|The Ron Carey Campaign
UNITED STATES ATTORNEY SOUTHERN DISTRICT OF NEW YORK
For Immediate Release
Contact: U.S. Attorney's Office Robert Hadad Public Information Officer (212) 791-1937
Michael E. Horowitz (212) 781-8685
MARY JO WHITE, the United States Attorney for the Southern District of New York, and JAMES M. KALLSTROM, the Assistant Director in Charge, New York Field Office of the Federal Bureau of Investigation, announced that three informations were filed in Manhattan federal court today against MARTIN DAVIS, a political consultant, JERE NASH, the former manager of the campaign of Ronald Carey for re-election to the presidency of the International Brotherhood of Teamsters, (the "IBT"), and Michael Ansara, a telemarketer, containing charges arising out of their participation in illegal schemes to raise money for the Carey re-election campaign. Some of the facts underlying these criminal charges have lead to a recommendation by the Court-appointed Election Officer that the 1996 IBT election be rerun.
According to the informations filed against DAVIS, NASH, and ANSARA, the Government filed a civil action under the Racketeer Influenced and Corrupt Organizations ("RICO") Act in June 1988 against the IBT and others, which alleged, among other things, that the IBT had been corrupted by organized crime, and had been operated in an undemocratic manner. In March 1989, this RICO action was settled pursuant to a Consent Decree, which was signed by the Honorable David N. Edelstein, United States District Judge, Southern District of New York. The Consent Decree established a disciplinary mechanism to rid the union of corruption and organized crime, which has resulted in the sanction and removal of hundreds of corrupt IBT officials and members. The Consent Decree also provided for direct, rank-and-file secret ballot elections by the IBT membership for the first time in the IBT's history. To ensure fair, honest, and open elections, the Consent Decree provided that Judge Edelstein would appoint an Election Officer to supervise the 1991 IBT election for IBT International Officers, and upon request of the Government, the 1996 IBT election for IBT International Officers.
The 1996 IBT election was supervised by Barbara Zack Quindel, who was appointed by the Court as Election Officer. Among other things, the Election Officer was required to oversee and investigate compliance with certain Court-approved Rules for the 1996 IBT election. Both the Rules of the election and federal labor law prohibited: (1) employers from contributing to or soliciting contributions for a candidate; (2) supervisory and managerial non-IBT union officials from contributing to or soliciting funds for election campaigns; and (3) the use of IBT funds to promote the candidacy of any individual.
The informations charge DAVIS, NASH, and ANSARA with participating in a conspiracy to circumvent the law and election rules to raise money for the Carey campaign. The scheme included illegally using and diverting IBT General Treasury funds, including embezzling and converting such funds to make contributions to political organizations in order to obtain, in exchange, donations to the Carey campaign; and the falsification and concealment of material facts from the Election Officer in an effort to prevent the Election Officer from learning the true nature and sources of certain contributions to the Carey campaign.
Plan to Swap IBT Funds in Exchange for the
The DAVIS and NASH Informations charge that in May or June, 1996, DAVIS learned the IBT had, in the past, provided substantial financial support to Democratic party entities, and that the IBT was considering similar donations in 1996. DAVIS, with the agreement of NASH and the IBT Director of Government Affairs, determined that he would attempt to use potential IBT contributions as a means to induce the DNC to raise money for the Carey campaign.
The DAVIS and NASH Informations charge that DAVIS had several conversations with a former official of the Clinton/Gore '96 Re-election Committee (the "Clinton/Gore Committee") and an official of the Democratic National Committee (the "DNC") and the Clinton/Gore committee who agreed to locate a donor for the Carey campaign in return for DAVIS's help with raising funds from the IBT for various Democratic committees. A foreign citizen was identified by the DNC who agreed to donate $100,000 to the Carey campaign; however, her contribution was rejected by lawyers for the Carey campaign, because she was an employer, according to the charges. Other discussions were held regarding an IBT contribution to "Unity '96", a joint fundraising effort on the part of the DNC, the Democratic Senatorial Campaign Committee, and the Democratic Congressional Campaign Committee, in exchange for locating a donor for the Carey campaign, the Informations charge.
Illegal Contributions by Labor Officials
According to the DAVIS and NASH Informations, large sums of money, including cash, were raised by officials of various labor unions for the Carey campaign. DAVIS, NASH, and others disguised the source of the cash contributions by causing them to be falsely identified on campaign contribution reports filed with the Election Officer.
The Direct Mail Campaign
According to the DAVIS, NASH, and ANSARA Informations, in July 1996, DAVIS and NASH determined that direct mailings for the Carey campaign should be undertaken by the November Group. DAVIS and NASH believed that such mailings, costing $700,000, were necessary because, among other reasons, Carey's lead over Hoffa was narrowing, and that Hoffa was raising substantially more money than Carey. DAVIS and NASH also agreed that the Carey campaign would be responsible for raising $300,000 to pay the November Group for the direct mailing campaign, and that DAVIS would be responsible for raising an additional $400,000 for the November Group's fee. DAVIS, NASH, and ANSARA, then allegedly schemed to finance the direct mail campaign.
Donations by the IBT to Political
In September, 1996, DAVIS and ANSARA devised a scheme whereby wealthy non-employers would donate money to the Carey campaign, and, in exchange, the IBT would contribute money to "get-out-the-vote" efforts that would assist the political candidates and causes supported by these wealthy individuals. NASH agreed to participate in this scheme and the IBT Government Affairs Director agreed to make the appropriate contributions that would assist DAVIS in raising money for the Carey campaign, so long as the contributions were sufficiently consistent with the IBT's objectives that they could be justified if scrutinized.
As charged in the Informations, ANSARA enlisted the assistance of a wealthy individual, who solicited other wealthy individuals to donate to the Carey campaign. Under the scheme, for each dollar solicited by the wealthy individual, the IBT would contribute several dollars to organizations chosen by the donors.
The Informations charge that among the organizations chosen by the donors was a consumer and environmental advocacy group named "Citizen Action". Citizen Action helped this wealthy individual obtain donors for the Carey campaign by refunding monies to various persons, who then used the refunds to help fund their contributions to the Carey campaign. In total, the wealthy individual obtained $185,000 in checks, which were made payable to "Teamsters for a Corruption Free Union" ("TCFU"), a fundraising committee established by the Carey campaign. In return for these contributions, in October 1996, facilitated by NASH, the IBT Director for Government Affairs allegedly caused the IBT to donate $475,000 in IBT General Treasury Funds to Citizen Action, and $175,000 to another organization, upon obtaining the necessary approvals from IBT officials. The monies donated to TCFU were used by the Carey campaign to pay the direct mailing fees of the November Group.
Contribution to the National Council of
According to the DAVIS and NASH Informations, DAVIS and NASH arranged through the IBT Director of Government Affairs for the IBT to make a contribution to the National Council of Senior Citizens, for the benefit of the Carey Campaign. The NCSC hired the November Group and DAVIS applied certain proceeds from the contract to the direct mail fees of the Carey campaign.
Contributions to the Carey Campaign
The DAVIS and ANSARA Informations charge that in late September 1996, ANSARA and DAVIS agreed to have Ansara's wife, Barbara Arnold, make a $95,000 contribution to the Carey campaign, which DAVIS would arrange to reimburse with money provided to ANSARA through illegal means. DAVIS and ANSARA arranged for Arnold to be reimbursed, in part, by ANSARA charging the IBT for services he never performed on a telemarketing contract ANSARA had with the IBT. Additional reimbursement for the Arnold contribution was supplied by Citizen Action, which sent $75,000 to ANSARA, and a commercial printer who sent funds to ANSARA. Ansara sent false invoices to cover these payments.
The AFL Contribution
According to the DAVIS and NASH Informations, in the Fall of 1996 DAVIS sought to raise another $100,000 for the Carey Campaign direct mail fees by arranging another IBT contribution to Citizen Action. It is charged that when the IBT Director of Government Affairs indicated he could not justify further contributions to Citizen Action, Davis allegedly arranged with NASH and the IBT Director of Government Affairs for the IBT to contribute $150,000 to the AFL. The Secretary Treasurer of the AFL agreed with DAVIS to transfer the $150,000 to Citizen Action, which then gave Davis $100,000, which he used to pay for the Carey campaign's direct mail fees.
Concealment of Illegal Fund Raising
According to the Informations, DAVIS, NASH, and ANSARA conspired and schemed to conceal their illegal fundraising efforts from the Election Officer. They hid the fact that donations to the Carey campaign were made in exchange for IBT donations to certain organizations; that IBT General Treasury funds were diverted to pay Carey campaign bills; that contributions to the Carey campaign were from, solicited by, and funded by employers -- including union officials.
It is also charged that DAVIS, NASH, ANSARA and others made numerous false statements to the Election Officer during the course of her investigation of contributions to TCFU, covering up the nature and source of the contributions and the nature of the contract between the November Group and the Carey campaign.
DAVIS is charged with one count of conspiracy to defraud the United States, to make false statements to the Election Officer, to commit mail and wire fraud, and to embezzle and convert union funds; one count of embezzlement and conversion of IBT funds; and one count of mail fraud. Under the charges DAVIS faces a maximum penalty of 15 years in jail, fines, and restitution.
NASH is charged with one count of conspiracy to defraud the United States, to make false statements to the Election Officer, to commit mail and wire fraud, and to embezzle and convert union funds; and one count of making false statements to the Election Officer. He faces a maximum sentence of 10 years in prison, fines, as well as restitution.
ANSARA is charged with one count of conspiracy to make false statements to the Election Officer, to commit mail fraud, and to embezzle and convert union funds. He faces a maximum penalty of 5 years in prison, fines, and restitution.
The three defendants were arraigned before United States Magistrate Judge Theodore H. Katz.
Assistant United States Attorneys MICHAEL E. HOROWITZ, ANDREA LIKWORNIK WEISS, and MARTINE M. BEAMON are in charge of the case.
The charges contained in the Informations are merely accusations, and the defendants are presumed innocent until proven guilty.