the rights of local union members. It became an administration that was subverted by the arrogance of power and became an administration that truly believed it was above the rules. At it's core, this administration was rotted by hypocrisy. Having said all of this, I cannot help but be reminded and yet puzzled by how all of these transgressions occurred on the watch of the Justice Department and the Consent Decree appointees. Consider the fact that the FBI and Justice Department were aware of many of signals of possible corruption by Ron Carey before he took office in 1992. Why did they ignore the smoke surrounding Carey until a fire broke out after the 1996 election. Were they so busy helping and supporting Carey's every move, including the unbridled spending of approximately $700 million of members' dues money and his continued malicious of his enemies that they missed the real problem? It would lead one to conclude that the government has yet to prove it is equipped to run or guide a labor union. The first indication of serious trouble came with the persistence of the International in refusing to call a special convention of the elected delegates to deal with the union's deteriorating financial condition, while the International at the same time was recklessly spending money. I understand currently the union's reserve have dropped to $700,000. Commencing in July of 1992, the General Secretary-Treasurer of the union in a series of letters expressed his growing concern with regard to the deterioration of the union's finances and soon thereafter the situation started being referred to as critical. During 1992 and 1993 Carey openly recognized that the problem would have to be addressed by a special convention of the International. During this period, 1993 and 1994, International Vice President, Giacumbo, and I called for a special convention on numerous occasions to address the financial condition of the International. These requests were met by vicious and, at times, profane responses from the majority members of the general executive board. It may seem incredible that in the face of the deteriorating financial condition of the International, the supposed reformers would not be in favor of holding a special convention to permit the delegates elected by the membership to address the problem. This entire notion of keeping vital business away from the directly elected delegates was totally obnoxious to concept of reform and democracy within the union. Certainly the entire notion of elected convention delegates was one of the centerpieces of the reform movement. After the referendum vote count on the dues increase had commenced and it became apparent that Carey's dues increase proposal was going down, Carey recommended abolishing the four United States area conferences, thus eliminating the offices held by the four conference chairman, who had opposed his dues initiative. This action by Carey and his supporters on the general executive board was so obviously political and retaliatory so as to defy explanation. Even though problems had been festering, this issue forced my open and public split from the Carey appointed general executive board. In all the action against the conferences and their elimination was a complete fiasco for the union. It was not at all productive, but only served to split and divide the union. I spoke openly against the abolishment of the area conferences within the International and publicly. In a meeting in Chicago I described Carey's actions as "a power grab to take complete control" of the IBT. I further stated that "we are witnessing the destruction of the Teamster's union as we know it." In a statement to the Cleveland Plain Dealer Newspaper, I said, “this move does nothing to bring Teamsters together, just further divides us". We spent 10 or 11 days on this issue like it was the most important thing that had to be done, and in the meantime the international union is going broke and the financial crisis hasn't been resolved. Total abolition was an absolutely vindictive act designed to eliminate his most vocal and effective critics. The political dealings and manipulations of the Carey administration were manifested in virtually every aspect of the union structure. One action that hit close to home was Carey's splitting of Joint Council 41. A leadership of Joint Council 41 had widely been known as being anti-Carey. Members of local unions who had lost in a Joint Council 41 election of officers held in December 1994, petitioned the International for the establishment of a new separate Joint Council of their own that was to be, in effect, pieced out of joint council 41. It's creation represented political gerrymandering of the worst kind while providing Carey with a base of power in Ohio. In terms of union democracy, the International convention chaired by General President Carey in Philadelphia, Pennsylvania, July 1996, was an absolute atrocity. Even a casual half interested observer of the convention would have recognized the highhanded tactics of Carey in chairing of the convention, his quick gavel, forcing the seating of his hand picked appointed delegates and then his subsequent filibustering of his own convention. However, we cannot overlook and certainly cannot over emphasize the truly unconscionable and reprehensible action of the chair during that convention. It involved a calculated and orchestrated effort to deny the rights again of the elected delegates to address union problems and issues. As a result, the convention was never allowed the opportunity to address the financial crisis, the lack of a strike fund, or any of the other important issues of concern for the membership. As I mentioned earlier, the election of delegates by the membership for the purpose of conducting convention business was, and will continue to be, an important element of the entire reform process. How Carey could have gotten away with this under the very noses of the Justice Department and the appointed Consent Decree officials continues to bewilder me to this day. I cannot and will not believe that intelligent and supposedly well intentioned people could have been so totally duped by a mere smokescreen of reform. Due to the totally discriminatory and retaliatory application of internal union discipline by the Carey regime, I resigned from the IBT ethical practices committee, effective March of 1996. I set forth in a letter March 14th, my letter of resignation from the ethical practices committee, specific reasons, and case results for my decision. Two staunch Carey supporters and members of the international executive board, Tom Gilmartin and Diana Kilmury, had been found by decisions of the IBT elections officer and by the elections appeals master to have committed acts of improper surveillance, coercion, and intimidation of other members and opposition candidates. Particularly offensive was the fact that Vice President Gilmartin held the position of chairman of the ethical practices committee. Although similar actions of surveillance, coercion, and intimidation had led to the suspension of other Teamster officers and members, the actions of Gilmartin and Kilmury went virtually unpunished. By this time, for the reasons briefly set forth above and for many, many other reasons, based on totality of the conduct of the Carey administration, I'd become totally and absolutely distanced from Carey group. I believe my feelings in this regard were amply set forth in my March 14th letter of resignation from the ethical practice committee. I stated, "Ron, in the beginning I had faith and trust in you and a reform movement. I had hoped that the reform we'd campaign so hard for would certainly include justice and fairness for all Teamsters, regardless of political affiliation. However, unfortunately just the opposite has happened. Ron, I have not fought for reform in the Teamster's union for over 30 years to now subvert or prostitute the principals I believe in. My ideals, my morals, and my reputation will not allow me to look the other way, as you and others in your administration have." I have for some time been an open critic of the actions of the Teamsters Independent Review Board. I believe the IRB to have exercised preferential and disparate treatment to critics and opponents of Carey were targeted for investigation and punishment. The mission of the Consent Decree was designed to attack organized crime, not to undermine internal union democracy or to provide any union administration with the power to pursue malicious prosecution of it's enemies and become immune to any of it's own wrongdoing. I sincerely believe that my outspoken criticism of the IRB had made me a target. In a letter dated December 11, 1996, I was advised by Charles Carberry, Chief Investigator for the Independent Review Board, that a sworn in-person examination would be taken of me December 23, 1996, pursuant to the authority set forth in the Consent Decree. The sole purpose of the examination on the basis of questions that were asked, was to probe deeply into my association with Gene Giacumbo, a former International vice president and an extremely outspoken critic of the Carey administration and the IRB. Although Mr. Giacumbo had been previously suspended, I knew of no decision or finding that held Mr. Giacumbo to be a member of any organized crime family or any decision that barred Mr. Giacumbo for associating with Teamster members. More importantly, I could not think of any conceivable reason why I shouldn't be able to associate with Gene, a person whom I respected and whom I had befriended from our services together on the general executive board. Gene had a long and respected history of reform within the union. I have to admit to you that I sit here today with a great deal of discomfort and concern. To me, the government should never run a union. Government intervention in the affairs of the union does not ever, in the long run, work to the benefit of the membership in my opinion. Further, as a lifelong democrat and also a person who is devoted a better part of his life to this union, I must confess that I am uneasy about appearing in front of a Congressional committee, chaired by a Republican no less, and give testimony that may cause this committee to delve even more deeply into the affairs of my union. However, from what I have seen, I wish to come forward and state my endorsement of these hearings. Too much has gone on in the past six years and too many truly terrible things have happened to this union and it's outspoken leaders, for any of us to now stand silent. Although I have long been an advocate of reforming the Teamsters, I know also that this great union has too often been unfairly characterized. Recently, we have suffered the worst humiliations, where the anointed reformers of the union have devastated the union's treasury and seriously fractured it's cohesiveness. Accordingly, hearings of this nature taking place today are absolutely necessary for a complete and total catharsis to take place. The membership must fully know what happened to it's money, who is responsible for the losses, and why the government monitors failed to take corrective action. Hopefully the misdeeds of this regime will never, never be repeated. In addition to the actions of the International officers themselves, it is clear that many mistakes and miscalculations were made by people supposedly overseeing the administration of this union's affairs and purportedly acting for the good of the membership. Most certainly the intrusion of the government in the affairs of this union has been a dismal failure. I would hope that this committee can focus on and perhaps find answers to the following questions. What happened to the $20 million that was spent by the government to provide Teamster members with a clean and fair election and how did it fail with all of the resources of the Federal Government? What happened to approximately $80 million of Teamster's dues money that was spent on maintaining and enforcing the Consent Decree? What happened to the approximately $700 million of Teamster's dues money that was dissipated during the Carey administration? Finally, my purpose for coming here today lies with my hope that this process can somehow lead to the rightful return of this union to it's membership. We need to get back to the fact that labor unions are organizations that belong to their members, that they should be independent of employers, independent of organized crime, independent of political parties, and most certainly, must be independent of the government and be free to express their members interests through a democratic process. Union members must be free to determine the destiny of their union. Thus far, I've seen both objectivity and honesty in this committee's investigation of the travesty that has taken place. I can only ask that these hearings and this process continue with the integrity necessary to permit the Teamster's union to get back on the right course. This committee, Congressman Hoekstra, must leave no stone unturned in finding the truth and telling the American people and hardworking Teamster members what happened to their money. You, Mr. Chairman, are the last best hope in achieving those goals and I thank you for allowing me to be here today. WRITTEN STATEMENT OF SAM THEODUS, FORMER VICE PRESIDENT, Chairman Hoekstra. Thank you. Mr. DeRusha. TESTIMONY OF ROBERT G. DERUSHA, FORMER INTERNATIONAL Mr. DeRusha. Mr. Chairman, members of the committee, my name is Robert DeRusha. I thank you for the opportunity to testify and I thank you and the committee for trying to find out why the government failed to protect the Teamster's union from corruption. The Teamster's union was important part of my life for almost 45 years. I was privileged to represent my brothers and sisters as a local union officer for 28 years, as an officer at Joint Council 10 in Boston for more than 20 years, and as an International Union Trustee for approximately 7 years. I retired from the union at the end of 1995, largely because of my health. It was a difficult decision. Anyone that knows me will tell you that I'm stubborn. When I was in a fight I did not want to give up. The three International union trustees, Bob Simpson, who is here with me today, Ben Leal, and I were trying to determine how and why General President Carey and his administration were spending the union into bankruptcy. The three of us were trustees prior to 1991, when General President Carey and his slate were elected under the Consent Decree. Unlike the other officers who are elected by the membership, we were elected by the delegates at the 1991 IBT convention and by a substantial margin. As an International trustee, our specific responsibility as assigned by the IBT constitution is to review the union's books, once during every six-month period. When brother Carey took office, there was at least initially no change in the access and cooperation afforded the trustees in performing our duties. We were allowed to attend the meetings of the union's general executive board, we still got copies of all financial reports distributed to union officers. We were allowed to question those individuals without restriction. When we asked for documents, they were quickly provided. This cooperation came to a grinding halt after the trustees sent the General President a letter in August 1993, outlining our concerns about the union's worsening financial condition and our suggestion for various changes that would help stop this decline. We wrote the letter because we felt we had a duty to the membership. It was our fiduciary responsibility. Our repeated questions and suggestions had produced no change and no response. We finally decided it was time to put our fears and suggestions in writing. It took almost six weeks before we got a response from brother Carey. I'd like to clarify one thing. We just didn't decide in 1993 to send that letter. From July-to-September of 1992--we see the worsening condition going on all the time, the finances dropping, the things that were taking place, the admittance by the administration there should be a convention to straighten out this mess, and nothing was being done. We had repeated meetings with--I hate to say brother--Mr. Carey, and we were advising him that we wished he'd have a meeting with the Joint Councils' heads in the United States and Canada, then with the conference heads. We felt that a compromise or some such for the type of convention--a limited convention--could be arranged ahead of time because they were very fearful of having an open convention, an |