Feds Release Teamsters from Oversight, But Is Corruption Really Gone?

James Hoffa, Jr.This past January 14, the Justice Department and the International Brotherhood of Teamsters reached an agreement to end a quarter-century of federal oversight. Prosecutors believe a new era is overdue. "While threats persist, the organized crime influence the government found to have reached the highest echelons of IBT leadership in 1988 has long been expunged," announced Southern District of New York U.S. Attorney Preet Bharara. The deal, set for a hearing on February 11 before District Chief Judge Loretta Preska, phases in an autonomy plan over five years and institutes safeguards against corruption. Yet the sincerity of Teamsters General President James P. Hoffa's commitment to reform is open to question. The union, a favor factory for Hoffa and his allies, may become even more of one when full autonomy does arrive.

The settlement, spelled out in the U.S. Attorney's Office statement, calls for the union to appoint independent officers to investigate allegations of corruption, effectively replacing the current three-member Independent Review Board (IRB) for this function. The agreement also requires the union to maintain its federally-imposed election process in which all union members, and not just convention delegates, are eligible to vote for top IBT officers. Ken Paff, national organizer for a dissident union faction, Teamsters for a Democratic Majority, strongly supports this provision. "We're pleased because we have protected and even enhanced the supervised right to vote for all members," he said.

For a different set of reasons, President Hoffa also is celebrating. From the time he assumed office more than a decade and a half ago, he has worked every possible angle to end federal control. "When I took office in 1999, I pledged that we would run a clean union, that organized crime would never have a place in the Teamsters union," Hoffa declared following U.S. Attorney Bharara's announcement. "I also promised that we would ensure that every rank and file Teamster has a direct voice in electing the union's international officers. After 15 years, we have accomplished these goals." But this assertion may be airbrushing reality. For a decade or more, lawyer Edwin Stier, the former federal and New Jersey prosecutor who had supervised the union's internal cleanup until he and his staff abruptly resigned in 2004, Hoffa wasn't quite as clean as he had been claiming. Hoffa originally had brought Stier aboard on account of the latter's reputation as court-appointed trustee of northern New Jersey's notorious Teamsters Local 560, which for years was controlled by the Genovese crime family. Though the cleanup process wound up taking a dozen years, it proved successful.

Teamster leadership since the 1950s, if not earlier, had been shot through with corruption and violence. The Final Report of the President's Commission on Organized Crime, released in 1986, cited four unions – the Teamsters, the Laborers International Union of North America, the International Longshoremen's Association, and the Hotel Employees and Restaurant Employees – as the most egregious offenders in the world of organized labor. The Teamsters back in 1957 had been thrown out of the AFL-CIO for corruption. That was the year James P. Hoffa's father, Jimmy Hoffa, took over the union and ran it with his legendary iron fist until entering federal prison in 1967 following separate convictions a few years earlier for jury tampering and pension fraud. Released from prison in December 1971, Hoffa was eager to take back control of his union from his successor and caretaker, Frank Fitzsimmons. It was not to be. Hoffa "disappeared" permanently on July 30, 1975 from a Detroit-area restaurant where he, another union official and a reputed mobster presumably were meeting for lunch. Fitzsimmons, and his successors, Roy Williams and Jackie Presser, each were enmeshed in the criminal underworld. Williams, convicted of bribery in 1983, admitted he owed his job to the Kansas City Mafia. "I made no bones about it," he said. "I was controlled by Nick (i.e., Kansas City mobster Nick Civella), and I think everybody knew it." And Jackie Presser had risen to the top courtesy of the Cleveland mob, where his father, Bill Presser, had been a key associate.

The U.S. Attorney for the Southern District of Manhattan, Rudolph Giuliani, who several years later would be elected New York City mayor, initiated an investigation of the Teamsters under the Racketeer Influenced and Corrupt Organizations Act (RICO). The result was the filing in 1988 of a far-reaching civil suit against union leadership, a complaint that included 18 members of the IBT executive board and 26 alleged organized crime members, almost all of whom had been convicted of serious offenses. Prosecutors cited the union for "a pattern of racketeering that included 20 murders, a number of shootings, bombings, beatings and a campaign of fear." The union, recognizing that a trial could prove enormously embarrassing, signed an agreement in 1989 committing itself to federal supervision. Then-U.S. Attorney General Dick Thornburgh remarked that the settlement ended "30 years of efforts by the Justice Department to remove the influence of organized crime within the Teamsters union."

To enforce the arrangement, the union's court receiver created a three-member supervisory body, the Independent Review Board (IRB). Launched in 1992, the IRB consisted of one appointee each by the Teamsters and the U.S. Attorney for the Southern District of New York, plus a joint union-government appointee. The board was charged with investigating "any allegations of corruption" and "any allegations of domination and control or influence" by organized crime. It also was empowered to take appropriate disciplinary action against offenders, including expulsion from the union. For a while, the arrangement looked promising. The IRB kicked 90 or more individuals out of the Teamsters for being members or associates of crime syndicates. A 641-page report released in October 2002, commissioned by the union and supervised by the aforementioned Edwin Stier, concluded that intensive federal efforts had purged the IBT of most of its underworld element. The change, Stier stated at the time, was "absolutely dramatic." His reform program, formally known as Project RISE (Respect, Integrity, Strength and Ethics), also wrote a new code of conduct and enforcement for the union.

The report, however, also emphasized that the reform process was not finished. Hoffa and his loyalists thought it was. And this divergence of opinion would be the source of rapidly growing friction between Hoffa and Stier. After a year and a half of running into obstacles, Stier and his team of investigators and lawyers quit en masse on April 28, 2004. The following day Hoffa wrote a letter to Stier, calling the walkout a "personal publicity coup." Stier disputed this assessment. "I've been doing this for 40 years," he said. "I knew what the risks were. I tried to warn them. The same thing happened when I was in state government. It's fine when you're investigating other people, but as soon as you start investigating people who have political influence, you, as the prosecutor, become the bad guy." Hoffa, undaunted, hired a new oversight team led by New York-based litigator and former prosecutor Ed McDonald.

The new in-house cleanup crew was more accommodating to Teamster leadership, most of all, Hoffa, who appeared to have a blind spot for corruption at loyal union affiliates, even as he cracked down on other affiliates. A prominent example was Teamsters Local 988, representing Houston-area UPS employees. Ex-President Chuck Crawley, who assumed office in 1997, had engaged in what prosecutors said was a consistent pattern of influence-peddling and intimidation. He eventually was convicted by a federal jury in December 2006 for arranging a $20,000 kickback from a vendor and rigging his local's 2002 elections. That was but a fraction of the more than the $1 million in kickbacks, salary and pension payments Crawley received following those elections. Stier stated that Hoffa confided in him that he was "being lobbied" to drop the case by people close to Crawley and the local secretary-treasurer, Dennis Bankhead, also accused of taking kickbacks but not convicted. Hoffa, argues Stier, dragged his feet in imposing a trusteeship upon the local, taking action only after the Independent Review Board got involved. The IRB in September 2004 would bar Crawley from the union.

In the cases of several Chicago-area locals, the Hoffa regime appeared to engage in outright obstruction. As investigators interviewed potential witnesses, there was "pushback" from the Teamsters at their Washington headquarters. According to Ed Stier's deputy, former FBI agent Jim Kossler, James Hoffa's personal lawyer in New York, Bruce Maffeo, "told Ed to stop all investigations in Chicago on orders of Jim Hoffa." And about that time, Hoffa's executive assistant, Carlow Scalf, who already had been suspended for 60 days (and eventually fired) for allegedly receiving unauthorized housing allowances from a Detroit-area local totaling nearly $70,000, refused to authorize $20,000 in fees to the investigators. Scalf then transferred Stier's in-house union staffer without telling Stier. Chicago was a trouble spot in other ways. Under Hoffa's watch, John Coli and other officials at Teamsters Local 727 allegedly fleeced millions of dollars from a union dental benefit fund. Also, a foreman of the City of Chicago's Hired Truck Program solicited bribes and made as much as $90,000 a year on the side by secretly operating a truck used in the program. The cleanup report supervised by Stier successor Ed McDonald made no mention of these cases. In short, while Hoffa was spurning outside mob influence, he was building his own patronage machine.

The announcement of a government-IBT settlement on January 14 thus invites agnosticism. On the one hand, the Teamsters have a ways to go before they are as clean as Hoffa claims. And that they are markedly cleaner than prior to 1989 owes to federal diligence, not to any sudden burst of public-spiritedness on the part of union leaders. On the other hand, progress has been substantial. And even the government had admitted from the start that a takeover would be a temporary arrangement. While there is a case for continuing IRB oversight, it is fair to ask: For how many more years will this continue? If 26 years aren't enough, what is? Government control over any institution yields diminishing returns. The ultimate consideration is whether 1.4 million Teamster members are getting their money's worth. And though delivering huge benefits, oversight has been expensive. The RISE internal cleanup program cost the union $15 million during its five-year run. And the union's share of Independent Review Board operating costs has averaged about $3 million a year, or roughly $60 million to $70 million over the board's lifetime. Members have paid these costs in the form of higher dues.

While the Justice Department-IBT agreement of last month may strike skeptics as premature, it would be hard to dispute the wisdom of phasing out government control rather than relinquishing it all at once. It gives overseers an opportunity to evaluate progress by the union and make constructive changes. And it ensures that all Teamster members, and not just convention delegates, will continue to have the opportunity to choose their leaders. Hopefully, the union can handle full autonomy. If not, there is always the possibility of another takeover. The Cold War axiom applies here: "Trust, but verify."

Photo: James Hoffa, Jr.


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