-Caveat Lector-
February 1, 2001
Commentary
Teamsters Fraud Could Lead To Democrats
By Micah Morrison
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.
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Kadosh, Kadosh, Kadosh, YHVH, TZEVAOT
FROM THE DESK OF:
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~~~~~~~~~~~~~~~
The Best Way To Destroy Enemies Is To Change Them To Friends
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