By Frank Swoboda and Brian Duffy
Washington Post Staff Writers
Wednesday, April 2 1997; Page C10 The Washington
Post
A federal grand jury in New York is investigating
whether Teamsters President Ron Carey received illegal campaign kickbacks
and employer contributions in last year's bitterly contested election against
James P. Hoffa for control of the 1.4 million-member union, sources confirmed
yesterday.
At the same time, Barbara Zack Quindel, the federal
official charged with overseeing the election, has yet to certify Carey's
victory, pending the outcome of her own investigation of the allegations.
Quindel has the power to order a rerun of the election. Sources said yesterday
they did not expect Quindel to issue a ruling until after the grand jury
completed its investigation.
The Carey campaign, meanwhile, said it has returned
more than $200,000 in campaign contributions that opponents allege were
illegal.
Nathaniel Charney, general counsel to the Carey
campaign, abruptly resigned from his New York law firm last month. Bruce
Simon, senior partner in the firm Simon Cohen & Weiss, confirmed Charney's
resignation. He said, however, that "in view of the circumstances I think
any further comment would be inappropriate."
The investigations threaten to undermine the biggest
union reform effort in U.S. government history, a 40-year legal effort
that resulted in Carey's stunning 1991 victory in federally supervised
elections.
A Teamsters spokeswoman yesterday would not comment
on the investigations except to repeat an earlier statement by Carey that
matters were being investigated by the appropriate authorities and the
union was cooperating with those authorities.
The Teamsters are operating under federal court
supervision as the result of a 1989 consent decree the union signed with
the Justice Department. The decree settled a civil racketeering suit in
which the government accused the Teamsters of being a wholly owned subsidiary
of organized crime.
Carey ran as a reform candidate against the union's
old guard leadership five years ago and has since won praise from both
the government and others outside the Teamsters for helping clean up the
union. Three of the six Teamster presidents who served before Carey's 1991
election were jailed for corruption, and a fourth died while under indictment.
Carey, members of his election slate and several
officials of his reelection campaign have been accused by the Hoffa campaign
of receiving illegal employer contributions to help pay for a critical
mass mailing last November, just before ballots were mailed to the union
membership.
The Hoffa campaign points to a $95,000 contribution
to the Carey campaign by Barbara Arnold. Arnold is the wife of Michael
Ansara, owner of the Share Group, a Boston telemarketing company that worked
both for the Carey campaign and the Teamsters' political operation in last
year's federal elections.
In late October, Arnold gave the Carey campaign
a $45,000 contribution. The contribution was made just a few days after
the Teamsters made a $48,687 payment to the Share Group. In late November,
Arnold made a $50,000 donation to the Carey campaign just days after the
Teamsters paid the company more than $48,000.
Federal law prohibits unions from accepting money
from employers in an election campaign, to prevent employers from trying
to influence the union leadership.
In its complaint to Quindel, the Hoffa campaign
noted that under the election rules, contributions from the spouse of an
employer "will be deemed contributions received from such employer or employer
representative." The Hoffa campaign said the Arnold contributions were
particularly important because they came so late in the campaign.
Arnold's lawyer, William Cudinha of Boston, referred
all inquiries yesterday to publicist Larry Rosky, who also serves as a
spokesman for the Share Group.
Rosky said yesterday he could not comment on any
aspects of the investigations, but he did say, "We're fully confident that
when facts come in, all [of Arnold's and Share's] actions will be seen
as totally within bounds." Rosky said Share has had a long relationship
with the Teamsters and a variety of unions and progressive causes and was
the nation's only unionized telemarketing firm. He said the firm also did
work for Carey during his first campaign.
Sources close to the Teamsters said that one of
the problems in trying to connect the Teamsters' payments to the timing
of Arnold's contributions to Carey was that the Teamsters also were making
payments to the company for work in the general elections.
Hoffa's supporters are having none of that. Tom
Pazzi, Hoffa's campaign manager, calls it a simple "misuse of union funds."
Other Hoffa campaign officials claim the return of $200,000 in contributions,
including Arnold's money, was an admission the payments were illegal.
@CAPTION: A federal grand jury is investigating
campaign contributions to Teamsters President Ron Carey.
© Copyright 1997 The Washington Post Company