By STEVEN GREENHOUSE
April 28, 1998
-- Clearing the way for another struggle for control of the Teamsters,
a federal monitor ruled on Monday that James P. Hoffa could remain
in the race for the union's presidency. However, he also found
that Hoffa had engaged in some improprieties during the 1996 union
The decision clarifies the roiled picture
in this year's Teamsters race. It appears now that it will be
a face-off between Hoffa, widely considered the front-runner,
and Ken Hall, a high-level Teamsters official who played a pivotal
role in last year's successful strike against the United Parcel
The union experienced another jolt on Monday
when a federal grand jury in Manhattan indicted William Hamilton,
the union's former director of government affairs, charging him
with helping siphon union funds into the campaign of Ron Carey,
the embattled president now on a leave of absence. Hamilton's
lawyer, Robert Gage, asserted that his client was innocent.
After months of internal jockeying, the faction
of the union once dominated by Carey, the self-styled reformer
under investigation for his role in the embezzlement scheme, has
largely lined up behind Hall. But by accusing Hoffa of improprieties,
including giving false testimony, Michael Cherkasky, the federal
election monitor, seems to have stripped both sides of the ability
to run as untainted reform candidates.
The stage is now set for another campaign
in which Hoffa will pledge to restore the union to the swaggering
days when his famed father, James R. Hoffa, was its president,
while Hall will try to capitalize on Carey's successes, most notably
the UPS strike.
Cherkasky said that James P. Hoffa was responsible
for failing to report $44,000 in campaign contributions and had
not testified truthfully about receiving a $1,000 contribution
from a former Teamsters president, William McCarthy.
Explaining that he was loath to disqualify
candidates because it would limit union members' right to choose,
Cherkasky said in an interview that while "there were serious
violations, they were not sufficient in this context to disqualify
Mr. Hoffa. Any disqualification is inherently anti-democratic."
But Cherkasky found serious violations by
several key Hoffa aides and supporters. He barred Hoffa's chief
spokesman, Richard Leebove, from working in this year's Teamsters'
campaign, finding that he vastly underbilled the Hoffa campaign
and thereby made $167,675 in improper campaign contributions.
Cherkasky also barred one of Hoffa's running-mates, Mary Lou Salmeron,
from running again, finding that she had coerced the staff of
her union local to make campaign contributions.
His investigation also unearthed evidence
that could lead to the expulsion of two prominent Hoffa supporters
from the International Brotherhood of Teamsters, a 1.4 million-member
union representing truck drivers, warehouse workers, flight attendants
and other workers.
Cherkasky fined the Hoffa campaign $30,910
for improperly receiving donated services from his press spokesman
and for failing to itemize more than $50,000 in contributions
-- out of some $3.6 million collected by Hoffa and his support
"We certainly feel vindicated,"
Hoffa said in a telephone interview. "As we said all along,
our campaign was basically run properly. We intend to pay the
fines and move on with the campaign."
Cherkasky released his report after another
court-appointed monitor had barred Carey from running again, finding
that he had cooperated in an illegal scheme to siphon more than
$750,000 in union money into Carey's campaign coffers.
After that scheme was uncovered, federal
monitors ordered a new election and overturned Carey's narrow
1996 victory over Hoffa.
In the best news for Hoffa, Cherkasky cleared
him and his camp of the main charge against it, that it had failed
to detail the source of $2 million in campaign contributions.
The Hoffa camp insisted that those contributions came in sums
of $100 or less and thus did not have to be reported, while his
opponents insisted that much of that money came in large contributions,
which have to be reported, or came from employers, who are barred
from contributions to union candidates.
In a statement, Hoffa said, "This investigation
found that I am an honest man who ran an honest campaign."
While the Hoffa and Hall camps both insist
their candidates are clean, the recent rulings by federal monitors
have left each side accusing the other of being sullied. Hoffa's
supporters say Hall cannot claim to be Mr. Clean because they
say he was a protege of the disgraced Carey.
Carey appointed Hall to be director of the
union's 200,000 member small-package division, and in that role
Hall, a 41 year-old West Virginian, was Carey's right-hand man
throughout the strike last August by 185,000 UPS workers.
For his part, Hall called on Hoffa Monday
to pull out of the race.
"In the interest of restoring integrity
to the union, Hoffa should withdraw," Hall said in a telephone
interview. "First of all, among these findings, Hoffa lied
to the election officer. Secondly, he accepted $167,000 in illegal
During the five-month investigation, Cherkasky
and his staff audited the Hoffa campaign, subpoenaed information
from campaign vendors and interviewed hundreds of witnesses. He
concluded that it was credible for the Hoffa campaign to have
raised $2 million in sums of $100 or less after he examined hundreds
of check stubs, scrutinized bank accounts, and looked into the
sale of tens of thousands of Hoffa hats and T-shirtsto supporters.
"In sum, the Election Officer finds
credible evidence that at least a substantial majority of the
over $2 million in un-itemized contributions made to the Hoffa
Slate Campaigns came from lawful sources," his report said.
"While a significant dollar amount of contributions could
not be traced and, therefore, could potentially have come from
improper sources, there is no evidence of such improper contributions."
Cherkasky examined allegations that the leaders
of a large Teamsters local in Michigan gave each of 14 officials
a $2,500 raise and a large Christmas bonus that the officials
were said to have contributed to the Hoffa campaign. Cherkasky
found that the money did not go to Hoffa, but instead went to
the re-election campaign of Larry Brennan, the local's principal
Brennan, widely seen as Hoffa's chief mentor,
had given Hoffa a job as an administrative assistant at the Teamsters'
Michigan Joint Council, which Brennan heads.
Cherkasky said the pay raise, together with
turning the money to a top Brennan fundraiser, Carlo Scalf --
also a major figure in the Hoffa campaign -- was "disturbing."
Cherkasky said he would turn the evidence over to the Independent
Review Board, a three-person court-appointed board that oversees
the Teamsters to determine whether Brennan and Scalf should be
Several times in his decision, Cherkasky
asserted that Hoffa was less than candid in his sworn testimony
to the federal election officer. Discussing the failure to report
the $1,000 contribution by McCarthy, the former Teamsters president,
Cherkasky wrote: "Mr. Hoffa's testimony on the preparation
of" his campaign-finance statements, "and the omission
of the McCarthy contribution was not complete or accurate."
The report found that the Hoffa campaign
had sought to hide that Kevin Currie, the director of its New
York operation, was a felon convicted of grand larceny by having
the campaign write paychecks in his wife's name. The report found
that the Hoffa camp violated campaign expenditure and reporting
rules by paying $20,184.75 to Currie's wife.
In the indictment handed up on Monday, the
federal grand jury in Manhattan accused Hamilton, the union's
former director of government affairs, of six counts: conspiracy,
embezzling union funds, mail fraud, wire fraud, perjury in connection
with grand jury testimony and making false statements to the election
officer. Three Carey campaign aides have already pleaded guilty
to conspiracy charges.
According to the indictment, Hamilton approved
more than $750,000 in payments to Citizen Action and other liberal
groups in an effort to get out the vote to help the Democrats
recapture Congress in the 1996 campaign. As part of an embezzlement
scheme, the indictment charged, contributors to those groups were
then supposed to give money to Carey's campaign.
The indictment also accused Hamiltion of
approving contributions to the Democratic Party as part of an
effort to have Democratic donors give to the Carey campaign.
Robert Gage, Hamilton's attorney, said, "Bill
is innocent of all charges, and we look forward to our day in
In the past, Hamilton has asserted that he
did not knowingly do anything illegal and that the contributions
advanced the Teamsters' goal to help restore Democrats to control
On each of the six counts, Hamilton faces
a maximum of five years in prison and a fine of of $250,000.
Copyright 1998 The New York Times