June 7, 1997, New York Times
By STEVEN GREENHOUSE

NEW YORK -- The federal government announced Friday that it was charging a campaign fund-raiser working for Ronald Carey, the teamsters' president, with mail fraud, asserting that the fund-raiser masterminded a scheme in which embezzled union money was contributed to Carey's re-election campaign in 1996.

The charges are expected to step up pressure on the federal election monitor to vacate the close election and order a new one. The charges, filed in Manhattan, accuse the fund-raiser, Martin Davis, who runs a direct-mail business, of scheming to have the teamsters union and other groups illegally funnel at least $95,000 to the Carey campaign. Federal prosecutors said Davis had acted in one instance with the knowledge and urging of the teamsters headquarters in Washington. Carey was elected in 1991 on a pledge to clean up one of the nation's most corrupt unions and was re-elected last December after a bitter campaign in which he asserted that his opponent, James P. Hoffa, son of the legendary teamsters president, had close ties to organized crime -- ties that were denied.

A spokesman for Carey said prosecutors did not cite any wrongdoing by Carey, adding that the teamsters president planned to take appropriate and decisive action to clean up any wrongdoing uncovered in the federal investigation.

According to a criminal complaint unsealed Friday, Davis arranged for the International Brotherhood of Teamsters to pay nearly $100,000 to a Boston-area telemarketing executive, who in turn asked his wife to contribute $95,000 to the Carey campaign.

The executive, Michael Ansara, has agreed to plead guilty to conspiracy and admitted that he used teamsters money and other improperly received money to reimburse his wife, Barbara Arnold, for her donations to a Carey group called Teamsters for a Corruption-Free Union.

Richard Leebove, a spokesman for Hoffa, said the charges demonstrated that Carey's victory was tainted and that Barbara Zack Quindel, the federal official overseeing the election, should order a new one. "This $95,000, which came in late in the campaign, was absolutely essential for winning the election for Mr. Carey," Leebove said. "There can no longer be any justification for delay by the election officer in overturning this election and removing Ron Carey from office." Carey won 52 percent of the vote to Hoffa's 48 percent.

Hoffa has asked Ms. Quindel to overturn the election because federal law bars union candidates from using any money from their union's treasury in their campaign. Federal law generally prohibits union candidates from receiving money from employers or their spouses, and the Hoffa forces say Ansara qualified as an employer because he heads a telemarketing company, the Share Group of Somerville, Mass.

Michael Belzer, a expert on the union and a researcher at the Cornell University School of Industrial and Labor Relations, said: "My suspicion is this fund raising was a rogue operation that fund-raisers sometimes do when things are not going well. It sounds out of character for Carey, who has spent his whole lifetime building this clean reputation."

The 1.4-million member union is one of the nation's largest and most politically potent unions and represents not only long-haul drivers but also warehouse workers, parcel delivers and police officers.

Federal officials said it remained unclear whether Ms. Quindel would overturn the election. Ms. Quindel said Ms. Arnold's $95,000 had helped finance a last-minute Carey mailing of more than 1 million pieces of campaign literature -- a mailing that the Hoffa camp said was instrumental to Carey's victory. The $95,000 represents about 5 percent of the $2 million that federal officials say the Carey forces spent in the campaign.

Asked whether the criminal charges would cause the election to be overturned, Jeff O'Mara, a spokesman for Ms. Quindel, said, "The election officer does not comment on pending protest investigations." Her investigation is separate and independent from that of the U.S. attorney's office in Manhattan, O'Mara said.

Davis, whose direct-mail business, the November Group, is based in Washington, surrendered to the federal authorities Friday and appeared at a brief arraignment in Manhattan before U.S. Magistrate Sharon Grubin.

Davis remained silent in court. His lawyer, David Schertler, said it was Davis' intention to plead not guilty. His maximum penalty would be five years in prison and a $250,000 fine.

Federal officials said they would now seek a formal grand jury indictment, although they said it was possible that David would instead agree to waive indictment and cooperate with the authorities.

John Bell, spokesman for the Carey campaign, said, "The complaint against Martin Davis, which remains allegations provided to a grand jury, does not cite any wrongdoing or knowledge of wrongdoing by IBT president Ron Carey."

Asked whether Carey knew of the fund-raising scheme, Matthew Witt, another spokesman, declined to go beyond the prepared statement.

Prosecutors said Ansara received $97,175 from the teamsters for a contract to make 149,500 get-out-the-vote phone calls for last November's congressional elections. But the complaint said Davis -- with the teamster headquarters' encouragement -- told Ansara "to lose some of the calls" and use the profits from the calls not made to reimburse his wife for her contributions.

FBI Special Agent Joseph Phelan said in the complaint that his investigation found that only 107,578 calls had been made.

In the charges filed Friday, prosecutors also said that at the urging of an individual not named as a defendant, an organization paid Ansara's company $75,000 last October for services that Ansara admitted were never performed. The complaint said that in or about November, Ansara asked his wife, who had already contributed $45,000 to the Carey campaign, to contribute an additional $50,000. She wrote a check for $50,000 on or about Nov. 27, which was sent to Carey's campaign lawyers in New York.

Federal prosecutors said Davis had arranged a fraudulent contract in which Ansara received $11,250 from a printing company for work never performed. The printing company owed $11,250 to Davis in commissions for business he helped the printer obtain.

Ansara told Phelan that he had used money from the teamsters, from the printing company and from the unknown organization to reimburse his wife.