Link to Teamsters Inquiry Forces Advocacy Group to Cut Back

By STEVEN GREENHOUSE
New York Times
October 30, 1997

Citizen Action, the liberal grassroots group that was a powerful voice in last year's congressional elections, has been forced to dismiss its 20-member national staff because many large contributors have stopped donating as a result of accusations that the group was involved in illegal fund raising by the teamsters.

Leaders of Citizen Action fear that their move will weaken the group's voice in Washington and in national politics, but they insist that the group will remain active in 24 state organizations that campaign at the local level on numerous issues including toxic waste and campaign finance reform.

"While the U.S. attorney's investigation continues into last year's teamsters' elections, we are unable to raise enough money to maintain our national staff," Hetty Rosenstein, chairwoman of Citizen Action's national board, said, referring to the grand jury inquiry.

Citizen Action's move could prove a blow to the Democrats because it raises questions over whether the group will be able to finance a 1998 effort like the $7 million education and get-out-the-vote drive it undertook in last year's elections. That drive, called Campaign for a Responsible Congress, was created largely to defeat Republican candidates.

Indeed, on the liberal side of the political spectrum Wednesday, there was a deep sense of loss at the decision to disband Citizen Action's national operation, which many saw as an effective counterweight to the conservative drift in the nation and in Washington. Working closely with Citizen Action's affiliates, the national office fought efforts by the Republican-controlled Congress to weaken environmental legislation and to cut projected increases in Medicare and Medicaid spending.

"The whole thing is so effective and professional that it's a terrible loss to see the national operation close down, even though the state organizations are going great guns," said Ken Cook, president of the Environmental Working Group. That research group, which is based in Washington, has worked closely with Citizen Action to win tougher laws on pesticides, contaminants in drinking water and hazardous waste.

Citizen Action board members acknowledged that the group's fund-raising efforts have stumbled badly since the federal overseer of the teamsters' election found that advisers to the union's president, Ron Carey, created an illegal contribution scheme, in which the union gave $475,000 to Citizen Action. In return, the election overseer found, Citizen Action and some of its donors gave more than $100,000 to a direct-mail firm that worked for the Carey campaign.

In August, the federal election overseer, Barbara Zack Quindel, overturned Carey's victory because of the improper fund raising. Three of Carey's advisers pleaded guilty in September to participating in an illegal fund-raising conspiracy that they said included a contribution scheme with Citizen Action.

Federal prosecutors are also investigating whether the teamsters contributed money to the Democratic Party and Democratic donors, in return, were to give money to the Carey campaign.

Last year, the budget for Citizen Action's national operation was $2.3 million. The group's officials said that contributions were hundreds of thousands of dollars below expectations this year.

"The situation has been very difficult for us," Ms. Rosenstein said. "We've been under a cloud for months now.

"We've been really constrained because we've received legal advice not to respond to press reports so we haven't been able to tell our side of things. That makes it impossible to raise money."

Ms. Rosenstein and other board members said they were convinced of the innocence of Ira Arlook, the group's national executive director, and of Rochelle Davis, a senior official involved in the group's fund raising.

Arlook and Ms. Davis are cooperating with prosecutors, said Mark MacDougall, their attorney. MacDougall said in a statement that neither "knowingly participated in any financial transactions with the knowledge that funds drawn from the teamsters' union treasury were to be fraudulently diverted to the Carey re-election effort."

Several board members said that they hoped that when the investigation ended, donations would pick up and the organization would be able to hire a new national staff.

Last year, Citizen Action's political efforts, spearheaded by the national office, threw many congressional Republicans on the defensive by attacking their records on the environment and other issues, by having the group's hundreds of canvassers carry that message to voters and by having advertising broadcast and voter guides distributed that cast Republicans in an unfavorable light.

"In 1996, they were hugely effective," said Robert Borosage, co-director of Campaign for America's Future, a progressive advocacy group. "They had moved to a new stage, so it's certainly a setback at the national level, although at the state level they will keep going."

Brad Lint, executive director of the Iowa Citizen Action Network and a member of the national executive committee, said the 24 state organizations would continue operating as before, focusing on issues like raising the minimum wage and the reluctance of many banks to provide mortgages in poor neighborhoods.

Lint said that without the national staff, the affiliates would try to decide how and when to re-establish a national voice.

"This means we have to have some conversations about building back our national presence and the connective tissue," he said. "The national staff is the connective tissue, and the muscle has always been the state organizations."

Citizen Action officials estimate that they have 2 million members nationwide and that the state organizations employ more than 400 full-time workers. Most of them to go door to door, giving out literature and asking for donations.

The national staff lobbied on Capitol Hill, coordinated political efforts, helped affiliates do research and helped train organizers.

"I don't know if we'll have a lobbyist on Capitol Hill tomorrow or next week, but we'll have one again some day," said Phyllis Salowe-Kaye, executive director of Citizen Action in New Jersey. "What's never been taken away is our voice, and we have to figure out what mechanism to use to make it heard."

Copyright 1997 The New York Times.