Hoffa Can Remain in Race for Teamsters
Presidency, Federal Monitor Rules
By STEVEN GREENHOUSE
April 28, 1998
NEW YORK -- Clearing the way for another struggle
for control of the Teamsters, a federal monitor ruled on Monday that
James P. Hoffa could remain in the race for the union's presidency.
However, he also found that Hoffa had engaged in some improprieties during the 1996 union
election.
The decision clarifies the roiled picture in this year's Teamsters
race. It appears now that it will be a face-off between Hoffa, widely considered the
front-runner, and Ken Hall, a high-level Teamsters official who played a pivotal role in
last year's successful strike against the United Parcel Service.
The union experienced another jolt on Monday when
a federal grand jury in Manhattan indicted William Hamilton, the union's
former director of government affairs, charging him with helping siphon union funds into
the campaign of Ron Carey, the embattled president now on a leave of absence. Hamilton's
lawyer, Robert Gage, asserted that his client was innocent.
After months of internal jockeying, the faction of the union once
dominated by Carey, the self-styled reformer under investigation for his role in the
embezzlement scheme, has largely lined up behind Hall. But by accusing Hoffa of
improprieties, including giving false testimony, Michael Cherkasky, the federal election
monitor, seems to have stripped both sides of the ability to run as
untainted reform candidates.
The stage is now set for another campaign in
which Hoffa will pledge to restore the union to the swaggering days when his famed father,
James R. Hoffa, was its president, while Hall will try to capitalize on Carey's successes,
most notably the UPS strike.
Cherkasky said that James P. Hoffa was responsible for failing to
report $44,000 in campaign contributions and had not testified truthfully about receiving
a $1,000 contribution from a former Teamsters president, William McCarthy.
Explaining that he was loath to disqualify candidates because it
would limit union members' right to choose, Cherkasky said in an
interview that while "there were serious violations, they were not sufficient in this
context to disqualify Mr. Hoffa. Any disqualification is inherently anti-democratic."
But Cherkasky found serious violations by several key Hoffa aides
and supporters. He barred Hoffa's chief spokesman, Richard Leebove, from working in this
year's Teamsters' campaign, finding that he vastly underbilled the Hoffa campaign and thereby made $167,675 in improper campaign contributions. Cherkasky also
barred one of Hoffa's running-mates, Mary Lou Salmeron, from running again, finding that
she had coerced the staff of her union local to make campaign contributions.
His investigation also unearthed evidence that could lead to the
expulsion of two prominent Hoffa supporters from the International Brotherhood of
Teamsters, a 1.4 million-member union representing truck drivers, warehouse workers,
flight attendants and other workers.
Cherkasky fined the Hoffa campaign $30,910 for
improperly receiving donated services from his press spokesman and for failing to itemize
more than $50,000 in contributions -- out of some $3.6 million collected by Hoffa and his
support groups.
"We certainly feel vindicated," Hoffa
said in a telephone interview. "As we said all along, our campaign was basically run
properly. We intend to pay the fines and move on with the campaign."
Cherkasky released his report after another court-appointed
monitor had barred Carey from running again, finding that he had
cooperated in an illegal scheme to siphon more than $750,000 in union money into Carey's
campaign coffers.
After that scheme was uncovered, federal monitors ordered a new
election and overturned Carey's narrow 1996 victory over Hoffa.
In the best news for Hoffa, Cherkasky cleared him and his camp of
the main charge against it, that it had failed to detail the source of $2 million in
campaign contributions. The Hoffa camp insisted that those contributions came in sums of
$100 or less and thus did not have to be reported, while his opponents
insisted that much of that money came in large contributions, which have to be reported,
or came from employers, who are barred from contributions to union candidates.
In a statement, Hoffa said, "This investigation found that I
am an honest man who ran an honest campaign."
While the Hoffa and Hall camps both insist their candidates are
clean, the recent rulings by federal monitors have left each side accusing the other of
being sullied. Hoffa's supporters say Hall cannot claim to be Mr. Clean because they say he was a protege of the disgraced Carey.
Carey appointed Hall to be director of the union's 200,000 member
small-package division, and in that role Hall, a 41 year-old West Virginian, was Carey's
right-hand man throughout the strike last August by 185,000 UPS workers.
For his part, Hall called on Hoffa Monday to
pull out of the race.
"In the interest of restoring integrity to
the union, Hoffa should withdraw," Hall said in a telephone interview. "First of
all, among these findings, Hoffa lied to the election officer. Secondly, he accepted
$167,000 in illegal contributions."
During the five-month investigation, Cherkasky and his staff
audited the Hoffa campaign, subpoenaed information from campaign vendors and interviewed
hundreds of witnesses. He concluded that it was credible for the Hoffa campaign to have raised $2 million in sums of $100 or less after he examined hundreds of
check stubs, scrutinized bank accounts, and looked into the sale of tens of thousands of
Hoffa hats and T-shirtsto supporters.
"In sum, the Election Officer finds credible evidence that at
least a substantial majority of the over $2 million in un-itemized contributions made to
the Hoffa Slate Campaigns came from lawful sources," his report said. "While a
significant dollar amount of contributions could not be traced and, therefore, could
potentially have come from improper sources, there is no evidence of such improper
contributions."
Cherkasky examined allegations that the leaders of a large
Teamsters local in Michigan gave each of 14 officials a $2,500 raise and
a large Christmas bonus that the officials were said to have contributed to the Hoffa
campaign. Cherkasky found that the money did not go to Hoffa, but instead went to the
re-election campaign of Larry Brennan, the local's principal officer.
Brennan, widely seen as Hoffa's chief mentor, had given Hoffa a
job as an administrative assistant at the Teamsters' Michigan Joint Council, which Brennan
heads.
Cherkasky said the pay raise, together with
turning the money to a top Brennan fundraiser, Carlo Scalf -- also a
major figure in the Hoffa campaign -- was "disturbing." Cherkasky said he would
turn the evidence over to the Independent Review Board, a three-person court-appointed
board that oversees the Teamsters to determine whether Brennan and Scalf should be
expelled.
Several times in his decision, Cherkasky asserted that Hoffa was
less than candid in his sworn testimony to the federal election officer. Discussing the
failure to report the $1,000 contribution by McCarthy, the former Teamsters president,
Cherkasky wrote: "Mr. Hoffa's testimony on the preparation of" his
campaign-finance statements, "and the omission of the McCarthy
contribution was not complete or accurate."
The report found that the Hoffa campaign had sought to hide that
Kevin Currie, the director of its New York operation, was a felon convicted of grand
larceny by having the campaign write paychecks in his wife's name. The report found that
the Hoffa camp violated campaign expenditure and reporting rules by paying $20,184.75 to
Currie's wife.
In the indictment handed up on Monday, the federal grand jury in
Manhattan accused Hamilton, the union's former director of government affairs, of six
counts: conspiracy, embezzling union funds, mail
fraud, wire fraud, perjury in connection with grand jury testimony and making false
statements to the election officer. Three Carey campaign aides have already pleaded guilty
to conspiracy charges.
According to the indictment, Hamilton approved more than $750,000
in payments to Citizen Action and other liberal groups in an effort to get out the vote to
help the Democrats recapture Congress in the 1996 campaign. As part of an embezzlement
scheme, the indictment charged, contributors to those groups were then supposed to give
money to Carey's campaign.
The indictment also accused Hamiltion of approving contributions to the Democratic Party as part of an effort to
have Democratic donors give to the Carey campaign.
Robert Gage, Hamilton's attorney, said, "Bill is innocent of
all charges, and we look forward to our day in court."
In the past, Hamilton has asserted that he did not knowingly do
anything illegal and that the contributions advanced the Teamsters' goal to help restore
Democrats to control of Congress.
On each of the six counts, Hamilton faces a maximum of five years
in prison and a fine of of $250,000.
Copyright 1998 The New York Times Company