Indiana Bosses Charged with $894,000 Diversion

A special panel of Int’l Bhd. of Teamsters officials will convene July 10 to review charges by IBT’s Independent Review Bd. that Indiana Teamsters Joint Council 69 bosses diverted members’ dues money to JC69 to fund additional personal benefits. IRB, in a May report, alleged that $894,865 in local per capita payments were made to JC69 in 1994-99. The money was allegedly paid solely as extra benefits for JC69 bosses. IRB recommended that IBT force JC69 to return the money and put it in trusteeship.

IRB’s 32-page report alleges that JC69 bosses devised the scam in 1994  after disgraced ex-IBT president Ron Carey abolished IBT’s area conferences (intermediary bodies between joint councils and IBT). JC69 officials arranged to divert an amount equivalent to the per capita payments that previously had gone to the Central Area Conf. to JC69, to be used as an extra severance and pension fund for JC69 bosses. Reportedly, this was in violation of IBT bylaws.

In Jan. 2000, JC69 became aware of IRB’s probe, and JC69 president Danny Barton sent a letter to IBT president James P. Hoffa requesting retroactive approval to 1994 of the per capita payments to JC69. Reportedly, Hoffa directed Barton to draft an appropriate amendment to the JC69’s bylaws for his signature. But, IRB charged that JC69 took the funds for over five years without appropriate authority: “[R]etroactive approval does not cure the violation.”

The far-left Teamsters for a Democratic Union, which zealously backed the corrupt Carey, criticized Hoffa for retroactively approving the per capita tax without questioning the funds’ purpose. TDU urged Hoffa to probe other IBT entities where similar hidden perk schemes may exist, suggesting that the Ohio Conf., the Ky.-W.Va. Conf., and the Mo.-Kan. Conf. might require scrutiny. TDU called on Hoffa to “abolish do-nothing Teamsters structures such as [JC69]” and return the funds to members. [BNA 6/30/00]

Detroit Bosses, Hoffa Pal, Accused of Embezzlement
IBT’s Independent Review Bd. publicly charged IBT Local 337 president, Lawrence Brennan, and his top officers June 19 with embezzling union funds for their own union election campaigns. Brennan is a close friend and ally of IBT president James P. Hoffa. The charges coupled with other recent setbacks are widely seen as major blows to Hoffa’s hopes end the Dep’t of Justice’s eleven-year supervision of the corrupt union.

IRB’s 37-page report also named secretary-treasurer Colonel W. Myers, vice-president Robert F. Holmes, Jr., recording secretary Frank Walker, trustee Richard Gremaud and ex-Trustee Charles Isom.  They allegedly voted themselves a pay raise and increased Christmas bonuses for the sole purpose of diverting the money into their reelection campaign. It totaled about $32,000.

IRB also sharply criticized Carlow Scalf, an ex-Local 337 official who handled the reelection money, with failing to keep and maintain proper financial records and even shredding documents after the election. While the board said Scalf’s explanations for not keeping records was “unpersuasive and misleading,” it did not charge him with wrongdoing. Scalf is now Hoffa’s executive assistant.

IRB’s charges will now be reviewed by IBT’s executive board for a recommendation of a penalty, if any. Given his ties to the local, Hoffa has recused himself from the hearing.

Brennan, who is also president of IBT Jt. Council 43, which oversees all of Mich.’s locals, has been Hoffa’s long-time supporter and confidant. When Hoffa first tried to run for IBT president in 1991, he could not because he had not worked as a Teamster. Brennan hired Hoffa, then a Detroit labor lawyer, as an assistant. When Hoffa was elected in 1998, he was Brennan’s administrative assistant. [BNA 6/20/00; Det. News 6/21/00]