Former Teamsters Head Indicted
Carey Accused of Perjury in Probe of Misuse of Union Funds
By Frank Swoboda
Washington Post Staff Writer
January 26, 2001
Former Teamster president Ronald Carey was indicted by a federal grand jury yesterday for lying about his role in the campaign finance scandal that led to his ouster from the union nearly five years ago.
Federal prosecutors indicated they may also be looking at other labor leaders outside the Teamsters in their continuing investigation of an illegal money laundering scheme by the Carey campaign during his 1996 reelection bid. Carey narrowly defeated James P. Hoffa, but the election was overturned and Hoffa won the new election, taking over as president in 1998.
Carey attorney Mark Hulkower said the former union leader was "absolutely innocent of any wrongdoing."
Hoffa, in a statement issued by the Teamsters, said he supports the perjury charges against Carey. "The members of the Teamsters union have paid a terrible price for the misdeeds of Mr. Carey," Hoffa said.
The Teamsters union has sued to recover nearly $1 million it claims was illegally siphoned from the union to support the 1996 Carey campaign.
In a statement announcing the indictments, U.S. Attorney Mary Jo White of the Southern District of New York said "Carey made 39 false declarations and committed perjury before the grand jury."
The indictments are the latest chapter in a legal drama that began in 1989, when the Justice Department filed a racketeering suit against the Teamsters, accusing the nation's second-largest union of being little more than a wholly owned subsidiary of organized crime. The union, the government charged in its suit, had made a "devil's pact" with the mob.
The suit was eventually settled after the union leadership agreed to government supervision and the first direct election of national union officers in Teamster history. The union remains under federal court supervision today as a result of the consent decree signed by the old guard union leadership.
Carey, a little-known leader of a United Parcel Service local in Queens, N.Y., ran as the reform candidate and won the Teamster presidency in a three-way race.
In the seven-count indictment issued yesterday, Carey was charged with lying about his knowledge of the financial scandals involving his reelection campaign to both the grand jury and the union's Independent Review Board. Carey could be sentenced to five years in prison on each count.
So far, only one other Teamster official has been indicted. Former political director William Hamilton was convicted of participating in the financial kickback scheme in which officials in the Carey campaign were charged with making political contributions from the union to groups active in the 1996 elections and then arranging for those groups to kick back some of the money to the Carey campaign. It is illegal under federal labor law for union candidates to spend union money on their campaigns.
Hamilton was sentenced last year to three years in prison; he has appealed the conviction.
Labor sources said that rumors of a Carey indictment had begun to circulate nearly five months ago.
There was concern within the labor movement last night that White may be trying to target AFL-CIO Secretary-Treasurer Richard Trumka, but not for any role he might have played in a controversial Teamster contribution to the AFL-CIO that was passed on to a nonprofit activist group in the general elections. Some union officials last night said there were some indications White might be looking at Trumka's possible role in soliciting financial donations from union leaders outside the Teamsters to help Carey.
Such an act would not violate federal law, but it would have violated the Teamster constitution's ban on such donations from outside the union.
Trumka was unavailable for comment last night.