Federal Report Describes Teamster Money Scheme

By STEPHEN LABATON
New York Times
August 23, 1997

WASHINGTON -- In the heat of the tight race for the leadership of the International Brotherhood of Teamsters last year, federal investigators say, two top advisers to Ron Carey's campaign came up with an unusual fund-raising plan.

With heavy restrictions limiting contributions -- a legacy of the effort to rid the Teamsters of corruption -- the two fund-raisers, Michael Ansara and Martin Davis, decided to focus on wealthy patrons of public-interest groups.

According to investigators, the pair would try to persuade the patrons to give to Carey's campaign, and in exchange would promise that the Teamsters would contribute to the patrons' public-interest groups.

To set their plan in motion, Ansara went to California, where he proposed the idea to Charles Blitz, an acquaintance involved in raising money for various political causes, including a consumer advocacy group, Citizen Action. After Blitz agreed to help with the plan, investigators say, he raised $110,000 for the Carey campaign, which he passed on through Ansara.

Investigators said the contributions ultimately found their way to Carey's campaign fund, which was named Teamsters for a Corruption Free Union. On behalf of Citizen Action, Blitz then requested and received a $475,000 contribution from the Teamsters.

The "contribution swap scheme" and other improper practices were described in a detailed report released Friday by a federal election monitor, who was assigned by a federal judge to supervise the election. The report did not find any evidence that Carey or other Teamster officials knew of the improper campaign practices, instead referring the entire matter to federal prosecutors in New York for further study.

The election monitor, Barbara Zack Quindel, concluded that through the swap scheme and other unlawful practices, the Carey advisers diverted money from the Teamsters to help the Carey campaign. Ms. Quindel found that the scheme provided a large amount of the improper contributions to Carey's campaign that ultimately undid his victory.

Investigators working for Ms. Quindel also found a raft of other unlawful campaign practices. For instance, they said, employers like Ansara, who are barred by the rules from making contributions, used their wives to launder donations.

But it was silent about another important aspect of the inquiry -- whether the Democratic National Committee also played a role in Carey's re-election. In recent weeks, federal prosecutors have been trying to determine whether the Carey campaign improperly sought to coordinate financial support for his candidacy with the Democratic committee, a major beneficiary of Teamster contributions.

Investigators have been particularly intrigued by a 1996 memorandum found at the Democratic committee. The memorandum, from a senior party finance official to Davis, outlines a plan by the Teamsters to donate $1 million to state Democratic parties. On a fax cover sheet, Davis linked those donations to an unspecified commitment by the Democratic committee.

Steve Langdon, a spokesman at the committee, said it "does not believe any commitment was made or plan implemented." Langdon said the committee's records did not show that the state donations from the Teamsters were made in the time period of the memorandum.

Earlier this month, a former senior finance official at the Democratic committee, Richard Sullivan, told federal investigators in New York that Davis had suggested that the party's assistance for Carey's campaign would encourage the Teamsters to contribute to the party, according to a person involved in the inquiry who spoke on condition of anonymity.

But, the person said, Sullivan told the investigators that the Democratic committee never acted on Davis' proposal.

Davis, a political consultant who worked at a Washington firm called the November Group Inc. was charged in June with one count of mail fraud in connection with the use of Teamster money to help fund a $95,000 contribution to the Carey campaign. Ansara, who is now said to be cooperating with investigators, has agreed to plead guilty to conspiracy.

Carey told investigators that he had "no recollection" of approving the Teamster payments to Citizen Action and other groups, but that he assumes he must have approved the payments because records suggest so, the election monitor reported.

"He further stated that at no time did he have any idea of the existence of schemes to funnel IBT or employer funds into the Carey campaign," the report said. "Nor did anyone ever suggest to him that contributions by the IBT Government Affairs Department to political organizations would translate into contributions from outsiders to his campaign."

Aside from the swap scheme, investigators found other instances of improper contributions. Ansara, for instance, was barred from making contributions, so he had his wife donate $95,000 to the Carey campaign. According to the report, Ansara and Davis then devised a scheme for Ansara's wife to be reimbursed through a series of improper payments from Citizen Action and Davis' company.