letters that you have.

WRITTEN STATEMENT OF ROBERT G. DERUSHA, FORMER INTERNATIONAL TRUSTEE, INTERNATIONAL BROTHERHOOD OF TEAMSTERS - SEE APPENDIX C

Chairman Hoekstra. Thank you very much. Mr. Simpson.

TESTIMONY OF ROBERT SIMPSON, FORMER INTERNATIONAL TRUSTEE, INTERNATIONAL BROTHERHOOD OF TEAMSTERS

Mr. Simpson. Good morning. My name is Robert Simpson. Thank you for the opportunity to share my case with the Oversight and Investigations Subcommittee of the House Committee on Education and the Workforce. I'm glad that you are looking into the mismanagement of Teamster's finances by former President Ron Carey. I tried to investigate this with the other two trustees, Bob DeRusha and Ben Leal, in 1993, and my career was destroyed as a result.

More specifically, after 40 years of impeccable service to the International Brotherhood of Teamsters and local 743, the largest local in the IBT, I now come before you having been wrongfully found guilty of bringing reproach upon the one and only union I ever loved and still love, the International Brotherhood of Teamsters. To understand why I've pursued this case to the verge of personal bankruptcy, it is necessary for me to explain my distinguished history of service to the IBT.

I am a 63-year-old African American man who pulled myself up by my own bootstrap from being a Montgomery warehouse worker to becoming the president of local 743, the largest local in the IBT. I obtained this position by working 75 to 80 hours a week up to the time I was removed from office by then IBT President Ron Carey on August 22, 1994.

I have never been accused of having ties to any organized crime organization. I have never associated in any manner with any member of organized crime. Neither the chief investigator nor the Independent Review Board alleged or presented a single piece of evidence to the contrary. In fact, I have undergone and cleared two FBI investigations initiated by Arbitrator Lacey, the head of the IRB, in connection with my becoming an International trustee. I became and International trustee at the convention in 1991, when was I elected by the delegates to the convention with the highest vote total of any person running for any office at the convention.

Until I was charged and removed from office for those bogus charges, I had never been accused of any wrongdoing in connection with my service to the IBT to otherwise. The only time I have ever been charged with anything was when I was arrested on union picket lines fighting for the rights of my fellow Teamster members.

For almost four decades I have been, and still am, a well-respected labor leader, and was one of the highest-ranking African American labor leaders in the country. The former Attorney General of Illinois, Roland Burris, and the former Mayor of Chicago, Eugene Sawyer, testified at the IRB hearing that I am a man of impeccable character and honesty who has spent his entire adult life fighting for the rights of working men and women. I was chosen by the United States State Department to oversee the recent history making elections in South Africa. The City Council of Chicago unanimously passed a resolution that was sent to the IRB, demanding that I be given my job back. But most importantly, I am a man dedicated to serving the members of the IBT and local 743, who desperately wants and deserves my job back.

Essential to this committee's understanding of why I know the charges against me, the IRB's opinion and decision, and the district court's approval thereof were politically motivated, is an understanding of the history of the relationship between myself and Ron Carey. Prior to 1993, when I, in my capacity as an International Trustee with the two other trustees, wrote Carey a letter questioning his handling of the IBT's finances, I had the full uncompromised support of Carey, and my character and integrity was never questioned.

In June of 1993, my relationship with Carey changed forever. From June 15th to 17th, 1993, myself and the two other International trustees performed an audit of the International's finances and discovered that the union was in a negative financial condition that put it's financial stability in serious peril. Specifically, our audit showed, among other things, a significant increase in operating costs, low rates of return on our investments, and exorbitant per capita/affiliation fees.

On about September 17th, 1993, myself and the other trustees received a vicious self-serving letter from Carey regarding our questioning of his financial management of the IBT. In this letter Carey attacks me and the other trustees for questioning his handling of the IBT finances. In this letter Carey stated that, "if the tone of this letter seems sharp, it is meant to be."

Most telling, on June 30 of 1994, less than one year after I questioned Carey's handling of the IBT finances, bogus charges were brought against me and led to my removal from office and the destruction of my career.

Specifically, the charges brought against me alleged that I brought reproach upon the IBT and violated the IBT's constitution for allowing Peters to serve as a representative of local 743 after his mandatory retirement in 1989. On December 20th and 21st of 1994, the IRB held the hearings on the charges against me. At this hearing, the chief investigator did not present a single witness to testify in support of the charges. The only evidence the chief investigator offered was three volumes of exhibits relating to the charges. The chief investigator refused to even make a closing argument.

In response, through representation by Dan Webb and Sam Mendenhall, who is here with me, and the law firm of Winston and Strawn, I offered four volumes of exhibits in defense of my position that the proposed charges were unwarranted. In addition, I personally testified and presented 11 other witnesses who testified on my behalf also refuting the charges.

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