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The Teamster Scandal Essay, Research Paper
The Teamster Scandal
The contest for leadership of the Teamsters reflects a deep struggle over fundamental principles. The union today is a battleground between reformers committed to union democracy and workers’ power in the workplace, and a small group of officials defending their own power and the perks of office. Two models of unionism – really two models of society and politics – contend for the hearts and minds of the Teamster members. This is a struggle for the soul of the union.
They were once called the New Teamsters but the reform administration of former president Ron Carey has shattered into pieces since Carey stepped down because of corruption charges last year. Three rival factions in the union – sometimes called the Old Guard, the Reformers and the Traditionalists – contend for power. Each has a presidential candidate running for office, respectively: Jimmy Hoffa, Jr., Tom Leedham, and John Metz. The national union leadership and staff have become deeply divided.
The tragedy of all of this is that with the election of Ron Carey in 1991 it seemed as if the huge union so long dominated by organized crime had finally turned the corner. Six years later the promise of reform seemed fulfilled when Carey led 185,000 Teamsters in a strike against United Parcel Service (UPS), the powerful package delivery company. With months of careful preparation and rank-and-file organization, the Teamsters succeeded in keeping full-time and part-time workers united. In August 1997, after a solid strike that got the support of two-thirds of the American people, the union won against UPS on such issues as creating more full-time jobs and stopping the trend toward contracting out.
Although UPS is now trying to renege on hiring more full-timers, the victory represents not just Carey’s accomplishments, but the gradual transformation of the union over some twenty years, largely through the efforts of the reform group Teamsters for a Democratic Union (TDU). Over two decades a quiet revolution in the Teamsters had brought about new levels of membership involvement, the reform of local bylaws, and the election of new leaders in many local unions. The UPS strike gave expression to those changes, the result of long years of struggle which had created a more democratic and militant union.
But only three months later Carey resigned after charges by the Federally appointed Independent Review Board (IRB) that he had failed to prevent the misuse of over $700,000 from the union’s treasury. Carey’s campaign advisors Martin Davis and Jere Nash, and their associate Michael Ansara, all pleaded guilty to having embezzled and laundered union funds to benefit the Carey campaign and their own businesses. Carey claimed he never knew about the misappropriation.
Some Questions Being Asked
Question: What’s behind the controversy?
Answer: A complex, and illegal, fund-raising scheme engineered by the campaign organization that backed Carey’s bid for reelection in 1996 to a second five-year term as Teamsters president. Three Carey associates have pleaded guilty to the conspiracy. It also prompted election monitors to void Carey’s narrow victory over Hoffa last year and set up the rerun election.
Conboy stated that Carey willingly participated in the effort, despite the union leader’s claims he was left in the dark. Conboy reported that Carey authorized the diversion of $735,000 of Teamster treasury funds to his reelection campaign.
Q: How is the controversy affecting the Teamsters’ anti-corruption efforts?
A: Although the turmoil won’t help matters, optimists say there is no turning back on the reform process. They theorize that many more members have become active in the union and participated in corruption-busting union democracy, making it unlikely that the Teamsters will backslide substantially.
Although Carey and Hoffa both called themselves the candidates best able to clean up the union, both have come under question. Working with government officials, the Carey-led Teamsters removed or sanctioned 390 allegedly corrupt local union officials and put 70 locals into trusteeship. Questions were raised, however, about whether some of the Carey moves on that score actually cleaned up the union, or simply rewarded his political friends and punished his enemies.
Hoffa, son of legendary Teamsters President Jimmy Hoffa, has been tainted by the company he keeps and the memory of his father, who spent more than four years in prison related to union corruption.
Four of the original 27 members of younger Hoffa’s campaign slate were suspended from the union or pressured to bow out of the election. A fifth slate member–Jim Santangelo, head of a Southern California Teamsters local based in El Monte was under scrutiny by the IRB for allegedly taking an illegal loan. He denied any wrongdoing.
Q: Who else stood to be hurt by the campaign finance scandal?
A: The left wing of the national AFL-CIO, including some of the the top officials trying to revitalize the American labor movement. Although everyone denied wrongdoing, Conboy found that Richard Trumka, the No. 2 official of the AFL-CIO, was involved. In his report, Conboy said that Trumka–widely regarded as the likely eventual successor to AFL-CIO President John Sweeney–helped in a Carey campaign money-laundering maneuver and improperly raised additional funds.1
Testimony also was cited indicating the improper contributions for Carey were raised by Andrew Stern, president of the Service Employees International Union; Gerald McEntee, president of the American Federation of State, County and Municipal Employees, and Paul Booth, the union’s national organizing director.2
Conboy found that the Carey campaign tried to pull off a mutual-assistance deal with the Democratic National Committee and the Clinton-Gore campaign, but that the scheme never was activated. All the same, it could mean big legal problems for the Democrats, amid the continuing inquiries into their campaign fund-raising last year.
Q: What are the California connections?
A: The Teamsters union itself is one of the biggest in California, with an estimated 270,000 members. Santa Barbara-based fund-raiser Charles Blitz was named by Conboy as a key figure in the money-laundering scheme.
Blitz is said to have lined up wealthy California contributors who gave money to the Carey campaign in exchange for the funneling of Teamsters money to groups favored by the wealthy Californians. Some of that Teamsters money reportedly was contributed to a group that supported California’s Proposition 215 in 1996, a measure approved by voters to legalize the use of marijuana for medical purposes.
An overview of the players involved in the scandal and ongoing controversy follows.
The fall of Carey led directly to the breakup of the reform coalition he had led. As President, Carey had been a strong leader who held together a diverse coalition that included the militant democrats of TDU, other genuine union reformers, some traditional Teamster leaders, and a few out-and-out opportunists. After his election Carey even won over some members of the Old Guard – broadening his base, but also pulling the whole coalition to the right.
Carey held that coalition together with his own reputation and a straightforward serious program of union reform based on greater union democracy, more organizing, and an adversarial approach to the employers. Beyond that, Carey became the leading voice against the North American Free Trade Agreement (NAFTA), a key supporter of John Sweeney’s bid for the AFL-CIO presidency in its first-ever contested election, and moved the Teamsters from the Republican to the Democratic Party.
Over six years Carey cut union officials’ salaries and put more money into organizing. He increased education for stewards and rank and file members, putting emphasis on contract campaigns, local unions and shop floor organization. He got rank-and-file workers rather than just paid staff to organize new workers into the union. With that program he succeeded at companies such as Overnite, the largest nonunion trucking company which no previous president had been able to organize. Carey launched an organizing campaign among low-paid Mexican workers in the apple orchards and packing plants of Washington. He also carried out contract strikes among freight and carhaul workers. Finally in 1997, Carey called the meticulously planned and carefully executed national strike against UPS.
When Carey fell, the road to the Teamsters’ Marble Palace in Washington seemed to open before Jimmy Hoffa, Jr. Hoffa is convinced that his name, a big union bank account, and friends in the Republican Party will make him a great union president.
In the 1970s Hoffa, Jr. entered into a partnership in a high risk loan business with Alan Dorfman, a notorious mobster associate of his father who ended up dead – assassinated – in 1983. Today Hoffa associates with some of the most unsavory characters who remain in the Teamsters union, such as James Santangelo of the California Teamsters who is charged by the International with making himself illegal loans of union funds, and Larry Brennan, president of Michigan Joint Council 43. It was under Brennan’s watch that the Labor Department forced Council 43 to pay back $723,000 in excessive expenses including $99 000 spent on strip joints and golf courses.
Hoffa talks about bringing unity back to the Teamsters, however, Hoffa’s executive board slate is made up of 18 men, all high paid union officials, only two are black, none are Latino. There are no women on the slate, though the Teamsters is estimated to have 200,000 female union members, 15% of the membership. Despite talk of unity, Hoffa s slate represents the white, male bureaucracy of the union.
Employers represent another Hoffa constituency. UPS was caught by a court appointed election officer distributing material to workers to help Hoffa’s campaign. A UPS lobbyist in Washington attended Hoffa fund raisers and made contributions (as an independent contractor he was permitted by law to do so). UPS also helps Hoffa by creating problems for local reformers, making it clear that it would prefer an Old Guard administration.
Finally, Hoffa has the backing of one of the most conservative leaders of the Republican Party. Representative Pete Hoekstra, Republican from Michigan, has carried out an investigation of the 1996 Teamster election which has served as a platform for the Hoffa campaign.
What would a Hoffa administration be like? The union’s freight division, dominated by Hoffa-supporter Phil Young of Kansas City Local 41, gives an idea. Preston Transportation recently came to the Teamsters pleading economic hardship and asking for “relief,” in the form of lower wages. Young permitted the company a wage concession without going through freight contract procedures.3
At the end of June, John Metz, the head of Joint Council 13 in St. Louis and the Public Employees Division, also became a candidate for Teamster president. Metz represents a group of older union officials, sometimes called the Traditionalists. They reject reform, but are reluctant to be identified with Hoffa and the Old Guard. The real power behind the Metz slate is John Morris, an influential Teamster leader from Philadelphia. The Reformers call Metz’s group the “Waste Your Vote Slate,” arguing that the real contest is between Hoffa’s Old Guard and Leedham’s Reformers.4
In some parts of the country, Metz has attempted to claim the mantel of Carey. But he seems closer to Hoffa. For example, in June a local election took place in Chicago’s notorious Local 714. For years 714 was dominated by William T. Hogan who has been linked to the Accardo mob and was found guilty by the Teamsters Independent Review Board of nepotism and negotiating bogus contracts. The June election pitted William Hogan’s son Bobby Hogan against a reformer named Mike DiFrancisco. John Metz supported Hogan.
Leedham heads the Warehouse Division which claims 400,000 members (there may only be half that many), but unlike UPS or freight, the warehouse division has little cohesion. While Leedham himself is a very effective campaigner, he does not have much of an organization. TDU provides much of his organized support.
Part of Leedham’s strategy is to reach out to union members who have not voted in previous elections. While still campaigning among truck drivers and dock workers, Leedham will also go after low-paid workers, minority members, and women in areas such as the food processing industry.
Both Hoffa and Leedham compete for the votes of members, many of whom have become deeply disillusioned with the political struggle in the union. Hoffa will try to convince workers to trust him to lead them back to a mythical past. Leedham will ask the members to take responsibility for themselves in a democratic union as they go forward into a sometimes frightening future. The vote from the “reformed” Teamsters put Sweeney over the top in the national AFL-CIO’s first contested elections three years ago. The next few months will decide the fate of the Teamsters, and perhaps the fate of the American labor movement for decades. The scandal itself has far reaching implications, as shown below.
Teamsters’ Scandal Threatens the Administration
The Teamsters’ fund-raising scandal that brought down the union’s president now threatens to reach the highest levels of the White House.
Attorney General Janet Reno’s decision to investigate former White House Deputy Chief of Staff Harold Ickes for alleged perjury could reveal the extent of possible Teamster-White House collusion during the 1996 elections.
There have been allegations that Ickes and other top President Clinton officials agreed to do favors for the Teamsters in exchange for union contributions to Democratic candidates and organizations. A web of illegal fund raising schemes in 1996 led to Teamster President Ron Carey’s ouster from the union this year.
Reno said her 90-day investigation would focus on whether Ickes committed perjury when he swore to a Senate committee that he did “nothing ” to pressure officials of Diamond Walnut Growers in California to settle a bitter labor dispute with the Teamsters.5
The probe is one of three investigations Reno is conducting involving the Clinton/Gore 1996 reelection campaign.
She launched a 90-day preliminary investigation of Vice-President Al Gore’s personal fund raising activities late last week and also is looking at possible illegal coordination between the campaign and issue ads paid for by state parties, labor organizations and other advocacy groups.
At the end of 90 days she must decide if the evidence warrants the appointment of an independent counsel.
Congressional Republicans are applauding the renewed possibility of Justice Department investigation of political dealings between the Clinton/Gore campaign and the Teamsters. “This is an area that is ripe for investigation,” said Michigan GOP Rep. Pete Hoekstra, chairman of a House subcommittee that has been investigating the Teamsters’ failed ‘96 election. “We have found that every time you peel away another layer of what went on with the Teamsters, it gets uglier and uglier.”6
The scandal already has taken a heavy toll. Carey was forced to step down as president and then expelled from the union because of the contribution swap scheme involving liberal advocacy groups. Three of his top campaign aides and a wealthy California businessman behind one liberal fund-raising group have pleaded guilty to taking part in the scheme. And William Hamilton, the union’s former political director, has been indicted on similar charges.
Other internal union documents show that the Clinton administration was active in helping the Teamsters in their drive to organize Pony Express, an Atlanta-based package delivery company, and the successful delay of a North American Free Trade Agreement provision that allowed Mexican trucks and drivers to go anywhere in the country.
An independent counsel probably would also look into allegations of a contribution swap involving the Democrats and Carey’s 1996 campaign against James P. Hoffa. According to court documents and a report by the Senate Governmental Affairs Committee, top Clinton reelection campaign fund-raisers agreed to find someone to contribute to Carey’s campaign in exchange for the Teamsters giving thousands of dollars to state Democratic parties.
The Teamsters gave the money. A wealthy Democratic donor, according to the documents, was found to contribute to Carey’s campaign. But the deal was never consummated because the donor was an employer and ineligible to give to Carey under federal labor laws.
The Senate Committee concluded in its report that additional efforts were made to swap contributions and urged the Justice Department to investigate.7
Carey’s leadership had a devastating impact on the union and on the entire labor movement. Carey’s campaign consultants discredited and ultimately destroyed the reform administration of the Teamsters that represented one of the most important advances of the American labor movement in more than 50 years.
Carey Supports Probe But Won t Step Down, CNN Interactive, 25 August 1997, available from Netscape@http://www.cnn.com.
Fix, Janet L., Judge Set to Rule on Teamsters Vote, Detroit Free Press Washington, 10 September 1998, available from Netscape@http://www. northernlight.com.
Fund, John, Teamster Troubles, The Wall Street Journal, 14 May 1998, available from Netscape@http://www. northernlight.com.
Laborers Union Head Under Fire, The Associated Press, 6 November 1997, available from Netscape@http://www.laborers.org.
La Botz, Dan, Rank and File Teamsters Fight for Labor s Future, Dollars & Sense, 19 September 1998.
Lichtenstein, Nelson, The Struggle for a New Labor Movement–Again, Los Angeles Times, 3 May 1998.
Silverstein, Stuart, Fallout From Teamster Scandal Runs Deep, Los Angeles Times, 19 November 1997.
Teamsters Scheme Threatens Administration, Gannett News Service, 1998, on-line, available from Netscape@http://www.northernlight.com.
The Teamsters Next Election, The Washington Post Company, 3 July 1998, available from Netscape@http://www.laborers.org.
Ties Between Teamsters, Democrats Investigated, CNN Interactive, 23 August 1997, available from Netscape@http://www.cnn.com.
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- ... ten union members is a teamster. The union is organized into five ... and communications specialists. The local Teamster representatives negotiate with the management of a company ... a mystery that surrounds the Teamster Union and that is the disappearance of its ...