House Hearings on Teamsters 1996 Election

October 15, 1997, Wednesday

TYPE: COMMITTEE HEARING

LENGTH: 36798 words

COMMITTEE: HOUSE EDUCATION AND THE WORKFORCE SUBCOMMITTEE ON OVERSIGHT AND

HEADLINE: HOLDS DAY TWO OF HEARINGS ON THE 1996 TEAMSTERS ELECTION

LOCATION: WASHINGTON, D.C.

BODY:
HOUSE EDUCATION AND THE WORKFORCE SUBCOMMITTEE ON OVERSIGHT

AND INVESTIGATIONS HOLDS HEARING ON THE 1996 ELECTION

OF THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS

OCTOBER 15, 1997

SPEAKERS: U.S. REPRESENTATIVE PETE HOEKSTRA (R-MI),

CHAIRMAN

U.S. REPRESENTATIVE CHARLIE NORWOOD (R-GA)

U.S. REPRESENTATIVE VAN HILLEARY (R-TN)

U.S. REPRESENTATIVE JOE SCARBOROUGH (R-FL)

U.S. REPRESENTATIVE CASS BALLENGER (R-NC)

U.S. REPRESENTATIVE HARRIS FAWELL (R-IL)

U.S. REPRESENTATIVE PATSY MINK (D-HI)

U.S. REPRESENTATIVE RON KIND (D-WI)

U.S. REPRESENTATIVE LORETTA SANCHEZ (D-CA)

U.S. REPRESENTATIVE HAROLD E. FORD, JR. (D-TN)

JOHN C. KEENEY, ACTING ASSISTANT ATTORNEY

GENERAL, CRIMINAL DIVISION, JUSTICE

DEPARTMENT

BARBARA ZACK QUINDEL, FORMER INTERNATIONAL

BROTHERHOOD OF TEAMSTERS ELECTION

OFFICER

MICHAEL HOLLAND, FORMER INTERNATIONAL

BROTHERHOOD OF TEAMSTERS ELECTION

OFFICER

FORMER STATE SENATOR MURRAY SCHWARTZ, CEO, HONEST

BALLOT ASSOCIATION

*

HOEKSTRA: The subcommittee will come to order. The process that we're going to be using this morning is Ms. Mink and I will both give a -- an opening statement. We will swear in the witnesses. The witnesses have each been given up to, I believe, 20 minutes for an opening statement. Having seen Mr. Keeney's statement, Ms. Quindel's statement, I believe that they won't take as much time, and having seen and talked with Mr. Holland this morning, I don't expect that you'll take as much time. But we'll see exactly how that works, and then we will move into the questioning, the five -- the traditional five-minute per member questioning time. So that is the procedure and the time -- and the process that we will use this morning.

I want to begin by just again thanking my fellow members for taking time out from their recess schedule to come back to Washington to be a part of these hearings yesterday and today. After the testimony yesterday, I think that the importance of being here is clear.

Yesterday, we heard compelling testimony. We heard first-hand accounts of an election that went awry. We heard from Teamsters that were beaten for campaigning for, quote/unquote, "the wrong candidate." We heard from Teamsters that were forced to make contributions that, in some cases, they could ill-afford. We heard from Teamsters that spent union time and hard-earned union money campaigning for the Teamsters' president. We heard from Teamsters that voted at the last Teamsters' convention, despite the fact that they had not been elected as delegates to that convention. There were, quote/unquote, "bone- chilling" accounts from individuals voicing their concerns that they and their fellow Teamsters had been denied a fair and democratic election.

Worse yet, these rank and file Teamsters testified that, in spite of the progress made by the 1989 Consent Decree in ridding the Teamsters of corruption, a new form of intimidation and outright violence has found its way into the lives of Teamster members.

We also received compelling testimony yesterday concerning the internal operations of the Teamsters Political Action Committee, known as Drive. As should be evident by now, the subcommittee has begun an intensive investigation into numerous allegations surrounding the use of these funds, allegations that have, in part, recently led to the
guilty pleas of three individuals and the invalidation of the 1996 Teamsters election. At a minimum, yesterday's hearing provided a needed background for this investigation and, in my view, gave important insights into how this union was being operated by its leadership in the months and the years before and the months after the recent elections.

Today, the focus of the hearing shifts from the individuals or one group of individuals who were victimized during this election. Those were the individual rank and file Teamsters members. Now today, we're going to be taking and hearing testimony and discussing with those who were charged with overseeing the Teamsters election under the 1989 consent decree.

Before I introduce today's witnesses, let me again summarize how the federal government became involved in monitoring the internal elections and operations of this private union. In 1988, the U.S. government filed a civil RICO suit against the Teamsters to rid the union of the control and influence of organized crime. To settle this case, the U.S. Department of Justice entered into a consent decree with the Teamsters in early 1989. As part of this consent decree, the government agreed to supervise the 1991 Teamsters election to ensure a democratic election of a new general president and other officers.

At paragraph 12(d) of the 1989 Consent Decree, the IBT agreed to have the 1996 election of officers supervised by the election officer. The text of this can be seen at the chart to my left. Paragraph 12(d)(9) states, "The union defendants consent to the election officer at government expense to supervise the 1996 IBT elections." Again, note that the language of this paragraph only obligated the federal government to pay for the supervision of the election, not to pay for the conducting of the election.

On February 7, 1995, the court approved an order submitted by the parties providing that the 1996 election of officers would be supervised and conducted by the court-appointed election officer. At or about this time, it was also determined that the federal government, at taxpayer expense, would pay for this election, both for its conduct and for its supervision.

The Teamsters election is governed by a detailed set of rules issued by the election officer and approved by the district court. Some of the more noteworthy provisions of the rules for purposes of this hearing are spelled out again in the charts to my left. Yesterday, I went through those rules in some detail. I will not read those provisions again today, but will only have them here for reference.

Today's hearing will provide an insight into the federal government's involvement with the Teamsters. In particular, we will be hearing from Acting Assistant Attorney General John Keeney about the events leading up to the 1988 civil RICO case against the IBT and the rationale behind the 1989 consent decree.

On September 17, 1997, I sent a letter to the Department of Justice requesting specific information pertinent to this investigation. My prepared statement states that, as to date, this
subcommittee has yet to receive a response. However, just before the beginning of this hearing, we were handed a response -- I don't know if we have it -- a fairly lengthy letter from Andrew Fois. Is that right? Fois -- who's the assistant attorney general.

Ms. Mink, you have a...

MINK: Yes. I have a...

HOEKSTRA: You have a -- you are copied on this. If you do not have it. Do you have a copy?

MINK: It's (OFF-MIKE).

HOEKSTRA: OK. So you've got it about the same time that I got it. So at this point in time, we have not had an opportunity to take a look at how fully the Justice Department has asked our question -- or has answered our questions.

And I'm sure that, in the questioning period, Mr. Kenney, we hope that you'll be able to elaborate, both on the material we received from the Justice Department and also respond to other -- or respond to the full list of questions that we had submitted back in September. Specifically, we ask questions like who in 1993 made the decision to involve the federal government in the 1996 election? What was the process and the reasoning that led to that decision? Why does the Department of Justice interpret 12 -- paragraph 12(d) as a requirement that the federal government pay for both the supervision and the conducting of this election? And why, despite the fact that the Department of Labor was mentioned repeatedly in the 1989 consent decree, were they not involved in the 1996 Teamsters election?

Today's hearing will also include Ms. Barbara Zack Quindel, the former election officer that oversaw the 1996 Teamsters election. This office and the rules it promulgated were to ensure a fair, safe and democratic election, and to carry out these responsibilities under the consent decree, the election officer maintains a Washington, D.C. office with a staff of lawyers and other administrative staff as well as a network of 20 regional coordinators and other adjunct staff throughout the United States and Canada to assist in the elections and investigation of any allegations of violations.

It is my hope that this hearing will provide the subcommittee with an understanding of how the federal government spent almost $20 million on this election; where that money went; and why, at the end of the day, we were left with an election that could not be certified. We'd like to know why the election officer has called for a re-run election before determining if the current president of the Teamsters will even be eligible to run and before specifying what steps will be taken to avoid the mistakes which led to the failure of the 1996 election. Finally, we'd like to know how much this re-run election is expected to cost and if the election officer has taken any steps to ensure that rank and file members are not coerced by anyone during this election.

We will also hear from Mr. Michael Holland. He was the election officer who oversaw the 1991 Teamsters election. Mr. Holland will be
able to provide insight into the conducting of the 1991 election and how it may compare with the 1996 election.

In a similar vein, on a second panel today we will hear from Senator Murray Schwartz, who is the CEO of the Honest Ballot Association, a non-profit organization that oversees numerous union and other private elections.

HOEKSTRA: Mr. Schwartz will provide testimony on how to effectively and efficiently conduct union elections and how the recent teamsters elections may have varied from the procedures used by the Honest Ballot Association. I now yield to the gentle lady from Hawaii, Ms. Mink.

MINK: I thank you, Mr. Chairman. These hearings today are exceedingly important. It will establish the foundation for these hearings in the first place, by going back into the historic reasons for the consent decree being agreed to and ordered by the Court.

And I think this is terribly important. Because as I understand the majority's challenge is -- why did the government pay for the 1996 elections. What was the justification for that?

And secondly, why did the government, if it had agreed to -- pay for the elections, move into something in which they describe was beyond the purview of supervision of an election.

So, I think we have the three parties here that will be able to establish the background, the justification, the conduct and the reasons for the participation of the government in this instance.

The Chairman has more or less emphasized the role of the government in the 1996 election. But, I think it's important to understand the background of the consent decree, which occurred in 1989, leading to the 1991 elections. And that was because of the very pervasive acknowledged allegations of corruption within the union. Which under the Reagan administration, led to RICO proceedings against the Teamsters.

And it was under that burden of litigation which faced the Teamsters at that time, that the parties got together and under the Reagan administration's insistence of routing out corruption from the Teamster's union and then to lay that foundation with respect to other unions, proceeded to file the charges.

And in the course of that the parties came together, again, I believe under the Reagan administration and later under the Bush administration to come to terms with respect to that proceeding and came to this consent decree.

And I think that background is very important when we look to the whole issue of why the government then became responsible for the conduct and supervision of the elections in 1996.

The consent decree called for the Teamsters to operate, manage and pay for, excuse me, to pay for the management by the government of the 1991 elections. And that, as I understand it, cost the Teamsters something in excess of $20 million. But, the government then laid the foundation, which we will hear from Mr. Holland as to how that exercise of supervision and monitoring of that election was to take place.

Again, important to understand that that was always under the guidance and supervision of the courts and the courts, in fact, interpreted what the word supervision and conduct meant. So I think that we will learn a great deal about the background, the participation of the Justice Department and their assumption of their roles and what it was under the consent decree and, in fact, how it operated in 1991 and 1996.

And I believe that this information that is being provided by these three witnesses is very critical and I appreciate the fact that the majority has proceeded in this basis because I think this background is essential for a full understanding of why the government is in on the monitoring and conduct.

And I might say, Mr. Chairman, that while people might be critical that after spending all this money which was ordered by the court which was agreed to by the Reagan and Bush administration as to how to operate that it was because of the fact that the federal government was involved in this. That all of this conduct that has now reached our level of perception that created the election officers decision to call for a rerun.

The process cannot be condemned as a failure because of the rerun. The process has to be acknowledged as the reason for our ability to call for a new election. At least that's my perspective but let's hear from the witnesses and I thank you, Mr. Chairman.

HOEKSTRA: Thank you. All witnesses appearing before the Subcommittee on Education in the Work Force and its subcommittees are asked to take an oath and promise to tell the truth. Witnesses should be aware that under Title 18, Section 1621 of the United States Code, lying to Congress while under oath may be prosecuted under law.

In light of this, please rise and raise your right hand. Do you solemnly swear that the testimony you will give before this subcommittee will be the truth, the whole truth, and nothing but the truth? Mr. Keeney.

KEENEY: I do.

HOEKSTRA: Ms. Quindel.

QUINDEL: I do.

HOEKSTRA: Mr. Holland.

HOLLAND: I do.

HOEKSTRA: Good, thank you. Mr. Keeney.

KEENEY: Thank you, Mr. Chairman. Mr. Chairman, as you referred to it -- you have my statement, I'd appreciate it if you put in the record and with your indulgence...

HOEKSTRA: ...without objection.

KEENEY: I would like to take about four or five minutes and hit some of the highlights of my statement.

I appreciate the opportunity to be here to discuss the Department of Justice implementation of the 1989 consent decree in its civil racketeering action against the International Brotherhood of Teamsters.

The government has -- believes it's made great progress in reforming the IBT but continued efforts are critical to ensure the reform of the nation's largest trade union. The continued supervision of the IBT election is a law enforcement priority.

The centerpiece of the consent decree -- the centerpieces of the consent decree are disciplinary and electoral reform. The consent decree provides for the establishment of a three-member independent review board to investigate allegations of union related corruption. The consent decree also provided for the first ever Democratic rank and file election in the union's history.

That was done in 1991 and the second ever in 1996. And it further provided that the first of these elections would be supervised by a court appointed election officer and at the second election could also be supervised if the Department of Justice so elected.

Under the consent decree, the IBT was obligated to pay the costs of supervision the 1991 election and of the IRB. The consent decree provided that if the government elected to have the 1996 elections supervised, the government would pay for such supervision. The government elected to supervise the 1996 election and I'd like to emphasize this because there was real risk that organized crime would attempt to influence the 1996 election.

Unsuccessful attempts at such an influence were made in 1991 and the department had been emprized (ph) by government informants about the importance of the IBT to the organized crime families and of the intended efforts to regain control of IBT in the 1996 election.

The reforms, Mr. Chairman, affected by the consent decree are unprecedented. Through the actions of the IRB and the court appointed disciplinary officers who proceeded it, over 390 corrupt union officials and members have been sanctioned or removed. Many on the grounds that they knowingly associated with organized crime figures.

KEENEY: Similarly, but democratizing the process of choosing union leaders, the consent decree makes it more difficult for organized crime to control the selection of top IBT officials. The election supervision would span several years and oversees a multi- stage election process, includes the compilation of an accurate list of eligible voters among the union's 1.4 million members.

The supervision of delegate elections in approximately 580 local unions across the nation. The printing, distribution and collection of ballots, both for the delegate and international officer elections. The planning and conducting of all elections, and the investigation and determination of approximately, it turned out to be, 1,500 election protests brought by union members and employer companies during the election process to ensure a corruption-free vote.

In addition, in both the 1991 and 1996 elections, the election officer supervising the election promulgated detailed rules. In approving the 1996 election rules, the district court noted the importance of maintaining a set of election rules that was, for the most part, similar to the 1991 rules and thus already familiar to the IBT, its membership and to IBT employers.

It should be noted that the improper actions that the election officer highlighted in the recent decision that had prompted her to call for a rerun election came too late only because of the election rules and their campaign contribution disclosure provisions that form an essential part of the supervision process. Thus, comprehensive supervision by the election officer remedies and deters attempts to corrupt the electoral process.

The election officer refused to certify the election in order that the election be rerun. The election rules governing the election expressly contemplate the possibility of a rerun. The rules, which are adopted pursuant to the consent decree and approved by the district court overseeing the consent decree and by the Second Circuit, provide if the election officer does not certify the election, she shall immediately order a rerun of the election.

The election officer's decision to rerun the 1996 election was based upon findings of improper campaign contributions to the Carey campaign from non-members. I might add at this point that the findings of improper campaign contributions came late in the day insofar as because the ballots had already been sent out with respect to the election. And I might add that in the present approach, the timetable and the control of these disclosure of contributions has been tightened somewhat.

The proposed rerun plan approved by the district court sets forth a number of additional restrictions on campaign contributions and, as I indicated, has enhanced the disclosure requirements for such contributions.

The Department of Justice believes that continued supervision of the 1996 IBT election is a law enforcement necessity. Such supervision is crucial to preventing organized crime from reestablishing its control of the Teamsters union and to ensuring the permanent success of the democratic reforms achieved as a result of the department's civil racketeering action against the IBT.

We think we've come a long way in democratizing the Teamsters union, and we're hopeful that we'll be able to take whatever steps are necessary to continue that democratization so that we can have full and complete participation of rank-and-file members of the Teamsters in the election process without any fear of intimidation, physical or otherwise.

As the district court has noted, great progress has been made in ridding the union of organized crime influence as a result of the consent decree. It's common knowledge that for about 40 years the La Cosa Nostra dominated the selection of the leadership of the Teamsters. And we think that we have a process underway, a process in place that will minimize that influence and hopefully increasingly democratize, as I said, the electoral process.

Hundreds of union officials have been removed or disciplined. Members and candidates now actively participate in vigorously contested elections for international union officers. And organized crime, while not eradicated, is no longer able to conduct business as usual in the IBT.

Continued vigilance, and in particular, comprehensive supervision of the 1996 rerun election, is critical. We've come a long way, Mr. Chairman, and we don't want to retrogress and go backwards.

The election officer's decision of a rerun, on a rerun election demonstrates that comprehensive supervision was needed to prevent corruption from affecting the ultimate outcome of the election. If it were not for the comprehensive supervision, we wouldn't be here today, and the irregularities that were uncovered would not have been uncovered.

If anything, such supervision is even more necessary for the rerun, and the failure to supervise could serve as a green light to corruption and organized crime. Continued supervision of the 1996 election is necessary to ensure an honest and fair election and to avoid the risk of undermining the significant reform efforts that have occurred.

If the process of campaigning and balloting were obstructed by organized crime elements, immediate and effective investigation of election rule violations is possible only under supervision by an election officer. Judicial supervision is the best means of ensuring that the leaders of the IBT are elected fairly and democratically and without corrupt influence.

Mr. Chairman, that summarizes my statement. And I know that the committee has a number of questions continue, particularly with respect to the financing and what portions of the financing would be done by the federal government and what portions would be done by the IBT. With that, I complete. Thank you.

HOEKSTRA: Thank you. Miss Quindel.

QUINDEL: Thank you Mr. Chairman. My name is Barbara Zack Quindel. I'm a partner in the law firm of Perry, Lerner and Quindel and Saks in Milwaukee, Wisconsin. I've lived and worked doing the... Closer? Is this better? OK. I'll speak up as well.

HOEKSTRA: I'm told they can't hear me, either.

(LAUGHTER)

QUINDEL: I've lived and worked in Milwaukee since 1979 practicing labor and employment law. On May 30th, 1995, I was appointed election officer for the teamsters by the Honorable David N. Edelstein, United States district judge, and I served in that capacity until I stepped down effective September 30th, 1997.

There are currently approximately 1.4 million members of the Teamsters, a number greater than the voting-age population of more than 17 states. The Teamsters membership extends throughout the contiguous 48 states, Hawaii, Alaska, Guam, Puerto Rico and all of Canada.

As you know, and as we've heard again by speakers, for many years, the Teamsters were marked by corruption and dominated by organized crime. And in response to that problem, the Justice Department brought its civil racketeering lawsuit against the international union and its leaders in 1988. In order to resolve that lawsuit, the government and the Teamsters entered into the consent decree approved by the district court in 1989.

The consent decree sought to eliminate corruption in part by requiring that international officers be elected by direct rank-and- file voting, by secret ballot, in a unionwide, one member, one vote election. The decree provided for a court-appointed election officer to supervise rank-and-file elections of delegates to the Teamsters convention, followed by the second stage, a rank-and-file election of Teamsters officers from among candidates who were nominated at the convention.

QUINDEL: The consent decree also provided that at the government's option, the second election, to be held in 1996, would either be supervised by the Department of Labor or a court-appointed election officer, but that the cost would be borne by the government.

In 1995, February, the court ordered that the 1996 international- officer election would be supervised and conducted by a court- appointed election officer, and that, quote, "it is the intention of the government and the IBT that the election officer function in 1996 as similarly as possible to the 1991 election officer."

As noted above, I was appointed election officer in May then of 1995.

Back in 1993, the development of the budget for this 1996 election began, with a bottom-up analysis in which a cost was assigned to each task known to be necessary from the election officer's experience in 1991 and determined by the Justice Department and the election officer to be necessary for the upcoming election.

The budget developed for the 1996 election projected an expenditure of $21.2 million, spread over four fiscal years, Fiscal Year 1994 through 1997. This budget covered all three phases of the election, the delegate elections, the convention nominating votes by the delegates, and the rank-and-file mail balloting by all union members.

The Department of Justice submitted the budget for the election officer's supervision to Congress as part of its request for authorization to expend the necessary funds, and Congress authorized expenditures for the election supervision for Fiscal Years 1995, 1996, and 1997.

I submitted quarterly financial reports to the Department of Justice. Despite unanticipated additional costs, the total cost of the 1996 election to date is approximately 17.5 million. Thus, the election activities contemplated by the initial budget were completed 17 percent under budget.

I also provided detailed information about particular costs associated with the supervision effort in my letter of September 30, 1997 responding to a request for information by this subcommittee.

Under the consent decree, I acted in two different capacities. As an administrator, I supervised each step of the mechanics of the election. I also served as an adjudicator. I investigated and evaluated evidence and issued written decisions on protests filed by Teamster members.

I'm happy to share with you today any information you may desire on the process of running the election. As an adjudicator of protests, my decisions have to speak for themselves. I'm not at liberty, therefore, to supplement by discussing further details of my investigations or my deliberations, although I'd be happy to point you to written decision relevant to any inquiry you may have.

The basic requirements for the election are set forth in the consent decree, as implemented by the election rules issued by the election officer. In the spring of 1995, election office headquarters opened in Washington, D.C. to provide the central administration of the election process.

I was present in Washington headquarters two to four days per week on an almost weekly basis throughout the election process. I hired staff -- for Washington, approximately 25 employees at the peak -- to assist in carrying out election operations and to perform the financial and other administrative work of the office.

The first stage of the Teamster election process was holding the delegate elections. During the period from September 1995 through April 1996, each of 568 Teamster local unions nominated and elected delegates to the International convention, where candidates for International office would be nominated.

Election office staff reviewed the local union plans for each delegate election, and I ultimately approved each of those plans. A representative of the election officer attended a nominating meeting for each of the 568 local unions to conduct the nominations. Out of those unions, 275 had contested elections for delegates, which required a mail-ballot election.

The next stage of the process was the actual nomination of candidates for International office, and that took place at the Teamsters International convention in Philadelphia, Pennsylvania on July 15th through 19th of 1996.

The consent decree requires that each candidate for delegate -- I'm sorry, each candidate for International office receive five percent of the votes in a secret-ballot election among the delegates at the convention, and it -- that five percent is necessary to be successfully nominated and to appear on the November ballot.

I certified the credentials of all elected delegates. During three days of the convention, I presided over floor nominations of candidates for International office and conducted the three secret- ballot votes using electronic voting machines.

While most of the convention was in the hands of the International union and delegates, those aspects of the convention related to the nomination of International officers was completely controlled by me and my staff.

The final stage of the process was the actual election of International officers. And this involved the printing and mailing of mail-ballot packages to be sent more than 1.4 million members potentially eligible to vote.

Starting on December 10, 1996, we began to process and tabulate ballots from eligible voters on electronic voting machines. Prior to counting the ballots, election office count workers checked the eligibility of all voters.

Unlike public elections, persons on the Teamsters membership list were not predetermined to be eligible voters. I challenged certain members' eligibility to vote based upon a computer-generated eligibility list prepared under my direction.

Count workers compared each ballot return envelope to the eligibility list, and challenged ballots were segregated to be resolved later if necessary.

As a result of the initial count, the margin of victory for the candidates -- for most of the candidates was less than the total number of challenged ballots, and the closeness of the vote required substantial additional work.

Election office staff methodically resolved challenged ballots previously challenged by the election officer, by determining the voters' individual eligibility.

Ballots which were declared eligible were then counted in four supplementary counts. The last supplementary count took place on February 27, 1997.

A request under the rules for a recount was made, and the 463,582 ballots from members determined to be eligible were again counted by electronic counting devices on March 24th through 27th, 1997.

During the 1996 election process, over 1500 protests were filed with the election officer. Each of these protests were investigated as necessary and resolved with a written decision. To accomplish this work, regional coordinators conducted interviews, reviewed documents and videotapes, and where necessary personally inspected locations involved in disputes. My staff in Washington included a protest chief and as many as seven lawyers who drafted decisions, researched court and previous election-officer decisions, and assisted in investigations.

Under the rules, the election officer has broad power to fashion appropriate remedies. As stated in my decision, the election officer chooses a remedy, quote, "in light of the nature and seriousness of the violation, as well as the potential for interfering with the election process," close quote.

Following this principle, I issued a variety of remedies. I imposed fines for the first time in this process. I ordered the return of prohibited contributions, overturned retaliatory disciplinary actions, ordered campaign mailings for candidates, published notices in Teamster publications regarding violations, and ordered notices posted on local union bulletin boards. In some, I took a wide range of remedial action designed to redress the violation and eliminate interference in the election process.

An important part of the election officer's duty is to monitor campaign contributions and expenditures. Thus, the supervision effort included extensive campaign-contribution and expenditure reporting and disclosure requirements. As you know, in August 1997 I issued a post- election protest decision in which I refused to certify the election based on prohibited campaign contributions received and used by the Carey campaign.

QUINDEL: These illegal contribution schemes came to light because of the contribution disclosure provisions that form an essential part of this supervision process.

The election office designed the campaign contribution and expense reporting forms, along with detailed instructions for completion. On December 15, 1995, I issued an advisory on campaign contributions and disclosure. This 21-page booklet provided further clarification on rules relating to campaign contributions and expenditures.

In January 1996, I conducted a several hour training session for candidates regarding the rules on campaign contributions and expenditures, including a detailed explanation of the disclosure requirements and forms.

My staff and I prepared samples of completed forms, which gave examples of how various contributions and expenditures should be reported. These were distributed and discussed. I have provided the subcommittee with copies of the advisory and the CCER forms -- our reporting forms are known as CCER forms and instructions.

Election office staff also reviewed the submitted CCER forms and frequently made inquiries and requested further information regarding reported contributions.

As a result of these inquiries, candidates in slates were required to produce additional information sufficient to establish that the contributions were permissible. Absence efficient information to support a permissible contribution, I directed the contributions be returned.

Finally, I made quarterly reports to the district court as to all of my activities, including a detailed report on my decision to hire major vendors for the count process. Thus, my work was subject to the continuous oversight of the district court.

After receiving and reviewing the campaign contribution and expenditure report from Teamsters for a corruption free union, a committee of the Ron Carey campaign, in December of 1996, I decided to begin an inquiry into these contributions. After our investigation began, the campaign for candidate Jim Hoffa filed a protest on the same subject.

On August 21, 1997, I issued a decision that reviewed in detail the facts concerning contributions to the Carey campaign, my investigation of those facts, and the reasons for my decision to rerun the election.

In my decision, I found that the improper contributions were used to fund a last minute campaign mailing on behalf of the Carey campaign, and that the campaign mailing may have affected the outcome of the election. Thus, I determined that the protest must be granted.

Unfortunately, the violations that were the subject of my decision occurred late in the election process. Because these contributions were made during the last campaign reporting period prior to the count, they were not revealed until December 1996. At that point, the ballots had already been cast.

While the path that led to the discovery of these violations began with our campaign finance reports, my decision explains how the deception and untruthfulness that characterized the participants in these violations made investigation more difficult.

However, an extensive investigation was performed and I was ultimately able to present the factual background and analysis necessary to make the decision on certification that the consent decree and rules required of me.

As stated in the district court by the district court in its decision of September 29th, approving a rerun election plan -- and I quote -- "It is important to recognize that the process imposed by the consent decree was successful and that it exposed the contemptible parties, thus preventing them from reaping the benefits of their despicable schemes. This court and its appointed officers remain dedicated to the goal of union democracy, an honest, fair and informed election is of paramount importance as this union continues on its path to rid itself of the remains of corruption and deceit."

The election provisions -- that's the end of the quote -- the election provisions in the consent decree set forth the path to democratizing the Teamsters. A system of laws and rules that allow for free and open participation is critical in any democratic institution; however, laws and rules are sometimes broken. When that happens, democracy must be protected by the principles of enforcement and accountability. That is what happened with the Teamsters election process.

The court appointed me to do a job and with the assistance of an extremely capable staff, we accomplished much towards implementing the goals of the consent decree. I'm proud of the work that has been done and I thank the committee for the opportunity to present this overview. And I'd be happy to answer any questions.

HOEKSTRA: Thank you. Mr. Holland.

HOLLAND: Thank you, Mr. Chairman. My name is Michael Holland. I'm an union side labor lawyer from Chicago. In May of 1989 at the recommendation of both the Justice Department and the Teamsters Union. I was appointed by United States District Judge David N. Edelstein to serve as the election officer for the 1991 Teamsters election.

I served in that capacity from May of 1989 until June of 1993, when I resigned my position. At the conclusion of my active tenure as
election officer, I prepared and delivered to the court as well as to the parties to the consent order and others, who I'll point out in a moment, a report on my activities as election officer for the 1991 election. That three volume report is entitled "The Cookbook: How the Election Officer Supervised the 1991 Election." I understand that the committee staffs have received copies of the three volume report.

The three volume report itself is supported by about 15-feet of appendixes, protest decisions, memoranda, protocols and other materials that were prepared during the time that I was election officer. The entire report was filed, of course, with the court in New York. It is part of the permitted open record of the case.

Copies were provided to the Department of Justice in its entirety. Copies were provided to the union in its entirety. The election office, of course, has a copy. That was the principle purpose for creating the report in the first place.

And finally, a complete copy of the report was filed with the Senate Permanent Subcommittee on Investigations, which at the time when the report was developed was really the principle congressional committee that was overseeing the implementation of the consent order.

I have -- I was called on Friday around noon time, Chicago, and asked to come here today. I'm pleased to do so, but I indicated at the time that I would not be able to prepare written remarks for the committee or its staff. I did pull together some materials that I used during the 1991 elections, including the report that I refer to. And I'm, of course, available to the committee for questions or comments.

There's a couple of items that I didn't realize were part of the agenda of the inquiry until I watched the coverage of the hearing yesterday when I got to my hotel room last night. And the first is the issue that Congressman Norwood, I think initially raised, as well as the chair, of paragraph 12(d) of the consent order.

The question about what supervise means was litigated in 1989. It represented the first occasion that I went through the independent administrator to court. There was a significant dispute between the union and myself as election officer as to what the term supervise the 1991 election meant.

HOLLAND: I brought a copy of the decision because committee staff had indicated that costs were a consideration, and this really was the first decision that dealt with costs in 1989. But it also dealt with the issue of supervision, and if I might, for the committee's edification, I will be happy to give you a copy of the decision. It's reported in the Federal Supplement.

The independent administrator election officer and government understand the term "supervise" to involve an active and broad mandate to intervene in and coordinate the IBT electoral process up to and including the next general convention. The election officer seeks to promulgate electoral rules and procedures, educate IBT locals on the new process, monitor campaign candidate campaigning, devise absentee- voting procedures, and certify all elections.

The IBT, on the other hand, views the term "supervise" in a more passive framework, urging the court to interpret the meaning of "supervise" as requiring the election officer to oversee the IBT electoral process and provide post-election advice to locals only when sought. The IBT opposes the election officer's proposed proactive steps.

And remember this was in October of 1989, just to give you the historical perspective of what was said.

The judge's decision was, and I quote, "I find that the specific language of paragraph 12(d), taken together with the spirit and intent of the consent decree, requires that the term 'supervise' be interpreted in its most expansive and proactive meaning."

That decision, if I recall correctly, was appealed to the Second Circuit. The Court of Appeals in the Second Circuit upheld the district court.

Later, in early 1990 -- and I don't have the advantage of having this decision with me, so I'm operating by memory -- the issue of exactly how proactive and what specific steps the election officer was to take was litigated again before the district court, and in the district court's decision, the election officer was directed to, in my words, do everything from soup to nuts, from printing the ballots to determining voter eligibility to receiving the ballots when they were mailed back or for in-person elections where they were conducted in the local union hall, to counting the ballots, to certifying the elections, and of course to resolving protests and disputes concerning the election.

So, the court, in early 1990, specifically addressed and directed the election officer to take fundamentally all actions, to conduct the election. That case, not surprisingly, was also appealed to the Second Circuit Court of Appeals, and in all of those respects it was upheld.

Committee staff on both sides of the aisle had asked me about this earlier this morning, and my response was, the law of the case, as I saw it, in June of 1990, was that I was, as election officer, to take all actions with respect to the conduct of the election in 1991.

The second item that I would like to comment on very briefly -- and it again I think is to put it in perspective -- is exactly what constituted in 1991 the 1991 election. Again, this was an initial dispute between myself and the union.

I maintained that as election officer, in running the 1991 election, I was responsible for supervising in a proactive way the delegate elections in each of the local unions, which in turn led to the convention, which nominated by vote of the delegates elected candidates for International office, and then the third phase of the election, as Ms. Quindel has indicated earlier this morning, of running the International union officer election.

The union's position was that what my job was was to supervise the way in which voting took place at the convention only. In other words, I had no role or responsibility with respect to the delegate elections in what were then 630 Teamster locals. Nor did I have any responsibility with respect to the general election. My responsibilities were limited to the convention.

Again, the court in October of 1989 ruled that "the 1991 election" means the entirety of the election process, from the delegate elections in the local unions up to and including the counting of the ballots for the International union officer election.

Now, the point of this really goes to costs, and I just submit this for the -- for the committee's edification and consideration. The vast bulk of the cost of the election office in the 1991 election -- and I suppose that it's borne out in the 1996 election, but Ms. Quindel can address this -- is in running the delegate elections.

These are, depending on the number of local unions, up to, in my case, 630 election processes. There became 309 contested delegate elections in the 1991 election cycle, and that required the printing, mailing, counting of ballots in 309 separate elections located incidentally from Vancouver to South Florida, and from Honolulu to Glace Bay, Nova Scotia, for that matter.

And so the overwhelming portion of the expense in 1991, as my report from that election indicates, was connected with the delegate elections. There was some expense in the convention portion of what the election office had to do, and there was significant expense, though not as much as the delegate elections, involved in running the general elections.

And I say that to you because it is really the history of how this developed and perhaps it gives you a perspective on how these costs are allocated throughout the election process.

I am happy to respond to any questions that the committee has and at your convenience. Thank you.

HOEKSTRA: I thank the panel for their testimony and we'll submit all of the written statements for inclusion in the record.

The -- Ms. Quindel, the -- in -- as you've reflected back now, and having worked on this process for a couple of years, we're now here in October of 1997. We've spent $20 million. How -- in your analysis, how did we end with a failed election in 1996? Why did we have to rerun that election? What happened?

QUINDEL: As -- in my analysis, as I set forth in my decision, Congressman, a small group of individuals subverted the election process at the last minute by monies coming into that Carey campaign, monies which were used for last-minute mailings that may have influenced the outcome of the vote.

That decision laid out those schemes, and laid out the basis under the rules and the laws that required me to say this can't stand.

QUINDEL: What I did at the same time as issue that decision was issue an application to the district court setting forth what I thought were important reforms to the campaign financing provisions of the rules that would allow for further regulation and that would hopefully prevent that kind of misconduct in the future.

Specifically, where as the original election, the rules provided for contributions from nonmembers provided they were not employers. The prohibition in the union election spears that you can't contribute to the election if you were an employer.

That means even if you have a secretary, you can't contribute. It doesn't have -- you don't have to be a teamster employer. So while that prohibits certain individuals -- many individuals from contributing under the rules, it doesn't prohibit people who are not employers but not members from contributing.

However, in looking back at what had happened in the result of our analysis, I proposed to the district court that a rerun election have a ban on nonmember contributions. So that was one think that I proposed and and that was accepted by the district court. I also proposed that there should be limitations on the amount of contributions.

This was an extremely costly election for the candidates. Each side spent over $3 million in their campaigns and I think that one of the assessment I made is the more money that goes into the union election process, the more potential there is for problems and corruption.

So one of the things that I did in the proposed rerun plan was to limit contributions and now we're just dealing with the membership pool to $1,000 for members and $5,000 for candidates.

The other aspects of reform in this proposed plan involved the campaign contribution and reporting processes. The disclosure processes. The candidates and the slates (ph) had to file eight reports during the course of the election.

They were quarterly. One of the issues was how do you stop? How do you prevent somebody who at the last minute is trying to infuse the campaign with illegal monies right when the ballots are going out? And one of the ways that I determined that we could deter that in the future is by having a campaign finance report be submitted must prior to the ballots going out.

And not only would that report have to include contributions and expenditures that had been made to that date, but the candidates will also have to lay forth, set forth the contributions they anticipated making so that we couldn't get into a situation of somebody saying, oh well we made that expenditure but we didn't have to report it until a later time.

In addition, one of things we certainly saw and I'm sure you know from reading the report in your own investigation, is we saw vendors who did business with the IBT who were also vendors for the campaigns. Now -- and that led to certain issues certainly.

There was no ban on that under the rules under which the election was run. However, we thought about that and thought about whether there was way to prevent the potential for abuse in the next round of elections and I considered and I noted to the court that I considered an absolute separation. That is, if you did work for the IBT or if you did work for a joint council or a local union you were a vendor then you couldn't do work for a candidate.

The problem with an absolute ban as I explained to the court is that there are certain vendors in providing certain services where that would be difficult to have an outright ban. There may be an area where union printers need to be used and there are only a few people who can do a certain kind of job.

So what I proposed and what was accepted by the court was a disclosure requirement on vendors. So that if you were going to use a vendor who did -- who had done more than I think it's $5,000 worth of work for an IBT entity in the year of the campaign, you have to disclose that and let the other people know that you're using that and that would then allow us to examine that more carefully upfront. Examine it as to whether it was a commercially reasonable transaction.

So what looking back, I had the concerns you have. Which is, how can we avoid a process which was properly run up through the end of the election campaign and properly run on the vote counting? How can we avoid interference with that process on the part of individuals such as what happened in this election? And my conclusions were that we needed in a rerun plan these kinds of measures in the campaign finance area that would hopefully prevent that kind of conduct from repeating itself.

HOEKSTRA: Thank you. You've also done a good job of taking all of my five minutes.

(LAUGHTER)

QUINDEL: I'm sorry.

HOEKSTRA: That's all right. We're going -- we'll have probably multiple rounds of questioning. I will yield to my colleague from Hawaii, Ms. Mink.

MINK: Mr. Chairman, I would like to defer to my colleague Mr. Scott. He has a hearing down the hall in the Judiciary Committee which is equally important but I appreciate the fact that he's going
to be able to at least spend some moments here. So I would like to have you defer to him first. Thank you.

HOEKSTRA: Mr. Scott is recognized.

SCOTT: Thank you, Mr. Chairman, you're doubling up on me. We're here with the Teamsters and we're down the hall with the attorney general. I'm also on the Judiciary Committee and I'd like to thank you for recognizing me.

Mr. Keeney, how long have you been with the Justice Department?

KEENEY: Forty-six plus years, Mr. Scott.

SCOTT: So you are familiar with the problems with the Teamsters?

KEENEY: Yes.

SCOTT: How much mob influence do you think there was on the 1991 and 1996 election compared to the 1980s and before?

KEENEY: Well there's a dramatic change between 1991 and -- in 1991 and 1996 compared to what took place before. The influence of the mob from our observation in both of those elections was not really strong whereas they had the dominate role in the previous elections. As you know, they selected most of the leadership for the Teamsters during the preceding 20 years.

SCOTT: OK. A lot of problems occurred in this election where the was money laundering and people profiteering. In what you saw was the profiteering by individuals or possibly could any of that money gone to an organization like organized crime?

KEENEY: Well from my observation we saw very little of the money in these two elections although (ph) the profiteering going into organized crime.

SCOTT: OK, thank you. Ms. Quindel, we heard yesterday some complaints of intimidation regarding solicitation of funds and you have recommended the contributions for the run-off or the rerun election be limited to members. There's an inherent intimidation when you solicit money from staff members. Did you consider prohibiting contributions from staff members?

QUINDEL: I would say that we did not consider that in the rerun because of what our review of the protest decisions that had come in and I do, if I can, want to comment briefly on that. Did not indicate to us that that was a widespread or that intimidation was a widespread and systematic problem among staff members of the union.

We did, however, deal with and address intimidation. I point you to a decision that we issued as protest decision 812 where I watched some of the testimony yesterday. Many of those allegations were addressed and I found a violation. I found several violations and ordered the return of that money as well as ordered the head of the organizing department to send notices explicitly explaining the rights of members including staff members to participate or not participate as they chose.

SCOTT: But they will allow the solicitation of staff members whose jobs may be in jeopardy?

QUINDEL: The rerun does allow -- the rerun allows all members to participate and participation does include contributions.

SCOTT: Did you hear -- you had complaints of violence. We heard testimony of violence yesterday. Was there any evidence that this violence was coordinated in any way?

QUINDEL: I did not find any. Again, the incident that was described yesterday was the subject of a protest decision. I'll be happy to share it with you.

SCOTT: You are considering -- there is a consideration now of Mr. Carey being disqualified because of infractions. Is that being considered now?

QUINDEL: It is. Election appeals master Kenneth Conboy is.

SCOTT: If he is disqualified, will the timing of the election change?

QUINDEL: That's a matter that really is not in my control at this point. That's a matter that would be up to the court or...the election officer.

SCOTT: Did you find any...if you had complaints on both sides from both candidates, did -- was there any consideration of Mr. Hoffa being disqualified because of infractions on his side?

QUINDEL: There was no disqualification of Mr. Hoffa and I don't believe it was considered.

SCOTT: Were you involved in the convention supervising the votes at the convention?

QUINDEL: Yes I was.

SCOTT: Now there was some suggestions that some of the ballots cast weren't as secret as people wanted them to be secret.

QUINDEL: Thank you for asking me that because I really wanted to qualify this point.

The convention was a two-prong proceeding. As I said most of the action at the convention was conducted by the union and it was the
business of the union and they had not only the elected delegates that I oversaw -- whose election I oversaw, but also appointed delegates.

And I think that's what you were hearing about yesterday. And the votes that were taken on the business of the union were not under my control and I that is a matter that was up to the union as to how they ran that ballot and that you heard about.

What was under my control and what I can assure was only elected delegates participated and was the nomination of international candidates. In fact, when I stood up in front of the convention to do those nominations, I asked and people followed that all non elected delegates remove themselves from the area. And only the elected delegates took part in the nomination. The actual nomination proceedings and the voting. We had certified elected delegate lists from which the nomination voting occurred. So thank you for letting me clarify that.

SCOTT: Thank you, Mr. Chairman.

HOEKSTRA: Mr. Norwood.

NORWOOD: Thank you very much, Mr. Chairman and I'd like to make a little comment about perhaps some of the things Mr. Keeney is concerned about as well as the Democratic witnesses yesterday and my good friend from Hawaii.

I believe most of us are very pleased that there was a consent decree in '89. We think -- I think it appropriate that that election in '91 and '96 be supervised. I think we all very much want to do what we can do to assure that the IBT does not have mob influence and I certainly believe that the government should supervise the next rerun election.

I don't necessarily believe we ought to pay for it, but I think we certainly should do it. And I just wanted to perhaps ease some concerns about that because I keep hearing that in conversation that part of what we're after is not supervise and that isn't all true.

Mr. Keeney on -- you've been with the Justice Department a long time. You are very familiar with the consent decree?

KEENEY: Yes, sir.

NORWOOD: OK. On September 17 of this year, the Committee on Education and Work Force sent a letter to the Department of Justice with twenty-four questions. You are familiar with that letter?

KEENEY: Yes sir.

NORWOOD: And you know that we just received a reply this morning?

KEENEY: Yes. I apologize for the delay in the responding, Mr. Norwood.

NORWOOD: I'm getting use to it. I hadn't been here too long but I'm beginning to understand. We needed it on the thirtieth, but because of that their -- and because this assistant attorney general Andrew Fois selectively answered the questions of the twenty-four, I'm going to start with the five or six questions that he didn't answer.

KEENEY: Can I just focus on the selective? In your response you ask us to give -- if we couldn't reply completely to reply give you whatever we had and that's what we were trying to do. We're not being selective. We are going to answer all of them, Mr. Norwood.

NORWOOD: Well this day is a good day for just such as that. And I ask you and the other witnesses to understand we only have few minutes. Please answer the questions and be as brief as you possibly can. I don't have anything to do until 8 p.m. tonight and it's OK with me to stay here but we probably could get out a little earlier if you will try to just focus on the question.

What role did (AUDIO GAP)...during secret ballot elections were conducted in compliance with the (AUDIO GAP)...described at Section F, paragraph 12(d)(8) on the consent decree. And would you please provide the dates of any and all meetings between DOJ and DOL officials with regard to the 1996 Teamsters election including the names and the titles of the individuals in attendance and any resulting documents summarizing these meetings.

Now I know you have to furnish that latter later. But perhaps you could help me with the first part of the question. What role does -- did and does DOL play with the respect to ensure secret ballot elections were conducted in compliance?

KEENEY: They largely deferred to the Department of Justice and to the supervision of the court with respect to this matter here, Mr. Norwood.

NORWOOD: Say it another way.

KEENEY: Their role with respect to this election and supervision of it is minimal. They defer it to the process that has been set in place by the court and to the Department of Justice.

NORWOOD: So DOL played no part in the secret ballot elections?

KEENEY: Minimal part.

NORWOOD: Minimal part?

KEENEY: Yes.

NORWOOD: And I hope that we can very rapidly get the answers to the other part of my question.

KEENEY: Yes, sir, we'll try to.

NORWOOD: Thank you very much.

KEENEY: It's going to be difficult to give you details with respect to that because there were meetings but to whether we can up with the detail as to who attended all of them, I don't know.

NORWOOD: Section F, paragraph 12(d)(9) of the consent decree provides for DOL to supervise any IBT elections or special elections conducted after 1991 for the office of the IBT general president, secretary of treasury, vice president, trustees. Again, what role did DOL play in this regard?

KEENEY: Again, it's the same answer, Mr. Norwood.

NORWOOD: What is the DOJ's position with regard to having DOL supervise a new Teamsters election and any subsequent election?

KEENEY: Our position is that we would very strongly prefer that the system that has been in place for 1991 and for the 1996 election to date be continued rather than bringing the Department of Labor into it. And I do not think that the Labor Department disagrees.

NORWOOD: But the consent decree provides for the Department of Labor to be involved in it? In light of that provision in the consent decree, how does the Department of Justice become involved in supervision rather than the Department of Labor?

KEENEY: Well actually, the courts involved in the supervision and the courts designated the supervision process and there has been no objection to that process. There have been some objections to procedures but not as to the overall process.

NORWOOD: In other words, if you want to change what the consent decree says, and not follow it and do it another way, that's OK if the court says it's OK?

KEENEY: It's OK if the court says OK, but I mean we're not really changing the process. We're changing some of the procedures.

NORWOOD: The process in the consent decree provides for the Department of Labor to supervise the elections. Yet you've said here today, you don't think that's a good idea. The Department of Justice ought to do that.

KEENEY: Well the Department of Justice to the extent that the Department of Justice is a moving party in the consent decree but it's actually the court that makes the determination. Once this process is place, the Department of Justice role is not that significant. It's these people that run the show.

NORWOOD: Mr. Chairman, I see the red light, I'll finish the next time around.

HOEKSTRA: Ms. Mink.

MINK: Well thank you, Mr. Chairman. I would like to follow on Mr. Keeney and use my other alternating time to address questions to the other panelists. But for the moment, for the Justice Department, your participation in this whole process was because the process began with the Justice Department's involvement in the RICO challenge and the potential litigation under that act. Isn't that true?

KEENEY: That's right. That's correct, Ms. Mink.

MINK: So the Justice Department always was the initiator, the department that was basically responsible for not only the RICO charges but also the consent decree. Is that correct?

KEENEY: That's correct.

MINK: Did the Labor Department have any role in making any determination at that point with regard to the consent decree?

KEENEY: There were consulted with respect to the consent decree but the Department of Justice was the moving party, Ms. Mink.

MINK: Why did the -- why did you consult? Why did the Justice Department consult with the Labor Department?

KEENEY: Because they are specialists in the labor area.

MINK: So you felt that their collaboration and input was necessary in crafting the kind of consent decree or did they have any part in it?

KEENEY: They were consulted, Ms. Mink. I'm not prepared to how extensive the consultation was because we viewed that as a matter for the Department of Justice since we filed the RICO action.

MINK: Whose idea was it to end the litigation and agree to a consent decree? Was it the Department of Justice? Was it the Labor Department?

KEENEY: The idea of filing the action was came from the Department of Justice.

MINK: The RICO you mean? Or are talking about the...

KEENEY: To file the RICO action, yes.

MINK: And then who was the one that initiated the consent decree process as a process that might bring more democracy to this union and get rid of the corruption?

KEENEY: That was the result of consultation within the Department of Justice which involved the United States attorney, Southern District of New York, the Federal Bureau of Investigation, the Criminal Division, and ultimately, the attorney general.

MINK: All of the officers and agencies that you just listed agree that this was a process that would yield the same result as going to court and making individual charges under RICO. Is that correct?

KEENEY: That's correct, Ms. Mink.

MINK: So in so doing, whose idea was it to say that if there was a supervised election in 1990 , 1996 that the government should pay?

KEENEY: Well we agreed to that in the consent decree that if there were -- first the agreement was that 1991 would be paid for by the Teamsters and if there were -- if we wanted to monitor in 1996 , we would have to pay. That's part of the...

MINK: At that time, did you have in your mind that you would, in fact, be monitoring that 1996 elections and that therefore there would be costs engaged by the federal government at that point?

KEENEY: I don't know how much we focused on at that point, Ms. Mink. We were just looking down the road and as to the possibility.

MINK: You felt that it was necessary to make that offer in order to get the union to agree? Was the union part of this negotiation?

KEENEY: Yes. It was a negotiation process. And yes, we didn't dictate, we negotiated and the negotiation gave us all we wanted in 1991. It gave us part of what we wanted in 1996 .

MINK: So the focus on 1991 was that there would be to supervise the election and that the Justice Department would be the primary government sponsor, supervisor of the process to make sure that it
worked? Audited the books and made sure that the process was conscientiously followed by the election officers?

KEENEY: Supervise the process and once it got into place, the people here at the table control it.

MINK: Could you tell us how much the 1991 supervision and conduct of the election cost the Teamsters? I assume that the entire costs of the government's participation in supervision and conduct of the 1991 elections from delegate elections all the way through was paid for by the Teamsters. is that a correct conclusion?

KEENEY: That's correct. And my understanding, the figures from them is $24 million.

MINK: So they spent $24 million? So along the way as this process was elaborated, they fought the involvement of the government in the delegate selection process and the elections at the local because that increased the cost to the union. Is that an accurate statement?

KEENEY: Did you say they fought?

MINK: Yes, they went to court.

KEENEY: They wanted it as...

MINK: ...as we understand from Mr. Holland.

KEENEY: Yes. They limited...

MINK: They wanted to limit the supervision.

KEENEY: I wasn't involved in that process but ultimately we won out and the monitors were given the responsibility for all three phases which we wanted very much.

MINK: So could you just -- one final question. Elaborate on how the decision was made by the Justice Department or whoever made it, that the 1996 election should also be supervised?

KEENEY: That was made again with the recommendations of the United States attorney in New York, the criminal division and the FBI and ultimately got the approval in the October 1993 of the attorney general.

MINK: Thanks.

HOEKSTRA: Mr. Hilleary.

HILLEARY: Thank you, Mr. Chairman. Ms. Quindel, you stated in your written testimony that you presided over the floor nominations of candidates for the international office and conducted three secret ballot votes using electronic voting machines.

Did you have any complaints filed or hear any concerns about how that was took place and was there concerns of the ranking file that
(OFF-MIKE) that were concerned with that there really wasn't really a secret ballot that people could tell who was voting and how they were voting?

QUINDEL: No I did not. I think that it's helpful to just understand that there two kinds of voting going on. Our voting took place in the evening in a special area with voting machines -- very similar to what you would see in a public election.

There was also voting that you heard about yesterday from the witnesses; a yes-no voting where some of that was done by divisions of the House and then later with scanners at the doors of the convention center. So I heard yesterday that people had concerns about that voting and we heard complaints during the course of the convention.

We, in fact, took in a number of protests during the course of the convention that were however due to that part of the convention that was not under my supervision.

HILLEARY: Was not all the voting per se under your either direct or indirect supervision?

QUINDEL: No sir. Only the nominations voting. The Teamsters took a number of votes about union business that were not under my supervision.

HILLEARY: And you would say that there was no scanning per se of the votes that you supervised? Of the votes noted?

QUINDEL: No. There was a written eligibility list of delegates. As the delegates came in again like a political election. Yes, you are allowed to vote. They went into a voting booth, made their nomination voting and then those ballots were electronically counted.

HILLEARY: There were several witnesses as you say that testified yesterday. I think they were basically scared to death. They felt like it was a -- was not a democratic situation down there. Because they had testified they had people come up to them and say we're voting on various things, suggesting.

Then you have they have voted and they had done the right thing. I mean it was -- I think a consensus of the panel that that was not an environment conducive of democratic voting and it was a great concern I think to all of us that environment -- at least those panelists felt that environment existed in those votes. They were not very happy with the way that had been done.

HILLEARY: But you did not necessarily investigate any of those type of complaints?

QUINDEL: That's correct.

HILLEARY: OK. Are you -- have you ever had to investigate as part of your job organizations known as the New Party Citizens Action or National Lawyers Guild?

QUINDEL: Why don't we take it one at a time? The citizen action was part of the investigation of the protest decision that I issued on August 21. So yes, the answer to that is, I did investigate that.

The New Party was not a part of that investigation. The New Party was raised after that time on September 19 as potentially part of a some type of contribution plan.

Following that time, I recused myself because of that and another matter that was raised in the September 19 interview and wrote a letter to the court and provided that to the committee as part of my responses as to why I felt it would be a potential perception or appearance of conflict if I continued that investigation on that matter that was just raised.

The National Lawyers Guild, there was a protest in the fall of 1996 as to the New York Chapter of the National Lawyers Guild holding a fundraiser. That protest came in and was very shortly within the week resolved. The fundraiser was canceled and monies turned back. So, no, I did not have to investigate that matter.

HILLEARY: Could you explain your husband's involvement with the New Party?

QUINDEL: My husband is a member of the New Party. We are both members of the New Party. Progressive Milwaukee is an organization in Milwaukee that supports candidates for nonpartisan office and it is a chapter of the National New Party.

HILLEARY: OK. Are you aware of any Teamster involvement with the New Party?

QUINDEL: Well I'm aware certainly of the Teamster contribution to the Chicago New Party. The $5,000 contribution and again, that was something I addressed in my letter to the court on June 6 explaining what I knew.

HILLEARY: When was that? I see the red light. When was that contribution made by the way?

QUINDEL: I don't -- my understanding was that it was made in April of 1997.

HILLEARY: OK. Well we'll continue later, Mr. Chairman. Thank you, Ms. Quindel.

HOEKSTRA: Mr. Ballenger.

BALLENGER: Thank you, Mr. Chairman. Mr. Keeney, I don't know if you saw it or not but I submitted to the record an article called, "The Trouble with the Teflon Teamster," October 27, 1997. A Fortune Magazine story connecting Mr. Carey with various crime figures. Did you...?

KEENEY: I have not seen it. No.

BALLENGER: OK. Do you have any information that would lead you to conclude that Ron Carey is a known associate of any crime figure and if so, would that bar him from any involvement with the Teamsters?

KEENEY: There have been allegations with respect to involvement in the past and they have been looked into by Mr. Lacey who is the head of the IRB and others.

BALLENGER: Yesterday a witness...

KEENEY: To further your answer, if it could be demonstrated, I assume it would be a basis for barring him. Yes.

BALLENGER: Yes, that's what I was thinking.

Yesterday a witness submitted a letter to the subcommittee which quotes an individual saying that Carey is a spokesman for the mob. Do you have any opinion that Mr. Carey might be, as they say, mobbed up?

KEENEY: Mr. Ballenger if we had substantial evidence that anybody who was mobbed up and were involved in the Teamster process, we would bring it to the attention of the IRB and hopefully they would move to bar that person.

BALLENGER: But in reality, you haven't brought that to the IRB?

KEENEY: No sir.

BALLENGER: Has the Department of Justice discussed whether Mr. Carey has ties to Cosa Nostra with Mr. Demarco -- DeArco or any other federal informant?

KEENEY: I'm sorry can I have that again, Mr. Ballenger?

BALLENGER: Yes. Have you'll discussed the idea that with Mr. DeArco who is a federal informant about connections with Cosa Nostra by Mr. Carey?

KEENEY: There were some allegations that came from Mr. DeArco and they were looked into and disposed of, Mr. Ballenger.

BALLENGER: Disposed of means forget them?

KEENEY: Forget them in a sense that there was nothing further to pursue.

BALLENGER: Well has the Department of Justice reviewed whether Mr. Carey was associated with Mr. Joe Trerotola, Trerotola? And if so, has the Department of Justice examined whether Mr. Trerotola had close ties to the La Cosa Nostra?

KEENEY: Well there is an established relationship I think in the union hierarchy in the past with respect to Mr. Trerotola and Mr. Carey.

BALLENGER: Well I'll like to, if I may, submit for the record again Mr. Chairman, a FBI investigation pretty well stating this that Mr. Trerotola was involved and that Mr. Carey could call a strike anytime he wanted to and the pickets were sent there without any other discussion and the fact that...

HOEKSTRA: Without objection, so ordered.

MINK: ...reserving the right to object. We have not seen this.

(UNKNOWN): She's getting it for you right know.

MINK: May we reserve the right...

HOEKSTRA: Sure.

MINK: ...to object and have an opportunity to look at it?

HOEKSTRA: Yes.

MINK: Thank you.

HOEKSTRA: The gentle lady reserves the right to object. We'll come back to this later.

BALLENGER: Right. And one thing more, Mrs. Quindel. You mention the fact that the reason for your investigation -- serious investigation came when three people were caught because of their contributions. They three guys that have admitted guilt and so forth. Because of that, it was your examination caused the throwing out of the election.

QUINDEL: Actually, our investigation began long before that.

BALLENGER: Well the point I was bringing up as you made the statement that because of their automatic -- I mean because of their way of donating dishonestly, that was the reason and yet we have testimony from yesterday that members of the union were forced to have payroll deductions and everything going back six and months before that. Did you have any knowledge of that where complaints not delivered to you and the fact that they were forced to make $100 a month, $50 a month donations to Mr. Carey's campaign?

QUINDEL: We did have knowledge of allegations of cohersion in contributions. We addressed a number of those allegations.

BALLENGER: How did you address those?

QUINDEL: We thoroughly investigated that.

BALLENGER: And found out that it were true?

QUINDEL: We found out certain things were true. They were not payroll deductions.

BALLENGER: And what did you do?

QUINDEL: We ordered the return of the money, we ordered the supervisor who was involved to send a letter to each of the members of the organizing department setting forth their rights which was to either campaign, either contribute on not contribute. To be completely neutral if they so chose. That no job action would be taken on the basis of whether they contributed.

BALLENGER: Well they said yesterday that they felt that they were threatened if they did not continue, that they would be -- they'd lose their jobs. It doesn't appear that your statement or your effort on your part protected them at all.

QUINDEL: Well sir, I would point you to the decision and also you understand that we have to investigate allegations and go on the basis of facts that we found.

We did not find a systematic practice. We did find instances of another kind of thing with payroll deductions and we remedy that and in those situation. But I think what you're talking about was addressed, was fully investigated and I'd be happy to point you to those decisions.

BALLENGER: Well let me ask one more think, if I may before -- is my time up yet? Real quick. What I was going to ask you is the trip to Washington, the convention that was paid for by you all, I would guess.

QUINDEL: No.

BALLENGER: At least that's the way it was -- and the fact that they were all invited to attend a $250 plate dinner that was sponsored. Again, this was a convention that was supposedly paid for by the federal government and they were all invited to a nice little cocktail party where they didn't get anything to eat but they had to pay $250 each to the fundraiser.

QUINDEL: Sir that wasn't the convention. It was a meeting held by the union in Washington in June. We didn't pay for any of that. We investigated it though. And in my decision, it's fully explains...

BALLENGER: Did they get their money back?

QUINDEL: Did who get their money back?

BALLENGER: The $250 they were forced to pay.

QUINDEL: Well, I don't know who you're referring to but there was...

BALLENGER: The individuals that attended that thing and were mandated to pay that money to Mr. Carey's campaign.

QUINDEL: I think what I would advise you take a look at the decision. What we found was that there was not coercion in the attendance at that fund-raiser. There was coercion in certain instances of raffle tickets that were being sold. And so, we investigated each of the allegations that people made. Found where there was coercion and remedied it.

BALLENGER: Thank you, ma'am. Thank you, Mr. Chairman.

HOEKSTRA: Mr. Scarborough.

SCARBOROUGH: Thank you, Mr. Chairman. I just want to address a couple of questions to you, Ms. Quindel, regarding timing. Before I do though, I wanted to just read a quick overview from the article that was mentioned in the record yesterday. It says, how did the feds get in all this mess? Only a month earlier, they're star reformer, Ron Carey, scored a stunning victory in the UPS contract squabble. But there sat Jerry Nash, Carey's former campaign manager, weeping in a New York courtroom, trying to explain why he and two fellow aids funnelled illegal contributions to Carey from the union's treasury. It got messier.

Just days after Nash's courtroom appearance, the government's overseer of the Teamsters election, Barbara Zack Quindel was embroiled in controversy. Quindel, who had invalidated Carey's election right after the Teamsters struck a deal with UPS, recused herself in deciding whether Carey would run again in a new election. She stepped aside to avoid any appearance of a conflict of interest on her part after revealing that she and her husband had links to an obscure political party to the Carey campaign.

And it goes on to explain President Clinton and Democratic National Committee's possible mix-up in all of this. But, I wanted to ask you about timing because reading that article, reading the introduction of it brings up two questions for me regarding timing.

The first has to do with, when you invalidated the election immediately following the UPS strike. And the second one has to do with, when you became aware that there was a conflict of interest between yourself and your position, and because of your ties to the Carey campaign. First question has to do with your decision on timing on when to overturn the election. And I ask you, first of all, if you recall in February, 1997 being informed that the Carey campaign had to return a $95,000 check from, I believe, it was Barbara Arnold. Do you recall that?

QUINDEL: My decision states that that's what occurred in February, yes.

SCARBOROUGH: OK, did you consider at that time overturning the election because of the $95,000 check?

QUINDEL: I think I indicated before, my deliberations as to what I considered at any given time are not something that I can talk about. But I can tell you that there were many factors that went into my consideration as to whether this election would be overturned, and I was under duty by the court to thoroughly investigate and that's what I did.

SCARBOROUGH: Right, and you certainly can't talk about your deliberations. I want to go into March though in 1997, March 6, 1997. A member of your staff interviewed Jerry Nash, Carey's campaign manager, and over the course of the interview it became clear to you that story that Nash and general counsel of the Carey had knowingly provided false information to the election office, knowingly. And then you put that on top of the $95,000 check. And then, I think later on in March, another $126,000 had to be returned, and you still had not decided at this point to overturn the election, correct?

QUINDEL: I think the decision speaks to that.

SCARBOROUGH: OK, and what I'm getting at, I think, a lot of us would like to know what happened between the end of March, when you knew that you had been lied to by Carey, when you knew you'd been lied to by Jerry Nash, when you knew you'd been lied to by the general counsel of the Carey campaign? What happened between March and August, when you decided belatedly to overturn the election?

QUINDEL: Many things happened, and I described them all in my decision. We had to get testimony from Mr. Nash I felt was important and that we were blocked. I had to go to court. I went to the U.S. District Court. I had to go up to Second Circuit. There was a criminal investigation that was going on, where we were delayed in our ability to interview many witnesses, in fact even through the course of the investigation, there were witnesses who would not speak to us.

So, I had a duty as I told the court, and as the court understood, that I had to be two things in this decision, and sometimes they were conflicting. I had to be thorough and I had to be prompt. And when I was ready to make that decision, and felt I had the facts necessary and the analysis ready to make the decision, I issued it.

SCARBOROUGH: And what was your duty that you had?

QUINDEL: Pardon me.

SCARBOROUGH: You said you had a duty to be thorough and to be prompt?

QUINDEL: That's correct.

SCARBOROUGH: Did you ever make any statement that you thought it would be inappropriate or that you wanted to delay making a decision during the UPS strike, because that would effect the strike?

QUINDEL: Yes, I did. I said publicly on several occasions that I was ready to issue my decision shortly after the strike began, and delayed issuing it because I did think it would be inappropriate.

SCARBOROUGH: And where did that duty flow from? You're talking about duty. It seems to me by you not acting, you were making a political decision. Not only does it seem that way to me, I think, it seems that way to everybody, that you injected yourself into the process for your own political reasons after being paid -- I think an editorial this morning said -- close to $1 million over two years time. You're making a decision to withhold information on the outcome of the election, and I think you owe, not us, but I think you owe the American taxpayers an explanation of what duty you were operating under then when you made that very political decision to sit on your hands.

QUINDEL: May I respond to (ph)? I made that decision based upon my duty as a court officer for the court. The court process and my process led me to believe that whatever I did in issuing a decision in that point in time was going to be subject to criticism. And I looked at what I thought was the right thing to do under the circumstances, and I did not believe it was right for me to inject myself into that labor management dispute. I made that decision, I bear responsibility for the decision, and I think it was the right decision.

SCARBOROUGH: So that was based on your own personal, let's say prejudices or beliefs, and not based on any duty out of the law or out of the court decision in 1989?

QUINDEL: No sir, I believe my duty as a court officer was not to interfere with the economic livelihood of the members of this union. The members of this union could not see their court officers as credibly acting in their benefit if I acted in a way that could potentially threaten their economic livelihood. I do believe I acted in accordance with my duty as a court officer.

BALLENGER: Mr. Chairman, I'd like to withdraw my request to submit that document until such time as Ms. Mink has had a chance to look at it, and agrees to allowing the submitting of that document.

MINK: Mr. Chairman, I object to the introduction of these documents.

HOEKSTRA: I believe the gentleman is withdrawing his request.

BALLENGER: I'm withdrawing it.

MINK: Oh, he said until such time as I've had a chance to review it. And I've reviewed it...

BALLENGER: Yes, whatever you decide.

MINK: and I object to their introduction. They're unsubstantiated allegation by an unidentified individual. And therefore, I do not believe it's appropriate for the record.

BALLENGER: Are you objecting to all of them or just that one?

MINK: Yes, the whole thing.

BALLENGER: Just the one that was FBI, right.

MINK: Oh, just the cover sheet, fine.

BALLENGER: Thank you, ma'am.

SCARBOROUGH: Ms. Quindel, who knew about your decision for the disqualification or the requirement for a rerun election? Who knew about it and when?

QUINDEL: The....

SCARBOROUGH: You said you'd made the decision, but you delayed the announcement. When you made the decision, who knew about the decisions and what documents were prepared?

QUINDEL: Actually, the final decision was not prepared until the day before I issued the decision.

SCARBOROUGH: But you had made the decision prior to that? Who did you inform...

QUINDEL: Yes, I was ready to go through the steps of issuing the decision.

SCARBOROUGH: Who did you inform that that decision, that you had made that decision, or who did you consult with?

QUINDEL: Well, I can tell you this. I consulted with people who I worked with in the election process who had a need to know, a very small group of people that were investigators and people I was working on the decision with.

QUINDEL: I did not inform the union. I did not inform the Justice Department. I did not inform the court.

HOEKSTRA: Yesterday we received testimony. Did you have security within that tight group to ensure that this information did not get out? Yesterday we heard testimony.

QUINDEL: Yes.

HOEKSTRA: You probably heard...

QUINDEL: Right.

HOEKSTRA: ... the testimony as well, that there was a belief -- that some people have a belief that people within the Teamsters knew of your decision prior to anybody else knowing about the decision.

QUINDEL: Yes, I heard that.

We did have, I thought, very good security. I mean, the way I thought I was assured of that was when we issued the decision, I sent copies to all of the interested press who had made sure that they knew at the same time I sent it to all of the candidates, and nothing -- nothing appeared until the candidates had received it. Everybody got it at the same time. I was very pleased that there were no leaks.

Now, there were no leaks. Was there speculation? There was speculation for quite a while...

HOEKSTRA: Yes indeed.

QUINDEL: ... before I let...

HOEKSTRA: Well...

QUINDEL: ... released my decision...

HOEKSTRA: I understand that.

QUINDEL: ... and I had gotten a letter...

HOEKSTRA: You took all my time last time.

QUINDEL: OK.

HOEKSTRA: You can't do it twice in a row.

(LAUGHTER)

QUINDEL: I'm sorry. I'm sorry.

HOEKSTRA: I get some time too here.

MINK: There's a red light already.

HOEKSTRA: Yes.

The -- I'm a little concerned -- the -- what strikes me here is that -- what?

(UNKNOWN): Your time is over.

MINK: The red light.

HOEKSTRA: My time hasn't started, I think, I don't believe she pushed the button.

(LAUGHTER)

The...

MINK: It couldn't be all that interesting.

(LAUGHTER)

QUINDEL: We need your House supervised.

HOEKSTRA: We need to supervise. The...

(LAUGHTER)

I know -- the -- all right. The -- I believe the gentlelady recognizes I'm usually fairly lenient with the little button over here.

MINK: I take back my remark.

HOEKSTRA: All right. Thank you.

The -- I'm thinking that sometimes we're looking at this -- we're looking at the trees instead of the forest. We have 1,300, I think, or 1,500 violations that you contested were going through the three major boxes that you sent over, which include your opinions and how those were decided. We had testimony yesterday that said yes, you probably conducted your votes at the convention in an appropriate way, but that there was an overall aura at the convention that clearly delineated and identified for people what camp you were in, based on the other votes that were taking place, that you did not have responsibility for, and I'm concerned that perhaps, as the election officer, and as people looking at this thing looked at all the details, but what they forget -- they never took a look, a step back and said, wow! you know, there's an aura here that, you know, this doesn't look like a very fair and democratic election.

Your statement today talked about, you know, that this decision for a rerun was based on improper contributions. Your statement calling for a rerun goes much broader than that, and I applaud it. I've read that.

I want to go through with Mr. Keeney a document that I think is right there on your right, Mr. Keeney, which I believe is the -- I'm not a lawyer, so I don't know the exact wording for it, but this is what Mr. Davis has agreed and signed onto as what he has pled guilty to, is that correct?

KEENEY: That's what my understanding is.

HOEKSTRA: Let's just go through this and -- Mr. Davis was a defendant. There are similar documents, and I'd like to submit those for the record. Mr. -- the statements of Mr. Inserra (ph) and Nash, and I think these are readily available, but I want to go through the one on Mr. Davis that you can perhaps explain to me, Mr. Keeney, exactly what this means.

KEENEY: Mister Chairman, I'll be glad to explain in general terms...

HOEKSTRA: OK.

KEENEY: ... any questions you have, but I have very little personal knowledge with respect to...

HOEKSTRA: OK.

KEENEY: ... these three...

HOEKSTRA: OK.

KEENEY: ... these particular prosecutions.

HOEKSTRA: Maybe you don't need a whole lot.

I'm just going to read, and you tell me what -- I'm -- this is what Mr. Davis has agreed to that, as a defendant -- this is on page four, paragraph 11. It's the fourth line.

"And others, known and unknown, unlawfully, willfully -- willfully and knowingly did combine, conspire, confederate, and agree together and with each other to defraud the United States in connection with its lawful governmental functions, to make materially false statements and representations, and to falsify, conceal, and cover up by trick, scheme, and devise material facts on a matter within the jurisdiction of the executive and judicial branches of the government of the United States."

This is something that Mr. Davis has admitted that he did, is that correct?

KEENEY: Yes, sir.

HOEKSTRA: All right.

Let's go on to page -- page eight, paragraph 19, beginning at the third line.

Again, Mr. Davis, the defendant "and others, known and unknown, unlawfully, willfully, and knowingly would and did defraud the United States by impeding, impairing, defeating, and obstructing the election officer appointed by the United States District Court" -- and I'm skipping about five lines -- "raise money for the Carey campaign, prevent the election officer from learning the circumstances, true nature, and source of all contributions to the Carey campaign, prevent the election officer from learning the manner in which the IBT funds were used to promote the Carey campaign, and conceal in various ways their unlawful actions from the election officer."

That is what Mr. Davis has pled guilty to, is that correct?

KEENEY: Yes.

HOEKSTRA: Next, (clears throat) excuse me -- next page, paragraph 20.

Again, Mr. Davis "unlawfully, willfully, and knowingly would and did falsify, conceal, and cover up by trick, scheme, and devise material facts and did make materially false and fictitious and fraudulent statements and representations" -- skip a few lines -- "in order to prevent the election officer from learning of their illegal schemes to raise money for the Carey campaign."

This is again what he pled guilty to, correct?

KEENEY: Yes.

HOEKSTRA: Paragraph 21. That's the bottom of the page, three lines from the bottom...

KEENEY: Mister Chairman, just to explain, he -- these are manner and means of carrying out the conspiracy. He pled guilty to the overall conspiracy...

HOEKSTRA: Sure. And these are...

KEENEY: This is...

HOEKSTRA: These are the facts of how this actually happened.

KEENEY: The backup, yes.

HOEKSTRA: Thank you for that clarification.

"And promises namely a scheme and artifice to deprive members of the IBT of money and their right to the honest services of their officers and employees, and c) their right to have the IBT election conducted in conformity with the rules."

Again, how he -- how this scheme or facts associated with pleading guilty to that count.

Going on to page 11, "known and unknown," top of the page, "unlawfully, willfully, and knowingly would and did embezzle, steal, abstract, and convert to their own use and the use of others and caused others to embezzle, steal, abstract, and convert to their own use and the use of others' monies, funds, and property of a labor organization by which one or more coconspirators were employed, directly or indirectly."

Correct? Is that another statement of fact?

KEENEY: A statement with respect to the manner and means in which the violation was carried out.

HOEKSTRA: OK.

And then we get under the next title, "methods and means of the conspiracy, Martin Davis and others schemed to circumvent the law and the election rules to raise money for the Carey campaign."

Paragraph 24: "The methods and means of the conspiracy included illegally using and diverting IBT general treasury funds" -- this is moving general treasury funds -- "including embezzling, stealing, abstracting, converting such funds to make contributions to political organizations in order to obtain in exchange donations to the Carey campaign."

Again, a -- a means?

KEENEY: Yes.

HOEKSTRA: OK.

(WHISPERING)

Page 14, paragraph 33: "Martin Davis, the defendant, with the knowledge of others known and unknown, solicited officers, managerial employees, and representatives of other labor unions to raise large sums of money for the Carey campaign. Because these individuals included individuals who were employers under the rules and therefore were prohibited from contributing to raising money for and funding the Carey campaign, certain of the contributions that were raised were concealed from the election officer. In addition, Davis, Nash, and others, known and unknown, disguised the source of certain cash contributions received from these individuals by causing the source of the funds to be falsely identified on the CCERs" -- I think that's the campaign filing statements -- "filed with the election officer."

The next paragraph, top of page 15:

(UNKNOWN): Your time's up.

HOEKSTRA: "Davis and Inserra (ph) developed a plan whereby wealthy nonemployers who supported particular candidates and causes would donate money to the Carey campaign in exchange -- and in exchange the IBT would contribute money to get-out-the-vote efforts that would help those candidates and causes."

Is that again a means?

KEENEY: Means, yes.

HOEKSTRA: Paragraph 35, line three:

HOEKSTRA: "Thereafter, Nash requested the IBT government affairs director to make contributions to certain organizations, including Citizen Action, informed him that such contributions would assist Davis in raising money for the Carey campaign."

A means?

KEENEY: Yes.

HOEKSTRA: I have -- I'll read one more, and then there will...

MINK: Your time is expired.

HOEKSTRA: Yes.

"The wealthy individual" -- paragraph 36 -- "The wealthy individual agreed to solicit contributions for the Carey campaign from others in exchange for IBT contributions in multiplied amount to organizations chosen by wealthy individual or donor solicited by him, which included Citizen Action. To these organizations, which were the quid pro quo for the contributions solicited by the wealthy individual, Inserra (ph) agreed to hold the Carey campaign contributions check until the IBT contributions were made. Citizen Action helped the wealthy individual obtain donors for the Carey campaign by refunding monies to various persons."

We will finish this, but this is more than, Ms. Quindel, what I believe you describe as "improper contributions." I think you stated it much better in your decision overturning the election. This was a broad-based scheme to defraud Teamster members, rank-and-file Teamster members, which is what we heard about yesterday, which is what is in these 1,300 alleged violations that you investigated, which I think represented, at the convention -- I think what we ended up seeing is we maybe saw a wonderful process of taking a look at individuals' activities, but missing a broad-based effort to corrupt this election, which I am glad that we did discover; but you know, I'm not sure it should have taken until eight months after the process, but I'm glad we got there.

But this is more than about illegal contributions. This is a broad-based scheme of people who have now pled guilty to serious charges, and this isn't just a few dollars here and a few dollars there. And this is, you know, this -- this is a problem.

And I'm not sure how the -- in my last five minutes that we had together, the items that you outline are going to go after this atmosphere that was -- that is described in this documents and the two
other pleadings that we have, and the testimony that we heard from rank-and-file Teamsters yesterday into the atmosphere of the overall election.

Ms. Mink.

MINK: Thank you. Thank you for my ten minutes.

(LAUGHTER)

HOEKSTRA: We will -- the gentleman -- the chair will give the gentlelady from Hawaii ten minutes.

MINK: Thank you.

(LAUGHTER)

I think that all of us here on the committee acknowledge this outrageous conspiracy, illegal scheme to launder money as absolutely despicable conduct on the part of people who were associated with the Teamsters, and all of the charges and the statements that the chair read from the attorneys' information and account of the charges indicate the depth and degree of this conspiracy. No one here on the committee makes any statement to in any way diminish the severity of these offenses and the nature of this conspiracy in now causing the overturn of this election.

But my question to you, Ms. Quindel, is: Who uncovered this? Who blew the whistle? Who found out about it?

And could it have been found out if there had not been this election process engaged in by yourself and by your predecessor Mr. Holland?

QUINDEL: We found out about this through the initial filing of the campaign finance and disclosure. Now, these campaign finance and disclosure forms, while I know the congresspeople are very familiar with this requirement, is not a requirement of labor law. It's not a requirement that the Department of Labor follows when it supervises an election. This is something that election officer Holland developed for this election process, that we continued in my tenure as election officer, and it turned out to be the key basis upon which this was discovered.

Once, it wasn't on the face...

MINK: Does any other...?

QUINDEL: It wasn't on the face of that document, but it was certainly the beginning of the leads that led to the unraveling of a complex network of yes, very despicable schemes.

MINK: Does any other labor union election of its international officers have a rule of law, a rule of operation which is legally binding that requires both sides or all of the contestants in an election to indicate where their funds came from, to support their campaigns?

QUINDEL: My understanding is there are a few international unions that have this practice in their by-laws or constitution. It has -- in neither of those cases am I aware that it has received any kind of the enforcement that has gone on in the Teamster election. So...

MINK: But for the requirement of reporting the funding of the campaigns, there would not have been this opportunity to uncover this conspiracy and illegal scheme to launder money.

QUINDEL: That is my belief.

MINK: So that certainly, if there is any factor that has led to the finding of this corruption, it would have to be the election process, which in my estimation verifies the importance of the process, because it uncovered this whole mess. Is that true?

QUINDEL: Yes.

MINK: The -- your testimony stated by the District Court, in its decision, approving the rerun, who said, quote, "It's important to recognize that the process imposed by the consent decree was successful." This is in your testimony. Which district court and whose decision is that?

QUINDEL: That's Judge Edelstein's decision of September 29th, 1997. He is a district court judge in the Southern District of New York, the judge who approved the consent decree and has made all of the rulings that we've heard about since 1989.

MINK: You have been criticized for the length of time that all of this took, in terms of coming up with a final determination. Can you explain the steps that you had to take in order to arrive at this conclusion, that the elections had to be -- were fraudulent and had to be rerun?

QUINDEL: We had to interview numerous witnesses. I think it's close to 50 witnesses, more -- several of them more than once. Several of the key witnesses were unavailable to us or delayed in their availability due to the parallel criminal investigation that was taking place. We have had to subpoena unwilling participants for this investigation. I dealt with more white collar criminal attorneys, and that also delayed our ability to investigate, as we had to accommodate the -- properly so, the witnesses who we felt were key in understanding and unraveling the schemes that were necessary to show the violations.

We also had to carefully analyze the law that applies to this election, and the rules, and what the consent decree required. Extensive legal analysis was necessary.

We examined thousands of pages of documents that we requested from the Carey campaign, from the Teamsters.

In short, this was a major piece of litigation that we were uncovering.

QUINDEL: I indicated that we had to go up to the Second Circuit, and that didn't take place. We couldn't get up there until June, where a ruling was appealed.

So the investigation was intensive, extensive, and at the same time, constantly I was aware that the members of this union deserved an answer as to the election. But I had to give them an answer that I felt was done according to the rules, thoroughly done, completely done, so that I could make the necessary decision that I had to make.

MINK: When you discovered that there was suspicious contributions coming in large sums of money to the Carey campaign, at what point in your discovery process and your analysis of the contributions did you turn over the matter to the Justice Department?

QUINDEL: There was continual sharing of information from my office with the Justice Department. I couldn't tell you the exact date, but it was early on in our investigation that they became aware of the allegations. And in fact, there was a great deal of publicity around the allegations in early February, or mid-February, sometime in that period.

MINK: So at that point, the Justice Department was already involved in its own independent investigation as to actually what happened?

QUINDEL: Yes, I don't know the exact time, but it was February or March that they informed me that they had opened a criminal investigation.

MINK: And what time was that?

QUINDEL: Late February, early March.

MINK: In late February?

I want to get back to Mr. Keeney, with respect to the decision making for the '96 elections that the Justice Department felt ought to be supervised. And I'm sure you're aware now of several efforts in the Congress here to forbid the department from funding the costs of the rerun election...

KEENEY: I am, Ms. Mink.

MINK: ... for '96. If such becomes the law and those measures pass and are enacted -- I believe they're not yet enacted. They're in conference. Should they be part of an appropriations bill and contain
language which prohibits the funding of this by the federal government, what recourse does the Justice Department have to enforce the consent decree? And what actions will the Justice Department take to enforce the justice decree? And could it end up in a contempt citation of a government if we fail to pay for the costs of the rerun?

KEENEY: I don't know whether it could end up in a contempt situation. Let me tell you, Ms. Mink, what we're trying to do. One, we're hopeful that the Congress will not forbid us to use the money. We think it's extremely important in the national interest that this election be monitored thoroughly and completely to the end as it has been so far.

But if Congress takes that action, we are now in discussions with the Teamsters with respect to their picking up additional portions of the costs of the rerun election. We're considering whether or not the fines that have been imposed by Ms. Quindel against Davis and these other people, if the district court -- individual district judges before who these matters or -- if they would allow us to utilize that money, to put it in the fund for the reelection.

We're doing these things, and we'd like to reprogram money from two fiscal years in the Department of Justice. But that apparently is what some members of Congress are concerned about. We hope that the Congress does not act to tie our hands, but we are trying to -- we recognize your concern and legitimate concern about the expenditure of public funds, and we're trying to handle it in a manner that would be satisfactory to you. But we don't have control over it.

MINK: What would be the jeopardy...

HOEKSTRA: The gentlelady's time has expired.

MINK: Has it?

(LAUGHTER)

HOEKSTRA: Yes.

MINK: All right (OFF-MIKE)

HOEKSTRA: Ten minutes.

(LAUGHTER)

Mr. Norwood.

NORWOOD: Thank you for my 10 minutes, Mr. Chairman.

(LAUGHTER)

Mr. Keeney, in 1991, we used the same consent decree as we did in 1996?

KEENEY: Yes, it's one...

NORWOOD: And in 1991, the Teamsters paid for the election?

KEENEY: Right.

NORWOOD: And in your 48 years at the Justice Department, there's been around 20, I think, consent decrees entered into with unions to eliminate mob influence. Can you tell me any one of those that were paid for by the taxpayers of this country?

KEENEY: Offhand, I can't. I think there might have been one or two, but I can't point to those (OFF-MIKE).

NORWOOD: Mr. Chairman, I'll ask this letter...

KEENEY: Substantially, all of them had been paid for by the union itself.

NORWOOD: That is clearly the process by which we've operated under for years...

KEENEY: Yes, sir.

NORWOOD: ... until 1996. And Mr. Holland, we're going to have a turn to talk about that in a few minutes.

KEENEY: But in 1991, we had that agreement in there that if the government wanted a monitor or oversee, that it was going to have to pay for it. That's the stumbling block, that's the problem we're facing right now.

NORWOOD: Did the government oversee the election in '91?

KEENEY: Yes.

NORWOOD: The government did oversee it?

KEENEY: And the union...

NORWOOD: And it was paid for by the union?

KEENEY: Paid for by the union.

NORWOOD: Was it found to be corrupt in any way?

KEENEY: Pardon?

NORWOOD: The '91 election -- was it found to be corrupt? Was it thrown out in any way?

KEENEY: It was not.

NORWOOD: Now we've got a '96 election that the taxpayers paid for and it's thrown out because it's corrupt. Maybe we need to go back to the program of 1991.

Mr. Chairman, I'd like to submit for the record the letter of September 17th that we sent to the Justice Department, and from which I am contending to ask Mr. Keeney questions from.

HOEKSTRA: Without objection, so ordered.

NORWOOD: Mr. Keeney, could you please only this line of thinking provide us a chronological list of all the consent decrees entered into with unions to eliminate mob influence? And for each, describe how they compare to the Teamsters' consent decree in terms of the manner in which any elections were supervised and/or conducted. Who paid for any and all cost of these elections, and the total cost of the federal government of each consent decree? That will sort of, I think, let us understand how what we did in '96 is considerably out of the ordinary as to what we've done over the past few years. Are you able to give us that information?

KEENEY: I think we can give you -- if we haven't given it to you, I think we can. And I will add, if necessary, who paid for it. I think you're right, that the vast majority, if not all of them, were paid for by the union.

NORWOOD: Now I want to just briefly go back to section F, paragraph 12D, because I find this -- and I hope you can answer it. I want you to first tell me if you can answer this. I find it interesting that though the U.S. attorney signed a consent decree in '89 on behalf of the Justice Department and the people of the United States, that somewhere along the line in the Justice Department, somebody has decided no, we don't want to do it how the consent decree says, we want to do it our way.

In other words, the consent decree says that the Department of Labor, who does have the expertise, will supervise IBT elections. Can you tell me who in the Justice Department decided that well, I don't like this consent decree, it doesn't -- I don't agree with it, we'll just have the Justice Department do it, rather than Department of Labor, though the U.S. attorney had agreed on behalf of the people of the United States to follow the consent decree. Now what I need to know -- who did that?

KEENEY: That was a decision that was made by the United States attorney, concurred in by the department. And I might add...

NORWOOD: The U.S. -- excuse me, sir. U.S. attorney made the decision not to follow the consent decree that the U.S. attorney signed and agreed to?

KEENEY: I'm not sure that I can agree to your formulation of that. We view that provision as giving us the election to have the Labor Department supervise. We discussed that with the Labor Department, and the Labor Department, because of reasons of expertise and the experience that had been had, we decided the best approach was to use the election officer.

KEENEY: I don't agree that we've gone against the consent decree. I think the consent decree can be read consistent with what we did -- with the concurrence of the Department of Labor.

NORWOOD: We didn't write a good agreement if you can do that. If section F says that the Labor Department will oversee it, how do you read into it that it's going to be the Justice Department?

KEENEY: Because the Department of Labor agreed that it would be more appropriate to use the process that was in place.

NORWOOD: But they agreed to that after the U.S. attorney signed an agreement on the behalf of the people of the United States. Where do they get the authority to throw out the consent decree that we agreed to.

KEENEY: They have the right and authority to make a determination as to whether or not they had the expertise as distinguished from the expertise of the -- of the election officer procedure.

NORWOOD: Names, please, sir. Next question: Describe the number of Department of Justice, Department of Labor, and court staff involved in implementing the terms of the 1989 consent decree. Include an estimate of the cost of their salaries to implement the terms of the 1998 consent decree. List the staff, their titles, and indicate the role played by each in the 1991 and '96 Teamster's elections, respectively. Can you give us that information?

KEENEY: It would be difficult. I don't -- I didn't see what was submitted to you this morning, so I don't know whether that's included.

NORWOOD: It is not in there.

KEENEY: OK, but that's going to be very...

NORWOOD: I'm only asking you about the eight that you didn't -- that the Justice Department didn't answer. My question is, can you do that in a timely manner?

KEENEY: We can only give it to you in general terms. We can't reconstruct every individual who was involved in the decisional process. We can tell you the people in authority, who ultimately approved it.

NORWOOD: Is "can't" mean "won't?"

KEENEY: No, no, no. "Can't" means we're unable to. We will give you, Mr. Norwood, everything that we can possibly give you with respect to this. I'm just telling you that it may be impossible to give you the detail that you want. We'll give you an answer and we'll give you as much detail as we can.

HOEKSTRA: Gentleman's time has expired. Mr. Scott?

SCOTT: Mr. Keeney, I just left the other hearing and the attorney general complimented your work over the years in dealing with union corruption and the work that you've done.

KEENEY: I'd like to compliment the attorney general for her work over the years and...

(LAUGHTER)

SCOTT: References have been made about people being asleep at the switch -- I guess, is the suggestion. Has there -- how many, Mr. Keeney, you've been with the Justice Department how many years?

KEENEY: Forty-six.

SCOTT: Forty-six years. Have you -- how many elections have you known that have been thrown out because of corruption?

KEENEY: Gee, you got me, Mr. Scott. Off hand -- I'm sure there have been, but I can't...

SCOTT: You can't -- you can't -- so, it's at least very unusual?

KEENEY: It's unusual, yes.

SCOTT: OK, now who's idea was it to prosecute people for crimes as a result of their activities in this election?

KEENEY: The decision was made by the United States Attorney in the Southern District of New York after referrals from Ms. Quindel.

SCOTT: So, based on the work of Mrs. Quindel and the Justice Department, criminal prosecutions were initiated and the election was thrown out?

KEENEY: Yes.

SCOTT: Ms. Quindel, references have been made to the amount of mon