The Prosecution and Persecution of Ron Carey
Ron Carey looked like a tired stereotype: the disgraced labor boss on the witness stand, with dark bags beneath his eyes, denying accusations of wrongdoing in a made-in-Queens accent. In a federal courtroom in Washington, Charles Carberry, a stout, balding, rough-along-the-edges former prosecutor who used to lock up Wall Street and mob crooks in New York, was hurling one brutal question after another at the beleaguered Teamsters president. Why didn't you monitor the financial practices of your campaign? Why did you make misstatements to investigators about the flow of money between various Teamsters funds? Why didn't you demand more information about the funny-money business at the union once it became public? Why did you attend a retirement party for a Teamster accused of swindling a local? With each question, Carey's shoulders drooped further; his combativeness faded. In various ways, Carberry, chief investigator for the Independent Review Board (the I.R.B. investigates and adjudicates cases of internal Teamsters corruption), was asking over and over how Carey could not have known about the scheme in which his campaign aides illegally funneled nearly a million dollars in union funds to outside groups in return for donations to Carey's re-election campaign. Carberry's inquisition had a powerful implicit message: If you really didn't know, how can you claim to be competent enough to manage the nation's largest union?
Months before these three days of hearings in January, Carey's re-election victory over Jimmy Hoffa, the son of the notorious corrupt labor chieftain, had been overturned by a court-appointed elections officer. Subsequently, Carey was disqualified from running again. He voluntarily took a leave of office--but did not fully step aside so that reformers in the union could coalesce (and recover) behind another candidate. The U.S. Attorney in New York was still investigating the scandal, and perhaps him. And now in this proceeding, the I.R.B. was weighing charges against Carey. The labor leader was near bottom, fighting not to be kicked out of the union he joined in 1955 as a teenager. But the defiance that first marked his testimony dissipated under Carberry's assault, and after the grilling, Reid Weingarten, Carey's high-profile attorney, didn't bother to ask further questions. The members of the review panel--former Federal Judge Frederick Lacey, labor attorney Grant Crandall and ex-C.I.A. director William Webster--looked downcast. In the courtroom audience, Hoffa supporters chuckled with glee. On Carberry's face was a thin smile. Carey's last-ditch attempt to save his reputation, to preserve his union standing, was teetering.
The prosecution--and persecution--of Ron Carey has been an ugly affair. This is not to say that an innocent man has been framed. But Carey has been dealt the equivalent of a career death sentence in procedures short on due process and on the basis of underwhelming evidence that he participated in the wrongdoing. Moreover, the Teamsters essentially have been stripped of their president in a less-than-democratic fashion (though not in an extraordinary manner, for the union operates under numerous rules and oversight mechanisms that have emerged from a consent decree it signed with the Justice Department in 1989). Perhaps Carey yielded to the temptations of power. But a close reading of the record shows that this remains an open question. Carey may well have been a lousy manager and allowed underlings the opportunity to misappropriate funds. But that is not why he was banned from the election. He was banished for having been a knowing party to the crimes committed; and that is a debatable conclusion. When the stakes are so high--whoever controls the Teamsters influences the entire labor movement and, to an extent, the national political landscape--it is reasonable to expect that the system should operate with openness, deference to due process and careful interpretation of facts. That has not happened.
Ron Carey was elected president of the Teamsters in 1991. Under him, scores of dirty locals were reformed (often with the I.R.B. casting out the thugs), and the union flexed its political muscle in progressive fashion and beefed up its organizing power, which was bolstered by the successful strike against U.P.S. last summer. But the union, coping with the harsh realities of deregulation, remained a brotherhood deeply divided, with many members yearning for the good old strongarming days of Jimmy Hoffa. In 1996 Carey faced a strong challenge to his re-election from son-of-Hoffa. Both sides desperately needed money. Hoffa's campaign banked $1.8 million--half its total budget--in what it claimed to be 20,000 donations from small, unidentified donors. (The Hoffa campaign is now under investigation for this fundraising, and it is possible the inquiry will threaten Hoffa's participation in the next election as well.) In the white heat of the 1996 campaign, Carey's campaign manager, Jere Nash, conspired with political consultants Martin Davis and Michael Ansara to arrange illegal contribution swaps and to raise money in ways that violated the law and union rules. At the center of this scheming was a money carousel: In the course of a week in October 1996, the Teamsters, drawing on general treasury funds, gave $735,000 to Citizen Action, Project Vote and the National Council of Senior Citizens, progressive advocacy groups mobilizing voters against the Republican-controlled Congress. There was nothing improper about the union making such donations; Carey had pledged publicly to use union resources to counter Congressional Republicans. But in return for the contributions, wealthy individuals who might otherwise have donated to these advocacy groups sent $227,500 to Carey's re-election campaign. Plainly put, union funds were converted into Carey campaign funds.
Carey beat Hoffa 52-48 percent. But before the ballots were counted, Hoffa supporters filed various complaints against the Carey slate. Following an investigation of the Carey campaign schemes, Barbara Zack Quindel, the election officer, invalidated the results last August. But Quindel did not disqualify Carey from the rerun election. Her investigation had unearthed no evidence that he was part of the scams.
After Nash, Davis and Ansara pleaded guilty in September to felonies related to Carey campaign fundraising, Quindel reopened her investigation but then recused herself and was replaced by Kenneth Conboy, a Reagan-appointed federal judge who had left the bench to become a corporate attorney specializing in securities law. In mid-November, Conboy released a decision maintaining that Carey had been in on the chicanery. He disqualified Carey from running again--in one stroke ending Carey's career and making Hoffa the favorite for succeeding Carey. A week later, Carberry, the investigator for the Independent Review Board, issued similar charges. (Conboy's decision was open to appeal in the federal courts; Carberry's charges would be presented to the three I.R.B. members, who then would decide what punishment, if any, was warranted.) Together, these two reports constitute the case against Carey. It is not open-and-shut.
The two reports rely on four pieces of evidence. None is conclusive individually. Lumped together, they supposedly form a pattern that proves Carey to be a schemer. Here they are:
§ In an affidavit for Conboy's inquiry, Nash said he had a discussion with Carey regarding a contribution to Citizen Action that was part of the illegal swap. Nash claimed he told Carey the contribution would "help Davis with fundraising for the Carey campaign" and that Carey then O.K.'d the donation.
§ Nash said he discussed with Carey campaign fundraising conducted by officials of other unions, who under Teamsters rules are not allowed to solicit donations. And Nash claimed he showed Carey charts that listed these improper contributions.
§ In an interview with a Teamsters attorney in March 1997, as the scandal was unfolding, Bill Hamilton, the director of government affairs at the union, recalled that he spoke to Carey about the Teamsters contribution to Citizen Action.
§ In a sketchy two-page affidavit for Conboy's inquiry, Monie Simpkins, Carey's executive secretary, said that Nash had informed her about the illegal swaps when they were occurring and that she mentioned to Carey that Nash had spoken to her about Teamsters political contributions. Simpkins also claimed Carey approved, via the phone, four of these swap-related contributions.
That's basically it. There is no direct testimony that Carey had full (or near-to-full) knowledge or that he was an active plotter. And each one of these tidbits can be challenged.
Assume Nash did speak with Carey about the Citizen Action contribution. That does not mean Carey was told an illegal quid pro quo arrangement existed. If Nash told Carey that a contribution might assist fundraising, Carey could have thought that a legitimate contribution might produce a legitimate side benefit. For instance, a Carey fundraiser trying to shake a donation from a liberal funder could cite a Teamsters contribution to Citizen Action as proof Carey had transformed the union into a progressive outfit.
As for Nash's fundraising charts--which would be hard proof that Nash did inform Carey of illegal donations--they no longer exist, if they ever did. Nash said he destroyed all copies and deleted them from his computer. No other witness claims to have seen these charts.
The Hamilton statement is supposed to show that Carey was in the loop. But again, if true, it indicates at most that the Citizen Action contribution--not the swap--was mentioned to Carey. And Hamilton, in the same interview, explained that this one discussion occurred "very quickly" and fixed on the "concept," not the details of the donation.
Monie Simpkins is a problematic witness. When the scandal hit, she told a lawyer for the Carey campaign that she had not spoken with Carey about the scheme, according to this lawyer. Then Simpkins told a Teamsters attorney she had not received Carey's authorizations for the four contributions in question. But she retracted that assertion and said she had in passing obtained Carey's approval for one of the donations--but not the four she mentioned in her affidavit.
Simpkins has repeatedly altered her tale, rendering her an unreliable source. Still, her most incriminating remark was merely that she had told Carey she had talked with Nash about the political contributions. She has not said that she told Carey these contributions would be traded for donations to Carey's campaign. The most that can be read into her affidavit is that she might have given Carey cause to wonder. Further undermining the Simpkins evidence is testimony at the I.R.B. hearing given by Theresa Sherman, another secretary at Teamsters headquarters. Sherman said that Simpkins in 1996 had admitted privately to her that she, Simpkins, had approved at least one of the swap-related contributions without discussing it with Carey and that she was worried she could go to jail for it. And in December 1997, Sherman testified, Simpkins called her and said that Carey had never known about the questionable contributions and that her previous incriminating statements had been twisted. Sherman's testimony is hearsay, but it offers further reason to be skeptical of a case built on a short affidavit from Simpkins.
Ultimately, the case against Carey boils down to the vague, uncorroborated statements of a convicted felon who is facing ten years in prison and is looking for help with his sentence (Nash); a nugget of nondefinitive information provided by a Teamsters official (Hamilton); and suggestive testimony from a secretary who has provided changing versions of events and who may have illegally signed Carey's initials to a contribution (Simpkins).
Carey's defense is not without its holes. He says he has no recollection whatsoever of the political donations at issue (such as the $475,000 Teamsters contribution to Citizen Action) and no memory of approving $885,000 in advocacy contributions the Teamsters made in a two-week period--despite the fact that Nash, Simpkins and Hamilton each claimed to have spoken to him in some regard about these contributions. For his part, Carey says he was in the middle of a brutal campaign and burdened by severe knee problems, and expected the national office to deal with the details of the union's overall political plan once he set it in place. But even if the donations were consistent with union policy, it is hard to believe they did not register with Carey. This lack of memory seems to have enraged his pursuers. It is, Carberry wrote, "incredible." And Conboy noted, "I find it unbelievable that Mr. Carey would have no recollection of ever having discussed that $475,000 contribution with Mr. Nash, Mr. Hamilton or Ms. Simpkins."
Still, the point remains: To date, neither Conboy nor Carberry nor the U.S. Attorney has produced direct, incontrovertible evidence from a reliable source that Carey was in on the money exchange. Conboy inferred that Carey participated in the scam, and maybe he guessed correctly. But a union should not turn on the inference of one man, especially when the process is not open to challenge. Before Conboy booted Carey from the Teamsters election rerun, he did not hold a hearing, share evidence he had gathered with Carey or allow Carey and his lawyers the chance to confront the witnesses against him.
After Conboy disqualified Carey, the union leader filed an appeal with U.S. District Court Judge David Edelstein, who oversees the Teamsters consent decree. Carey's attorneys challenged Conboy on the facts and on the process, complaining that Conboy had conducted his inquiry in "Star Chamber-like secrecy." But Edelstein declared that since Conboy was technically not a "state actor," Carey was not entitled to due process protections. He also ruled that Conboy's investigation had been "extensive and comprehensive" and that Conboy's findings "are entitled to great deference." Carey is appealing Edelstein's ruling.
Carey was finally able to penetrate the secrecy on March 11. At a supplemental I.R.B. hearing, Jere Nash took the stand. It was the first time Carey's lawyers could grill the chief witness against their client. In this dramatic showdown, Nash stated that his one and only conversation with Carey about the scheme--the most significant piece of evidence against him--took place during a fifteen-second phone discussion; that he did not mention the swap explicitly; that he merely told Carey that by approving the Citizen Action grant Carey could help campaign fundraising. According to Nash, Carey said to him, "No one ever explained it to me like that," and indicated he would approve the contribution. Nash testified that he did not explain to Carey how this would help campaign fundraising and that he never spoke with Carey about the other donations involved in the swaps and did not know if Carey had approved them. Nash said he gave no indication to Carey that anything conspiratorial or illegal was afoot.
Nash's testimony also revealed that he may have been neck-deep in a shady conflict of interest. In 1996 he received $128,000 from Martin Davis's consulting firm, which was the largest vendor for the Carey campaign. This pay was ostensibly for six months of part-time work Nash did related to the Clinton-Gore campaign. (Nash's compensation from the Carey campaign was much less: $2,500 a month.) Nash simultaneously was managing the Carey campaign and employed by its biggest creditor. The swaps occurred when Nash and Davis were looking for money to pay for a $700,000 direct-mail push for the Carey campaign--a direct-mail effort to be handled by Davis and one that would result in large profits for his firm. With Davis his main income source, Nash, then, may have had a financial incentive to go along with Davis's swap scheme and not inform Carey of it. And as Carey's attorneys noted, Nash, who is cooperating with the U.S. Attorney, might be testifying against Carey to win a reduction in sentence.
Motives aside, Nash's testimony made clear that the important question of who will lead the Teamsters rests on the meaning of a vague fifteen-second exchange. Several reporters left the courtroom that day mumbling a shared conclusion: The case against Carey could never succeed before a jury.
Yet the I.R.B.'s history does not bode well for Carey. In more than 200 cases, the board has almost always validated the charges at hand; this has usually led to the accused being tossed out of his position or the union. Even if Carey triumphed with the I.R.B., that would not necessarily affect the Conboy decision to disqualify him from the election rerun, now scheduled for this summer. At best, a favorable I.R.B. decision would permit Carey to serve out his term, claim vindication and remain a Teamster. (The I.R.B. decision might also influence whether the U.S. Attorney seeks an indictment of Carey.) Unlike their mood at the end of the first I.R.B. hearing, Carey's lawyers and supporters were buoyant when Nash left the stand. It was probably the best day Carey had seen in a year.
The I.R.B. and Conboy charges do raise a criticism Carey cannot escape: The Teamsters scandal happened on his watch. Repeatedly, Carey's defenders have portrayed him as a big-picture leader who delegates details to others. He was constantly on the move, often on the road and hard to reach. But it was in this environment--with hundreds of thousands of dollars flowing to and fro--that a small band was able to hijack the funds of the members, with or without Carey's participation. Ultimately, Carey does share responsibility. As the union election rules note, "Ignorance by a candidate...[that union funds] were used to promote a candidacy shall not constitute a defense." The I.R.B. could find him uninvolved in the swap scheme and still whack him for failing in his fiduciary obligations. Malfeasance or nonfeasance--that is the question, and it's not a good choice for Carey.
The Ron Carey saga is a sad one. He is a thirty-year veteran of the Teamsters wars who, with the backing of a rank-and-file movement, transformed a sleazy union into a revitalized force. Yet he has not been a figure to which progressives can easily rally. The rules have rendered it difficult for him to fight back, and his side has been ineffective in bringing his version to public attention--a difficult task when his defense rests on I-don't-recall. But since the Teamsters scandal will continue to have reverberations for the labor movement and U.S. politics, it is important to understand that the affair may be a tale of political consultants perverting a union--and not one of traditional, top-down union corruption. If there is a lesson to be lifted from this mess, it is this familiar chestnut: Those who challenge the status quo have to be damn careful. Carey took on powerful forces, in and out of the union, and his foes were forever on the lookout for ammunition. In 1994, the old guard within the Teamsters drew up a memo on how to bring down Carey--"we have to go after his clean image," it urged--and today it seems as if their master plan succeeded. By slip or by crook, Carey made it easy for others to discredit him and, consequently, the entire union and the labor movement. And being railroaded does not change that.