What Went Wrong?

The campaign money scandal of Teamster President Ron Carey.

Steve Early

This arti­cle was the cov­er sto­ry of In These Times’ Decem­ber 14, 1997 issue.

The 'Gang of Three' brought their political contacts, rich friends, focus groups, telemarketing schemes and junk mail.

Not long ago, Team­ster scan­dals were the work of wise guys with names like Jim­my the Weasel, Fat Tony, Tony Ducks or Tony Pro. The cur­rent one, sur­pris­ing­ly enough, is the work of peo­ple asso­ci­at­ed with the Demo­c­ra­t­ic Par­ty, Cit­i­zen Action, lib­er­al unions and oth­er pro­gres­sive causes.

Dur­ing the 1996 re-elec­tion dri­ve of reformer Ron Carey, who was elect­ed pres­i­dent in the union’s first mem­ber­ship vote in 1991, the rep­u­ta­tion and moral author­i­ty of his new, cor­rup­tion-free Team­sters took a seri­ous beat­ing, not at the hands of his oppo­nent, James P. Hof­fa, but due to the actions of his own cam­paign han­dlers and inside-the-Belt­way boost­ers. Their elec­tion vio­la­tions prompt­ed fed­er­al over­seers to order a re-run of the con­test, sched­uled to begin on Feb­ru­ary 16.

On Novem­ber 17, the Team­ster reform move­ment suf­fered an even greater blow when elec­tion inves­ti­ga­tor Ken­neth Con­boy ruled that Carey should not be allowed to par­tic­i­pate in the re-run because he knew about improp­er fundrais­ing by his cam­paign. Carey denies the charge and has pledged to appeal Conboy’s decision.

Mean­while, fed­er­al pros­e­cu­tors in New York are con­tin­u­ing a crim­i­nal inves­ti­ga­tion. Three Carey asso­ciates have already plead­ed guilty and face heavy fines and jail time for mail fraud, con­spir­a­cy or embez­zling union funds on Carey’s behalf. They are: his cam­paign man­ag­er, Jere Nash, a one­time leader of Mis­sis­sip­pi Com­mon Cause and con­sul­tant to tlis 1996 Clin­ton-Gore cam­paign; Mar­tin Davis, a mil­lion­aire ssm­ster polit­i­cal advis­er, who also aid­ed the Demo­c­ra­t­ic Nation­al Com­mit­tee (DNC) and bro­kered deals for the A.FLC” 0’s Union Priv­i­lege cred­it card pro­gram; and Michael Angara, a for­mer com­mu­ni­ty orga­niz­er and leader of Stu­dents for a Demo­c­ra­t­ic Soci­ety (SDS) at Har­vard Uni­ver­si­ty in the late 60s, who lat­er became a social­ly-respon­si­ble” businessman.

Oth­er alleged par­tic­i­pants in or casu­al­ties of this troika’s illic­it schem­ing include the Team­sters’ polit­i­cal direc­tor William Hamil­ton, an alum­nus of the Amer­i­can Fed­er­a­tion of State, Coun­ty and Munic­i­pal Employ­ees (AFSCME) and a for­mer busi­ness asso­ciate of Ansara. Hamil­ton was forced to resign in July and now faces Team­ster Inde­pen­dent Review 3card charges of aid­ing the diver­sion of dues mon­ey to Carey’s cam­paign — a mat­ter that a fed­er­al grand jury in New York is also inves­ti­gat­ing. Ira Arlook, direc­tor of Cit­i­zen Action and anoth­er ex-SDSer, has run up more than $200,000 in legal bills defend­ing his orga­ni­za­tion against pos­si­ble crim­i­nal charges over its Team­ster mon­ey-laun­der­ing role. The scan­dal so dam­aged the fund-rais­ing abil­i­ty of Cit­i­zen Action’s nation­al orga­ni­za­tion that the group just closed its Wash­ing­ton, D.C., office and laid off 20 staffers.

The biggest poten­tial losers, how­ev­er, are Team­ster mem­bers — par­tic­u­lar­ly those who have worked for change in the union. In the face of beat­ings, black-list­ing, red­bait­ing and oth­er obsta­cles to reform, Team­sters for a Demo­c­ra­t­ic Union (TDU) — labor’s most durable and suc­cess­ful rank-and-file group — sac­ri­ficed and strug­gled for more than 20 years to elim­i­nate cor­rup­tion, gang­ster­ism and sweet­heart deals. The reform­ers’ efforts final­ly bore fruit six years ago with Carey’s vic­to­ry in an elec­tion con­duct­ed as part of the set­tle­ment of a Jus­tice Depart­ment law­suit filed under the Rack­e­teer Influ­enced and Cor­rupt Orga­ni­za­tions (RICO) Act. Work­ing with TDU activists around the coun­try and a minor­i­ty of local offi­cers, Carey has since put 75 trou­bled locals under trustee­ship, cut waste, stepped up Team­ster orga­niz­ing, hired aggres­sive new staff and won sig­nif­i­cant bar­gain­ing vic­to­ries like the recent Unit­ed Par­cel Ser­vice (UPS) strike.

Now, the shenani­gans of Carey’s reelec­tion team are over­shad­ow­ing — and threat­en­ing to undo— much that he and TDU have accom­plished. Hof­fa, son of the union’s most noto­ri­ous past pres­i­dent, is gear­ing up for anoth­er bid to oust the reform­ers from office. Labor’s recent­ly improved pub­lic image has tak­en a big hit as sto­ries about Carey’s clean-up have been replaced by embar­rass­ing media rev­e­la­tions about Team­ster elec­tion vio­la­tions. The scan­dal lias giv­en crit­ics of democ­ra­cy in oth­er unions stronger argu­ments to use against direct elec­tion of their top offi­cers. And it’s also cre­at­ed uncer­tain­ty about the future direc­tion of the AFL-CIO because, just as Carey’s 1991 vic­to­ry boost­ed John Sweeney’s chances of becom­ing fed­er­a­tion pres­i­dent two years ago, the defeat of Team­ster reform­ers now could under­mine Sweeney’s own administration.

In his rul­ing on Carey’s eli­gi­bil­i­ty, Con­boy, a for­mer fed­er­al judge, acknowl­edges that there is more to be inves­ti­gat­ed about Hoffa’s fundrais­ing prac­tices. Team­ster reform­ers argue that if divert­ing union dues into cam­paign trea­suries or accept­ing mon­ey from employ­ers or Team­ster ven­dors is going to be a dis­qual­i­fy­ing offense for Carey, it should also remove Hof­fa from the bal­lot. As In These Times went to press, no new can­di­dates had emerged. Nev­er­the­less, it’s worth exam­in­ing how the union’s reform project became so endan­gered in what may yet become a full-blown tragedy for labor.

The cur­rent scan­dal has its roots in the lat­er stages of Carey’s first run for the Team­ster pres­i­den­cy. There were no high-priced con­sul­tants around when he launched his orig­i­nal cam­paign in 1989. Back then, he was a Queens, N.Y., UPS local pres­i­dent with a rep­u­ta­tion for hon­esty, mil­i­tan­cy and inde­pen­dence from the cor­rupt pow­er struc­ture of the union. He was the very def­i­n­i­tion of a dark horse” can­di­date — and wide­ly dis­missed as such by labor insid­ers and the press.

Carey’s first elec­tion effort relied almost entire­ly on TDU because he had so lit­tle back­ing with­in the union’s bureau­cra­cy. Only 30 out of 600 Team­ster local pres­i­dents ever endorsed him. Direct­ed by ex-Unit­ed Mine Work­ers staffer Eddie Burke, a hero of the 1989 Pittston coal strike, the offi­cial Carey cam­paign was often an exer­cise in impro­vi­sa­tion— con­stant­ly shored up by TDU Nation­al Orga­niz­er Ken Paff in Detroit and the group’s net­work of expe­ri­enced activists (who were heav­i­ly rep­re­sent­ed on Carey’s slate). Unlike last year’s fias­co, Carey’s ear­li­er run was low-bud­get (cost­ing less than $1 mil­lion) and based on the leaflet­ing, phone-bank­ing and orga­niz­ing activ­i­ty of hun­dreds of rank-and- file volunteers.

To reduce the offi­cial campaign’s depen­dence on and polit­i­cal debt to TDU (which Carey has nev­er joined), Burke made a fate­ful deci­sion in 1991. He hired the Novem­ber Group, a Wash­ing­ton, D.C.-based polit­i­cal con­sult­ing firm, and a Somerville, Mass., fund-rais­er called the Share Group. The now-defunct Novem­ber Group was a typ­i­cal hive of lib­er­al hus­tlers. Its then 30- year-old co-founder and part­ner, Mar­tin Davis, got his start work­ing for Wal­ter Mon­dale. He and Hal Mal­chow, the firm’s oth­er prin­ci­pal, had a client list that includ­ed the BNC, state Demo­c­ra­t­ic par­ties and the Clin­ton-Gore cam­paign. Their spe­cial­ty was cam­paign strat­e­gy, fund-rais­ing and get-out-thevote oer­sua­sion mail.” Davis and Malchow’s main con­tribu-tion to Carey’s first run was a series of embar­rass­ing ads in The Team­ster mag­a­zine that fea­tured pho­tos of pigs feed­ing in a trough and mod­els dressed up as car­toon­ish Mafia fig­ures. Even the Carey back­ers most con­cerned about union cor­rup-tion found the mate­r­i­al crude and vacuous.

Nei­ther the Novem­ber Group or Share — found­ed by Michael Ansara and part­ly owned by Davis and Mal­chow — raised much mon­ey for Carey’s first cam­paign or made big bucks offof it. But Davis and Ansara saw their work as an invest­ment in the future. It was a foot in the door of the Team­sters’ Mar­ble Palace” in Wash­ing­ton that they believed would lead to more lucra­tive deals after the reform­ers took over.

The con­sul­tants’ pay­back wasn’t long in com­ing. Even before Carey’s Feb­ru­ary 1992 inau­gu­ra­tion, the Novem­ber Group made a failed bid to take over Team­ster pub­li­ca­tions. Then the firm moved in on the union’s leg­isla­tive depart­ment and its $4 mil­lion polit­i­cal-action fund. At Burke’s sug­ges­tion, Carey hired Jere Nash to take charge of the Team­sters’ tran­si­tion process.” Nash’s chief cre­den­tial was that he had once over­seen the tran­si­tion team of Mis­sis­sip­pi Gov­er­nor Ray Mabus. Like his fel­low polit­i­cal con­sul­tants, Nash had nev­er worked for a union before, knew noth­ing about the Team­sters and had no con­nec­tion to mem­bers or to the reform movement.

Nash, in turn, gave the Novem­ber Group a key role in mak­ing rec­om­men­da­tions about the future of the union’s polit­i­cal pro­gram. Not sur­pris­ing­ly, the con­sul­tants sug­gest­ed using more direct mail and con­sul­tant ser­vices. Between 1992 and 1996, the Novem­ber Group billed the Team­sters for $650,000 (and reward­ed Nash by mak­ing him a con­tract employ­ee of the firm). More impor­tant­ly, Mal­chow and Davis prof­it­ed from intro­duc­ing their polit­i­cal clients — Demo­c­ra­t­ic can­di­dates in need of cash — to their new friends at the Team­sters, who had a big pile of mon­ey in the union’s DRI­VE (Demo­c­ra­t­ic Repub­li­can Inde­pen­dent Vot­er Edu­ca­tion) fund. The con­sul­tants worked close­ly with Hamil­ton, who became the Team­sters’ chief dis­penser of hard and soft mon­ey. In this role, Hamil­ton thwart­ed any Team­ster back­ing for the fledg­ling Labor Par­ty and arranged only token giv­ing to the New Par­ty. His idea of inde­pen­dent polit­i­cal action was telling Trans­port Top­ics last Jan­u­ary that the Team­sters’ PAC had plans to give more to the GOP” since they con­trol Con­gress” and the union want­ed to build bridges to those in power.”

In the larg­er scheme of things with­in the New Team­sters,” this busi­ness-as-usu­al approach to pol­i­tics might only have been a minor dis­ap­point­ment of Carey’s first term. After all, Carey had, with the help of oth­er staffers, staked out an inde­pen­dent posi­tion on polit­i­cal issues rang­ing from NAF­TA to the mer­its of Bill Clin­ton (whom Carey refused to endorse in 1996 because of his anti-work­er free trade deals). But, unfor-tunate­ly, Carey’s vocal crit­i­cism of politi­cians who betrayed labor didn’t trans­late into new DRI­VE pri­or­i­ties that might actu­al­ly affect their behav­ior. The union’s polit­i­cal appa­ra­tus remained to the hands of Belt­way insid­ers pre­oc­cu­pied with Demo­c­ra­t­ic Par­ty deal-mak­ing, White House invi­ta­tions and con­gres­sion­al access.” Carey’s defer­ral to these folks on polit-ical mat­ters became the Achilles’ Heel of his administration.

Reform­ers had a tougher time get­ting re-elect­ed last year than they expect­ed. Carey’s crack­down on crooks and lead­er­ship perks alien­at­ed large sec­tions of Team­ster offi­cial­dom. Still-pow­er­ful bureau­crats who split their sup­port between two Old Guard” can­di­dates in 1991 bankrolled a uni­fied $4 mil­lion chal­lenge, front­ed by Hof­fa. For too long, Carey adopt­ed a Rose Gar­den” strat­e­gy in the face of this threat. He avoid­ed the per­son­al cam­paign­ing in the field that had made such an impact on mem­bers the first time around. This enabled Hof­fa to don the man­tle of the insur­gent. The wealthy Detroit labor lawyer mas­quer­ad­ed suc­cess­ful­ly as a pop­ulist crit­ic of a New Team­ster” estab­lish­ment that was spend­thrift, incom­pe­tent and run by out­siders.” To strength­en his polit­i­cal base and sur­vive a July 1996 con­ven­tion dom­i­nat­ed by the Hof­fa forces, Carey decid­ed to broad­en his Exec­u­tive Board slate.

Some of his new run­ning-mates deliv­ered much-need­ed votes through their own local polit­i­cal machines. But, over­all, the Carey administration’s tilt to the cen­ter had a damp­en­ing effect on grass­roots cam­paign­ing wher­ev­er there was ten­sion between the rank and file and offi­cials now allied with Carey.

Enter the Gang of Three” — Davis, Ansara and Nash — with their polit­i­cal con­tacts, rich friends, focus groups, tele­mar­ket­ing schemes, junk mail and self-serv­ing advice about how con­sul­tants like them­selves could save the Team­sters from Hof­fa. With Nash installed as Carey’s cam­paign man­ag­er, they con-spired to finance a cost­ly air war” on Carey’s behalf that was viewed as a safe polit­i­cal sub­sti­tute for fight­ing it out on the ground. Their crown­ing achieve­ment was a pan­ic mail­ing of 1.7 mil­lion fliers sent out dur­ing a one-week peri­od so late in the cam­paign that many Team­sters didn’t get them until after they’d already vot­ed while oth­ers received as many as five dif­fer­ent Carey leaflets on the same day.

Foot­ing the bill for this $700,000 last-minute bar­rage was a big chal­lenge. Since the bill was com­ing from Davis’ own Novem­ber Group, he took the lead in rais­ing the nec­es­sary funds. He devised var­i­ous ways of lever­ag­ing and trans­form­ing union expen­di­tures into Carey cam­paign rev­enue through con­tri­bu­tion swaps.” His part­ners in this enter­prise — unwit­ting or oth­er­wise — includ­ed insti­tu­tions and indi­vid­u­als inel­i­gi­ble to donate mon­ey to Carey because they were union ven­dors, employ­ers or rel­a­tives of either.

One of Davis’ biggest over­tures was to his pals at the DNC. In return for the Democ­rats tap­ping their donor list for Carey, Davis promised — and the union deliv­ered — hun­dreds of thou­sands of dol­lars to state par­ty orga­ni­za­tions. Anoth­er deal involved Cit­i­zen Action, which sud­den­ly got almost half a mil­lion dol­lars from the Team­sters direct­ly, plus $150,000 fun­neled through the AFL-CIO, for mail­ings last fall on behalf of its labor-backed Cam­paign for a Respon­si­ble Con­gress.” Some of this mon­ey was divert­ed to pay for the Novem­ber Group’s Carey mail­ings and to reim­burse Ansara’s wife for a $95,000 Carey dona­tion that Ansara unlaw­ful­ly solicit­ed from her as part of his plot­ting with Davis. Ansara then hit up var­i­ous pro­gres­sive flinders, rais­ing more than $200,000 that Carey lat­er had to return. Ansara also skimmed mon­ey off a $97,000 con­tract he got from Hamil­ton to have non-union tele­mar­keters make 150,000 calls last fall remind­ing Team­sters to vote for Bill Clin­ton and the Democrats.

Carey sup­port­ers over at the AFL-CIO were also drawn into this schem­ing. Peo­ple who wouldn’t touch Carey with a ten­foot pole in 1991 — like AFL-CIO Pres­i­dent John Sweeney, Sec­re­tary-Trea­sur­er Richard Trum­ka and AFSCME Pres­i­dent Ger­ald McEn­tee — fell all over them­selves try­ing to help him this time around because of his cru­cial role in their 1995 palace coup against Lane Kirk­land and Tom Don­ahue. Union staffers were report­ed­ly pres­sured to give and, accord­ing to U.S. Attor­ney Mary Jo White, large sums of mon­ey, includ­ing cash, were raised by offi­cials of var­i­ous labor groups for the Carey cam­paign.” White’s inves­ti­ga­tion of such trans­ac­tions, which are pro­hib­it­ed by fed­er­al law, continues.

Carey has been ques­tioned sev­er­al times before a fed­er­al grand jury (which has also heard tes­ti­mo­ny from Sweeney and Trum­ka). He has pledged full coop­er­a­tion with ail inves­ti­ga­tors and repeat­ed­ly declared him­self to be an unwit­ting vic­tim of the Gang of Three” and what Ansara calls their mis­guid­ed ide­al­ism.” In the end, the crim­i­nal inves­ti­ga­tion — like Conboy’s probe — will come down to the old Water­gate ques­tion: What did the pres­i­dent know and when did he know it?

Team­ster reform­ers were sched­uled to meet Novem­ber 22 in Cleve­land to assess the sit­u­a­tion at the annu­al TDU con­ven­tion. Whether Carey remains their stan­dard-bear­er, or a replace­ment can­di­date emerges, strict new con­tri­bu­tion rules ensure that the next round of elec­tion­eer­ing will be much less expen­sive than last year’s $7 mil­lion slugfest. TDU is tak­ing the offen­sive against Hof­fa — this time, by expos­ing his ties to anti-union Repub­li­cans who held con­gres­sion­al hear­ings in Octo­ber to dis­cred­it the reform­ers and thwart pub­lic fund­ing of the re-run. (Tax­pay­ers paid $20 mil­lion for the 1996 vote; the Team­sters are split­ting the tab with the gov­ern­ment this time.)

It remains to be seen how all of this will play with the mem­bers when they get the chance to vote again. The 110,000 Team­sters employed in the truck­ing indus­try are like­ly to be most con­cerned about the Carey administration’s progress in rene­go­ti­at­ing their nation­al con­tract, which expires March 31. If Team­ster reform­ers can spear­head anoth­er UPS-style vic­to­ry in freight, their elec­toral prospects will be great­ly improved.

Steve Ear­ly worked for 27 years as an orga­niz­er and inter­na­tion­al rep­re­sen­ta­tive for the Com­mu­ni­ca­tions Work­ers of Amer­i­ca. He is the author of sev­er­al books, includ­ing Refin­ery Town: Big Oil, Big Mon­ey, and the Remak­ing of an Amer­i­can City (Bea­con Press). 

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