Grand Jurors Complain of Inaction in Presser Probe

Times Staff Writers

A federal grand jury investigating Teamsters Union President Jackie Presser has complained to two federal judges in Cleveland that the Justice Department is dragging its feet in the politically sensitive fraud case, The Times has learned.

Robert A. Reading Jr., the grand jury's foreman, said in an interview that he and other jurors have been "as patient as we possibly can be" in the 32-month probe. "The Justice Department has had ample opportunity to weigh everything," he said.

Federal strike force prosecutors in Cleveland recommended six months ago that Presser be indicted on payroll-padding charges involving his hometown Teamsters local here. But Justice Department officials have raised a series of questions about the case and have refused to authorize seeking an indictment.

Although a federal grand jury cannot indict on its own without a prosecutor's concurrence, Reading said the jury is considering "several alternatives" to prompt the department to take action.

One step would be to gain access to a 100-page strike force memorandum that sets out the prosecution's strategy in the case--a move that might provide leverage in pressing for an indictment. The Justice Department has refused to turn over the document.

Meanwhile, sources say, the department has dropped two potential co-defendants, both longtime associates of Presser, from the case. They are Harold Friedman, an international vice president of the Teamsters, and Tony Hughes, a former boxer and Presser business agent.

Law enforcement officials familiar with the investigation said Wednesday that the development could weaken the government's case against Presser or possibly be an indication that the case is slowly being dismantled.

Assistant Atty. Gen. Stephen S. Trott, who heads the Justice Department's criminal division, declined Wednesday to respond to the grand jury's complaints. "We don't comment on open investigations, even to admit they exist," he said.

Trott said his unwillingness to comment "comes from federal law which requires that grand jury proceedings be conducted in secret. Violation of that law is a contempt of court."

Reading agreed to talk to a Times reporter on condition that he not be asked about matters of evidence heard by the grand jury. He said he would comment only on procedural matters.

Fraught With Difficulties

A high Justice Department official, who spoke on condition he not be identified, said he was generally aware of the grand jury's impatience. But he would not explain the reason for the department's delay, except to say the Presser case is "fraught with technical and legal difficulties."

The case is also fraught with sensitive political considerations for the Administration, although Justice Department officials vigorously deny that politics is playing a role in the inquiry.

Presser, 58, was President Reagan's lone supporter among major labor leaders during the 1984 presidential campaign and served as co-chairman of the labor committee for the President's second inauguration.

Jury foreman Reading said the grand jurors voiced their complaints to Chief U.S. District Judge Frank J. Battisti and U.S. District Judge Alvin Krenzler, both of whom have authority over grand jury matters in Cleveland.

Met With Judge

Battisti, who has traditionally removed himself from Teamster cases because he has a brother active in the union, told Reading through aides to consult with federal prosecutors, Reading said. Krenzler, he said, met with him for 45 minutes and outlined the powers of grand jurors.

Reading said he has informed his 22 fellow jurors that "several alternatives" for action may be available, but he declined to discuss them with a reporter.

The strike force recommendation submitted in January proposed that Presser be indicted on charges of fraud and conspiracy for putting "ghost employees"--cronies who get paid but do no work--on the payroll of Cleveland Teamsters Local 507, of which Presser is still secretary-treasurer.

Reading, a 38-year-old real estate sales manager, said grand jurors have asked to see the document, "so that we can proceed ahead," but that the Justice Department has refused.

'Want to Proceed'

"We have good faith in the strike force prosecutors here," he said. "We want to proceed ahead, but the case hasn't been outlined to us yet. The (grand jury) system has acted with great expediency in other cases."

He said the grand jurors "want to act in a prudent and conscientious manner. At the same time, we are to walk at arm's length from the judiciary and the Justice Department. We are a very dedicated group."

Referring to Justice Department officials in Washington, he said: "Everyone is probably walking around with their hind sides protected. But maybe there's good reason for it. I don't want to pass judgment prematurely."

He added, apparently referring to Presser, that he believes "we should treat everyone fairly, despite his notoriety."

Jury's Term Extended

Reading said the jury's normal 18-month term has twice been extended because the Presser case is still pending.

Under federal rules of criminal procedure, a grand jury's power is limited to outlining charges that become an indictment when a prosecutor signs them. Unlike grand juries in many states, regular federal grand juries have no authority to issue a report short of an indictment, and cases of a "runaway" grand jury that acts on its own are rare.

Officials in Washington decided there was insufficient evidence to prove that Friedman knew about the existence of ghost employees, even though he served as president of the local, sources said. Hughes had been recommended in the prosecution memo for indictment as one of five ghost employees, but Justice Department officials felt evidence against him was insufficient.

With Hughes eliminated, the four remaining alleged ghost workers are: Allen Friedman, Presser's uncle, who was convicted nearly two years ago of receiving $165,000 while performing no work for Local 507; Jack Nardi, who pleaded guilty two years ago to receiving $109,000 as a ghost employee, and John J. (Skip) Felice and George (G.G.) Argie, who were convicted of embezzling union funds. (Allen Friedman and Harold Friedman are not related.)

Robert L. Jackson reported from Cleveland and Ronald J. Ostrow reported from Washington.

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