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Y 4.ED 8/1: 105-86
FINANCIAL AFFAIRS OF INTERNATIONAL
BROTHERHOOD OF TEAMSTERS
COMMITTEE ON EDUCATION AND
ONE HUNDRED FIFTH CONGRESS
HEARING HELD IN WASHINGTON, DC, MARCH 26, 1998
Serial No. 105-86
Printed for the use of the Committee on Education and the Workforce
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1999
APR 0 8 1999
COMMITTEE ON EDUCATION AND THE WORKFORCE
WILLIAM F. GOODLING, Pennsylvania, Chairman
THOMAS E. PETRI, Wisconsin
WILLIAM (BILL) CLAY, Missouri
HEARING ON FINANCIAL AFFAIRS OF
Thursday, March 26, 1998
House of Representatives,
Committee on Education
and the Workforce,
TABLE OF CONTENTS
The subcommittee met, pursuant to notice, at 10:03 a.m., in Room 2175, Rayburn House Office Building, Hon. Pete Hoekstra (chairman of the subcommittee) presiding.
Present: Representatives Hoekstra, Norwood, Ballenger, Hilleary, Schaffer, Mink, Scott, and Kind.
Also present: Representatives Clay, and Owens.
Staff present: Robert Borden, Professional Staff Member; Jay Diskey, Communications Director; Patrick Lyden, Staff Assistant; Bill McCarthy, Press Secretary; Mark Rodgers, Workforce Policy Coordinator; Kevin Talley, Staff Director; Cindy Von Gogh, Calendar Clerk/Advance; August Stofferahn; Mike Reynard; Mike Quickel; Joe di Genova; Victoria Toensing; John Loesch; Brian Connelly; Philip Smith; Fred Smolen; Lisa Rich; Bill Outhier; Gail Weiss, Staff Director; Mark Zuckerman, Deputy Counsel/Press; Brian Compagnone, Staff Assistant; Jim Jordan, Special Counsel; Cassandra Lentchner, Special Counsel; Michael Berlin, Counsel; John W. Lee, Senior Investigator; and Lisa Lotkin, Executive Assistant.
Chairman Hoekstra. (presiding] The subcommittee will come to order. The subject of today's hearing is the financial affairs of the International Brotherhood of Teamsters.
STATEMENT OF THE HON. PETE HOEKSTRA, CONGRESSMAN FROM THE STATE OF MICHIGAN
Part of this unfortunate story we already know. Through this subcommittee's hearings last October, through articles in the press, and through findings of the election officers and the proceedings of the court in the Southern District of New York, we know that despite seven years of Federal supervision and $20 million of taxpayer's money, the IBT election of 1996 was fatally flawed. It failed and must be redone sometime this year.
We now know, in at least some detail, that President Ron Carey's effort to reelection was marred by illegal financial dealings and that the IBT's own funds secretly funneled into the Carey campaign through various laundering schemes. And we know that Carey's campaign consultant wrote a memo to Mr. Carey, naming dozens of people at the IBT headquarters who worked full time on getting Carey reelected while they were on the International's payroll. That too was illegal.
The 1996 election, however, is not the focus of this subcommittee's investigation. Our focus is larger in scope, as we have made clear to those we have been force to subpoena for documents. This is a permanent standing subcommittee of the House with broad oversights powers and responsibilities. Over the next months we will be looking at three money trails: the finances of the IBT, which is our focus today; the $20 million spent by the Federal Government to finance the cost of the 1996 election; and the illegal swap schemes used to finance the Carey campaign for reelection.
We start this morning by looking at the finances of the Teamsters. The fail election of the Teamsters was not an isolated event. Rather, it was the culmination of at least four years of Ron Carey's arrogance and abuse of power, his total disregard for the rank and file members, and his lack of respect for legal safeguards intended to reform the