By Lynne Duke
Washington Post Staff Writer
Saturday , November 20, 1999
Nov. 19-A former Teamsters official charged with illegally raising
money for former union president Ron Carey was found guilty by
a federal jury today in a sprawling case that involved President
Clinton's top fund-raiser and the Democratic National Committee.
William W. Hamilton Jr., former political
director of the International Brotherhood of Teamsters, was accused
of arranging to have the union make large contributions to the
Democratic Party and various liberal groups in exchange for their
support for Carey's 1996 reelection campaign.
He was charged with illegally diverting $885,000
in union funds to help Carey, who won but was later ousted as
a result of fund-raising improprieties.
Hamilton, the highest-ranking official to
be charged in connection with the illegal contributions, was found
guilty in U.S. District Court of all six counts with which he
was charged, including conspiracy, embezzlement, fraud and perjury.
He could face up to 30 years in prison and a fine of $250,000.
Sentencing is set for Feb. 29.
Five others have previously pleaded guilty
in the complex contribution-swapping scheme, including Carey's
campaign manager, Jere Nash, who cooperated with prosecutors and
testified at Hamilton's trial.
Mary Jo White, U.S. attorney for the southern
district of New York, said the verdict "sends a clear and
unmistakable message that rank-and-file union dues cannot be misappropriated
to promote one union candidate over another."
Carey's bitter rival and successor, Teamsters
President James P. Hoffa, praised the verdict as "an important
step towards closing a dark chapter in Teamster history"
and said he would take steps to recover the money that was "looted"
from the Teamsters treasury.
But Robert Gage, Hamilton's attorney, said
he would "pursue a vigorous appeal on Mr. Hamilton's behalf."
Hamilton's defense insisted that the Teamsters
contributions to political organizations were legitimate and that
Hamilton was duped by other Carey aides involved in the swap schemes.
The five-week-long trial featured testimony
about the role of Terence R. McAuliffe, the chief fund-raiser
for President Clinton's 1996 reelection campaign and now a leading
fund raiser for Hillary Rodham Clinton's Senate race. McAuliffe
also pledged $1.3 million of his own money to guarantee the mortgage
on the Clintons' new home in Chappaqua, N.Y., but that arrangement
drew criticism and the Clintons secured more conventional financing.
Richard Sullivan, former finance director
of the Democratic National Committee, testified that McAuliffe
repeatedly encouraged him to find a Democratic donor to contribute
to Carey in exchange for large Teamsters contributions to the
Neither McAuliffe nor any other figures from
Democratic fund raising circles have been charged with wrongdoing.
A spokesman for White said the investigation is continuing.
Richard Ben-Veniste, McAuliffe's attorney,
said his client did nothing wrong and has been cooperative in
the case. "He was never a target of the investigation,
he cooperated fully and completely and without condition,"
Ben-Veniste said Thursday. "He did not raise any money for
Mr. Carey, nor did he urge anyone to raise money for Mr. Carey."
But Sullivan testified that he spoke with
McAuliffe five or six times in 1996 about the contribution-swapping
scheme, which was initially proposed by a Teamsters consultant.
McAuliffe said "that if we could get a $50,000 contribution
for the Carey campaign, he knew we could get $500,000 for Unity
[a Democratic fund-raising effort] from the Teamsters," Sullivan
In the end, the Teamsters donated $236,500
to various Democratic state committees, but the party had trouble
finding a donor to fulfill its part of the deal to find contributors
for the Carey campaign. The DNC did find a Philippine national,
not a U.S. citizen, who wanted to make such a donation. But the
Teamsters ruled her out because she was an employer, whose contributions
are not permitted under union rules.
In a second scheme that was cited in the
Hamilton prosecution, Teamsters officials arranged to give union
money to three liberal groups that in turn steered money to the
"The scheme can best be described as
a swap scheme, a quid pro quo, a 'you'll scratch my back and I'll
scratch yours,' " prosecutor Robert Rice said at the start
of the trial.
For example, prosecutors said, Hamilton helped
funnel $150,000 in Teamsters funds through the AFL-CIO to the
liberal group Citizen Action in exchange for that group's donation
to pay for a Carey direct-mail campaign.
Carey won reelection by a narrow margin. But because of the finance irregularities, the election was thrown out by federal officials assigned to supervise the balloting under a 1989 consent decree. Carey was disqualified from seeking reelection and thrown out of the union, as was Hamilton. In a subsequent special union election, Hoffa won the Teamsters presidency in 1998.