as well as their cohorts, including Junior Campbell, a business agent with Local 79 of the Laborers' International Union, kept the difference--a sum that amounted to at least $10 million.

But not all of 2 Broadway's woes stem from corruption according to MTA spokesman Tom Kelly. The massive renovation of the 1.2 million s/f space--which has notoriously spiraled hundreds of millions of dollars over budget--was severely underestimated fiscally at the project's outset.

"The facade work as well as work on the building's piping and plumbing turned out to be more extensive than anyone at first expected," Kelly said. "When they actually went into the walls and looked at all of the piping a lot of it was worst than they first thought and had to be entirely replaced. That costs tens of millions and wasn't due at all to corruption."