Demand Return of Funds Paid to ‘Ghost Employees’ : 9 Teamsters Members Challenge Presser

Times Staff Writer

In a rare challenge, nine members of Teamsters President Jackie Presser’s hometown local are demanding return of at least $300,000 in payments he allegedly authorized to “ghost employees” who did no work for the money.

The nine members of Cleveland Local 507, all long-haul tanker drivers who have a reputation of independence, are seeking the funds plus interest from Presser and the local’s other principal officer, Harold Friedman, and two alleged ghost employees, Allen Friedman and Jack Nardi.

Allen Friedman, Presser’s uncle, was convicted in 1983 of receiving $165,000 while performing no work for the local. Nardi, who reputedly has links to organized crime, pleaded guilty that year to receiving $109,800 as a ghost employee. But the government dropped charges last year against both men to avoid disclosing information on Presser’s service as an FBI informant.

Presser’s Contention


Despite the conviction and the guilty plea, Presser maintains that Allen Friedman and Nardi did perform work for their union salaries and said that was the reason why the Justice Department refused last summer to indict him for authorizing the payments, said Paul Alan Levy, lawyer for the nine truck drivers.

However, Justice Department officials have said they rejected a federal strike force recommendation that Presser be indicted because of information that FBI agents had sanctioned his use of ghost employees as a means of enhancing his links with organized crime figures.

In a letter to Local 507’s executive board, Presser and Harold Friedman, the nine drivers contended that the “convictions (of Allen Friedman and Nardi) could never have been obtained in the first place unless the Friedman jury concluded--and Nardi conceded--that the work was not performed. Accordingly, we cannot accept the sole explanation tendered by Brother Presser as a satisfactory reason for the union to refuse to pursue the matter further.”

Driver’s ‘Demand Letter’


Teamsters spokesmen refused to comment Thursday on the so-called “demand letter” by the drivers. Under federal labor law, such a letter is a necessary first step before suit can be filed to recover union funds wrongfully disbursed.

“We do not believe that government encouragement or coercion would be a defense to a suit against union officers for misuse of the union treasury, because only the union membership, not the FBI, can authorize union expenditures,” the nine wrote.

“If the duly authorized agents of the government approved these payments, they constitute a taking of the local’s property for government purposes without just compensation, in violation of the Fifth Amendment, for which the United States is liable,” the nine added.

A federal grand jury in Cleveland is examining the handling of the Presser case by the FBI and the Justice Department. The case is politically sensitive because Presser was President Reagan’s sole supporter among major labor leaders.


No Funds to Return

Dennis P. Levin, a Cleveland attorney for Allen Friedman, said Thursday that, if he were a member of the union, he would have taken action similar to that of the nine Teamsters but added that his client has no funds to return. Friedman, who served 11 months in federal prison before the government dropped charges against him, has had his house foreclosed.

Levin said that next week he will write to Atty. Gen. Edwin Meese III, seeking $6 million in compensatory damages for Allen Friedman on grounds that he was entrapped by government agents and unnecessarily confined. He will contend that Friedman was prevented from doing work for his union salary at the insistence of Presser and government officials.