February 1, 2001
Teamsters Fraud Could
Lead To Democrats
By Micah Morrison, a senior editorial page writer at the Journal.
Former Teamsters President Ron Carey is slated to be arraigned today
in federal court in New York on seven felony counts of perjury and false
statements in connection with a sweeping conspiracy to illegally fund his
1996 re-election effort. Some Democratic powerbrokers implicated in the
scandal are fastening their seatbelts. It could be a rough ride.
Mr. Carey's lawyer, Reid Weingarten, says his
client will plead not guilty. Mr. Weingarten himself
is a sign of the seriousness of the case. He's one of
a small circle of scandal superlawyers based in
Washington. He says, "I don't believe he
committed any crimes and he'll be fully vindicated
at the end of the day."
Mr. Carey is charged with repeatedly lying to
federal investigators, election monitors, and a
federal grand jury about his role in a conspiracy to
embezzle Teamsters union funds to aid his 1996
re-election campaign. In November 1999 a key
Carey aide, former Teamsters political director William Hamilton, was
convicted of fraud and conspiracy in the embezzlement of $885,000 in
union funds to support the Carey re-election.
The Hamilton trial implicated not only Mr. Carey, but other powerful
figures in the American labor movement as well, including AFL-CIO
Secretary Treasurer Richard Trumka, American Federation of State
County and Municipal Employees head Gerald McEntee, and Service
Employees International Union chief Andy Stern. Terry McAuliffe, Bill
Clinton's nominee to chair the Democratic National Committee, and in
1996 the head of the Clinton-Gore re-election effort, also was implicated.
Aside from Mr. Carey and Mr. Hamilton, none of these men have been
charged with any crimes.
U.S. Attorney Mary Jo White, criticized in these pages and elsewhere for
a glacial prosecutorial pace, appears to have not entirely abandoned the
pursuit of other powerful union figures. Having first convicted Mr. Hamilton
and obtaining pleas from a series of lesser figures in the conspiracy, she is
now going after Mr. Carey. Will Mr. Trumka and others be next?
Mr. Trumka appears to have played a key role in one of the illegal swap
schemes featured in both the Carey indictment and the Hamilton trial. The
jury in the Hamilton trial found that Mr. Hamilton had asked Mr. Carey to
approve a $150,000 contribution from the Teamsters treasury to the
AFL-CIO. By pre-arrangement with the co-conspirators, allegedly
including Mr. Trumka, the AFL then donated $150,000 to a liberal activist
group, Citizen Action. Citizen Action then sent $100,000 to a political
consulting group to which the Carey re-election campaign owed money;
the $100,000 was used to reduce the Carey campaign's debt. In other
words, money was taken from the Teamsters treasury and routed through
the AFL-CIO to the personal benefit of Ron Carey. Mr. Hamilton was
convicted in the scheme.
In testimony included in his indictment, Mr. Carey is repeatedly asked
under oath about Mr. Trumka's involvement and repeatedly denies any
knowledge of it. "Did anyone discuss with you whether Richard Trumka
was going to make donations to your campaign?" asked the the chief
investigator of the Independent Review Board, the federal oversight panel
supervising the union under a corruption clean-up decree. "No," Mr. Carey
replied.
Mr. Carey also is charged with perjury in testimony related to a second
scheme involving Mr. Trumka, AFSCME head Gerald McEntee, and
SEIU chief Andy Stern. Testimony at the Hamilton trial implicated the
union bosses in a scheme to channel $50,000 each to Mr. Carey, illegal
under labor law.
Questioned before a federal grand jury about the donations, Mr. Carey
was asked "if anyone at the Teamsters organization had any conversations
with anybody at the AF of L, the SEIU or AFSCME concerning the Ron
Carey campaign?"
"No one has ever told me that," Mr. Carey replied. Asked in a follow-up
question whether any of his staff had conversations with the three unions,
Mr. Carey said, "I have never been told of it and have never heard of it."
Mr. Trumka, Mr. McEntee and Mr. Stern have all denied any wrongdoing.
But Mr. Trumka asserted his Fifth Amendment privilege when questioned
by government investigators. The AFL's code of conduct says no officer
who takes the Fifth can hold office. AFL-CIO President John Sweeney
waived the regulation for Mr. Trumka.
Mr. Trumka is one of the most powerful figures in the American labor
movement, and his links to the Democratic Party are tight. In the midst of a
presidential primary battle in 2000, he traveled to Iowa to back Al Gore
against Bill Bradley. The AFL poured a fortune into the getting out the
Democratic vote in the presidential showdown.
Absent from the Carey indictment is any mention of Mr. McAuliffe, the
Clinton fund-raising kingpin. According to testimony at the Hamilton trial
by a former DNC finance director, Mr. McAuliffe attempted to carry out a
scheme in which the DNC would find a donor for Mr. Carey and in return
the Teamsters would donate money to Democratic groups. Under federal
law, it's illegal to use money from a union treasury to promote the
candidacy of anyone running for union office, which would have been the
effect of the swap scheme. Mr. McAuliffe's lawyer says his client was not
involved in any wrongdoing and cooperated with the investigation.
Ms. White's office says "the investigation is continuing." Should Mr. Carey
be convicted -- or decide it's in his interest to cooperate -- more
indictments could be forthcoming. |
