by John Fund
May 14, 1998
The Teamsters, the nation's largest union,
is still being run by followers of President Ron Carey, even though
Carey has been forced to step down and is barred by federal officials
from seeking re-election. Its former political director, Bill
Hamilton, has just been indicted on charges he funneled money
to the Democratic Party in an effort to have its donors give money
to the Carey campaign.
Meanwhile, the Teamsters have refused to
turn over to Congress subpoenaed documents on its hiring of private
investigators who have worked for President Clinton's campaign.
Congress has voted to bar taxpayer funding of the upcoming rerun
of the Teamsters election, but a 2nd Circuit federal court has
ruled that the taxpayers must pay the tab again.
Taxpayers have a right to be angry. The Teamsters
already have spent more than $20 million on a 1996 election in
which Carey won narrowly using an elaborate scheme to funnel outside
money to his campaign. But balloting by the 1.4 million members
Teamsters for a new president will not end until October, which
means a new leader cannot be installed before the November elections.
Of course, rather than installing apolitical administrators, the
Clinton administration seems content to allow the Teamsters' central
office to remain under the control of Carey's discredited followers
for one more election cycle.
That control could be worth millions to Democratic candidates this fall. Former Teamster Communications Director Duke Zeller says Teamster officials diverted more than $50 million in union funds to the Clinton-Gore campaign in 1992. In 1996, the Teamsters' political action committee was the nation's
largest, giving 97% of its $10 million in contributions to Democrats. Since the Carey scandals, the PAC has taken in less money but is still a 400-pound gorilla. The Teamsters
contributed $3.4 million to candidates last
year and already have some $1 million on hand for the 1998 election.
There is no question the Teamsters are joined
at the hip to the Clinton administration. "We ask for and
get, on almost a daily basis, help from the Clinton administration
for one thing or another," wrote Hamilton, the indicted former
Teamster political director, in a 1996 internal union memo.
The Teamsters have been under federal supervision
by an independent review board since 1989, when union officials
signed a consent decree designed to root out corruption. Mob influence
certainly has declined, but political corruption is still a problem.
Kenneth Conboy, the former federal judge
who barred Carey from office, said Carey's campaign involved "a
federal embezzlement." The diversion of union funds into
politics helped the union's net worth fall from $157 million in
1991 to only $702,000 last year. That means the union managed
to average losses of $100,000 per working day for more than five
The depletion of the Teamsters' treasury
raises the question of what else the independent review board
missed. Last month, Sam Theodus, a former Teamsters vice president
elected on the Carey slate, testified that the union engaged in
"high-handed tactics and abuses of power." Theodus said
he was ignored when he tried to bring evidence of the abuses to
the review board. He says after the board failed to help union
trustees gain access to the Teamsters' books, he concluded the
board was in "Carey's back pocket."
A legacy of corruption
Carey may be gone, but there is growing evidence that both the Democratic National Committee and other unions were involved in his misdeeds. Mary Jo White, the U.S. Attorney for the southern district of New York, has detailed how officials of AFSCME, the Service Employees Union and the AFL-CIO all were involved in illegal schemes to fund the Carey campaign. She has established that AFL-CIO Secretary-Treasurer Richard Trumka sent a letter requesting $150,000
from the Teamsters. Then the AFL-CIO donated
an identical amount to Citizen Action, a left-wing group, which
then paid the November Group consulting firm $100,000 to send
out last-minute mailings trashing Carey's main rival, James P.
White also has released evidence that DNC
officials attempted a similar money-laundering scheme. Trumka
twice has taken the Fifth Amendment when asked about these charges.
Last month, Rep. Peter Hoekstra's (R-MI) subcommittee quizzed
John Sweeney, Trumka's boss, about why he was still in office
despite an AFL-CIO rule requiring the expulsion of any official
who invoked the Fifth to cover up union corruption.
When asked if he knew why Trumka had taken the Fifth, Sweeney
admitted he had never had a substantive conversation
with him about it. "He said he had been advised by his attorneys
not to discuss the matter with anyone," Sweeney said.
The indictment of Hamilton shows White is
moving up the food chain and could be targeting Trumka and DNC
officials. But it is still unclear how vigorously she will pursue
her investigation. The departure of Charles LaBella, the Justice
official in charge of probing the campaign fundraising scandal,
leaves White as the most notable symbol of integrity among professional
prosecutors looking at the campaign fundraising scandals. The
burden is on her now to show that Justice Department attorneys
are capable of handling a sensitive investigation of officials
of the incumbent administration's party.
John Fund is a member of the editorial board
of The Wall Street Journal. He is also a contributing editor of
For more information about the labor organizations Fund criticizes, visit the sites of the Teamsters or the AFL-CIO. The Washington Post has compiled this chronology of the Teamsters' fundraising scandal. For a contrasting view of the
controversy, read Alexander Cockburn's "Beat
the Devil" column in the current issue of The Nation. The
Oct. 16, 1997 issue of IC on campaign finance reform featured
a debate between Fund and former Clinton speechwriter David Kusnet
on the use of union dues for political contributions.