IBT Racketeering Suit Against Carey Dismissed

The Int’l Bhd. of Teamsters $3 million RICO suit against its ex-boss Ron Carey for allegedly defrauding IBT to finance his 1996 re-election campaign was dismissed Oct. 1 by the U.S. Dist. Judge Laura T. Swain (S.D.N.Y., Clinton). IBT charged that Carey conspired with other individuals and groups to unlawfully swap union contributions to various liberal advocacy groups for reciprocal unlawful payments by those groups to Carey’s 1996 campaign. Swain found that IBT failed to present facts sufficient to prove the “existence of a pattern of racketeering activity” and dismissed the suit.

Other named defendants included ex-IBT political director and convicted union embezzler William W. Hamilton, plus Carey campaign consultants Martin Davis, Jere Nash, and Michael Ansara, who all have pled guilty for their roles in the scandal. Also named were Ansara’s wife, Barbara Arnold; fund-raiser Charles Blitz; the nonprofit advocacy group Citizen Action; and two of Citizen Actions officers, Ira Arlook and Rochelle Davis. The suit also named the law firm of Cohen, Weiss and Simon and its former associate Nathaniel Charny.  Noticeably absent were the AFL-CIO’s Richard L. Trumka and bosses from other union linked to scandal.

IBT sought recovery of some $885,000 from the defendants that it said was lost from the IBT treasury as the result of the illegal money-laundering scheme as well as some $2.2 million the union spent in the resulting rerun election.

Swain found that the evidence shows the predicate mail fraud activities all occurred between mid-Oct. and late Nov. 1996. Likewise, the wire fraud activities of the co-defendants occurred in a two-month period between Oct .and Dec. 1996. Further,  “There is nothing in the complaint to suggest that this illegal fundraising would have occurred absent the campaign,”  and there is nothing in “the complaint [to] support an inference that the crimes alleged would have continued after the election,” Swain said.Thus, according to Swain, IBT failed to show the “continued criminal activity” element of RICO.

IBT attorney, J. Bruce Maffeo of the New York firm of Seiff, Kretz & Maffeo, said Swain dismissed the suit on narrow grounds but left room for the IBT to amend its complaint. “That’s what we will do,” he said “We’re committed to pursuing this litigating until we have full recovery of all the money that was embezzled or was expended by the union” in the rerun election. Carey was represented in the litigation by attorney Judith B. Chomsky of Elkins Park, Pa. [BNA 10/4/01]