September 30, 1997
The Ron Carey Campaign Investigations
(Events January - August, 1997)
In a report to the Election Officer filed in January, Carey campaign states that money from the "Teamsters For A Corruption Free Union" (including contributions from Barbara Arnold, whose occupation is listed as "student") was used to pay for the direct mail services performed by Martin Davis and his November Group. Carey campaign paid November Group total of $378,000 for direct mail services during the campaign. (New York Newsday, June 11, 1997).
February 4: Using information unearthed by Boston local union head John Murphy, James Hoffa slate files election protest based, in part, on Carey campaign's use of TCFU monies. In addition to the $95,000 funneled through Arnold, TCFU also lists the following contributors: Gwendolyn Grace (a California "artisan," married to businessman Charles Hornack), $50,000; Jeremy Sherman (son of Midas Muffler chain founder Nate Sherman), $35,000; Annette Furst (a Massachusetts doctor), $15,000; Charles "Chuck" Blitz (a "philanthropist" associated with the Pokahu Fund), $10,000; and Shanti Addison Fry (Director of Corporate Financing for the Bank of Boston), $1,000. None of TCFU's contributors are members of the Teamsters Union.
March: White collar criminal lawyer for Ansara and Arnold, J. William Codinha, calls Hoffa complaint a "witch hunt." Arnold claims the $95,000 she sent to Carey campaign through TCFU came from an inheritance. Arnold tells Boston Globe her contribution was motivated by a desire to "clean up" the Teamsters and to aid in "rebuilding the US labor movement."
March 10: Carey campaign returns Arnold's $95,000 contribution. Also returns $115,000 contributed to TCFU by seven other non-Teamsters. "It's not a violation; there's nothing wrong. It's just one more attempt by the Hoffa people to flail at the wind. They can't admit defeat," said Jere Nash, Carey campaign chairman.
March: Grand jury convened in U.S. District Court for the Southern District of New York, to begin investigation into Carey campaign practices.
March: Nathaniel Charny, a lawyer for Carey campaign, resigns from the firm.
March 21: Philadelphia Inquirer, noting that Arnold's payments to TCFU closely followed IBT payments to Ansara, quotes Carey campaign spokeswoman: "Renee Asher has termed the timing of the donations as ‘serendipity.' She said that Arnold is independently wealthy and the money had nothing to do with her husband's business." (Philadelphia Inquirer, March 21, 1997)
March 22: Ron Carey, having won the Teamster election for General President with 51.5 percent of the vote, is sworn into office for second term. Also sworn in are 18 members of the General Executive Board who ran on Carey's slate, and 5 Vice-Presidents who campaigned with Hoffa. Election results not certified by Election Officer prior to ceremony.
April 17: Carey campaign manager Jere Nash petitions Judge Edelstein to block disclosure to Election Officer of notes of his March 10 interview by Susan Davis. Attorney Davis advises Court that Carey has instructed her to release the interview notes. "Mr. Nash is alone in the world, here," Nash's lawyer tells Court. "He's got the Teamsters against him, he's got the election officer against him and all he did was sit in a room with four lawyers who promised him that what he said would be confidential."
May 8: Carey campaign files amendment to Candidate Contribution and Expense Report ("CCER") filed with Election Officer for period December 1996 through March 1997. Report shows that Carey campaign in debt $452,066. Included are $75,000 owed the November Group, $129,000 owed AFSCME for phone bank work in November 1996, and $91,000 owed to Delancey Printing. (Delancey Printing is the "Printing Company" which sent $11,250 to Ansara in payment of his fake invoice in October, 1996).
May 12: Hoffa campaign files new protest with Election Officer based on Carey campaign and TCFU amended CCER's.
June 6: Carey campaign operative Martin Davis arrested, charged with mail fraud (up to 5 years in prison, $250,000 fine). In sworn complaint, FBI Agent notes that "Cooperating Witness 1," later identified as Ansara, has agreed to plead guilty to a conspiracy charge and to cooperate in continuing FBI investigation.
June 7: New York Times quotes Carey campaign spokesman John Bell: "The complaint against Martin Davis, which remains allegations provided to a grand jury, does not cite any wrongdoing or knowledge of wrongdoing by IBT president Ron Carey." Asked if Carey in fact knew of the fund-raising scheme, IBT spokesman Matt Witt "declined to go beyond the prepared statement." (New York Times, June 7, 1997)
June 9: Election Officer Zack Quindel writes to Judge Edelstein, who oversees Teamster election under Consent Decree. Acknowledges her membership in Citizen Action, and her husband's current position as a "member of the Board of the Wisconsin Citizen Action organization since 1992." Also acknowledges April, 1997 $5,000 Teamster PAC donation to "The New Party," a political party with which her husband, a Milwaukee politician, is publicly aligned. Zack Quindel denies that her contacts with Citizen Action and The New Party "would in any way impair my ability to properly investigate and impartially render a decision" on the Hoffa election protests.
June 10: Wall Street Journal, in editorial, notes that Ron Carey twice seen entering White House on June 9. (WSJ, June 10, 1997).
June 12: Second Circuit Court of Appeals denies appeal of Carey campaign manager Jere Nash seeking to block disclosure by Cohen, Weiss and Simon of its interview with him to Election Officer. Court denies Nash claim that interview protected by attorney-client privilege; holds that privilege belongs to Carey, and notes that he has waived it.
June 18: Rep. Pete Hoekstra, R-Mich., urges Zack Quindel to not certify Teamsters election pending criminal investigations into Carey campaign. Hoekstra questions Zack Quindel's impartiality, an apparent reference to she and her husband's involvement with Citizen Action.
July 8: AP reports that IBT paid New York souvenir maker Axis Enterprises $250,000 in fall of 1996. Payment was for T-shirts and banners used in IBT's "Get Out the Vote" campaign. According to "people familiar with the investigation," Axis billed November Group's Martin Davis for the souvenirs, who then directed Axis's owner to add $94,000 to the bill, and sent it to the IBT. IBT paid $250,000 to Axis, which then paid $94,000 kickback to Davis. "Carey had no knowledge of this - if it happened," said Teamster spokeswoman Nancy Stella. "He certainly would not have condoned it." Article notes that Martin Davis has agreed to postpone his initial court appearance for 30 days.
July 14: Boston Herald, noting postponement of Davis's court appearance, speculates that the delay is to permit him to work out details of a cooperation and plea agreement with U.S. Attorney. "Sources close to the investigation said it is still in its early stages," the paper notes. "Other sources said investigators are looking at officials within the Teamsters headquarters."
Note: Ron Carey skips scheduled
appearance at Teamsters Canada convention in Vancouver B.C. on July 14.
Carey also skips IBT negotiations for national contract with United Parcel
Service (IBT's largest employer) on July 15 and 16.
Note: AFL-CIO President John Sweeney, in Boston for July 17 worker rally, strongly endorses Carey: "I think that Ron Carey's election was run by the rules, and more than amply supervised and monitored," Sweeney tells Boston Herald. "And since I was the one who swore the new (Teamsters) officials in, I hope that the election will be certified."
July 24: Quoting unnamed ex-Democratic National Committee ("DNC") official, Wall Street Journal reports that Martin Davis approached DNC Finance Director Richard Sullivan in summer of 1996. Davis allegedly offered to "squeeze more money" from Teamsters PAC for Democrats if DNC would persuade its large donors to give money to Carey campaign. Davis passed memo from Sullivan (requesting payment of $1 million by Teamsters to DNC state affiliates) to IBT Director of Government Affairs William Hamilton with cover note: "Bill: I'm forwarding this to you from Richard Sullivan. I'll let you know when they have fulfilled their commitment." According to the unnamed source, the DNC made no "commitment" to Davis, and no DNC donors were contacted. IBT spokeswoman Stella says internal IBT probe found no evidence "that would lead us to believe anyone was aware of this, if it happened."
NOTE: in related story Associated Press, quoting union sources, reports that Carey "testified in New York last week before a grand jury investigating whether illegal donations were funneled to his re-election campaign," seemingly explaining Carey's absences from Teamsters Canada convention and UPS negotiations July 14-16.
July 27: Federal grand jury investigating Carey campaign subpoenaed documents from IBT headquarters relating to Democratic organizations, AP reports. Similar subpoena was sent to the DNC, the article states. IBT lawyer Earl V. Brown, Jr. "would not discuss the subpoena or even confirm its existence." But memo to IBT staff by deputy counsel Dave Neigus instructs them to gather all documents "regarding organizations affiliated with the Democratic party." Neigus also tells staffers to "not discuss these matters with anyone." Targeted in subpoenas are IBT accounting office, General President's office, and legislative affairs department run by Hamilton.
July 29: Two days after service of subpoenas seeking links between DNC and Carey campaign, William Hamilton resigns. Hamilton, who came to the Teamsters in January 1995 (replacing respected Teamster lobbyist Dave Sweeney, whom Carey fired), quits because "there is no merit to further cooperation by me" in the U.S. Attorney probe, which Hamilton calls "a circus." By quitting, Hamilton avoids Teamster rule preventing continued employment after invoking Fifth Amendment right against self-incrimination, sources state.
August 8: Wall Street Journal notes that Cohen, Weiss & Simon (law firm to which illegal TCFU contributions were mailed), bills IBT over $1 million per year in legal fees. Cohen, Weiss also serves as counsel to Local 804, Ron Carey's home local. The firm acted as counsel to the Carey campaign, making more than $300,000 of "in-kind" contributions to Carey slate.
August 22: Election Officer Zack Quindel releases decision on Hoffa protests; orders re-run of Teamsters election. Re-run order (which is subject to approval by Judge David Edelstein) includes all positions won by Carey slate, except for position of President of Teamsters Canada, for which there was no opposition. Order leaves five Central Region Vice Presidents in office, since all were members of the Hoffa slate. EO rejects Hoffa request that Carey be disqualified.
NOTE: Some information in Zack Quindel's 134 page decision was disclosed in advance of her decision. Important new facts include:
Carey personally approved check to Campaign for a Responsible Congress
arm of Citizen Action. Check (issued with Carey's approval on October 24)
totalled $475,000. (EO Decision, p. 73-74). Check far outstripped previous
IBT contributions to Citizen Action: in four prior years, IBT donations
to the organization averaged $15,650 per year. (EO Decision, p. 75). As
earlier reported, Citizen Action paid Ansara $75,000 on November 14, which
he funneled through his wife to TCFU, c/o Cohen, Weiss & Simon.
Carey campaign manager Nash met with Carey's executive secretary and
office supervisor, Monie Simpkins, on union time at Carey campaign headquarters,
located one block from the IBT offices. Nash candidly disclosed what the
EO terms the "contribution
swap scheme," telling Simpkins that "the IBT was going to
be making contributions to certain political organizations, and in return
certain individuals would contribute to the Carey Campaign through TCFU."
(EO Decision, p. 72-73). Simkins agrees to "expedite" the IBT
checks. Simpkins admits that on at least one occasion, she told Carey that
the check he was approving "was one that Mr. Nash had called about,
and . . . it needed to be approved quickly." (EO Decision, p. 73).
In his March 10, 1997 interview by Cohen, Weiss lawyers, Carey campaign
Jere Nash stated that "leaders of other labor organizations"
gave cash to Carey campaign which was held by IBT employees Ed Burke and
Rick Blaylock. Nash (believing that the lawyers conducting interview represented
him personally, and that his statements were privileged) also stated that
the cash from other union leaders was reported on Carey campaign reports
as "receipts from the sale of campaign merchandise." EO writes
that Blaylock and Burke denied these allegations in sworn statements, but
she evidently did not interview the two. (EO Decision, p. 88).
Nash's claims are supported by fact that Davis twice approached Carey
lawyer Susan Davis asking whether Carey campaign could legally accept "large
contributions from the presidents of other unions" or, alternatively,
from their spouses. (EO Decision, p. 66).
On March 12 (two days after the Nash interview), Cohen, Weiss lawyers
tell campaign manager Nash of their intention to advise Martin Davis to
get his own lawyer. Nash tells lawyers that this is a "bad idea"
and that they could not "spin Martin out on his own." "[W]e
are all one family," Nash states (naming Nash, Davis, Ansara and Charny),
and adds that "if the lawyers break up the family, everyone in the
family was going to be hurt." (EO Decision, 88-89).
IBT Director of Government Affairs William Hamilton and Martin Davis discussed Carey campaign fundraising on "at least 3-4 occasions." At the time of the IBT 1996 Convention, Davis suggested to Hamilton that they form a committee "to solicit large amounts of money from nonmembers" in order that they might "contribute without publicity" to Carey campaign. Together, the two "reviewed the names of potential donors." (EO Decision, p. 66). "Sometime in August or September," Nash created Teamsters For a Corruption Free Union ("TCFU") in order to collect "large non-Teamster donations to support the Carey Campaign." (EO Decision, p. 67).
August 22: Despite testimony that Carey's secretary told him one of the checks he approved in the "contribution swap scheme" was requested by Nash (who was not an IBT employee), EO finds no evidence of misconduct by Carey. But EO notes that "troubling questions remain" about the $475,000 check to Citizen Action: "Mr. Carey states that he does not have any memory of authorizing the expenditure, a surprising statement in light of its size compared to other IBT contributions in the same period." (EO Decision, 119).
NOTE: EO notes that future developments in the grand jury or congressional inquiries might cause her to reevaluate her decision not to disqualify Carey: "If, subsequent to the issuance of this decision, evidence is brought to the Election Officer's attention that could warrant disqualification of Mr. Carey or other members of his slate, the Election Officer will consider it." (EO Decision, 119).
NOTE: As part of her remedy against the IBT, the EO orders the union to provide a copy of her Decision, at the union's expense, "to any member, upon his/her written request" sent to The Teamsters, 25 Louisiana Avenue NW, Washington DC 20001. (EO Decision, 123).
August 22:Teamsters For A Democratic Union ("TDU"), which had earlier urged Zack Quindel to certify the results of the Teamsters election, now hails her decision as an "opportunity to unite the union and move forward." In March 22, 1997 interview with the San Francisco Chronicle, TDU head stated that he "tries to raise money from the same people" that illegally donated to the TCFU. (EO Decision, 102, fn. 74).
August 23: In what commentator William Safire calls a "squirming" appearance on NBC's Meet The Press, Carey denies having advance notice of EO's decision. Carey also denies knowledge of the "contribution swap scheme," and states that he did not know that his campaign manager, Nash, spent his mornings working for Carey's campaign, and his afternoons working for Clinton/Gore. On same show, Hoffa calls for appointment of special prosecutor to probe charges of DNC involvement in Carey campaign fundraising.
August 26: Independent Review Board ("IRB") launches a third investigation of Carey campaign (others include Elections Officer and federal grand jury in New York). Created under the 1989 Consent Decree between the IBT and government, IRB investigates corruption, and makes recommendations for discipline to IBT.
August 27: Philadelphia Inquirer, hometown paper of Carey's octogenarian ally Johnny Morris, joins Jim Hoffa in calling for Carey to step down pending new election. "People in hell want ice water," Carey spokesman John Bell tells AP, "but that doesn't mean they're gonna get it."
August 30: Election Officer Barbara Zack Quindel announces her intention to resign. Quindel, who drew fire for delaying her decision pending resolution of UPS strike, indicates that personal reasons are behind the resignation. She states that resignation will be effective upon approval by Court of her proposed plan for rerunning the election. Jim Hoffa states his intention to seek appointment of former President Jimmy Carter to the Election Officer position.