New Report Claims Union Is Mob-Free, but May Be a Cover-up

teamsters-logoIs it the truth or is it a whitewash?  That’s the question rank-and-file members of the International Brotherhood of Teamsters ought to be asking in the wake of the release of the public portion of a new report prepared for the union, concluding that the IBT is free of organized crime.  Union leadership, beginning with President James P. Hoffa, couldn’t be happier.  But there’s an unpleasant reality:  The report is in conflict with an earlier one released over a year ago.  The extent to which the Teamsters can sway skeptics will determine how soon, if at all, the federal government will lift its more than decade-and-a-half of surveillance.

 

The new report, released on July 14, was prepared under the supervision of Ed McDonald, a former federal prosecutor and now a partner with the Dechert law firm in New York City.  The Teamsters hired McDonald, who previously had led the Organized Crime Strike Force for the Eastern District of New York, as part of its campaign to get a clean bill of health from the federally-approved Independent Review Board (IRB).  The IRB had been set up in the aftermath of a 1989 out-of-court settlement of a civil RICO filed by the Justice Department.  Union officials are pointing to the findings as vindication of their view that this monitoring no longer is needed.  But the study may be hiding as much as it is revealing.    

 

In April 2004, another study, also prepared at the union’s request, was released.  The lead person in that effort was Edwin Stier, a prominent Washington, D.C. lawyer and former federal prosecutor who’d led the Justice Department’s successful cleanup of northern New Jersey’s notorious Teamsters Local 560.  When Hoffa took over as Teamsters president in 1999, one of the first things he did was hire Stier.  Stier and his staff in response put together an internal cleanup proposal called RISE (Respect, Integrity, Strength and Ethics).  Some five years and $15 million later, on April 28, 2004, Stier and his entire team of investigators and lawyers resigned, charging that Hoffa had “backed away” and “inexplicably retreated” from the union’s commitment to fight corruption.  In his resignation letter, Stier stated he had “substantial reliable information that organized crime again threatens the union.” He specifically cited top Hoffa aide Carlow Scalf and certain Chicago-area Teamster officials as subverting the investigation.  Scalf himself has a checkered past; as a Detroit-area Teamster boss, he’d been suspended from the Teamsters for 60 days for allegedly embezzling nearly $70,000. 

 

Stier isn’t about to clam up now that that the McDonald report is out.  Calling it a “whitewash,” he points to the report’s omission of any mention that officials at Chicago’s Local 727 have allegedly bilked millions of dollars from union dental benefit funds.  Stier also notes that the new report did not discuss allegations that a foreman in the city’s Hired Truck Program solicited bribes and made as much as $90,000 a year on the side by secretly owning a truck used in the program.  Cleaning up a union, as Stier learned first-hand from the Local 560 experience, is an arduous process.  The prosecutions and reforms in that instance originally had been estimated at 18 months, but wound up taking 12 years.

 

Teamsters officials – hardly a surprise – stand by the McDonald report.  Pat Szymanski, the union’s general counsel, claims Stier did not accomplish what he was hired to do, and was replaced because he no longer could be trusted to do the job.  His replacement, McDonald, used even stronger language.  “We found that everything he (Stier) did was wrong,” he said.  “We disagree with his conclusions.”  He added that the Justice Department was dissatisfied with the code of conduct proposed in the Stier report.  Stier, in response, strongly disputes the charge. “The board (IRB) had seen the draft,” he noted.  “There was never a rejection of this document by the federal government.”

It is far from certain as to which version of the story will gain the upper hand.  But it is of more than passing curiosity that the union would move so quickly to discredit a half-decade-long reform effort because it didn’t like the conclusions or the recommendations.  Stier believes the Teamsters were desperate to discount the findings, while looking respectable.  “It became clear that Jim Hoffa was beginning to succumb to…pressure in Chicago,” he noted.  As the union gears up for its fall elections, union rank and file can be sure to hear a whole lot of Hoffa’s side of the story – and not too much of Stier’s.  (Chicago Tribune, 7/14).