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The Teamsters Mess Is Spoiling Labor's Comeback


News: Analysis & Commentary: UNIONS

THE TEAMSTERS MESS IS SPOILING LABOR'S COMEBACK

A string of wins--then the ugly election-finance scandal

With his unanimous reelection as AFL-CIO president at the federation's biennial convention in Pittsburgh on Sept. 24, John J. Sweeney should have been riding high. In his first term, Sweeney had made impressive progress in putting organized labor on a comeback path. Unions are making headway in organizing workers. Union voters--and campaign money--were a major force in the 1996 congressional elections. The capper: the Teamsters' August victory over United Parcel Service Inc.

But labor's new day in the sun is suddenly threatened by the shadow of a widening fund-raising scandal at the Teamsters. On Sept. 18, top officials of Teamsters President Ron Carey's election campaign pleaded guilty to illegal fund-raising schemes that involve the Democratic National Committee and officials of President Bill Clinton's and Vice-President Al Gore's reelection teams.

If they implicate Carey, he could be indicted or barred from running in the rematch election recently ordered by court officials. That would make an automatic front-runner out of James P. Hoffa, son of the infamous Teamsters leader. A Hoffa victory would set back Teamster reform and revive memories of unions as hotbeds of corruption, even as the AFL-CIO embarks on a national TV ad campaign to improve labor's image.

The spreading campaign-finance scandal may reach into the AFL-CIO and other unions, too. Prosecutors are looking into whether funds were diverted to Carey's campaign by AFL-CIO Secretary-Treasurer Richard L. Trumka and other unions. Carey denies wrongdoing. The AFL-CIO says an internal review found no evidence of violations by Trumka or other federation officials.

It won't be easy for union leaders to conduct business as usual. Jere Nash, a former Democratic Party political consultant who headed Carey's election campaign last year, told a New York federal judge that he and two colleagues laundered Teamsters dues money through outside liberal groups to help Carey's election. In one case, they asked the Teamsters to get Carey to approve $475,000 for Citizen Action. In exchange, Citizen Action had other donors give money to Carey's election effort.

A VICTIM? Because of the charges, Barbara Zack Quindel, the official who oversaw the '96 Teamsters vote, in August called for a rematch early next year. In a bizarre twist, Quindel quit on Sept. 23 after a Carey campaign aide said Carey had donated money to a political group to which she and her husband belong.

Carey's defense: The union gave money to Citizen Action and other groups in prior years, so he had no reason to suspect that these requests were any different. "If there is a victim here, certainly I am the victim," he asserts.

There's another potential victim: If Carey or Trumka is dragged down, Sweeney's progress in reviving the union movement could be undermined.

Ironically, the campaign-finance revelations come just as the AFL-CIO is launching a two-year television advertising campaign. The image ads, on which the federation plans to spend $20 million a year to produce and run, are aimed at getting Americans to think more positively about labor unions. The ads, however, may be crowded out by reports of the spreading Teamsters scandal.By Aaron Bernstein in Pittsburgh, with Paula Dwyer in WashingtonReturn to top

TABLE

Sudden Impact

FUNDING WOES Campaign officials for Teamsters President Ron Carey plead guilty to illegal fund-raising, increasing the chances that Carey may be barred from running for office.

BACK TO THE FUTURE If Carey is barred from the January election, rival James P. Hoffa is likely to win, returning old Teamsters leadership to power.

WIDER NET? The AFL-CIO's campaign contributions are under scrutiny because some federation funds were allegedly diverted to Carey's election drive. Probers are looking into AFL-CIO Secretary-Treasurer Richard Trumka's role.

DATA: BUSINESS WEEKReturn to top


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