Chairman Hoekstra. Okay. The-

Mrs. Mink. Mr. Chairman?

Chairman Hoekstra. Yes.

Mrs. Mink. Are we under the five-minute rule?

Chairman Hoekstra. Oh, I'm sorry; yes. We haven't used it today, but now is a good time to start. Thank you.

And you both--I mean, you're elected as trustees with one of the primary responsibilities to review the books every six months, and roughly in 1993 you're denied access?

Mr. Simpson. Well, we had a fiduciary responsibility to check the books twice a year, and prior to this administration coming on, we could go in and basically ask for anything that we wanted and we would get it. We could review any department heads, directors of departments, and we could go over everything with a fine-toothed comb. But then once the money started leaving and we started questioning what was happening with the money, then suddenly this open thing of giving us the records and letting us have copies and talking to the various department heads and directors--it ceased. They wouldn't allow us to do it anymore. It was a constant fight trying to get--maybe if we would see something on a line item and we would ask for documentation to see what this money was being spent for, they wouldn't give it to us.

Chairman Hoekstra. And you knew there were problems?

Mr. Simpson. We knew there were problems, yes.

Chairman Hoekstra. And once there were problems, they said "No more."

Mr. Simpson. Yes, that's exactly true. And then we just felt that if we didn't send up a red flag--because we were constantly asking to see the General President every time we went in, but he refused to see us, and we felt that since he wouldn't see us, the only person that would come in and talk to us was the General Counsel, Judy Scott, or either the General Secretary-Treasurer, Tom Sever, and they couldn't answer the questions or couldn't tell us what we wanted to know; they played games with us.

So, we felt that we had to put what we had in writing and send it to him and send copies to the General Executive Board because we felt that if we didn't do something and

the money continued to leave--and as the financial watchdogs of the organizations, if we didn't say something, then the fingers would be pointed at us saying that we didn't do our job.

Chairman Hoekstra. I mean, I think that's key. You, the three of you--or the two of you that are here--are elected by the membership. As Mr. LeFevre would say, the rank and file -

Mr. DeRusha. No--the delegates.

Chairman Hoekstra. By the delegates.

Mr. DeRusha. Delegates; that's correct.

Chairman Hoekstra. Okay; by the delegates--to be the financial watchdogs and represent the delegates at the IBT to ensure the integrity of the numbers--you're shut out. As a matter of fact, I think it goes beyond that.

Mr. Simpson, you were retaliated against by Mr. Carey, correct?

Mr. Simpson. I was retaliated and removed from office with these bogus charges without even having a hearing until about six months later.

Chairman Hoekstra. You were also denied to access to meetings, I think, specifically the General Executive Board in September?

Mr. Simpson. Right after we sent the letter in August.

Chairman Hoekstra. That's right.

Mr. Simpson. Then they started barring us from the meetings. First he said you can't sit it on the executive sessions, and then after that they sent letters and called us and told us we didn't need to come in at all.

Mr. DeRusha. I think, Mr. Chairman, to try to make it a little clearer, too, the position of trustee is also the position of international representative. Okay--so we had the--the president, that is, had the ability to assign us to do any work he wanted us to do, anywhere in the International Union. And at first we were given assignments, but after the letter, nothing. And it really started a little bit before that because the handwriting

was on the wall; they didn't want to hear from us; they didn't want to see us, and they didn't want our input at all because it wasn't the input they wanted to hear.

So, in Carey's letters he'll say they only go to the International twice a year. That wasn't true. We went there several times a year because it took so long to get the records that we needed. We had to be persistent to the point it was unbelievable to drag these records out of them, and everything was done--cheap, little childish tricks--to delay us, to eat up our time. We'd go down there for a three-day thing and have to come back three times for three-day visits to get what we needed. So, we were there many more days than that. The fact that we were only there twice a year didn't mean we only did the books then.

Chairman Hoekstra. Mr. Simpson, can you describe a little bit more the retaliation that happened to you over a period of time? It was not just the once you were barred from the meetings. The end result is they removed you from office, correct-- from the Teamsters?

Mr. Simpson. Yes, after the letter went out--and I think you have to have a little bit of the history of that because prior to that I was constantly given assignments by General President Carey. When he first was elected I met with him and I told him that--I congratulated him--and I told him that I was willing to work with him to move this union forward. I had no problems at all with reform. I had no problems at all with clearing out the bad elements of the union. I thought that I had one of the most progressive unions in the country, so I had no problem with it and I told him I would work with him.

He was sworn in on February 2nd. Within two weeks he had called me to come into Washington to head up a committee for local 1714 that was under trusteeship, and after that I must have had four or five other assignments, even in Cleveland with 507, which was supposed to be a troubled local that was supposedly mobbed-up. I was called in to deal with that one. I was sent into Chicago; we removed a guy that had been an international vice president as a trustee, and he made me a trustee to take over that local that was supposed to be mobbed-up, to clean it up.

I was constantly given assignments until that letter went out. When that letter went out, then suddenly--in order to shut me up I guess--he came at me, and I guess since I had the largest local in the International, he wanted to make an example out of me.

Chairman Hoekstra. Well, maybe when we listen to the tapes of the executive board meetings, we'll find out exactly why they removed you and why they did those types of things. Ms. Mink?

Mrs. Mink. Thank you very much. I only have five minutes, and I know my colleagues have a number of questions they want to ask. But the most serious accusation I've heard today, which gives me a great deal of concern and trouble, is what you have said, Mr. LeFevre, in your testimony and that has to do with charges of pension fraud. Can you elaborate exactly what you meant by those charges?

Mr. LeFevre. Perhaps the easiest way to explain this is to start with an analogy. If I attempt to take a tax deduction for your kids, you are going to try and stop me and so is the IRS, I hope, eventually.

The Teamster affiliates' pension fund is funded by and is owned by the locals, 559 of them. Its benefits have been frozen since 1/1/95. The International Union used to act as agent for the locals in making contributions to the fund. It stopped doing that when it froze benefits. It said to the locals, if you want to continue funding benefits, here's a formula to do it by--and I think that was an arbitrary act when they came up with that number--but here's the formula to do it.

They go like this--we're not sponsors; we're not anything except administrators anymore. Yet they continue to take a deduction on their books for this plan. They say they owe $28.5 million. Each and every year an actuary would determine, what do you have to come up with to make the minimum funding contribution? The Carey administration never made that contribution. In 1992, 1993, and 1994, it simply added up what the actuary told it and put it on its books as a debt. When it terminated its sponsorship of the plan and turned it over to the locals, it no longer had responsibility for the debt; it no longer had ownership of the assets.

That plan is the collective property of 559 locals, from small ones like mine and the former one Mr. DeRusha was in and the big ones like Mr. Simpson used to head. That is our property. It is my mission to recover the property that belongs to my local union. I am supposed to do this by my bylaws. If I'm not--if I'm just letting somebody take property from my union, I'm not fulfilling my own fiduciary responsibility. I read the constitution and the bylaws, and I look at the magazine, and I say, “Wait a minute; a negative-negative is a positive. This plan is over-funded. What is going on here? Uhoh." I now have a responsibility to tell somebody else about my thesis.

I put together six people--an accountant, an actuary, an economist, a lawyer, an MBA, and a labor historian--to read my thesis, to go through it, to check me, to see if I hadn't suddenly lost my senses, or was I correct. I am correct, they tell me. I've gone to source material, I've gone to the law, I've gone to how accounting should work, and I find that that organization is claiming a debt and assets--responsibility for assets--that do not belong to it. It belongs and is the responsibility of the local unions.

Why would it do such a thing, I asked myself. Well, the reason that it does such a thing is that it secures 25 percent additional revenue for that organization, rather than it appearing on my books as both an asset and a debt, and in the net effect it would be an asset of about $20 million split up 559 ways. It's a rather small line item in each and every local's books, but that is the proper way to do it. The accounting rules say you are to account for the interest of a curtailed or terminated plan according to the interest each employer has in the plan. The IBT has no interest in the plan. That's maintenance of a fraud.

Mrs. Mink. Is this a matter that you have raised as a official complaint from your local to the IBT? Is it a pending claim or pending complaint?

Mr. LeFevre. As well, yes.

Mrs. Mink. Included with other things.

Mr. LeFevre. Yes..

Mrs. Mink. But is this part of the complaint?

Mr. LeFevre. Yes.

Mrs. Mink. When did you file that complaint?

Mr. LeFevre. When it was finished on February 26.

Mrs. Mink. On February 26?

Mr. LeFevre. Yes.

Mrs. Mink. And when are you expecting to have this matter determined?

Mr. LeFevre. I have a partner in doing this, and he was told by the General SecretaryTreasurer that, "I'll see you in court. There will be no hearing in the IBT."

Mrs. Mink. So it's going to go to which court? You filed a judicial litigation as well-

Mr. LeFevre. I filed an advisory to the court. I have not received an acknowledgement, although Mr. Rumore has received an acknowledgement from the IRB thanking us for the information--it was basically a thank-you note--started an investigation there. As to when there's an actual hearing, ma'am, I can't--I'd like to answer your question directly, but I don't know the answer to it.

Mrs. Mink. Mr. Chairman, I ask unanimous consent that a letter from Grant Thornton, who is the accountant and official audit office for the IBT, in explanation of this issue with regard to the pension item in their report which is filed with the Labor Department. I have two letters here.

55-063 99-2