Carey Aides Contend Teamster Boss Knew About Donation Scam

Aides to Ron Carey, president of the Teamsters union, have told government prosecutors and a federal election overseer that he had general knowledge of a fraudulent scheme in which union money was donated to several liberal groups that, in exchange, had their donors contribute to his re-election campaign last year, officials involved in the investigation say.

The accounts of the Carey aides contradict the Teamster leader’s strongly worded assertion at the AFL-CIO’s national convention this week that he had known nothing of the scheme and that campaign aides had betrayed him and the union.

Last week Carey’s campaign manager and two campaign consultants pleaded guilty to fraud and conspiracy in fund raising for his re-election. They said they had decided to cut corners in seeking money for the campaign because they believed in Carey as a union leader and corruption fighter and because he had been trailing his opponent, James Hoffa, both in fund raising and in polls among members of the International Brotherhood of Teamsters.

The guilty pleas followed by a month the finding of the federal election overseer, Barbara Zack Quindel, that at least $220,000 had been circuitously funneled from the Teamsters treasury into the Carey campaign.

Quindel overturned Carey’s narrow victory of last December over Hoffa and ordered a new election. She declined to disqualify Carey from running in that election, saying she did not have evidence that he known of the scheme, but has since said he will be barred from running if federal officials find that he was a participant.

That question is now being investigated by the office of the U.S. attorney in Manhattan.

Under federal law, the campaign of a union candidate is to be totally separate from the union’s activities. In addition, federal law bars union money from being used to advance the candidacy of a union official.

Asked whether Carey had known even generally of the scheme, his lawyer, Reid Weingarten, said Friday:

“I don’t think it’s true,” he said. “Quindel expressly said she had no knowledge of his wrongdoing, and we have been told expressly by the U.S. attorney’s office that he’s not a target.”

Although officials said some Carey aides have now told them that the president was generally aware of the fraud, many details of the witnesses’ accounts could not be learned. Without strong evidence to support those witnesses, the case could evolve simply into a matter of their word against his.

Herb Hadad, the spokesman for the U.S. attorney’s office, declined to comment on what Carey’s aides had told the prosecutors.

Carey asserted that Hoffa had the backing of organized crime figures who he said would loot the union, as mobsters did in decades past. “There’s no question, there’s a back-at-the-cookie-jar mentality,” he said.

Hoffa spokesman Richard Leebove noted that Quindel had looked into some of Carey’s accusations and had dismissed them because the Carey camp was relying on circumstantial evidence.

Carey ridiculed Hoffa’s campaign finance filings, which stated that he had received $1.8 million in contributions but did not list the sources. The Hoffa camp said the donations had come in sums of less than $100, which do not have to be reported, but Carey suggested that some of that money must have come in larger sums and that the donors should have been identified. Carey also questioned how it was possible that only a handful of the members of several of the Teamster locals most closely identified with Hoffa were listed as donors.

Carey also accused federal prosecutors and Quindel of doing little to uncover what he called violations by Hoffa.

“If you want to have a fair election, you’ve got to investigate him as well,” said Carey, who criticized Quindel for declining to do a full investigation of Hoffa on the ground that whatever fund-raising violations his campaign had committed were immaterial because he had lost the election.

Carey said he had met only five times with Martin Davis, the consultant behind the fund-raising scheme. He also said he had rarely met with William Hamilton, the Teamsters’ political director, who oversaw the union’s contributions to Citizen Action and the Democratic Party and who, officials say, is under investigation. Carey said the only campaign aide he had consulted frequently was Jere Nash, his campaign manager, who is one of those indicted.

Leebove did not find Carey’s account credible. “We now know his secretary, his scheduler, his bodyguard, his political director, his campaign manager, his campaign consultant all knew about the fund-raising conspiracy of which Ron Carey was the beneficiary,” Leebove said. “But he says he didn’t know about it. It boggles the mind.”