FBI Probing Payments to Carey Consultant

c The Associated Press
By KEVIN GALVIN
July 9, 1997

WASHINGTON (AP) - Opening a new avenue in the probe of Teamsters President Ron Carey's election campaign, the FBI is scrutinizing a New York souvenir maker's $94,000 payment to a political consultant, according to people familiar with the investigation.

Martin Davis, the consultant, is charged with funneling union money through a Massachusetts telemarketer to Carey's campaign. He was working for both the Teamsters union and Carey's campaign through his November Group consultancy.

Davis contracted Axis Enterprises Inc. to produce T-shirts and banners for union rallies leading up to the 1996 general elections, and Teamsters spokeswoman Nancy Stella confirmed Axis was paid about $250,000 last fall.

That payment apparently included $94,000 for Davis.

"Carey had no knowledge of any of this - if it happened. He certainly would not have condoned it,'' said Stella, who reiterated that the union was cooperating with investigators.

According to people who spoke only on condition of anonymity, when Davis received Axis' bill, he directed the firm's owner, Larry Cohen, to send the invoice to the Teamsters instead and to add on the fee for Davis' services.

"This thing is extremely well-papered,'' said one source. "There's a check, and when the check comes to Axis there's a check cut to Davis in the exact amount that Davis said was his fee to the Teamsters.''

It was unclear what the $94,000 was used for, but investigators have been trying to determine how Davis allegedly funneled improper funds to the Carey campaign.

"This is very close in time to the actual election,'' the source said. "It takes place in late August and early September, and the actual invoicing takes place in late September.''

Political campaigns sometimes have consultants pay third parties, such as private investigators, they don't want to list on disclosure forms. But having a subcontractor pay the consultant - and the size of Davis' fee for this particular job - seemed unusual.

Davis and his attorney, Dave Schertler, have refused to comment on the probe. On Monday, Davis agreed to postpone a court hearing in New York for one month.

Cohen declined comment through his attorney, Peter Sheridan. Neither Axis nor Cohen is considered a target of the probe.

A federal grand jury in New York is investigating whether Carey's slim victory over James P. Hoffa in December's union election was tainted. Under the rules of the contest - which was funded with $22 million in public money - candidates were barred from using union funds or accepting donations from anyone who was an employer.

The complaint against Davis was based on information provided by Michael Ansara, the owner of a telemarketing firm contracted by the Teamsters. Ansara agreed to plead guilty to conspiracy and is cooperating with the FBI.

In addition to the allegations against Davis, investigators are looking into whether the liberal consumer group Citizen Action paid Ansara $75,000, knowing that the funds would be passed along to Carey's campaign, sources familiar with the probe said.

The FBI also has received cooperation from a printing company that performed work for the campaign and Davis, whose primary business is direct mail.

According to the FBI, the printer sent two invoices for $11,250 to Ansara at Davis' instruction because of outstanding commissions he owed Davis.

Carey's campaign paid Delancey Printing Inc. of Alexandria, Va., more than $180,000 last year. Owner Merle Delancey declined comment.