(FORTUNE Magazine) – The New York Times recently ran a lengthy report with a gripping story line, to which, however, we found ourselves instantly talking back. The report featured a familiar cast of Big Apple no-goodniks and began as follows: ''Twelve men, including eight top painters' union leaders, were indicted yesterday and accused of participating in a Mafia-led conspiracy that rigged bids for every major public and private painting contract in New York City for 12 years.'' Skulduggerous, eh? The cast of characters -- all of whom are pleading innocent -- included various folks said to be capos and consiglieri with street names like Gaspipe, as well as allegedly corrupt union officials attempting to ''satisfy their own greed,'' or at least this was the boilerplate analysis of the U.S. Labor Department's Office of Labor Racketeering. The injured party was identified as mainly the citizens of New York City. The Times reported that the conspiracy had cost the city ''tens of millions of dollars in inflated contracts in the last decade.'' Anthony M. Voelker of the Police Department's Organized Crime Control Bureau was quoted as positing that the painters' union saga was a ''textbook case of an assault by organized crime on the economic health of New York City.'' Why resist this clean-cut story line? Mainly because of two subversive premises that kept clamoring for attention somewhere back there in the brainstem while we tried to follow the reporter's reasoning. Premise No. 1 is that the cost of honest unionism in New York City exceeds the cost of Mob unionism. No. 2 is that the city, or at least its governing establishment, is in no position to groan about inflated construction costs, as the local pols have labored for years to maximize same. To start with No. 2, New York is not alone in so laboring. The Davis-Bacon Act, passed in 1931, requires the payment of ''prevailing'' local wages on all federally funded construction projects, and generations of Labor Department bureaucrats and judges have translated this to mean that union monopoly rates must apply. Thirty-two states, including New York, have their own versions of Davis-Bacon, which stick it to the taxpayers on construction projects where state money is involved. The overall cost to the country of Davis-Bacon is hard to calculate. So is the cost to New York City. But -- returning to Premise No. 1 -- we do have some guidelines on the respective costs to the city of doing business with contractors who have (a) honest unions and (b) mob unions or no unions. Our guidelines are based on data supplied by the Manhattan district attorney's office, which appears not to have noticed that its data are susceptible to more than one interpretation and are hard to square with the party line around Gotham, i.e., that the mob is raising the public's costs. What the data really show is that painting contractors allied with (or controlled by) the mob are able to provide substantially lower contract bids than can honest contractors supplying union labor. In one hypothetical example supplied by the D.A., the labor-cost advantage for the mob operator is around $17,000 on a contract postulated to be worth around $134,000. To be sure, the mob rakes off some part of that differential for itself (possibly 10% or so, according to other data from the D.A.). But the bottom line seems clear enough: The legal labor monopolists are doing far more damage to the city's fragile economy than do Gaspipe and his pals, even if the latter continue to get all the bad ink.