The Ron Carey Campaign 
Investigations 

Panel Charges Teamsters Leader

By Frank Swoboda
Washington Post Staff Writer
Wednesday, November 26, 1997;
Page A01

A government-appointed panel yesterday took the first step toward removing Ron Carey as president of the 1.4 million-member union for his alleged involvement in the spreading financial scandal surrounding his reelection campaign last year.

The Independent Review Board, which has the power to remove Carey from office, released its findings just hours after he announced he would temporarily step aside as union president to fight an earlier government decision disqualifying him from running in a special rerun election against rival James P. Hoffa.

The IRB action is the biggest blow so far to Carey's embattled presidency, leaving the onetime champion of the Teamsters's reform effort facing the possibility of being banned from the union to which he has dedicated his entire working life.

Federal officials recently threw out Carey's narrow 1996 victory over Hoffa and ordered a new election after concluding that Carey's campaign was illegally financed.

Carey also is under investigation by a federal grand jury in New York City. Three top Carey campaign operatives have pleaded guilty to criminal charges that they conspired to divert money from the union's general treasury to his campaign.

Yesterday's events move the nation's second-largest union closer to again becoming a ward of the federal government, which has worked for nearly a decade to rid the Teamsters of corruption. With Carey gone, and the union's political leadership in turmoil, the government finds itself having to place monitors inside the union to oversee its day-to-day operations.

Efforts to reach Carey's attorney, Reid Weingarten, for comment on the IRB action yesterday were unsuccessful. Earlier in the day, before the IRB announcement, Weingarten said Carey was taking leave because he was "placing the interests of the union and the reform movement above his own. And he expects to be fully vindicated when he finally gets his day in court."

The three-member review board, which includes former FBI director William H. Webster, accused Carey of participating in a scheme to funnel money from the union's general treasury to his reelection campaign. The board concluded that he authorized $735,000 in Teamsters contributions last year to three outside political action groups -- Citizen Action, Project Vote and the National Council of Senior Citizens -- "knowing the contributions would result in a personal benefit to you in money to pay expenses for your reelection campaign." Carey has denied any wrongdoing in connection with the scheme.

The board's complaint now goes to the union's general executive board for action. The executive board can issue its own ruling or refer it back to the IRB. If the IRB does not like the way the union resolves the case, it can take it back and issue its own ruling.

Teamsters spokeswoman Nancy Coleman said the union would not have an immediate response. The general executive board has seven days to respond. Carey has a right to contest the IRB findings.

The complaint essentially tracks the findings of Kenneth Conboy, a special elections officer who last week disqualified Carey from seeking reelection.

The review board action came less than 24 hours after the Justice Department appointed a special independent auditor to oversee the day-to-day spending by the union and to examine all the union's finances.

The Teamsters have been operating under government supervision since 1989, when the union signed a consent decree giving the Justice Department oversight of its operations. The agreement settled the government's civil racketeering suit accusing the union of being a wholly owned subsidiary of organized crime. Carey was first elected president in 1991 as a reform candidate under election rules set down by the government.

In its 41-page complaint, the IRB said that it did not believe Carey's statements that he had no memory of approving any of the money used in the campaign swap schemes.

The IRB said that in one four-week period last year Carey approved $1.5 million in union financial transactions. "His claim one year later that he has no memory of the actual approval of any of these appears to be incredible given their unprecedented size and their relation to the federal election, a special event. Carey's lack of memory is less believable because he admitted it was rare that he would personally approve expenses so these were not routine events in a blizzard of approvals."

The review board said that as president of the union Carey violated his "fiduciary obligations to the members in his stewardship over the union's money." The board said the fact that Carey failed to inquire about a number of the financial transactions in question "supports an inference that he deliberately closed his eyes and thus had knowledge."

Earlier in the day, the union announced that Carey would be taking a temporary unpaid leave of absence while he fought the disqualification ruling. Under the union's constitution, Secretary-Treasurer Tom Sever will take over the duties of the general president's office while continuing to serve as secretary-treasurer. No other leadership changes were necessary as a result of Carey's action.

Carey also will step aside as president of Local 804 in New York City, a post he continued to hold after his election as general president in 1991.

Federal authorities also are investigating allegations by the Carey camp that the Hoffa campaign violated election rules. The new election for Teamsters president has been postponed until at least May 1, while the Hoffa investigation is underway.