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 emergency convention, and let everybody rehash everything. Every time it would come up at the general executive board meeting, people like Kilmury, Gilmartin, and some others, John Morris, whatever--and I'm not afraid to name names--there's others--would jump and scream, "no", they outnumber says the delegates. But, what happened is we finally realized we had to reduce it to writing and said it to Carey in hopes that, in black and white, he would see it and really understand it. That we'd met with him individually and as a group, and so forth--numerous times. So, we did. We did it reluctantly to begin with. And then as the reply came back, he rejected all our suggestions. He attacked us personally. He went so far as to allege that somehow the trustees were responsible for the union's worsening financial condition. As a result of our--I'd like to point out, I only come on as a trustee in January of 1989-the union had over $200 million dollars at that time in cash reserves. I think there were no red flags waving. Membership was dropping somewhat, but a lot of other things were happening to the union movement. When Carey took over he had about $154 million. By the time we wrote our letter it was down to about $75 million. It was obvious where we were going--we were going down the tubes, and he knew it. He put in the magazine, he put in letters, we needed a convention, but nobody was going to do. Not him; nobody else. As a result of our letter, the International union trustees suddenly went to the top of brother Carey's enemy list. And I think you really have to know some history of all the other people to know what happen, but immediately Ben Leal was suspended. They went into his local, they filed charges against his daughter who happened to be a business agent for the local, and they found an excuse to suspend him for a couple months--I think it was two months, it might have been three. But the result of the suspension was he could no longer run for office when a new convention come up. They eliminated him from that point. And they hoped intimidate him by the simple fact that they had suspended him and kicked his daughter out of the union. The next one was Bob Simpson. They went after Bob Simpson. As a result, Bob will explain his position and what happened to him, but he was kicked out of the union. Then it was my turn. They weren't so fortunate with me. I'd been around a little longer than they had and it really comes to head when I was criticizing Tom Sever. The first meeting or second meeting in 1992, it was--I believe his name was Nash--was there, and he was expounding how he was going to form a budget, which Judge Lacey and others said the International Teamsters should have a budget. We never operated with a budget. I agreed with that. I think we should have a budget. And he said at that meeting, it would be six months before he could get it together. He had to go back over the last few years of the books and everything and see what we had to have for a budget. So six months later I questioned Tom Sever, the General Secretary-Treasurer. Well, they're still working on it--it will be another six months. So another six months later, it was on my calendar, I asked him again. Now, they hadn't done it quite, but they were working and it was pretty close. Six months later, there was another excuse. Six months later, when I brought him to talk to him, he started with the same bull. So I went after him. I told him I wanted--just because he wanted to act like a country pumpkin here, the rest of us weren't. I'm sick of his lies and so forth. He went out the door, and when he went out the door before he slammed it, and Bob was sitting there, "I'm going to have you investigated DeRusha,” and he slammed the door. Two weeks later, there was an International auditor sending me a letter that he was going to spend three weeks at my local, auditing the books of local 437. Local 437 is a small local and you'll see that Carey stresses that in his letters--500 members, 600 members, whatever it might have been at the time. Seems strange, when he mentions all three of us, he'll mention Simpson, but he never says after Simpson's name, he was the head of the largest single union in the whole union. I wasn't the head of the smallest one. There were 10 the same size in the eastern conference, roughly 350, 400, 500. There were 10 in the Canadian conference, and I didn't even bother to check the other conferences. Because this union's backbone is still, in spite of what a lot of people may think, the small unions--the craft unions, the individual one-on-one type locals. So sure enough, this guy shows up--his name was Cox. Well Cox and the other International auditors were a weapon. This is how they started out putting the fear in people. They would go in and in many local this happened, you either shut or we're going to put you in trusteeship. And that was the message he carried. But when he come to my local, I knew what he'd done in other locals, and I met him at the door. I had the executive officer of my local there and I had an accountant there and I handed him a letter stating that he was only on a witch hunt and I was going to treat him just like we had been treated as trustees. He couldn't get to the phone fast enough to call Dick Bell at the International. He didn't know what to do and I kept it that way. I did to him what they did to us. And when he went out of there, he told us what a good job we'd done; he'd only a found a couple little things. One of the things though he did try to pin on us--our bylaws were--carried a clause in it that we could assess a member a dollar if he was 10 days late on his dues. That was clause in there that has been in there for many, many years, back before I'd ever become the head of the local and that was 1968, which was done before we had dues checkoff payroll deduction. And that was the way to get the people to come into the office and pay their dues. It had become illegal. And at that point, when it become illegal, I stopped doing it. Cox says, we got you. You didn't collect all this money. So, needless to say, you can figure what I told him about his ignorance and whatever. This is exactly what it was. It was just a scam tried to put some fear into me. The only thing he didn't know, I knew as much about what was going on as far as the law went at that point, as he did. So when he got over embarrassment, he left. Brother Carey and brother Sever did everything they could to obstruct our review and prevent us from performing our duties under the IBT constitution. We were barred from attending meeting of the general executive board, they refused to give us copies of the financial reports that were routinely given to all other officers, they refused to give us copies of documents we asked for, they refused to let us have the assistance of a certified accountant. And one time they did send one in, a fairly young kid, nice kid, he said I don't know nothing about unions; I don't know what I'm doing here. We talked to him, we replied to him, after a couple of hours, we said you could go. Because he knew nothing and he wasn't supposed to know anything. They even refused to give us copies of financial documents that were produced. As a result, anything that we wanted to study, we had to copy by hand. We couldn't make photocopies, we couldn't use a tape machine to read into to have notes produced. Any labor lawyer will tell you that an union member asking to inspect the books, records, and accounts is entitled to have an accountant or attorney and have copies of records. We were elected union officers, and particularly we were elected as the financial watchdogs of the union. Yet, Carey and Sever denied us even the rights a member should have had. On top of the law we were threatened. In February of 1995, that's when Sever threatened me. When Carey received the letter, I got a call from a Washington reporter. He says, "Carey says this is war on you three trustees." Well, he's made that statement again to several people--to "outright war,” he's used in some cases. It was after that the accountant showed up in my office. It seems impossible that any other union officer could do what Carey and Sever did and get away with it. Union are supposed to be democratic institutions and the Federal law is supposed to guarantee that elected officers get the information they need to carry out the fiduciary responsibilities to the membership. We sought relief. The general executive board, which was and still is, and I stress that, still is controlled by brother Carey--that's written in here--I hate to use the word, brother--denied our appeals. We sent copies of our appeals and wrote letters to the United States Attorney, twice--never even got a reply from him, not once--and to the Independent Review Board. We never had any response from the United States Attorney. The Independent Review Board had a lawyer take our depositions. We also sent the IRB additional evidence concerning obstruction by brothers Carey and Sever, but the IRB refused to do anything. It had become a very futile situation for us. I don't know that we would have been able to uncover any of the schemes that brother Carey used to embezzle funds from the International union. But I do know that we were able to uncover a number of highly questionable, if not flatly, illegal financial practices. I don't know why the government, the United States Attorney, the IRB, and the court did nothing, while Carey, Sever, and the other members of the Carey slate were allowed to run the union into the ground. The one thing that bothers me about what's happening now--Carey's been suspended. Many of the decisions that come from Carey or come from the IRB had the last sentence on it for who is penalized. If you knew or should have known, you're kicked out to or suspended. Here we got a whole slate of Carey people that gained all the use of that money that was funneled around, yet they were all sitting there running this union. It's unbelievable that those same people, who did this to other people, because they didn't know they should have known, are still able to sit there and run this union. I just don't know that it's exactly what they did, but it was nothing. They did nothing. The Carey--the government--nobody helped us. They ignored us and I think they really wanted us to go away. It should never be allowed to happen again. Thank you for allowing me to testify and I look forward to answering any of your questions about the submitted testimony and |