Teamsters Official Accused of Corruption to Reimburse $40,000

Michael J. Riley, the highest-ranking Teamsters Union official in Southern California, has settled a corruption charge by agreeing to reimburse $40,000 to a Los Angeles Teamsters local under his control.

Riley, an international Teamsters vice president who also heads the union’s 135,000-member Southern California joint council, was accused in May by the union’s court-appointed investigations officer of allowing seven staffers of Teamsters Local 986 to keep their union-paid automobiles upon retirement. The officer called that an improper gift of union funds.

Riley also was accused of covering up corruption in Local 986 and improperly accepting thousands of dollars in union car-allowance payments. Those charges have been withdrawn after further investigation, according to a spokesman for Frederick Lacy, the union’s court-appointed administrator.

Since a 1989 settlement of a racketeering lawsuit filed by the U.S. Justice Department, the Teamsters Union has been under federal oversight. Court-appointed officials have the power to rid the union of corrupt leadership and to monitor the election in December of a new president. The election will be the first rank-and-file presidential election.

The charges against Riley--which carried the possibility of expulsion from the union--had been a blot on the union presidential campaign of R. V. Durham, a Teamsters executive from North Carolina who is the election favorite. Prior to the filing of charges against Riley by court-appointed investigations officer Charles Carberry, Durham named Riley to a slate of international vice presidential candidates. Despite the pending charges, Riley was placed on the ballot by delegates to last June’s Teamsters constitutional convention.

To settle Carberry’s allegations, Riley agreed to pay $40,760 to Local 986, which represents warehouse workers and drivers and which Riley runs as secretary-treasurer. The money reimburses the local for cars that were given to seven business agents of the local when they retired.

Riley had contended that his local had long followed the policy of making retirement gifts of staff cars as long as their value was below $5,000.

Riley said he will attempt to recover the value of the cars from each of the retirees. He said Local 986 would no longer give union-paid automobiles as retirement gifts.

He said the settlement, which does not constitute an admission of wrongdoing, “vindicates me.”