Teamster Leaders Fighting to Curb Panel Named to Rid Union of Mafia Influence

Leaders of the Teamsters Union are chafing under the supervision of three outside monitors appointed by a federal judge last spring to rid the nation’s largest union of the influence of organized crime.

Officers of the 1.6-million-member union had agreed to the appointments so that a civil racketeering lawsuit against the Teamsters could be settled without a trial. The legal action had been filed by the Justice Department last year.

But a behind-the-scenes fight has developed over sweeping powers that the three independent overseers want to exercise.

So bitter, in fact, has the struggle become that both sides are asking for court intervention, and U.S. District Judge David N. Edelstein of Manhattan has called a hearing for this morning to try to resolve the issues.

According to documents obtained by The Times, Teamsters general counsel James T. Grady has written to Frederick B. Lacey, whom Edelstein appointed as union administrator last May, contending that Lacey is exceeding his authority as chairman of the oversight board.

Grady charged also that the hourly fees and demands for private office space of the three monitors, all lawyers, could reach more than $1 million a year, which he termed too high a price for the union to pay. The union has paid none of the expenses submitted to it by the monitors so far.

Lacey, a former federal judge in New Jersey, responded hotly that the Teamsters had agreed last March to pay all reasonable costs of the monitors and their staffs and thus is reneging on the court-approved agreement.

Lacey said that the union apparently has resolved “that it is going to try to do everything it can to slow down or impair the functions of the court-appointed officials.” He called Grady’s position “unacceptable and incredible.”

Justice Department attorney Randy M. Mastro, agreeing with Lacey, has written to Judge Edelstein that Teamster leaders have “blatantly attempted to frustrate the work of the court officers” by refusing to provide funds to cover their fees and expenses.

But Grady countered that the court agreement provides only that “reasonable” costs should be charged to the Teamsters. He said that Lacey’s jurisdiction is limited and the union would not allow him to examine books and records of pension funds, employee benefit operations and certain other accounts.

Lacey, who practices law in Newark, N. J., was given broad review powers over Teamster operations. The settlement accords him “the same rights and powers” as Teamster President William J. McCarthy in certain instances. Lacey maintains that his mandate allows him to question the appointment of vice presidents by McCarthy and to delve into all major union expenditures.

Lacey said also that he plans to promulgate guidelines “for investigation and discipline of corruption within the IBT (International Brotherhood of Teamsters).”

Under the settlement, the primary responsibility for investigating the scandal-plagued union rests with Charles M. Carberry, a New York lawyer and former federal prosecutor whom Judge Edelstein named as “investigations officer.” Carberry may bring cases before Lacey, who is empowered to act as a hearing officer.

In one of his first moves, Carberry is seeking the ouster of Harold Friedman, an international vice president, and Tony Hughes, an international representative. Friedman and Hughes are trying to keep their posts in spite of being convicted last January on racketeering and embezzlement charges in Cleveland.

A third court-appointed officer, Chicago labor attorney Michael H. Holland, will supervise the Teamsters’ first-ever secret ballot direct elections of the president and delegates in 1991. Teamster leaders already are fighting Carberry and Holland over private office space and funds for staff assistants that they contend they must have.

The court settlement that provided for the three Teamster overseers grew out of an unprecedented civil racketeering suit in which the Justice Department contended that the union had been heavily influenced by organized crime for decades.

Teamster leaders, although arguing that the lawsuit was politically motivated and without merit, ultimately agreed to a settlement that, according to one former union source, “gave the government nearly everything it wanted.”

“The (Teamster) executive board approved the settlement because it allowed McCarthy and other board members to keep their highly paid jobs until they retire in a few years,” the source said, speaking on condition that he not be identified.

As part of their voluntary consent order, McCarthy and other Teamster leaders acknowledged that “there have been allegations, sworn testimony and judicial findings of past problems with La Cosa Nostra corruption of various elements of (the Teamsters).”