BY CAM SIMPSON FEDERAL COURT REPORTER
November 27, 1998
One of the most controversial and powerful
union bosses in the nation, accused of a litany of financial abuses,
quietly received immunity from prosecution from top Justice Department
officials in Washington, the Chicago Sun-Times has learned. The
deal virtually ensures thatChicagoan Edward T. Hanley Sr., who
reigned for 25 years over the Hotel Employees and Restaurant Employees
International Union, won't ever be investigated by the government
for alleged financial abuses disclosed two months ago, according
to law enforcement sources and others familiar with the case.
Hanley was forced out of the union earlier
this year. A federal monitor overseeing the union turned up the
alleged abuses after a 2 1/2-year investigation, painting Hanley
as reigning like a monarch. The investigation found that dues
from some of the lowest-paid union workers in the country went
for a $3 million jet used by Hanley's family, a fleet of Cadillacs
for union bosses and a $100,000 motor home parked near Hanley's
Allegations against Hanley include:
* Even though he was general president of
the international union, he had what amounted to a $31,000-a-year
``no-show'' job at the Chicago local union run by his son.
* His international union approved creation
of an alleged ``ghost'' union local in Rhinelander, Wis., near
Hanley's vacation home.
* Under Hanley, the union maintained a fleet
of leased vehicles costing more than $500,000 a year. The vehicles--many
of them Cadillacs--were used by officials who had no apparent
duties and top union bosses and their family members, including
* Some of those leases were ``front-loaded''
with steep payments footed by the union so officials could buy
their cars on the cheap once the union leases expired. Hanley
repaid the union almost $14,000 because of such deals but did
not admit any wrongdoing.
Sources familiar with the immunity deal said
it protects Hanley from prosecution on those alleged abuses and
would make it difficult to pursue almost any investigation stemming
from Hanley's tenure.
A Justice Department spokesman in Washington
declined to comment on the decision to grant immunity to Hanley.
The department also rejected a request from the Sun-Times under
the Freedom of Information Act for a copy of the immunity letter.
According to sources familiar with the case,
Hanley's quest for immunity began earlier this year after he secretly
agreed to leave the union post. His departure agreement, signed
in late February, came only after the federal monitor in the case
threatened to file civil charges against him. A federal judge
sealed the agreement until Hanley announced his ``retirement''
Shortly after the departure deal was hammered
out, sources said, Hanley's lawyers learned of a federal criminal
investigation into allegations that Hanley's international ran
the ``ghost'' local in Wisconsin. An official affiliated with
that union received what is known as a ``target letter'' from
authorities, sources said.
Hanley's lawyers were stunned, sources said.
They believed investigations would not be pursued once Hanley
agreed to step down, according to sources.
The lawyers then threatened to pull out of
the departure agreement with the monitor's office unless Hanley
received immunity, sources said. The monitor was set up in 1995
under a court-approved deal between the Justice Department and
Before deciding to grant Hanley immunity,
sources said, the Justice Department in Washington gave federal
prosecutors in Chicago only two weeks to determine whether they
could make a criminal case against Hanley. That made the task
for U.S. Attorney Scott Lassar's office almost impossible given
the volume of evidence gathered by the monitor and the FBI during
their probe, according to sources familiar with the case.
A spokesman for Lassar declined to comment.
John Cassidy, a Washington lawyer who represented Hanley in dealings
with the Justice Department, also declined comment, as did Kurt
Muellenberg, the federal monitor.