Missing link in Teamsters scheme?

By Bill Sammon
THE WASHINGTON TIMES
November 21, 1997

The FBI and the Senate Governmental Affairs Committee are investigating a group they believe may be the missing link in an illegal money-laundering scheme between the re-election campaigns of President Clinton and Teamsters President Ron Carey.

The group, known as Teamsters for a Democratic Union, was asked by Senate investigators Wednesday to turn over documents on campaign contributions, according to sources close to the probe. FBI agents in a federal grand jury probe of the Teamsters have also begun inquiries in recent days, The Washington Times has learned.

The TDU link is important to investigators because it would shatter the defense that Democrats have invoked for months -- that they never went through with the scheme to funnel funds into the Carey campaign. Authorities now suspect the Democrats funneled the money to TDU, which passed it along to the Carey campaign.

Carey rival James P. Hoffa was quick to pounce on this new line of inquiry in the widening Teamsters scandal. On Wednesday, Hoffa lawyer Bradley T. Raymond asked U.S. Attorney Mary Jo White, who is heading up the grand jury probe in New York, to "immediately investigate allegations that contributors to the Democratic National Committee ... and/or the Clinton-Gore campaign have participated in an illegal contribution scheme with the Teamsters for a Democratic Union."

The scheme was hatched by Carey campaign consultant Martin Davis, who has since pleaded guilty to conspiracy, wire fraud and embezzlement of union funds. Davis promised Terence McAuliffe, President Clinton's top fund-raiser, that the Teamsters would spend unprecedented sums to elect Democrats if the Clinton-Gore campaign or DNC would convince its wealthy donors to contribute to the Carey campaign.

Mr. McAuliffe referred the matter to a subordinate, Laura Hartigan, who shopped the idea to DNC Finance Chairman Richard Sullivan. Mr. Sullivan directed a subordinate, Mark Thomann, to find a wealthy donor for the Carey campaign. Mr. Thomann convinced donor Judith Vazquez to make a large contribution to the Carey campaign. Mrs. Vazquez had originally wanted to give her money to the Clinton campaign but was barred by law from doing so because she was a foreigner.

In the end, the Carey campaign also refused Mrs. Vazquez's contribution because she was an employer and, as such, was barred by election rules from giving to a Teamsters candidate.

Democrats have argued that since the Vazquez money was rejected by the Carey campaign, no harm was done. But now investigators believe the Democrats may have convinced its donors to give to TDU, an independent group of union members that has long supported Mr. Carey. "According to our information, DNC donor Gail Zappa, and perhaps other contributors to the DNC, have made large contributions to TDU," Mr. Raymond wrote. DNC spokesman Steve Langdon said: "We know of no basis for whatever allegation is being made about alleged contributions by Democratic donors to TDU."

Peter O'Toole, a spokesman for the Clinton-Gore campaign, said: "We do not know anything about it, and the specific allegations don't seem to pertain to Clinton-Gore anyhow."

In August, former election officer Barbara Zack Quindel ruled that TDU "raised and spent approximately $458,000 on campaign activities" for Mr. Carey last year. "This is a huge sum of money for an organization that, according to 1991 Election Officer Michael Holland, had less than 4,000 members," Mr. Raymond wrote this week. Mr. Raymond also said Mrs. Quindel, the only investigator who has seen TDU's financial records, may not have been aggressive in pursuing possible improprieties by the group. That is because Mrs. Quindel is a member of the New Party, a small political organization that counts among its national leaders Sandra Pope, who is also a leader of TDU, Mr. Raymond said.

"Mrs. Pope's simultaneous involvement with the New Party and TDU suggests the possibility, if not likelihood, that there was yet another 'contribution swap' scheme between the IBT, the New Party and TDU," Mr. Raymond wrote. In September, Mrs. Quindel abruptly resigned her position because of possible conflicts of interest involving the New Party. She said Davis confessed to her that he had shopped the money laundering scheme to a New Party leader in Wisconsin, where Mrs. Quindel lives.

"Given her ties to the New Party we have no confidence that prior to her resignation and recusal she has taken the necessary and/or appropriate steps to insure that TDU's funding has come from lawful sources," Mr. Raymond wrote. He also raised new allegations against the AFL-CIO in the Teamsters scandal.

"We also have reason to believe that certain officials of the AFL-CIO laundered illegal campaign funds to TDU that were later reported by TDU as proceed[s] from sales of literature or campaign paraphernalia at TDU's 1996 convention," Mr. Raymond wrote.

TDU officials were unavailable for comment last night because they were in Cleveland, preparing for their 1997 convention.

On Monday, a federal election overseer disqualified Mr. Carey from next year's Teamsters election because of widespread illegalities in the Carey campaign. An election officer has since asked that the election, scheduled for February, be delayed by 45 days so Mr. Carey can appeal and allegations against Mr. Hoffa can be investigated.