U.S. News And World Report

Trumka Is In Thick Of Financial Scandal

Cleaning Up Teamsters May Turn On Their Former Officials

By Jeff Glasser

He was once portrayed as a white knight helping to sweep clean mobbed-up labor locals. Now former Teamsters political director William Hamilton faces up to 30 years in jail. His crime: conspiring to "loot" $885,000 from the Teamsters treasury in an all-out bid to re-elect Ron Carey, the former president banned from the union for life. The impending downfall of Hamilton, who is set to be sentenced in federal court this week, is part of a messy and ongoing saga that has already caused political damage to the Democratic Party. It also portends another black eye for the "reform" labor movement, just at the moment when Big Labor is wielding the kind of political clout it hasn't seen in 30 years.

Smack in the middle of the fed's inquiry is the No. 2 official of the AFL-CIO, Richard Trumka, the former head of the United Mine Workers union. He's already violated internal union rules by taking the Fifth Amendment to avoid answering questions about funneling money to the Carey campaign. John Sweeney, the AFL-CIO boss, has refused to suspend Trumka. Then there's Arthur Coia, who was supposed to clean up the Laborers' International Union and has been called a "mob puppet" by a federal prosecutor. "These guys are just as bad as the last scoundrels," says Mike Moroney, a labor investigator who has fought corruption since the 1970s.

The political donnybrook already erupting between the Teamster "reformers" and the reascendant old guard promises to get bloodier. In an ironic twist, Teamsters President James Hoffa, the alleged racketeer's son, is threatening to file a civil racketeering lawsuit against his discredited predecessors.

Sources tell U.S. News that Hoffa has endorsed a draft of the lawsuit, which would seek $9 million in damages from Carey, Hamilton, and other conspirators, including political consultant Martin Davis and telemarketer Michael Ansara.

The Teamsters had originally planned to file the lawsuit this week, but sources say Hoffa is considering delaying it until after a March 28 appearance before a congressional oversight panel. "He doesn't want to have to answer tough questions from the Republicans about why the DNC National Committee] isn't named" in the suit, says a labor source.

Noticeably absent from the draft are any mentions of Trumka or Terry McAuliffe, President Clinton's master fundraiser, whose name also came up in the Hamilton trial. Critics carp that Trumka is being spared because the AFL-CIO recently gave the Teamsters $500,000 to support a strike against Overnite Transportation. "There are rumblings that it is a quid pro quo," says Ken Boehm of the National Legal and Policy Center, a union corruption watchdog group that has called for Trumka's resignation. Hoffa's camp denies the charge.

The facts. Federal prosecutors asserted during Hamilton's trial that Carey supporters sent $885,000 in Teamsters funds to liberal outfits such as Citizen Action. They then kicked back $325,000 to Carey's campaign, the prosecutors charged. "The money poured out of the Teamsters General Treasury Fund like water from an open faucet," Assistant U.S. Attorney Robert Rice declared in his opening statement.

The prosecutors' star witness, former Carey campaign manager Jere Nash, testified that three labor leaders-Gerald McEntee of the American Federation of State County & Municipal Employees, Andy Stern of the Service Employees International, and Trumka-each committed to raise $50,000 for Carey's bid. Prosecutors said their fundraising tactics violated union election rules. Trumka also appears to have played a role in one of the swap schemes, according to the court testimony. He has denied any wrongdoing.

The DNC's role? Former DNC Finance Director Richard Sullivan says that he and McAuliffe discussed ways to help the Carey campaign in the hopes of securing future Teamsters support. McAuliffe said "that if we could get a $50,000 contribution for the Carey campaign, he knew we could get $500,000 for [the Democratic fundraising program called] Unity from the Teamsters," Sullivan testified. McAuliffe's attorney, Richard Ben-Veniste, says his client did nothing wrong. "He has been told all along he is not a target," he says. Besides, a suitable donor was never found. So no quid pro quo was ever consummated, making federal prosecution unlikely. At least for McAuliffe.

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