Teamsters Reject Suit Settlement : Racketeering Case Proposal Called on 5 Officials to Quit

The executive board of the Teamsters Union voted unanimously Saturday to reject a government proposal calling for five Teamster vice presidents to resign, scuttling efforts to settle the Justice Department’s unprecedented racketeering suit against the nation’s largest union.

James T. Grady, general counsel of the 1.6-million-member union, branded the settlement proposed by U.S. Atty. Rudolph W. Giuliani “totally unacceptable.”

Grady, in an interview after a 3 1/2-hour meeting of the Teamsters’ general executive board at union headquarters here, said: “The entire document, from page one to the last page, was totally unacceptable and an insult to the entire American labor movement and the Teamsters movement particularly.”

Official Resigns

The government scored a partial victory before the meeting began, with the resignation in Detroit of Robert H. Holmes, the union’s second-ranking vice president. In a deal struck with the government, Holmes, 76, stepped down and will be dropped this week as a defendant in the suit that is scheduled for trial in New York federal court Feb. 27.

Randy M. Mastro, the assistant U.S. attorney in charge of the suit, confirmed that an oral agreement had been reached with Holmes and “will be reduced to writing and submitted to the court for its approval” this week.

In a resignation statement issued on his behalf, Holmes said “the unwillingness of a majority of the current general executive board” to institute reforms that he and Weldon L. Mathis, the general secretary-treasurer, and others had proposed made his participation in the union’s ruling body “a continuing source of frustration.”

William J. McCarthy defeated Mathis last July by a 9-8 majority to succeed Jackie Presser as president. Presser, who favored Mathis to succeed him, died of cancer.

Mob Influence Charged

The civil suit, brought against the Teamsters last June under the Racketeer Influenced and Corrupt Organizations Act (RICO), charged that the union is heavily influenced by organized crime and is no longer responsibly serving the interests of its membership.

In the first such move against an international union, the suit asked U.S. District Judge David N. Edelstein to oust the Teamsters’ top management, place the union under court trusteeship and bar certain alleged Mafia figures from any contact with the union or its officers.

The settlement proposed by Giuliani and Mastro, in addition to requiring five vice presidents to step down along with Holmes, called for placing the union under “total control” of a three-person board of monitors until the year 2011, according to a source who attended the union board meeting Saturday.

The five vice presidents whose resignations were required by the settlement were Joseph Trerotola of New York; Ted R. Cozza of Pittsburgh, Pa.; Harold Friedman of Cleveland, who was recently convicted in a labor fraud case in which Presser had been a defendant; Joseph W. Morgan of Hallandale, Fla., and Donald Peters of Chicago.

Election Changes

The settlement proposal also called for changing the Teamsters’ election procedures for delegates to the union’s convention and for selection of the Teamsters’ top officers, union sources said.

The changes would have given union members a direct vote, rather than the current method of picking top officers through indirect delegate selection. Critics contend the present system allows the union leadership to perpetuate itself and opens the door to mob influence.

A source present at the board session said one of the most objectionable settlement provisions called for the union leadership to admit that the Mafia, also known as La Cosa Nostra, runs the organization.

‘Government at Worst’

“We can’t agree to that,” the union source said. “As far as I can see, they don’t. This is government at its worst.

“Another reason we could not contemplate settling on these terms is that it would set a benchmark for the rest of the union movement,” the Teamster source said.

Mastro would not confirm or deny the terms of the settlement proposal.

One source close to the union said that some board members and their lawyers, who accompanied them to Saturday’s meeting, were stunned at the severity of the government’s proposal, because Grady had told them earlier that conversations he had with Giuliani and his team led him to expect an offer the union could live with.

Asked if he expected the trial to take place, Grady in the interview said: “Absolutely. We believe we’ll be victorious when we have a chance to present the case.”

Officials Testify

He said all of the union’s vice presidents have “testified in the long, expensive discovery process” as the two sides prepare for trial. “None took the Fifth Amendment (privilege against self-incrimination), and not a single element of wrongdoing has been discovered.”

Mastro said he could not respond on matters that are not part of the court’s public record, which includes the depositions by the union vice presidents.

But he said that during the discovery process “a number of Teamsters from around the country have asserted their Fifth Amendment rights.”

While declining to predict whether settlement efforts would be renewed, Mastro said: “We’ve been prepared for trial all along at the end of February.”

The Teamster vice presidents whom the government sought to oust in the settlement are those whose names have figured in organized crime investigations over the years, whether or not they were ever charged with crimes themselves, several sources said.

In general, they are people who allegedly have been influenced by the Mafia, or who are perceived to have taken no action to eliminate influence by the criminal syndicate.

Expresses Surprise

One person who attended the Teamster board meeting expressed surprise at Peters’ being included in the list of those who must step down.

“Where they came up with Peters, I don’t know,” he said. “Don said: ‘I don’t know whether to be insulted or honored.’ ”

Holmes, a Teamster for 52 years, worked on trucking docks in Detroit in the early 1930s with former Teamster President Jimmy Hoffa. A British immigrant, he has been at sharp odds with McCarthy and his allies since McCarthy’s election.

But some of those board members who joined Holmes in voting for Mathis have since allied themselves with McCarthy. These include Arnie Weinmeister of Seattle, who was recently reappointed as head of the Western Conference of Teamsters.

Henry Weinstein reported from Los Angeles and Ronald J. Ostrow from Washington. Staff writer Robert L. Jackson also contributed to this story.