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 money that was paid. Could we have saved any money if we had hired full-time staff people rather than an ad hoc situation as you were in?

QUINDEL: You mean in terms of the election officer position?

SCOTT: Yes.

QUINDEL: Potentially. When I came into this job, there was an established budget. It was based on an hourly rate in 1995 and 1994. For all of the fiscal years, that was what was budgeted. I can't tell
you how the Justice Department determined that. I can tell you that a number of individuals who I sought to -- to -- or who were in places working as attorneys, were not able to leave their practices and were not able to work on anything other than an hourly rate.

SCOTT: And based on the budget that was available, were you over budget or under budget?

QUINDEL: We were under budget.

SCOTT: Significantly?

QUINDEL: Well, that's -- I suppose -- a matter of opinion. I said 17 percent.

SCOTT: Seventeen? OK. Mr. Holland, in the '91 election, did you see any -- what kinds -- did you see any infractions that occurred in the '91 election?

HOLLAND: We resolved and decided also in 19 -- in the 1991 election period 1,500 or so protests. So, there were many violations of the election rules that were remedied in 1991, including some that involved campaign contributions, like Ms. Quindel -- whenever the reports were filed, my desk was stacked up and before I finished that next day's work, I would've have gone through all of those and looked at them and flagged what I thought were suspicious or inappropriate or potentially inappropriate contributions and sent them...

SCOTT: Now, do you have -- were there allegations of violence?

HOLLAND: Yes.

SCOTT: Intimidation?

HOLLAND: Some.

SCOTT: Did you find that any of those allegations were well- founded?

HOLLAND: In some cases, yes.

SCOTT: Was it your view that the aggregate total of those violations were not sufficient to question the results of the election?

HOLLAND: I should say, while there were individual protests about threats and intimidation, in certain situations there were none that were part and parcel of any sort of post-election protest seeking to invalidate the international election in 1991.

SCOTT: Can you give us a little background? Not -- the '96 election had a lot more fund-raising involved. Can you compare the two?

HOLLAND: I need to consult with Ms. Quindel, but my sense is -- and the cook book (ph) refers to this -- that there were about $3 million -- perhaps $4 million spent in 1991's election and that, that
was just about doubled in the 1996 election. Ms. Quindel could confirm whether I have both of those numbers right, but it is on the order of magnitude of twice as much money was expended in 1996, as was expended by candidates in 1991.

SCOTT: Thank you, Mr. Chairman.

HOEKSTRA : Mr. Hilleary?

HILLEARY: Thank you, Mr. Chairman. I want to direct a couple of questions to Mr. Keeney. You know, we're getting some heat to pay for these new elections -- the new rerun election coming up -- and I -- at least in my mind, I can't figure out where all the money's gone already for the previous elections. And I think that -- you've been handed a letter there that's dated February 16 '96 from International Brotherhood of Teamsters to the Justice Department, setting forth $4 million in costs would be incurred by the Teamsters in the course of the '96 election. Additionally, the Teamsters allege that they would bear another $3 million in costs in that letter related to the convention, which were election expenses. I was wondering if you all had ever verified those expenses that they lay forth in that letter.

KEENEY: Not to my knowledge.

HILLEARY: Can...

KEENEY: It was difficult for us to verify that they were expenditures. It would take a considerable audit.

HILLEARY: As far as the -- as far as the $3 million, can you tell me exactly how the $3 million that they claim is part of the convention expenses -- have you verified that -- either that amount or in fact all those have gone in fact toward the election?

KEENEY: I can't. I do know that the -- and maybe Ms. Quindel can help a little bit on this -- that they did pick up some of the expenses. I think they may have provided some facilities and telephone expenses and so forth -- well, Ms. Quindel had been told that. She would have to verify that.

QUINDEL: For the convention -- are we talking about -- or for the whole entire process?

HILLEARY: They claim $3 million get went -- at the convention went toward the election process. Has anybody verified that amount of money?

QUINDEL: I'm not sure that, that's what the 3 million refers to. We did -- at the convention, I can tell you that we had office space. The election office had an office at the convention center and we had phones, and it's my understanding that, that was part of the Teamsters' cost. But I think you'd have to -- we'd have to ask the Teamsters.

QUINDEL: I think they may be referring to the costs of holding the convention.

HILLEARY: They also go on in that same letter to say that they spent a total of $44 million to comply with the entire consent decree. And has there any -- been any accounting of that, any confirmation of that amount of money that they talk about in that letter?

KEENEY: Not to my knowledge, that...

HILLEARY: You know...

KEENEY: I don't know why we would go behind their figures with respect to how much it's cost them.

HILLEARY: Well, simply because we're going to be asked to pay more taxpayer money, and we -- when we can't verify numbers from previous costs, it seems very difficult to do that.

Mister Chairman, I'd like to ask unanimous consent to that letter be put in the record.

HOEKSTRA: Without objection, so ordered.

HILLEARY: OK.

I just -- one more question, Mr. Keeney. I don't know if you're familiar with a private...

KEENEY: I've just been reminded that we do have some cost accounting with respect to the 1991 election, Mr. Hilleary.

HILLEARY: But there's been a lot of money spent since then, of course, and I -- are you familiar with the fact that there's a private accounting firm, and the DOJ Inspector General, of the election officers -- that's doing some kind of an accounting of the '96 election? Are you familiar with where that audit is right now?

KEENEY: No.

HILLEARY: It seems to me it's going to be very difficult for us to pay more money that -- for Justice to ask for more money -- as I understand it, it's your position that we should continue to pay for a rerun, simply because it was -- you think that's part of the overall agreement?

KEENEY: Absolutely, but I mean only as a last resort. I share your concern about public monies being utilized. We're trying to come up with various ways, which I indicated earlier, to finance this without asking for additional money from the Congress.

HILLEARY: Well, it's going to be -- I think you're going to have a hard row to hoe if you're going to try to squeeze more money out of this Congress without any more questions being answered than you just answered with regard to the expenses up to this point.

But Mister Chairman, that's all the questions I had this round.

I yield back the rest of my time.

HOEKSTRA: Or did you want to yield to Mr. Norwood?

HILLEARY: If Mr. Norwood (OFF-MIKE)

HOEKSTRA: Yield your time to Mr. Norwood?

HILLEARY: Yes.

NORWOOD: Thank you, Mister Chairman.

Let me just quickly get my last question in for Mr. Keeney. And I want you to know, I'm not asking these questions because I'm bored and don't have anything to do. We have an obligation to our constituents and to the taxpayers to find out what really did go on here, and that's what this is all about.

My last question to you, sir, one of the 24 that were not answered in this morning's document is, I would like for the Justice Department to describe in detail all offices of DOJ with the responsibility for any aspect of the Teamsters election and implementation of the consent decree, including an explanation of the process for supervising and approving all expenditures in the Teamsters election of 1991 and 1996. Please list the staff, their title, and indicate the roles played by each in 1991 and '96 Teamsters elections respectively, and a date certain for the answers would be greatly appreciated, understanding that we are doing our sworn duty in asking you those questions.

KEENEY: I understand, Mister Chairman.

We will give you a response as quickly as we can. But again, I've got to go back to this. We cannot -- we just cannot physically come up with the detail that you want with respect to who was involved in each decision at each particular time. We can give it to you, and we'll give you the absolute best we can.

NORWOOD: That's called a protective covenant, Mister Chairman

Yes, I see the red light.

(LAUGHTER)

HOEKSTRA: Mr. Ballenger.

BALLENGER: Thank you, Mister Chairman.

I mentioned yesterday that I personally have been involved in elections in El Salvador and Nicaragua and Guatemala, and these were national elections, obviously covering an area -- I mean, everybody talks about how difficult it is to poll the Teamsters. You go into the backwoods of Nicaragua and so forth. These elections, obviously, were just as difficult to do, and the preparation was to make them as simple as possible.

My understanding is, we did about everything -- I don't know who was in charge of making the arrangements of making ballots that are so difficult that a lot of people decide to give up before they vote on the ballots, because it's so difficult to read the things and figure out what they're supposed to do.

Also, the fact that on a mailing, if you actually read the -- one of these little lined things that tells you what the addresses are, the envelope had two different ones on there, and so substantially a large number of ballots were sent in, and if you check the back of them on the wrong side, they sent it back to the people that had just voted for them.

I don't know what genius figured out a method of doing things like that. I don't know who put all this together. But it appears to me that we did everything we could to make a simple method, namely, an election, as complicated as possible, and I don't know how many ballots were returned. They're -- my understanding, and somebody can correct me if I'm wrong, is we really weren't quite sure how many ballots we printed, we weren't quite sure how many ballots we sent to be voted on, we weren't quite sure how many ballots were voted, we weren't quite sure how many ballots came back, and we aren't -- weren't quite sure if we counted all the ballots.

I mean, I've observed some pretty damn stupid elections in my lifetime, but to spend $20 million and come up with as dumb an election as you all did, I just don't understand it.

Let me just say, the Organization of American States put together an election in each one of these countries, with 500 volunteers from our country -- it didn't cost anybody anything. Those of us that went down there actually -- I think they paid our airfare, but we had to pay for our own meals and stuff. We didn't cost anybody $430,000 worth of effort per individual to be inspectors and so forth.

And if I were you, I'd be embarrassed to come to us again and ask, just because our federal government is involved, that we need to put $20, $15, $20 million into an election that is so stupidly and sloppily run as this one. It just doesn't make sense to me that you all could come back and request that.

Somewhere, somehow -- and Mr. Holland, you said that yours was less complicated, I guess, because the government wasn't involved -- I think the more we involve -- I mean, less involved, let's put it that way. Is that not true? Less involved?

HOLLAND: I wouldn't say that it was less complicated because there was less involvement from either consent order party, either the union or the government. It...

BALLENGER: Is there a reason why it should be so complicated?

HOLLAND: Well, it's -- it's -- first of all, the consent order has a long ballot, right? You have -- you have two international officers, the general president and the general secretary-treasurer, you have five at-large vice presidents now, you have three union-wide trustees now, you have five regional sets of vice presidents. So that means you've got to develop five separate and distinct kinds of ballots...

BALLENGER: Is this all because we've got a bunch of lawyers tied up into our election system?

HOLLAND: No, it's because the -- I mean, it's -- effectively, it was because the union constitution provided for all those elected officers prior to 1989, when the consent order came in, and then the government insisted on developing regional vice presidents...

BALLENGER: I don't want to interrupt you, but I think the light's going to go off on me.

HOLLAND: Yes, I was just seeking to answer...

BALLENGER: Let me just say, I've got the exact count that the last election in Nicaragua, a country, it's got more people than the Teamsters, voting and so forth, they spent a million and a half dollars on their elections. Now, don't tell me that because of some stupid legalistic stuff that comes out of Washington, D.C., that we need to spend twenty times as much, or almost twenty times as much, maybe 15 times as much, money to have an election that turns out to be an absolute disaster.

At least in Nicaragua it was, comparatively speaking, an honest election, and this one was put on by, obviously, misrun, money was spent all over the place, all kinds of threats and violence that took violence -- I'd be embarrassed if I was in charge of this election.

Thank you, Mister Chairman.

HOEKSTRA: Mr. Scarborough.

HOLLAND: Can I respond?

I mean, I can address some of the issues from a different vantage point than the Congressman.

BALLENGER: (OFF-MIKE) concerned, I didn't (OFF-MIKE)

(LAUGHTER)

HOEKSTRA: Mr. Scarborough.

SCARBOROUGH: And I will not preach a sermon, nor will I be as angry as Mr. Ballenger. He's obviously an Atlanta Braves fan or something to set him off this morning, I don't know what.

(LAUGHTER)

I want to get back to -- I want to get back to timing. During our first line of questioning on timing, we learned that Ms. Quindel, as an officer of the court, withheld and delayed adjudication of her decision to overturn this very corrupt election because she didn't want to hurt Mr. Carey in his negotiations.

SCARBOROUGH: I have a question for you, Mr. Keeney, as an official of the United States Justice Department. Does the U.S. Justice Department smile upon officers of the court -- and that is what she is despite her Freudian slip that she was an officer of the union -- does the Justice Department smile upon officers of the court making arbitrary decisions and delaying adjudication of decisions in hopes of helping union representatives in negotiations -- very volatile negotiations?

KEENEY: Mr. Scarborough, I'm not going to accept your description of the events, but all I can say...

SCARBOROUGH: Well, before you answer then, let's go back to my description of events. What part of the description do you disagree with?

KEENEY: I'm not going into that. I'm not agreeing with your characterization of Mrs. Quindel's motivations. I don't any -- what they were.

SCARBOROUGH: Well...

KEENEY: She was -- she had a...

SCARBOROUGH: I want us to -- I want us to get this clear because she stated on the record that she did not want to make a decision that would've had an impact on the union negotiations.

KEENEY: That's, in -- in our -- in my view, a discretionary call.

SCARBOROUGH: That -- what? That an officer of a court can make that decision?

KEENEY: That it was within her discretion as to when she -- the order -- yes.

SCARBOROUGH: How would that be different from the United States Supreme Court delaying a decision on Brown v. Board of Education because they didn't want to have an impact on governor's race in the South in the 1950s?

KEENEY: I would think they would have discretion there too. You might not agree with the way they exercise it, but they'd have the discretion.

SCARBOROUGH: So, they would have the power -- you think that, that would be a legitimate function of an officer of the court, paid $1 million to supervise a Teamsters' election and make sure that it's not corrupt -- it would be OK for them to sit on their hands and delay adjudication because they didn't want to hurt Ron Carey's negotiation with UPS? You think that's legitimate?

KEENEY: As I say, the timing of that was within her discretion.

SCARBOROUGH: Yes, Mr. Holland?

HOLLAND: There is one -- I carried around the consent decree, as you might expect, in my briefcase for about four years, and so I don't have that well-thumbed copy, but there is a scope of the order provision at paragraph M, page 26, that does exclude certain aspects of the operation of the union from the purview of the court appointed officers. And the one provision that I at least refer you to -- and it was something that I know as a court officer in 1989, '90, and '91, I talked about frequently with at least one of my fellow court officers at the time -- and that is that nothing herein shall be construed or interpreted as affecting or modifying the conduct and operation of the affairs of the IBT or any IBT official...

SCARBOROUGH: Mr. Holland, I hate to interrupt you because I know Mr. Ballenger did that. He's an angry man, but -- I'm going to have to interrupt you because that just simply doesn't appear to be relevant to this issue. Let me move on and -- but before I move on, let me editorialize briefly that I'm very disturbed that we are -- that we have some people here that think that it's within the domain of an officer of a court, who's supposed to be making sure that an election is fair and democratic, that they inject themselves into a very heated negotiation process by making a political decision.

Let's go onto timing of recusal and in the few seconds I have left -- going back to this article, they talk, Ms. Quindel, about you stepping down because of conflict of interest that you had because of your husband's links and your links to the new party and the Carey campaign. When did you and your husband first become involved with the new party? Was it with its formation in 1992?

QUINDEL: I think it's in my letter. The -- we belong -- I think -- as I explained to the judge, we belonged to Progressive Milwaukee back in around 1992 and then it became affiliated some time after that.

SCARBOROUGH: OK. Briefly -- final question and then I'll get back to it in the next round -- the question that I have and I'm sure a lot of people would have watching this is, what -- if this conflict of interest or appearance of a conflict of interest as you cited was serious enough to have yourself -- force yourself to withdraw earlier this year from your position, then what's really -- what was the difference between your conflict of interest then and the conflict of interest that you had before you even took over the position?

QUINDEL: That's a very important question. I'd be happy to explain. First of all, the new party and my membership, my husband's membership in it, had nothing to do with the investigation that I was
involved in, as far as I knew, and that's what we told the court on June 6. On September 19, however, for the first time, Martin Davis, in his testimony to me, made a reference to me which indicated that he said the new party in Wisconsin was involved. They were trying to get it involved in a contribution swap. That was the first time any allegation was raised about the new party and that combined with another matter that arose again September 19 led me to recuse myself from that investigation. I did not resign -- I had previously resigned my position for...

SCARBOROUGH: What was the first date that you gave me?

QUINDEL: First date?

SCARBOROUGH: The first date that your first knowledge of...

QUINDEL: September 19.

SCARBOROUGH: ...of new party involvement -- that's the first -- now, was that knowledge of actual involvement or was that the first time that...

QUINDEL: Allegation.

SCARBOROUGH: ...the first allegation. So, this supposedly occurred previously to September 19?

QUINDEL: That is what it was stated.

SCARBOROUGH: OK, I'll get around to the rest later. Thanks.

HOEKSTRA: The -- Ms. Quindel, are you also a member of Citizen Action?

QUINDEL: I've worked with Citizen Action in Wisconsin. I'm not a member of the national Citizen Action.

HOEKSTRA: You're a member of Citizen Action Wisconsin?

QUINDEL: You know, membership -- I may have given contributions -- whatever I said in my letter. I have worked with them.

HOEKSTRA: OK. Either for Mr. Keeney or Ms. Quindel -- does the constitution of the Teamsters, Article 12, Section 1(b)9 state, each candidate is strictly liable to ensure that each contribution is permitted under the rules?

QUINDEL: There is...

HOEKSTRA: Is that correct?

QUINDEL: There is a strict liability provision in our rules on campaign contributions.

HOEKSTRA: OK, does it -- does it also state that under the constitution of the Teamsters, violation of Article 12, Section 1(b)9 shall be grounds for removal of office? Is that correct?

QUINDEL: That's a provision of the consent decree.

HOEKSTRA: Lastly, doesn't the Teamsters' contribution in that section also state that ignorance by a candidate by a union and/or employer that union or employer funds or other resources were used to promote a candidate's candidacy shall not constitute a defense to an allegation of violation of the rules? Is that correct? Is that what the Teamsters' constitution states?

QUINDEL: That's in the rules.

HOEKSTRA: That's in the rules. Citizen Action helped the wealthy individual -- this is going back to our document on Mr. Davis -- Citizen Action helped the wealthy individual obtain donors for the Carey campaign by refunding monies to various persons. In total, the wealthy individual obtained $185,000 in checks payable to TCFU, which is a Teamsters fund-raising group, to be released to the Carey campaign upon the receipt of donations by the IBT. Is that, again, a means of executing what we had talked about before?

KEENEY: Appears so.

HOEKSTRA: Paragraph 38 -- the IBT director for government affairs caused the IBT to donate $475,000 in IBT general treasury funds. So, I mean, yesterday we heard they had their PAC fund and they have general treasury funds to Citizens Action. Citizen Action, Citizens for a Responsible Congress -- again, this is a means? This is again quote out of this document. This is what happened?

KEENEY: Mr. Hoekstra, I'd prefer not to comment on this because I think that's a matter that's presently under inquiry in the department.

HOEKSTRA: This is on the public record. I mean, did this happen or didn't it?

KEENEY: The whole thing is not closed out. That's...

HOEKSTRA: Well, this is public record. I'm just asking you -- I mean, this is available to anybody and everybody in this room.

KEENEY: OK, give me your question again.

HOEKSTRA: I mean, is that again the means that -- as you described?

KEENEY: The -- the...

HOEKSTRA: Paragraph 42, page 17, second line.

HOEKSTRA: "Barbara Arnold made a contrib-- will make a large contribution to the Carey campaign that would be refunded and reimbursed with money for provided to Ansara through illegal means."

Is that again a means?

KEENEY: Yes.

HOEKSTRA: Paragraph 43, page 18, line three:

"In or about late October 1996, Davis told Citizen Action that he would raise additional money from the IBT for Citizen Action if Citizen Action would pay the November Group an additional $100,000."

Is that again means?

KEENEY: Yes.

HOEKSTRA: Page 19, third line:

"The secretary-treasurer of the AFL agreed in turn to contribute the $150,000 to Citizen Action."

Again, means. That correct?

That's -- it's probably enough.

Ms. Quindel, after all of that -- and I think you are aware that Mr. Nash, Mr. Davis, and Mr. Ansara have all -- are all affiliated with the Carey campaign, is that correct?

QUINDEL: That's correct.

HOEKSTRA: Have all pled guilty on September 18 to felony charges that they conspired to funnel Teamsters Union money to the -- funds to the Carey campaign?

QUINDEL: That's my understanding.

HOEKSTRA: That is correct?

QUINDEL: Yes.

HOEKSTRA: The -- is it possible, through that whole process, that the head of the Teamsters, the president of the Teamsters -- this was PAC money, their drive money -- and this was general treasury funds, and large amounts. Is it reasonable to assume that he did not know what was going on?

QUINDEL: At the time I issued my decision, and based on my decision, I indicated what my conclusions were on that matter...

HOEKSTRA: And?

QUINDEL: And the conclusions were set forth in there, and that he did not know or participate in the schemes.

HOEKSTRA: And the -- ignorance by a candidate, that's 1(b), paragraph 10, ignorance by a candidate by a union that did not -- you did not apply that rule in this case?

QUINDEL: No, in fact there's a discussion of strict liability. I did find the Carey campaign strictly liable for these violations.

HOEKSTRA: But not Mr. Carey?

QUINDEL: No -- that he was liable for the violation...

HOEKSTRA: He was...

QUINDEL: I think you may be confusing liability with the remedy that I issued...

HOEKSTRA: Ignorance...

QUINDEL: Finding somebody liable does not imply a particular remedy.

HOEKSTRA: Ignorance -- "This ignorance shall not constitute a defense to an allegation of a violation of the rules."

Is that Mr. Carey's defense?

Ignorance?

QUINDEL: You'd have to ask Mr. Carey.

HOEKSTRA: OK.

Did Judge Conboy review your August 21, 1997 report and comment on it at a hearing September 17, 1997?

QUINDEL: He had a hearing, and he issued a decision.

HOEKSTRA: Did he comment -- and was there a live hearing -- I mean, did you have an interaction, an oral discussion with Judge Conboy?

QUINDEL: There was a hearing. Yes.

HOEKSTRA: OK.

At that hearing, did Judge Conboy ever say that it appears that parts of the report were deliberately fudged? Quote unquote, those two words, "deliberately fudged"?

QUINDEL: There's a transcript of the hearing, and I don't recall him saying -- whatever he said, it's part of the transcript.

(WHISPERING)

HOEKSTRA: Our recollection is that, at least if -- we cannot the transcript of that. We have...

QUINDEL: Well, we'd be -- I'd be happy to provide it. I think I did provide you with the decision of...

HOEKSTRA: Do you have the transcript?

QUINDEL: ... Master Conboy upholding the decision in all respects, except for one matter on share group.

HOEKSTRA: Ms. Mink.

MINK: Thank you.

Mr. -- my -- our colleague, Mr. Ballenger, described allegations that Mr. Carey was associated with various organized-crime figures. His statement could be interpreted to mean that these allegations have not been the subject of any investigation.

Mister Chairman, I want to ask unanimous consent that a decision of the Independent Review Board dated July 11, 1994, signed by Grant Crandell (ph), Frederick B. Lacey (ph), and William H. Webster, be inserted in the record at this point. This...

HOEKSTRA: Without objection, so ordered.

MINK: This report...

BALLENGER: Can I see that?

(UNKNOWN): Turnabout's fair play.

HOEKSTRA: Mr. Ballenger would like to reserve the right to object?

BALLENGER: Yes, if I may send that.

MINK: The report indicates that there was a thorough investigation of all of those named figures that Mr. Ballenger commented on, and that the report indicates in various paragraphs, which I have marked, that there was no finding of any such points that Mr. Ballenger accused him of. It's very precise, and every conclusion reached by these three distinguished individuals showed that there was no possibility of association of Mr. Carey or any such allegations against him with organized crime.

So, I believe the insertion of this report is extremely important in order to balance the record based upon what Mr. Ballenger has said.

So I renew my request that that report be inserted.

HOEKSTRA: Mr. Ballenger, do you wish to...?

BALLENGER: I'm just reading, I'll be back in touch.

HOEKSTRA: All right. We will...

(LAUGHTER)

Mr. Ballenger continues to reserve his right to object, and we'll get back to it at the end of your five minutes.

Thank you.

MINK: I want to ask some questions of Mr. Holland, because I think that his participation in the 1991 election process will shed some light, because the criticism now is all on Ms. Quindel's enterprise.

In any respects that you managed the election process, was Ms. Quindel's operation any different, as far as you know, of your own personal knowledge?

HOLLAND: Well, of my own knowledge, the broad structure of it was quite comparable to what we had established in 1989 and 1990...

MINK: You've brought with you...

HOLLAND: ... insofar as roles.

MINK: You've brought with you a cookbook. Was that part of the guidance which was forwarded to Ms. Quindel, which she followed? And do you know whether she followed the path that you structured in 1991?

HOLLAND: In 1989, in May, when I was sworn in, there were absolutely no guideposts as to how an election of the magnitude of the rank-and-file election of the Teamsters Union, with all the delegate elections, was to be run.

We created the process by and large every step of our way, running it by rules.

It was clear to me at the end of -- in the middle of 1992 that I was not -- it was highly unlikely that I was going to run the election or be involved the second time, and what we determined to do is to set forth everything that we did, so there wasn't any need to reinvent the wheel in the 1995-96 election cycle, and that's exactly what the cookbook was intended to do, together with making some recommendations of what we thought we hadn't done as well as we could, or where rules needed to be changed in order to better effectuate the interests of a full, fair, and free election.

MINK: Now, when you left this responsibility and returned back to private practice, did the court in any way instruct you as to what they hoped your continued participation or relationship would be in guiding any prospective elections that might occur in subsequent times?

HOLLAND: Yes, I mean, the court communicated that it wanted me to be available to the court, certainly, but also to the Justice Department and to the successive -- successor election officer.

MINK: So were you in touch, and did you consult with the Justice Department, with Ms. Quindel, and the court?

HOLLAND: I was always the voice at the other end of the line, I think, so-called.

MINK: Did you find any operation...?

HOLLAND: More so for Ms. Quindel than for the Justice Department, certainly.

MINK: Did you find in any of the operations -- I don't know how I have a red button out there already -- but anyhow, did you find any of the decisions and conduct on the part of Ms. Quindel to be contrary to your cookbook or contrary to what you regarded to be the way that this election review was to be conducted?

HOLLAND: Let me separate decisions, because she wrote 1500, as I did, and I am familiar with perhaps a handful, OK?

HOLLAND: Let me separate that from the administration of the election and as best I can tell on what -- on the parts of it that I'm familiar with, it was done exactly as we had done it in 1991, and it was done in a square and fair manner.

MINK: While your conduct of the election was the same as the conduct that Ms. Quindel -- because one of the colleagues on the other side of the aisle seem to infer that the Teamsters ran and conducted the '91 election, therefore they paid for it and that the government ran the '96. That's not true, is it? The government ran both of them -- '91 and '96?

HOLLAND: The election officer ran both of them -- '91 and '96 -- that's correct.

MINK: Thank you.

HOEKSTRA: Mr. Norwood?

NORWOOD: Thank you, Mr. Chairman. Mr. Holland, I want to ask you a couple of questions, finally. The consent decree that you used in 1991 was the same as was used in 1996?

HOLLAND: Yes, sir.

NORWOOD: And that same consent decree provided for the Department of Labor to supervise the elections?

HOLLAND: Well, it provided the government with an option. And when we wrote our report in 1992, we didn't talk about the election officer. We didn't talk about the Department of Labor. We didn't talk about the Department of Justice. We talked about the election authority because...

NORWOOD: Who supervised in '91 -- Labor or Justice?

HOLLAND: The election officer did -- chosen by the court on recommendations from Justice and the union.

NORWOOD: So, the Labor Department did not supervise the election in...

HOLLAND: That is correct -- in 1991.

NORWOOD: So, the Justice Department in '91 though because the consent decree, as we read it, says that Labor's supposed to do it. So -- anyway, happened both -- both ways?

HOLLAND: Well, you have two sentences in there, Congressman, that -- absolutely -- you're absolutely right -- what you have read with respect to the Department of Labor, but the previous sentence says the union defendants consent to the election officer at government expense to supervise the 1996 IBT election. So, you had -- basically, the Justice Department had an option, as I read it. One, they could have used the Department of Labor. Secondly, they could have used the election officer, and arguably, the Justice Department could have used some other instrumentality out of the government to run the 1996 election. The option was up to it. What was not an option, as I read the consent order back in 1989 and I read it now -- was who was going to pay. That was clearly going to be the government.

NORWOOD: I apologize, Mr. Holland. I've got the consent decree. It's pretty clear. I don't know how you can misread what it says.

HOLLAND: What page are we looking at?

NORWOOD: Sixteen.

HOLLAND: OK, me too.

NORWOOD: To me, that's already in the record and I think we made the point and we're running out of time -- 12(d) was litigated as we talked about earlier in these hearings, and the court decision at the time said to you as the election officer, that you were to be proactive. I believe that was the word you used...

HOLLAND: And supervising. That's what the court...

NORWOOD: ...in terms of supervising the election.

HOLLAND: In reading the court's decision, that's correct.

NORWOOD: Why didn't the taxpayers pay for your election then?

HOLLAND: Because the consent decree said that the union was going to pay.

NORWOOD: And it said that the taxpayers would pay in -- for the -- all the election in '96?

HOLLAND: Yes.

NORWOOD: No, it didn't. It said it would pay for supervision.

HOLLAND: Well, that was the second decision that I referred to.

NORWOOD: I see -- I see better why it is a difficult problem. Whoever wrote the consent decree didn't spell it out very well apparently.

HOLLAND: Well, it was a dickered deal to be sure, as I understand it, between the union at the time and the Southern District of New York.

NORWOOD: Well, you know, most of the attorneys I know are pretty particular about their words and how they use them and what words mean. In this particular case, I guess some people can have difference of opinion in who's supposed to pay. I'll tell you who has a little bit of an opinion about it and they're probably getting more everyday, and that's the regular folks out there in the world who pay taxes. They got a real opinion about the fact that they have to pay for a private union election. Now, everybody thinks we ought to have done the supervision, but I don't believe I'm going to find anybody at home who thinks it's a good idea that 20 million of their tax dollars went to pay for a private union election. I'll yield back because I need another line of questions. It'll take too long.

HOEKSTRA: Mr. Scott.

BALLENGER: Mr. Chairman?

HOEKSTRA: Yes, Mr. Ballenger.

BALLENGER: I have no objection to submitting the July 11, 1994 report of the Independent Review Board for the record, provided Ms. Mink agrees that the sub-committee shall, to the extent possible, submit for the hearing file, all available exhibits referred to in the report.

MINK: I have no objection.

BALLENGER: OK, thank you.

HOEKSTRA: So ordered, thank you. Mr. Scott? It's still Mr. Norwood's time. Mr. Norwood finished early.

MINK: He yielded.

HOEKSTRA: All right, you yielded back. Mr. Scott?

SCOTT: Thank you, Mr. Chairman. Ms. Quindel, the question of strict liability came -- came up and as I understand the strict liability, the Carey campaign will be held strictly liable for all of the problems that occur within his campaign, and as a result, his campaign could not declare ignorance and his election was thrown out. Is that -- and that the criminal involvement -- and possible criminal charges -- would be according to the criminal code, which could not be amended by the consent decree, but the strict liability refers just to his campaign. Is that accurate?

QUINDEL: The strict liability refers to whether there was a violation of the rules here, that the Carey campaign should be held liable for.

SCOTT: And...

QUINDEL: And I found that they should. They couldn't keep this money. They had to return it. They had, in fact, previously returned it. That's what the strict liability is.

SCOTT: And -- well, the suggestion was that he wasn't held personally accountable -- I guess -- apparently in criminal -- criminal law. The criminal law's still the criminal law. You can't amend that by a consent decree, is that right?

QUINDEL: That's right. But, what I understood the question to go to was should there have been a penalty of disqualification -- a personal penalty to Mr. Carey, which is within my realm of remedies, and I explained in my decision why I rejected that remedy based upon the information that I had and analyzed at the time. I think the criminal -- you're absolutely right -- I don't have any criminal powers in terms of that. I also don't have removal power. That would be something that the Independent Review Board -- removal from union office; bar from union office -- that would be a disciplinary measure that other court officers have authority over.

SCOTT: Thank you. Mr. Keeney, a lot has been said today about the taxpayer paying this bill. Can you tell us what the interest is and the taxpayer and to businesses and consumers in the nation to -- what our interest is in paying this bill? And also, the cost of prosecution -- prosecutions if we didn't have a consent decree? What is the national interest in paying these bills out of the Treasury of the United States?

KEENEY: The national interest is continuing the democratization of the -- of the Teamsters union. We've been dealing now for any number of years with prosecutions and all sorts of investigations of the Teamsters. Not only is the Teamsters union, as such -- in which I think three of the last five presidents have gone to jail -- but we've been dealing with a looting of the various funds that are administered by the -- by the Teamsters -- the pension and welfare funds, in particular.

And the expenditures by -- by the Department of Justice, by the federal government have been enormous and if the union can democratized and if the rank and file can take over their union and run it honestly, the savings to the federal government are incalculable.

SCOTT: And while I've got a little time, can you give us a little background on how we've been able to do in other labor unions?

SCOTT: And in another committee we were looking at the Laborers International and others, how we have been able to make progress on getting organized crime out of labor unions.

KEENEY: Yeah. Thank you, Mr. Scott. The President's Commission on Organized Crime recommended that the department investigate four major labor unions, and we started out with IBT as the first one. We've gone now to the Laborers International in which we have a consent decree which in effect gives the same authority as is given to the election officers and the other officers under the treaty, under the decree. And then we have the Hotel and Restaurant Workers Union in which we have a decree by the court which is sort of a hybrid, in between the LIUNA and the IBT.

SCOTT: But could you say a little bit about what progress you're making in getting the organized crime out of the unions? Are you making any progress?

KEENEY: Well, we, in the Restaurant Workers, we have a monitor, and he has taken action to get people out of the union. With respect to LIUNA, as you know, Mr. Scott, we have a hammer over the union in that we have a consent decree that's agreed to and we can file it any time that the investigation being conducted for which the union is paying is not satisfactory to the Justice Department, we monitor it. So far so good. It's going well. When it turns out not to be working well, we're going to file a, we will file the consent decree. That's within my authority, and I will do it if they don't comply.

SCOTT: Thank you, Mr. Chairman.

HOEKSTRA: Mr. Hilleary.

HILLEARY: Mr. Chairman, thank you very much. I don't have a whole lot more to ask. I have a clean-up question for my colleague Mr. Scarborough, who asked that this be asked. To Miss Quindel, are you aware of when your husband first became aware of the contribution by the Teamsters to the New Party?

QUINDEL: Yeah. I asked him about it as I reported to Judge Edelstein in mid-May of 1997. I saw an anonymous leaflet referring to it and I asked him about it.

HILLEARY: So mid-May of ninety?

QUINDEL: Ninety-seven.

HILLEARY: Seven. OK. Is he at all involved in the financial running of the New Party, the finances of the New Party?

QUINDEL: No.

HILLEARY: OK. Are you aware of any other contributions by Teamsters to the New Party?

QUINDEL: No.

HILLEARY: Previous to this or after that?

QUINDEL: I'm not -- meaning I don't know.

HILLEARY: OK. Does it strike you a little odd that they would -- maybe it's not, but it seems a little odd that they would give $5,000 to a relatively small organization like that. Do you feel like the timing there was in any way suspicious? Do you think they're in any way trying to influence you whatsoever?

QUINDEL: I didn't believe so. I think I indicated in my letter that I had reviewed the contributions above $1,000 that the Teamsters had made, and there was a whole gamut of organizations listed there. So I didn't conclude that I was, you know, when I found out afterwards, any attempt to influence me.

HILLEARY: OK. Well, that's all I have, Mr. Chairman. I'm going to yield the remainder of my time to Mr. Norwood.

NORWOOD: Thank you, Van. Are any of you members or have any of you worked for the National Council of Senior Citizens?

(UNKNOWN): Not I.

QUINDEL: Nor I.

(UNKNOWN): Nor I.

NORWOOD: Are any of you members or have you worked for Citizens Action?

(UNKNOWN): No.

QUINDEL: I think I responded to Mr. Hoekstra that Wisconsin Citizen Action may consider me a member, having made some contribution.

NORWOOD: Did you do anything other than make a contribution?

QUINDEL: No. As I said in my letter to Judge Edelstein, there have been work that -- I serve on a health task force, and somebody from their organization serves on it, so there's been -- I'm familiar with the organization, but I...

NORWOOD: Are you still on their task force?

QUINDEL: I haven't been to meetings in two years, so I don't know whether they consider...

NORWOOD: Prior to any of this?

QUINDEL: It's not their task force. It's the city of Milwaukee Health Department.

NORWOOD: But it is Citizens Action?

QUINDEL: They're another member of it.

NORWOOD: The reason I'm asking this is that you proved very clearly that there was a great deal of money laundering going to different groups, and I just happened to mention this, too, being taken out of the general fund of the treasury. And one of the very interesting sets of numbers that arise is the fact that generally speaking, IBT has been giving around $12,000 a year to Citizens Action. And all of a sudden we see last year half a million dollars going to them. And that should red tag anything I would think. I would certainly, if I were running that organization, I'd certainly notice something that different. And I have a little bit of difficulty understanding how the president of the organization wouldn't know such a drastic change had occurred from a $12,000 investment to a half a million dollar investment. And I'm sort of curious, Miss Quindel, did you investigate that? Did you look into that? Did you...?

QUINDEL: Absolutely.

NORWOOD: I mean, can you imagine...

QUINDEL: And it's in my opinion. In fact I note the same thing...

NORWOOD: But is it your opinion that you just simply couldn't find the information out? I mean, it doesn't make any common sense to believe that a president of an organization wouldn't know about some numbers like that. And I presume you took that attitude, too. Surely, the president of this organization knows when we go from $12,000 to $500,000. And did you search and look to see if the president knew?

QUINDEL: Yes, I did. And I reported my conclusion and my decision.

NORWOOD: I have heard some unbelievable things said about the New Party since all of this has come into my life. Do you have any idea how many members there are in the New Party nationally?

QUINDEL: I said, what I understood and what I've said in my letter to Judge Edelstein was between 10 and 11 thousand nationally.

NORWOOD: Nationally. I hear things and I know it's just rumor, but maybe you, since you sort of know something about them, things like communist party, socialist party. What in the world is the New Party, besides just a nonpartisan organization who works on issues?

QUINDEL: It's an independent...

NORWOOD: What issues do they work on?

QUINDEL: They've worked on education, they've worked on living wage, they've worked on issues around labor. They, most significantly, they brought a case before the Supreme Court that was heard last term about whether or not third parties could get ballot status and support candidates of other parties. They lost that decision. But it was a question -- it's an interesting debate that is contained in that Supreme Court decision.

NORWOOD: We'll come back to it, Mr. Chairman. I see the red light.

BALLENGER: Thank you, Mr. Chairman. I was just reading this article from The Washington Times of our hearing yesterday. And Mr. Paseo (ph) delivered his situation where he was beat up by Mr. Zero and thrown down a flight of steps and sent to the hospital and so forth, and he I guess appealed to you about something terrible like that occurring to him, and my understanding is that you required him to write a letter to his union that he wouldn't campaign any more in, I guess in the headquarters, wherever. And at the same time that Mr. Zero was requested not to beat up Mr. Paseo (ph) any more. I mean, does that sound like what you did?

QUINDEL: I don't think that accurately characterizes it. Except for the fact that I did find in that decision that there were, this was really a problem on both sides. However, I condemned in the strongest language the violent action on the part of Mr. Zero. And Mr. Zero ultimately had to send a letter to every member of the union indicating that his conduct was...

BALLENGER: And he basically is still an officer of the union, having done what he did?

QUINDEL: Well, as I indicated before, I don't have removal powers. My understanding that the disciplinary body that does have power to discipline members can review that action, but that's not a power that I have as election officer.

BALLENGER: Let me just ask one more quickly, and I'll yield back to the chairman. But my understanding is the new -- that IBT -- the Teamsters, in making out their check to the New Party, the $5,000, didn't deliver that to the New Party, they delivered it to Mr. Zero after you were so kind to him, and he delivered it to the New Party. Does that current sound logical to you?

QUINDEL: I don't know the facts. My understanding is that the check went to the New Party in Chicago, but I don't -- I didn't investigate that, and I don't know the facts.

BALLENGER: I yield to the chairman.

(UNKNOWN): (OFF-MIKE)

BALLENGER: What? Excuse me?

NORWOOD: I'm sorry.

BALLENGER: Yes, sir.

NORWOOD: (OFF-MIKE) Thank you, Mr. Ballenger.

HOEKSTRA: You're the chairman?

(LAUGHTER)

You're pulling rank.

(LAUGHTER)

NORWOOD: Would the gentleman yield?

BALLENGER: Whatever you decide to do between the two of you.

(LAUGHTER)

NORWOOD: Ms. -- well -- Ms. Quindel -- that light was running too. Ms. Quindel, I want to ask you just a couple of brief questions and request a couple of brief answers. Do you believe that it is in the best interest of this country, and indeed, the Teamsters union for it not to be connected with the mob?

QUINDEL: Yes, I do.

NORWOOD: I do, too. I think all of us, certainly everybody would agree with that. How strong are your feelings about that? I've
noticed in the last two days some people feel much stronger about that than others.

QUINDEL: I feel very strongly about that.

NORWOOD: Are you connected in any way with Mr. Carey?

QUINDEL: No, I'm not.

NORWOOD: Do you know him?

QUINDEL: Only through this election process, in terms of seeing him at meetings. We interviewed him.

NORWOOD: Did you think the outcome of this election was important?

QUINDEL: I thought the...

NORWOOD: As to who won?

QUINDEL: I thought the process of this election was important, and I thought that it was my duty to run this election fairly, honestly and in accordance with the consent decree, and that's what I did.

NORWOOD: Did you have a candidate you wanted to win?

QUINDEL: No, I did not.

NORWOOD: You were totally neutral in terms of who finally was the president of the Teamsters Union?

QUINDEL: Absolutely.

NORWOOD: Thank you.

HOEKSTRA: Would the gentleman yield now?

(LAUGHTER)

Thank you. Mr. Keeney, in many of these paragraphs, it talks about known and unknown, I think and you had indicated at one time that you were hesitant to talk about these documents because of our ongoing investigations. Are there ongoing investigations into the people that may have conspired with Mr. Nash, Mr. Ansara or Mr. Davis at this time?

KEENEY: There may be, because when he used the term -- the term known and unknown is a standard language that we put in that indicates that certain people were connected with the incidents in one fashion or another, but for one reason or another, their conduct did not warrant being charged.

HOEKSTRA: At this time?

KEENEY: At this time.

HOEKSTRA: Ok, good. Thank you. We've completed -- excuse me -- we have completed another round of questioning. There are some members who would like some time for additional questions, so we may go for one more round. Ms. Mink has a flight to catch, so we will go out of order and give five minutes to Ms. Mink right now.

MINK: Thank you, Mr. Chairman. I would like to use my five minutes to make a closing statement at this point. I want to take this opportunity to commend the two election officers here, the one, Mr. Holland, in 1991, and Ms. Quindel, for the 1996 elections, for the enormous responsibility that you have assumed -- that you assumed at that time.

It's a terribly important responsibility which I believe from the testimony that you have presented today, responses to questions, everything that I have read that's been submitted, that both of you conducted your responsibility in an honorable, efficient way in which commands respect and shows the integrity of both of you as individuals in this very, very difficult position that you are place in.

And I'm sorry that there have been numerous inferences and reflections on your personal character or your conduct, because I do not find anything in the record to suggest that there is any justification for such inferences. In fact, the manner in which you have recused yourself and finally felt because of the potential of misinterpretation, that you offered your resignation, I find to be in the highest tradition of government service.

I feel that what is at stake here is not only the future of the labor movement and the responsibility to restore democracy to the unions, but also to underscore the responsibility that all of us have as citizens. And we're here as citizens of this country given the duty to be representatives of our district, and so we speak for the membership in our district. And in that context, I think we have a very great responsibility to see this through.

Now we weren't party to the consent decree, we weren't party to the recall investigation and the charges that led to that prosecution. But all of us who have been attentive in any way to the charges of corruption and mob control and all of the strife and killings and murders that occurred in the course of the last 30 or 40 years, know the importance of the decision that the Justice Department made to proceed with recall. And it was in their judgment under the Reagan administration, to come to an agreement that there be a consent decree.

That should be very, very clear. It was not the Congress, it was not some political decision making, it was the Justice Department and all of the people that were there serving President Reagan, that made the decision that it was important with RICO charges and to go to court.

After having done that then, the case moved to the actual trial stages and a consent decree was entered into under the Bush administration. And I think it's very important for us to get out of this sort of partisanship here. We have a consent decree, its terms
and wording has been taken to court and reviewed by many court decisions. It's not arbitrarily decided by the election officials, nor is arbitrarily decided by the Justice Department.

The courts have reviewed the process, found out exactly what supervision meant, it's not for us to quibble now. And I believe that the election management and supervision by these two individuals has been exemplary, and should serve as a model for individuals who are put in this very, very difficult situation. It's contentious, you have all these complaints, you have accusations. Thousands of them were filed not only from labor membership, but from outside parties. In terms of allegations of misconduct, you had a very, very difficult job to perform.

And I think that you have both weathered well. And in any situation, there are people that will have continuing anxieties, misgivings and accusations that they have not been dealt with fairly, notwithstanding your full investigation of these matters.

So I would hope that as we deliberate on the Teamsters election matter further, that we put aside the issue of the importance of this election process and of the consent decree, and go about the business of trying to determine what new legislation or what new forms of federal regulatory authority might be interposed. We don't like this process, then surely my Republican colleagues who don't like government intervention are going to have to consider additional government regulations in order to assure democratic elections, democratic unions, because that's what we're all for -- that the process be open and fair and honest in terms of the way that unions are conducted.

MINK: I have a great faith in the labor movement and in the integrity of the officers of the movement, but I want to make sure that as they fulfill their responsibilities in running their unions, that individual rank-and-file members' rights, privileges, and recognitions are also taken into account.

And I believe that these two officers here, and the Justice Department, have performed in an exemplary manner, and I believe that these hearings have verified it. And so I'm here to thank you for your presence here and regret that I have to now try to make my district work period begin, one week late.

(LAUGHTER)

HOLLAND: I thank the gentlelady.

KEENEY: Thank you.

HOEKSTRA: Mr. Norwood.

NORWOOD: I would echo Ms. Mink's sentiments, in her congratulations. I will have to tell you...

(LAUGHTER)

I will have to tell you, however, Ms. Mink, down there in south Georgia we sort of expect folks who are making $34,000 a month to do a good job, real good job. So we think we -- that's fine that we -- well, it isn't fine we paid that much, but is certainly our right to expect some wonderful results.

Let me ask all three of you just a question before we close, just to make sure I have this in my mind. It has to do with the goals of the consent decree, and any of you tell me if I have this wrong. It seems to me the overall goal was to do everything that we could do to make sure that there was not any mob influence in the Teamsters Union. That was a -- that was part of what this basically was all about.

And then, secondly, from that, the purpose of the consent decree was to ensure that we had a open and free election for the Teamsters, so that we -- when we ended up, we would -- they would have then a president free of mob influence, and a president that the members of the Teamsters wanted to have and were able to vote for.

Now, for me, in addition to that, I think the consent decree meant that not only would we have a democratic election, but that we would ensure, through the Department of Justice and through the
Department of Labor, that when we ended up counting the votes, the election would have been open, free, and honest.

Now, that is my understanding of what the consent decree intended to do. Would anybody object to that?

Have I left anything out?

Well then, if I'm right in what I think our objections are, I think it is fair for me to say, we totally failed. We did not accomplish the goals of the consent decree. We did not end up with an election that we can even keep. We did not end up with an election that was fair.

And from that, then, I wonder why, Ms. Quindel, this happened. Why couldn't we have had, using how many employees? 500 or 600? 20 million bucks? Why couldn't we -- this cannot be brain surgery. It isn't that hard. Why we could not have ended up, at the end of the day, assuring in a preventive way, that we had an election that these men who've been -- and women, who've been through here the last couple of days, some on Carey's side, some on Hoffa's side, why we could not have ended up, after spending that much money, and this much paperwork, with an election that we could be proud of, as I think we were in the '91 election.

I mean, I believe we got through the '91 election saying that at the end of the day, there was a fair, open process why members of the union were able to elect their president, where -- is -- Am I right, Mr. Holland? Were you able to say that at the end of the day?

HOLLAND: I was able to say that. I think Ms. Quindel the same thing, notwithstanding the fact that she's ordered a rerun.

It was -- no one more than her, I would imagine, faced exactly the question that you've asked at the time when she was assembling her decision. Nobody more than...

NORWOOD: I don't mean this as an attack on Mrs. Quindel...

HOLLAND: I'm not suggesting that you are.

NORWOOD: I am saying that whatever else happened, the bottom line, we did not end up with a fair election that we can be proud of and have met our goals. Now, we must not go into a rerun the same way.

If we're going to have a rerun, then we have to assure ourselves that systems are in place, and we've heard, on this panel, over and over, many systems that were apparently pretty weak, in terms of getting to a fair election. We must be assured this time, no matter who pays for the election, that we do a better job of it.

And with that, Mister Chairman, I thank you very much for the hearings, and all you there.

HOEKSTRA: Mr. Scott.

SCOTT: Thank you, Mister Chairman.

I think we have to differentiate between supervising an election and blaming those who got caught breaking the rules for what happened. I think we -- if we look over what we've done so far, Mr. Keeney has indicated that we have made significant progress in getting organized crime out of unions. We've heard that people who broke the rules, some for personal profit, some to help their -- the candidate of their choice, have been caught and prosecuted. The election has been tainted by the irregularities, and has been thrown out.

Mr. Keeney couldn't think of any other election -- I'm sure there may have been, but he couldn't think of one. It's obviously very unusual.

So that no one can profit by breaking the rules.

As Ms. Mink has indicated, this is -- this process has gone over Democratic and Republican administrations. It's a bipartisan effort to clean up the unions. The members are entitled to a fair election. The public is entitled to fair elections. This one, it's been determined, was not fair, and the members will have an opportunity to cast their ballots again.

So that the election will result in a winner, in a fair election, or no winner at all.

I don't think you can blame the process -- you can't blame the process for failing. I think the process worked. Those that tried to take over the election were caught, prosecuted, and the election was thrown out.

And I'll yield the balance of my time, Mister Chairman, to any of the panelists that want to comment.

HOLLAND: The comment I was going to make before is -- is that, what Ms. Quindel uncovered was, I mean, by her description, a scheme and an artifice -- I mean, it was a Byzantine operation that she uncovered and then had, in my view, the courage to say that that may have affected the outcome of the election, and that triggers the rerun.

Nobody who's run an election -- and I've run a number -- likes saying that on their own watch because of the absolutely legitimate sort of inquiries that have gone on by and large here today.

But the fact of the matter is -- is that if that happens -- and you can't regulate that kind of morality as much as you would like to be able to do so -- and that's what Congressman Norwood was saying, is that what on a preventative basis could we do. Well, there -- I mean, on a preventative basis, I mean, there are a host of things, none of which are particularly pleasant or fun to do...

NORWOOD: Well, one thing you can do is you can let people know that if they participate in this kind of thing, they can't -- they cannot gain any advantage, because they may be jeopardizing the election of the candidate of their choice.

SCOTT: And this having, throwing out the election I think is somewhat preventative.

HOLLAND: That is the functional equivalent of election capital punishment.

HOEKSTRA: Thank the gentleman for yielding. Miss Quindel, just one last question. In your letter on September 23 to David Edelstein, you talk about the alleged donor has had a professional association with a member of the election officer's investigative staff. And then on page two, you also go on to say, "However, the latest revelations include facts that suggest the schemes of the Carey campaign may have involved a professional associate of one of the election officer's investigative staff." Is that person still employed in the election office?

QUINDEL: That person is still employed in the election office, yes. The professional associate -- yeah, the investigator, the investigator and I recused ourselves because of the allegations. But that did not affect her employment.

HOEKSTRA: Why did the investigator recuse herself? Or himself?

QUINDEL: From the investigation? She was an investigator on this disqualification investigation.

HOEKSTRA: And why are you leaving and why is she staying?

QUINDEL: I did not leave my position, Congressman, because of this letter. This was a recusal of the disqualification investigation. I had resigned the beginning of September.

HOEKSTRA: This is a pretty serious statement in your letter. "However, the latest revelations include facts that suggest the schemes of the Carey campaign may have involved a professional associate of one of the election officer's investigative staff." Well, because as we have heard earlier, these are pretty serious schemes. Is that, isn't that correct?

QUINDEL: That's certainly correct. And I think that we can't provide any further information about those matters because of the ongoing criminal investigation.

HOEKSTRA: Would this person have been aware of your decision in August prior to your releasing it that you were going to order a rerun election?

QUINDEL: This individual, as I've described in my letter, was part of the investigative process, yes.

HOEKSTRA: So they might have -- OK. Yes or no? She would have know of that decision before you made it public...

QUINDEL: Yes.

HOEKSTRA: ... or she would not have? She would have?

QUINDEL: She would have.

HOEKSTRA: Thank you. The, just in closing, the -- thank you for the panel. You have been here a long time. But it is a serious issue, and I think that, you know, we can take a look at it, and I think, you know, I'm not sure how you could have done it, gotten the election right the first time, because I think as I said in my opening comment, I think we might have been looking for the wrong thing.

The focus of a couple of your comments were, you know, we were thinking that the corruption or that the intent or the trial to influence this Teamsters election was going to come from the outside, and that we had to protect the Teamsters from potential corruption and mob infiltration. And actually, as we were fighting that war to protect it from mob infiltration and mob corruption, what we did is we maybe didn't think enough or somehow we didn't have the processes in place to protect it from corruption from the inside, which is now what we have seen and which I believe is the reason for the rerunning of the election because of the activities of three of the people who were intimately involved in campaigning and part of the election process. Not on the outside, but actually either being consultants or vendors or managing the campaigns of one of the participants.

And, you know, I think the quote, Mr. Keeney, that you had, "Invidious enemies of union democracy continue to thrive with a perverse and persistent energy. Rank-and-file Teamsters will watch this election with the hope that the union will continue to be free and democratic." Absolutely. I couldn't agree with that statement more. That the rank and file are watching. We heard that yesterday. The rank and file are probably the most disappointed people in the country by what has happened and the requirement of a rerun election, because they are proud to be Teamsters, and they want this organization brought back to its feet. And they have seen corruption from within. And I don't think that we expected these invidious enemies of union democracy to come from within the union. We expected that they would come out.

I can tell you that this subcommittee, myself personally, and I think this Congress, is committed to work with, well I guess Mr. Keeney, you're the only one that's going to be working on this process in the future. But Ms. Quindel and Mr. Holland, as we move forward in this process, you know, we may come back to you and to learn from your experiences and perhaps ask more questions, because it is our intent to free, again from the quote, these 1.4 million members are free from the clutches of organized gangsterism. Union corruption takes an enormous toll on its members and the public, and it is the responsibility of those of us in the legislative branch and the
judicial branch and the executive branch to work together to restore democracy and integrity to this union. And we are committed to it. We may disagree through the process sometimes, but we don't have any differences of opinion as to what our ultimate goal and what our ultimate vision is for the Teamsters -- free and democratic organization that has as its hallmarks, integrity. And we've made progress towards that. I view the 1996 election as a setback. Perhaps the decision to have a rerun is a step back in the right direction. But I wish we could have gotten it right the first time, but we can't go back and recreate it.

So now it's to learn from our mistakes, to learn from the good work that we have done and put in place a process to have a good election sometime in the near future and restore and have a fairly elected leadership and then see what next steps we need to go. So, thank you very much. Thank you for helping make this I think a very informative hearing. We have one more panel. Mr. Keeney, Miss Quindel, Mr. Holland, if you have an interest in this, this is somebody who I think is from the Honest Ballot Association, and who have run I think a number of elections, maybe not as many as Mr. Ballenger has run, in third-world countries, but they're familiar, and maybe we can all learn from that process as well. So I'd hope and welcome you to stay for that. This panel is dismissed, and we will take about a 10-minute break and convene at about 1:20. Thank you very much.

(RECESS)

HOEKSTRA: The subcommittee will reconvene.

HOEKSTRA: And as we begin our second panel today, we have Senator Murray Schwartz, who's the president of the Honest Ballot Association from Floral Park, New York. Good afternoon and thank you for being here. And we're sorry we're a little late, but that first panel took a little longer than what we thought it might. I think you've been informed that the witnesses that are appearing before the Committee on Education and the Workforce 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. Please rise and raise your 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? If so, please answer I do.

SCHWARTZ: Murray Schwartz.

HOEKSTRA: I do?

SCHWARTZ: I do.

HOEKSTRA: Thank you. Thank you. We will hear your testimony.

SCHWARTZ: All right. May I start by saying that you demoted me. I'm the chairman of the board. The president is Miss Gibbs (ph), who is here today.

HOEKSTRA: Oh, I'm sorry. Congratulations.

SCHWARTZ: And I want to take this opportunity to thank the committee for the invitation to appear as an expert witness and hope that my testimony may help to enlighten the members about some of the problems encountered in conducting union elections. I have here with me today Joseph Goldstein, the counsel, and Mrs. Muralin Falik, the executive director, and Miss Linda Gibbs (ph), the president, representing the Honest Ballot Association, an organization which was founded in 1909 by former President Theodore Roosevelt.

We have brought with us a small brochure which outlines and summarizes the functions of HBA. At this time let me say that all of the activities of the organization have been in the area of elections. We do in-person paper ballots, in-person machine voting, and mail ballot elections. As a special state prosecutor in 1937, Thomas Dewey elicited the aid of Honest Ballot to oversee union elections as well as public elections, which we were doing before that. According to our records, the first union election that Honest Ballot undertook was for the International Brotherhood of Teamsters, and we have continued in the field of supervising elections since then. Elections have
remained our primary purpose. And although we try to do anything that will help the betterment of mankind, which was adopted as our creed, to date, we are considered one of the leaders in the field of handling every phase of elections.

In 1979, I joined Honest Ballot as the CEO and chairman of the board, bringing with me a knowledge of election procedures. I had just retired as commissioner of commerce and industry for the city of New York. We restructured the organization and trained the personnel in new methods. I was fortunate to have recruited dedicated people who had the purpose and drive to help us expand. Since 1979, we have undertaken some very difficult elections. And as an example, in 1983, we were asked to supervise the election for the National Maritime Union. Now, this was an extraordinary election because it was a 60- day in-person election at 120 locations from Alaska to Hawaii, Panama and Puerto Rico. The ballots, although voted in person, were mailed to a central depository in New York City where we conducted the tally, tabulating the ports by region. The U.S. Department of Labor, through Labor Management Standards, conducted an extensive and thorough investigation of our procedures. When they finished the investigation, they approved everything that we implemented and did not find one error. We considered this quite an accomplishment. We were the only organization that was able to accomplish an election as intricate as the National Maritime Union without any reversible errors.

I've been experienced in all aspects of conducting elections, having run for party and public office for over 25 years, which I know you will all appreciate. I endured coping with incumbents and their organization in their attempts to fend off their opponents. Union elections are not very different from public elections. In order to overcome the problems, I decided that all elections conducted by Honest Ballot would provide a level playing field to all sides. We insist on supervising every phase of the election and notify the incumbents that even though they have retained us, they will receive no advantages. If they try to pressure us, we will not conduct the election. Honest Ballot's executive director, Mrs. Muralin Fallik, is a dedicated perfectionist, and she is involved in every phase of every election. Although we conducted elections throughout the country, they're all under the strict control and supervision of our main office in New York.

With regard to the current Teamster election, I must state that I do not have first-hand knowledge concerning the procedures and safeguards followed. All that I heard was from second-hand reports, and I don't like to comment on rumors. We would have liked to stand by as expert observers in this important election.

The following represents the procedures that Honest Ballot implements when we supervise a mail ballot election.

Number one. Honest Ballot personnel are present at nominations meetings to ensure that all potential candidates have the opportunity to be nominated. Honest Ballot requires all nominated candidates to meet with them immediately following the close of nomination. Candidates are then requested to fill out a form which states how he or she wishes their name to appear on the ballot. Honest Ballot then
provides all candidates with the dates that candidates and/or their observers may be in attendance, such as, we start with the proofing of the sample ballot, then the printing of all the ballots, the certification by printer of the number of actual ballots printed, which includes an overage percentage needed for duplicate ballots and/or names to be added after initial mailing. The mutilation and sealing of the master ballot plate which ensures that no additional ballots can be printed. Then there's the invitation for all candidates to be present on the day of mailing, where HBA is provided with a mailing receipt from the U.S. Post Office. The counting and certification of the number of ballots remaining to be used for the duplicate addition process, including damaged ballots, and the protocol to be followed when members call for a duplicate ballot. These calling members are provided with a confirmation number to ensure that post-election protests regarding the non-receipt of the same are proven with accurate record keeping. Better addresses are logged, and original ballots are remailed to the new location.

SCHWARTZ: The information and logging procedures to be followed by Honest Ballot regarding the receipt of voted ballots at the post office and the number of ballots returned undelivered to a separate location so that they do not in any way conflict with the returned ballots.

All of the above information is provided to the candidates in writing, to assure that everyone understands their rights and the procedures that will be used by the Honest Ballot Association.

Number two, mail returned ballots enclosed in business reply envelopes at the post office are verified against the receipts provided on a daily basis.

For example, we are told that a dollar figure is deducted from our account representing an amount of envelopes returned. Inasmuch as union funds are paid for the postage deducted, the Honest Ballot handcounts each envelope returned, and verifies that number against the receipt provided. In many cases, the dollar amount deducted does not coincide with the number of envelopes, because they go through an automatic machine. If this occurs, all observers are given the information, and the post office immediately questioned, and a correction is made.

A similar count and control is used for the returned ballots which are undelivered. Due to incorrect addresses and other things, a careful, daily log is kept that is available to observers representing the number of ballots that are remailed using the original ballot.

If the election by precincts differed -- are different, colored business reply envelopes are used by us. On a daily basis, all envelopes after counting would be checked off against the original mailing list. This check-off list would also reflect the individual members who requested a duplicate ballot by using the ID number and placing a "D" next to the original number.

To ensure that only one vote per member would be counted, each day all ballot envelopes would be sealed in a receptacle, and observers would sign the carton or the receptacle. A daily log of the number of -- wait a minute. A daily log of the number of invalid ballots of those individuals who removed their identification label from the business reply envelope and whose identity is not known against the check-off list is kept separately.

A written log of ballots returned by precinct would also be kept, so that Honest Ballot could crosscheck all numbers to ensure that the daily count and the precinct count match it. If the ballots are
checked off on a daily basis, and recorded on the original mailing list prior to the election, when eligibility questions arise the Honest Ballot would be able to immediately remove the ineligible ballot by ID number due to nonpayment of the required dues or the initiation fees not completely paid. And these ballots would be segregated and logged, and all observers would be provided with all of this information.

And then prior to the tabulation of the results, HBA would provide the observers with the following information. We give them proof that the sealed master plate of the ballot was not tampered with at any time. We give them a listing of all ballots used, and a comparison against the number printed, to assure that each and every ballot was accounted for. A listing of all duplicate ballots sent, and a removal of multiple ballots sent in by any member. This is due to the fact that members who did not receive his or her original ballot might receive it after requesting a duplicate. The HBA procedure is to count the later-dated ballot, which would be the duplicate, and void the original. A listing and count of all names added to the list after the initial mailing. A listing and count of all invalid ballots not identifiable, dues not in good standing, initiation fee not in good standing, and other things. A listing and count of all returned ballots undelivered, and a listing and count of the remailed ballots to a better address. All post office receipts and the total number of ballots returned by the given time and date set forth in the rules of election are provided to the candidates.

Prior to the tabulation, the valid envelopes would be distributed by precinct, and one precinct would be opened at a time. Personnel would remove the outer business reply envelope and the secret ballot envelope. All business reply envelopes would be counted and bundled. The secret ballot envelope would then be opened, removing the ballot. All secret ballot envelopes would then be counted and bundled. The HBA personnel must report if any secret ballot envelopes do not contain a ballot, since the number of actual ballots tabulated would differ from the number of envelopes received.

While counting and bundling the secret ballot envelopes, they're also checked, to make sure that all ballots were removed, so that nobody throws out secret ballot envelopes with ballots in them.

And then each ballot is opened, and if there is slate voting, there would actually be two stacks of Slate A and Slate B, which would be verified and counted twice.

Mixed voting would be handled by HBA personnel and tabulated in front of observers.

Now, a very important thing is that we have not been satisfied with many mark-sense machines, since we have found that they cause problems and delays. The mark-sensor machine that requires a lead content in the pencil to read a ballot is smudged when folded and mailed. If a mark-sensor machine that requires a specific lead pencil is used, the ballots are sent through the machine a second time for a second comparison, which takes more time than a hand count, especially if the second count does not match the first count.

We are strongly opposed to having a ballot rewritten after the member's original have -- cannot be read by the machine. Any ballot once voted should be sacrosanct, and not corrected by anyone else.

We understand that there is, however, new technology available whereby the voter can use pen or pencil as long as it is not yellow or red, and the fold lines and image shadows cannot interfere with the reading.

Observers are entitled to see each ballot tabulated, and the newer technology records each ballot on a screen as they are fed, so that observers can truly understand the process. This, of course, is accomplished with a hand count as well. Each precinct would receive a final count that is verified before starting the next section.

Challenged ballots removed from the valid envelopes will only be investigated if they could affect the outcome of the election. For example, if there was a 10,000-vote difference between any candidates, and there were 1,000 challenged ballots, they would not be opened. If, however, there were 20,000 challenged ballots, each envelope would be checked, to ascertain whether a member was eligible or not, and the valid ballots -- envelopes, if the outcome would be affected, would be opened, and the tabulation would occur.

When all results are known, HBA personnel would list all valid votes plus invalid votes received, and this would add up to the number of counted envelopes delivered to the HBA by the post office prior to the deadline.

All election materials, including the following, would be packed and sealed and stored for one year.

SCHWARTZ: And this is a rule by the Department of Labor. We would take all return ballot envelopes, all secret ballot envelopes, all order eligibility lists, and the tally sheets. And also used and unused ballots. We are providing the (AUDIO GAP)

...summarizes the procedures unions and/or their designated election company follow when conducting an election by mail.

We believe this should be helpful to the members of the committee. I'm prepared at this time to answer any questions from the committee regarding procedures and safeguards that Honest Ballot Association follows when conducting a mail ballot election.

In closing, I want to thank the committee for the opportunity to appear before you and hope that we can be helpful in providing information in the very complex area of union elections. Since all elections must be tailor made to ensure that they comply with all the regulations of the union's constitution and the requirements of the Department of Labor office of labor management standards. Thank you.

We made this long report because you wanted a full explanation of everything.

HOEKSTRA: That's exactly correct. Thank you very much. We'll go through five minute questioning period.

(AUDIO GAP)

...you've got a concern about the mark sensor type of ballot machines. Why don't they work, or why are they suspect when you're counting a large number of votes?

SCHWARTZ: You mean the mark sense machine?

HOEKSTRA: Well, for one thing they have to re-make a lot of them because, first of all, if you don't mark it with the exact pencil, which is a soft lead pencil, you don't get a mark that can be read. And many people mark it with a pen or they mark it with a hard lead pencil, and therefore, the ballot then has to be taken, re-made and then re-inserted. And that's one of the things that we object to.

Secondly, when you have a ballot that has a soft lead pencil and that ballot is folded in order to put into an envelope we find that the smudge from a soft lead pencil can get over on another side, and therefore you have two marks not one.

HOEKSTRA: Would you be surprised or what would your response be if you heard that the '96 Teamsters election used that type of ballot.

SCHWARTZ: No, I wouldn't be surprised.

HOEKSTRA: You wouldn't be surprised?

SCHWARTZ: No, sir.

HOEKSTRA: But, you don't use that type of ballot.

SCHWARTZ: No, sir.

HOEKSTRA: Because you don't find it to be very effective.

SCHWARTZ: We don't find it to be good for us because we don't find it to be accurate.

HOEKSTRA: If you, as experts in the field, in recognizing that this is probably one of the largest unions or the largest union in election in 1996, wouldn't you think that they would use the latest technology with the most accurate method?

SCHWARTZ: (AUDIO GAP)

...best and the fastest system that they could get and after looking around they decided on this, but this happens very often.

HOEKSTRA: Even though, with your experience it doesn't work very well.

SCHWARTZ: It's not my opinion.

HOEKSTRA: There are better ways of doing it.

SCHWARTZ: I don't believe that it does an exact election, which it should do.

HOEKSTRA: In your opinion, would the integrity of the election be threatened, if perhaps one percent of the ballots had to be re- written?

SCHWARTZ: Rewritten?

HOEKSTRA: Yes, I mean, like you said, if they had to be re- marked?

(AUDIO GAP)

...isn't that what you said, possibly could happen with these ballots that they would come in and there'd be smudges (AUDIO GAP)

...ink or whatever and they'd have to be re-marked so the scanner could actually read them?

SCHWARTZ: Well, my problem is that it's a human being that's doing it and I don't know how that human being views it -- I don't know who they are. I wouldn't want anybody to take a ballot that I have voted and try to correct it. They could make mistakes, it
doesn't have to be a deliberate thing. But, once I have voted the ballot that's the say it should be.

HOEKSTRA: Right. The -- what's your experience with bar coding on envelopes used in mail balloting? Is that a process that you use?

SCHWARTZ: Coding the envelope?

HOEKSTRA: Bar coding of the envelopes?

SCHWARTZ: No, we use that.

HOEKSTRA: You do use that.

SCHWARTZ: Yeah, we put the numbers on each one of the envelopes, so that when they come back we can check them off properly against the list.

HOEKSTRA: Do you in your process of conducting elections -- you've talked a lot about the technical process of mailing the ballots out. Making sure that the printing and everything is correct. Do you at all track spending by candidates or not.

SCHWARTZ: We usually have both sides in direct contact with us. And, if anything is going on one side will always report what the other side is doing. And we like to get into that right away because we have to report everything that happens to the Labor Department. And so we will immediately see if one side says to the other side -- is campaigning on union time or the other side is using union equipment or anything else -- we immediately come in and try to to put a halt to that.

HOEKSTRA: Thank you. Mr. Scott.

SCOTT: Thank you, Mr. Chairman. Mr. Schwartz, can you tell me how large the National Maritime Union is?

SCHWARTZ: It's -- it wasn't a question of the number of members, it was a question of the fact that it was in 120 different locations and the intricacy was because it was a 60 day in-person election and then a mail ballot.

SCOTT: Does your organization run state elections that do mail- in ballots? Several states, I think, Oregon, for example, or Washington states. One of them has a mail-in election. Have you done any mail-in elections for states?

SCHWARTZ: Mail elections?

SCOTT: Right.

SCHWARTZ: For whom?

SCOTT: States.

SCHWARTZ: Yeah, we have done a mail election for the State of New Jersey.

(AUDIO GAP)

...SCOTT: I think Mr. Schwartz misunderstood one of the questions that the gentleman from Georgia asked.

HOEKSTRA: Would you like to ask?

SCOTT: I thought -- I thought the first question was, do you -- is your operation -- do you run elections for profit. And I think what he answered was, for for-profits.

You're a non-profit organization, is that right?

SCHWARTZ: Yes.

SCOTT: And you -- your organization on a non-profit basis will run elections for for-profit organizations?

SCHWARTZ: Yes. Right.

SCOTT: OK.

HOEKSTRA: Thank you.

NORWOOD: Thank you, Mr. Scott, I did understand. And Mr. -- Senator Schwartz made it very clear it was a non-profit organization.

SCHWARTZ: Yes.

HOEKSTRA: Thank you.

Mr. Hilleary.

HILLEARY: Thank you, Mister Chairman.

Senator, thank you for coming today. This is gravy to wait as long as you had to wait, because the first panel was so long, but I want to talk a little bit about -- I was going to ask some more questions about the cost, but apparently that's not your area of expertise so much.

But I wanted to ask you also about maybe whatever rules you have with regard to conflict of interest. Now, you've been in business since 1909, so you obviously are successful at it, and that must include having a good set of rules, parameters for your employees with regard to conflict of interest, and I was wondering if you could amplify a little bit on what those were.

SCHWARTZ: Well, we hire quite a few people that are out in the field, and that are working on elections, and the one rule that we have: if anybody is associated or has someone in the family associated with the organization that we're doing an election for, they cannot go
on that election, and therefore we have a good background check on all of the people that we send out to do elections, because that is something that could cause a tremendous problem for us. We don't want anyone that may have a feeling one side or another when we go to an election. As a matter of fact, one of my people went to an election, and found that one of the people running there was their accountant, and they excused themselves, walked out, and turned the election over to another supervisor.

So we're very, very strict about that.

HILLEARY: When you say "associated with," now, you know, the popular phrase "show me the money," and I would assume that you would -- would you define "associated with," if say the incumbent administration in a union gave money to an association with which one of your employees or their spouse was a member or was somehow part of that organization? Does it include that?

SCHWARTZ: Frankly, I don't have that problem, because we don't give money to anybody.

HILLEARY: No, I'm saying that if you were in charge of an election and the incumbent administration in the union gave money to one of your employees or one of their associations that they were part of, or some member of their family, would that be included as a conflict of interest, based on the rules that you use?

SCHWARTZ: Yes, it would. It certainly would.

HILLEARY: OK.

NORWOOD: You're doing it right.

HILLEARY: That's all the questions I have, Mister Chairman.

HOEKSTRA: Mr. Scott?

SCOTT: Just a brief question.

Mr. Schwartz, you indicated that the cost of the -- your services in an election are a dollar to five dollars per member. That's just, as I understand it, the ballot operation, and it does not include supervising campaign financing?

SCHWARTZ: No. I believe my answer was what our parameters are. That's not an answer as to whether this election should have been, as somebody said, $6 million or $9 million. That...

SCOTT: But your services would not include supervising the convention that precedes the mailing of the ballots?

SCHWARTZ: No. I don't know what preceded. That's why I say I can't give an answer on this one.

SCOTT: And your services would not include the adjudication process of hearings for all of the protests that there might be?

SCHWARTZ: No. Our process includes the adjudication of all the protests. Our process includes that we go before the Labor Department and we go before the courts...

SCOTT: But the...

SCHWARTZ: ... if it gets that far.

SCOTT: But the protests you would hear would be on just the ballot process, not on violence and intimidation and complaints of that nature outside of the ballot process?

SCHWARTZ: No.

SCOTT: OK.

I just pointed that out because when you -- when we want to compare apples and apples, when you said a dollar to five dollars per member, and we're looking at five, six, seven, eight dollars per member, that -- we're comparing totally different things.

Thank you, Mister Chairman.

HOEKSTRA: Any additional questions?

Mr. Norwood.

NORWOOD: Mister Chairman, I guess I would just simply comment that still leaves us about $40 per ballot, just to handle protests.

HOEKSTRA: The -- I think there were actually -- you know, it was approximately $20 million, and I don't know if your costs are for the number of ballots that are actually counted, or for the number of ballots that are actually mailed out.

SCHWARTZ: No, it's for the entire process. It -- it takes in -- it comprises everything that we see we have to do in that election.

HOEKSTRA: OK.

SCHWARTZ: We know that we're going to have an aftermath. We know that we may have to go to court. We know all of that. And it takes in all of that.

HOEKSTRA: Yes. So it's the cost per member for which in this case, for the Teamsters, was about 1.4 million members, although somewhere in the neighborhood of what? 450,000 actually just voted, and you know, and we -- in that process, there must have been about 900,000 members that did not vote, but there were -- would still be costs associated with those members for the initial mailing of the ballots and those types of things, correct?

SCHWARTZ: We do -- we do the printing. We do the mailing. We do the postage. We do every phase of the election when we go in to do an election. Matter of fact, yesterday we did a Teamster election.

HOEKSTRA: OK.

Any additional questions?

Mr. Scott.

SCOTT: All of the phases of the actual balloting, but the conduct of the election, which would include campaign-financing, and all of the allegations that we have heard about violence in the local union and intimidation or on solicitation of funds, would not be part of your purview. Yours would be just strictly the balloting process.

SCHWARTZ: Oh, that's our purview.

SCOTT: That's right.

SCHWARTZ: To see that the election is done honestly and properly is our purview.

SCOTT: No further questions. Thank you, Mister Chairman.

HOEKSTRA: No further questions. I have no additional comments.

Mr. Schwartz, thank you very much for being here and helping wrap up a full day, or actually a full two days of hearings and, you know, knock on wood, I hope your 400 streak of successes with no overturned elections continues.

Strictly speaking, from a taxpayer representative, we've now run one, with taxpayer expense, and it's being rerun, and it cost $20 million, and so we're going at it again, and maybe we'll get the second one right.

But thank you very much for being here.

SCHWARTZ: I would just like to say in closing that it takes a few elections in order to have them under your belt and know what you're doing.

HOEKSTRA: Yes.

SCHWARTZ: And to start and do it right away.

HOEKSTRA: But we also believe we've got the knowledge in the Labor Department to perhaps help us do that, correct? Or at least that's been your experience.

SCHWARTZ: Thank you very much for giving me the opportunity, and I hope I've helped you.

HOEKSTRA: Good.

Thank you.

The subcommittee will be adjourned.

END

NOTES:
Unknown - Indicates Speaker Unkown
Inaudible - Could not make out what was being said.
off mike - Indicates could not make out what was being said.

LANGUAGE: ENGLISH

PERSON: PATSY T MINK (69%); VAN HILLEARY (57%); HARRIS W FAWELL (56%); JOE SCARBOROUGH (56%); CASS BALLENGER (56%); HAROLD E FORD (54%); PATTY MURRAY (53%);

LOAD-DATE: October 18, 1997

	Source:	All Sources : / . . . / : FDCH Political Transcripts
	Terms:	(LEXIS-NEXIS Provided Search)
	View:	Full
	Date/Time:	Wednesday, November 1, 2000 - 11:54 AM EST

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