Nonetheless, on June 25th, 1995, the IRB issued it's opinion and decision, wherein they determined the proposed charges against me had been established. In summary, the IRB found that I brought reproach upon the union by allowing Peters to attend meetings, lunches, dinners, and fund meetings where local 743's affairs were discussed; to incur expenses that were paid by local 743; and to attend IBT functions.

However, the IRB failed to cite even one decision which Peters allegedly made as an agent or representative of local 743. Nor did the IRB cite one instance where Peters bound local 743 to some decision or agreement he made. This speaks volumes. The only thing Peters did was to provide background information and consultation on issues facing the local, of which he was one of the founding members.

More importantly, in 1991, I informed the chief investigator that the local was utilizing Peters' knowledge and paying for some of his expense. I also informed him that the local had a legal opinion from it's general counsel that this was proper. Additionally, Arbitrator Lacey himself personally approved expenses for Peters after his mandatory retirement. Peter's incurred these expenses representing the president of the IBT at an IBT sponsored function. For Lacey to find me guilty of bringing reproach for doing exactly the same thing he did showed the political nature of the charges against me. Amazingly, the IRB also implied that I embezzled money from the local by paying certain expenses for Peters and others in connection with union affairs. This is untrue. I have never been charged with embezzlement and deny even doing so.

In conclusion, as a result of challenging Ron Carey's financial mismanagement, I was and am "permanently barred from holding any position with the IBT, or any IBTaffiliated entity in the future," and from obtaining "employment, consulting, or other work with the IBT, or any IBT-affiliated entity." I have been forced to work odd construction jobs just to make ends meet.

As an International trustee I was cleared with the duty--charged with the duty--of annually auditing the financial records of the IBT and issuing of a report concerning the same. I saw Carey misusing union funds and had a fiduciary duty to speak out. My obligation to the membership to the IBT exceeded any friendship and relationship I had with President Carey. Doing so has destroyed my life. However, it was the right thing to do and I would do it all over again if the same situation presented itself. I love the union much too much not to. Thank you and God bless you.

WRITTEN STATEMENT OF ROBERT SIMPSON, FORMER INTERNATIONAL TRUSTEE, INTERNATIONAL BROTHERHOOD OF TEAMSTERS - SEE APPENDIX D

Chairman Hoekstra. Thank you, Mr. Simpson. Mr. LeFevre. Are you going to summarize?

Mr. LeFevre. Is that an order, sir? And that's exactly what I'll do.

Chairman Hoekstra. That's not an order. No orders. Actually, it's wonderful testimony to hear from your descriptions exactly what went on in the Teamsters from 1989 to 1997

or 1998, and you've got some really important stuff to talk about and I think we also are eager to have a dialogue. But make sure you cover what you need to cover. Thank you.

TESTIMONY OF JOEL LEFEVRE, SECRETARY-TREASURER/PRINCIPAL OFFICER, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL 840

Mr. LeFevre. My name is Joel LeFevre. I want to thank you for giving me this time. I'm the elected principal officer, Secretary-Treasurer of Local 84 of the Technical Industrial Service Agency and Allied Workers. We're affiliated with the International Brotherhood of Teamsters. I'm also administrator of Local 840's pension and health funds and chairman of those boards of trustees, and I am a Trustee of Joint Council 16 Teamster's Pension Fund.

I draw no salary from any of those positions. I am paid solely as SecretaryTreasurer. I've been with this Local Union since 1986. Prior to 1986, I served on the professional staff of two other local unions in other internationals since 1976.

I came to Local 840 as the organizer in 1986. Today Local 840 is just about 1,100 working people, two-thirds of us are in clerical and technical positions, 18 percent light manufacturing, 15 percent maintenance, and 5 percent in warehousing.

I have a deep loyalty to the moral principles of the labor movement. That's why I'm here. I'm honored to count myself amongst the thousands of men and women in the labor movement who have dedicated their lives to defending the right to have a good job; receive adequate medical care; achieve protection from dire poverty and old age during periods of sickness, accident, and unemployment; and defend the right of every child and worker to get a good education; and live free of fear and prejudice with our families in decent homes. Pursuing these goals with energy, courage, compassion, determination, and honesty is what being a Teamster is all about. However, my beliefs in free speech and do process and the basic tenets of trade unionism have landed me in a lot of hot water with the Carey administration and it's supporters.

To understand this story, I'll talk a little bit about the structure of the union. That's a diagram of the structure of the Teamster's union. That inverted triangle has the members on top, 1.4 million of them. Then the local unions are the next layer. They do the vast majority of negotiating, contract administration, and member services. Then we have a layer of joint councils, which comprise the local unions in a particular geographic area. In my area of metro New York, there are 45 locals in Joint Council 16. Formerly, we had a layer in there called conferences. Then, the international union, with it's trade divisions; the international officers on the general executive board; and at the tip of this structure, the general secretary-treasurer and the general president.

That structure was designed to exercise union power through the membership at a grass roots level. Local unions are not branch offices of the IBT. The IBT is not the place that a guy working on loading dock goes to get his pay or grievance settled. A member who's out on disability, has her medical insurance dropped after a month, doesn't call an international union representative. That member calls somebody that she or he has met, the local union business agent, whose job it is to go there and help solve the problem. Today, there are many fewer business agents than there were in the past. I'll

explain that in a minute. They do the services for the members. There are a whole lot more staffers in the IBT, however, who don't.

The Teamster structure is intended to keep the members' money closest to the members in the local unions. That way the members can express their approval or disapproval of how money is being spent. Membership opinion can be expressed directly to those who are responsible for it's disbursement. Every member can offer a resolution at any membership meeting to change the way money is being spent.

That's not true for the international union. The members only direct input on how money is handled is in the local union. Therefore, the majority of dues money stays in local unions. This structure is designed to preserve the autonomy of local unions. The autonomy of local unions is on page one of the IBT's constitution as a declaration of principle.

The Teamster's union was one of the world's long strongest unions because of it's structure of keeping the bulk of it's resources and control over them in close to the members in the local unions. It's key organizational principles were low per capita taxes and local autonomy. This is a decentralized model of a labor union.

In late 1993, the Carey administration prepared to change this union, fundamentally by seeking to impose a centralized structure through a mail ballot referendum amongst the members. The plan would increase international income by over $40 million, increase membership dues by 25 percent, and permanently change the economic relationship between local unions and the international union and the members. The top IBT officials spurned the process identified in the constitution to do this and the government simply approved.

The Carey dues increase referendum was the first step the incumbents took to guarantee their reelection in 1996. If each of you could have the budget to open a dozen community offices and have your last two primary opponents and general election opponent arrested, then the term incumbent advantage would really mean something. Well, that's exactly what Ron Carey did and with government approval.

The dues increase referendum was defeated by a three to one margin in March 1994, reflecting the membership's rejection of the concentration of power in Washington and undermining local unions. After being rebuffed my the members, they came up with another way to get the money they needed in order to get reelected, without either a vote of the members or delegates or anybody, and ignoring the IBT constitution. They set about to organize an intricate web of corruption, funded by a complex financial scheme.

The IBT constitution provides for a $1 per month per member assessment on the local unions and it is triggered by the general executive board finding that the net value of the union is under $20 million. The regular per capita payment that locals pay is $3.90 per member per month. The general executive board imposed this assessment on the local unions in May of 1994. That generated an additional $17 million per year for the IBT. The locals either paid or got trusteed--that is, taken over by the International union. Every local paid.

Two months after the dues referendum was defeated, Carey revoked the charters of the four American conferences. You've heard about that. Shutting the conferences

also had a financial impact for the IBT. Twenty cents per member per month went from the IBT to the conferences. That was a net five percent income increase to the IBT. Together the $17 million from the assessment and the $3.4 million from closing the conferences meant a 30 percent more discretionary income to fund veiled campaign activity at the IBT.

On top of the $20 million unilaterally taken from the IBT locals, the Carey administration got another $11.5 million by freezing the pension plan for all local union employees. For a total of well over $30 million per year. The Teamster's Affiliate Pension Fund is cosponsored by all 550 plus local unions. I refer to this plan by it's initials, TAPF.

The TAPF fund accounting in 1996 shows that the plan had $48 million more in assets than it needed to meet it's liabilities. Yet, the IBT lists the TAPF as a $28 million liability on it's books. On the books of the TAPF, there is no receivable for $28 million, however. This purposeful use of the TAPF is in violation of the legal requirement that it be solely operated for the benefit of it's participants and their beneficiaries. That's the exclusive benefit rule of ERISA; that is the heart of ERISA. It is being violated here in a very big way.

In 1995, we had $17.25 million coming in from an assessment, saving $3.4 million from the conferences, the TAPF saved $11.62 million, for a total of $32.31 million. The IBT did not get the $40 million dues increase it tried to get by a direct ballot referendum, but it did get 75 percent of the money through the back door, without any votes. At the beginning of 1995, IBT leaders had to keep the cash flow coming in to continue large numbers of people on the IBT payroll and prepared to hire more field operatives and PR staff, while simultaneously appearing to have deficit spending under control. It was absolutely essential to keep the staff huge and local unions financially hurting. Making local leaders insecure about their finances produces a conducive environment for pledges of political support in return for pledges of financial assistance.

There is pension fraud at the IBT in immense proportion.

On February 26, 1998, we filed charges with the Courts' Overseers. These are the charges. We filed them with the Independent Review Board, the financial monitor, the election officer, as well as the United States Attorney's Office, and the Pension and Welfare Department of the Department of Labor. We filed them against each Teamster affiliate's pension fund trustee; Ronald Carey, the IBT General President; Thomas Sever, the IBT General Secretary-Treasurer, who now also acts in the stead of the IBT president, who is on leave; Aaron Belk, IBT Vice President; and every general executive board vice president who is responsible for this fraud. We've charged them with violating ERISA pension laws, violations of their fiduciary duties under the LMRDA, and gross violations of the election rules and the IBT constitution. That analysis of the TAPF is long and complicated. I'm not going to try to explain it right now. I included it as part of my written testimony for the record.

The IBT leaders sought to guarantee their ability to carry increased staff in order to get reelected. This scheme bore fruit in 1996, the election year. In that year, the payroll numbers swelled to 536 people; 210 of those people are shown on the LM-2 as getting field work expenses for most of the year. That excludes 41 people with clerical type titles, which I assume were hired for the convention. That compares to 480 people

in 1995 as total payroll; only 145 of them showing field work expenses, and 141 in the field in 1994, and 139 operatives in 1993, as you can see on the chart.

That's an increase of 44 percent of field staff for the 1996-election year from the year before. Forty-four percent more professional field operators, 65 professional persuaders is an enormous campaign asset. If they were deliberately added to the staff to assist the election campaign, then it is an illegal act.

As reported in the press the papers of Jere Nash, former campaign manager, contain a March 10th memo to Aaron Belk, suggesting that targeted budget increases and added personnel will help the campaign. These extra bodies could not be hired without the assessment. On March 11, 1998, at an IRB hearing on Mr. Carey, Mr. Nash testified under oath that he had let President Carey know in writing whom to thank for his campaign. That memorandum, dated January 27, 1997, from Nash to Carey states that it is the, "summary of who did what.'

I am sure the committee will be looking into the details of that memorandum, so I'm going to move off the discussion of the memorandum, simply to say that almost the entire building, I conclude from studying the memorandum, was converted into a campaign apparatus. All of those persons in the memo had full time jobs at the IBT, yet they were all campaigning full time and all of that is illegal and all of it was funded by theft, the deceitful accounting of union dues, and pension money.

I'm here to respectfully request that you monitor this situation. If the inaction evidenced to date continues in the face of the charges filed on February 26th, then the federally appointed monitors will appear complicit in felonious acts. We have provided documentary evidence and written analysis to this committee and to the court appointed IRB, the Independent Review Board; the election officer; the financial monitor of a massive fraud involving the Teamster's Affiliate Pension Fund. That this multimillion thievery started during the prior election, I have been informed, that it will not be considered seriously by today's election officer. So the illusion of reform under government supervision continues.

In order to pay for their huge campaigns the IBT's officers bamboozled the union's rank and file. The officers of the Federal court in the Southern District and the American public. They were only able to do this because everybody watching this election believed that the incumbent Carey Administration was honest. And at the outset, so did I. Capitalizing on this fact the incumbent's chief campaign strategy was to label their political opponents in the union "old guard, Mafia-connected, corrupt officials."

I have firsthand experience with this. In the interest of time, maybe I should skip most of it, except perhaps to say that during the convention, they put out a press release saying that those who supported local autonomy, were supporters of the Mafia. I wrote the amendment on local autonomy and tried to get the convention to expand on that concept. If Bill Neuchau were still alive, whose local I today head, who taught me what it meant to be locally autonomous, were here to say a few things, I'm afraid we would have to sensor what he would have to say.

I'm secure enough in my relationship--and I was threatened with death. I've got to throw that in there.