3 Plead Guilty to Illegal Use of Teamster Funds

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Signaling the expansion of an already far-reaching investigation into Teamsters President Ron Carey’s reelection campaign last year, the union leader’s former campaign manager and two outside consultants pleaded guilty Thursday to federal charges in an election finance scheme.

The development points to intensified federal grand jury scrutiny into possibly improper financial dealings between the Carey campaign and leading Democratic Party fund-raisers as well as with top AFL-CIO officials. In separate court appearances, the three figures who pleaded guilty disclosed ties between their efforts and the Democratic National Committee, the Clinton-Gore campaign and the AFL-CIO labor federation.

Thursday’s guilty pleas also raise further doubts about Carey’s ability to hold on as president of the Teamsters, the nation’s biggest private sector union. Carey’s 52% to 48% reelection victory in late 1996 over challenger James P. Hoffa was voided last month by a federal election overseer, Barbara Zack Quindel.


She is considering for a second time whether Carey--initially elected president in 1991 as a reform candidate pledged to ridding the union of its longtime corruption--should be disqualified from an upcoming rerun election because of his possible involvement in campaign finance wrongdoing. Carey, who recently drew national attention while directing the Teamsters’ largely successful strike against United Parcel Service, has denied any knowledge of improprieties.

Pleading guilty in New York on Thursday to conspiring to illegally divert Teamster funds into Carey’s reelection treasury were Jere Nash, the former Carey campaign manager, and Martin Davis, a Washington political consultant. In a federal document known as an information, they admitted to funneling union funds to the Carey campaign through a complex of political groups.

Michael Ansara, the owner of a Massachusetts telemarketing firm that did business with the Teamsters, pleaded guilty to creating a shell company that served as a conduit in the scheme. All three have agreed to cooperate with prosecutors, and all also are expected to help Quindel in her separate inquiry.

“These defendants have victimized the International Brotherhood of Teamsters and the election process,” charged Mary Jo White, the U.S. attorney for the Southern District of New York at an early evening news conference. “The crimes are very serious and galling because of their potential to undermine union democracy.”

In the revelation with the broadest political implications, the court papers stated that in June 1996, Davis proposed a mutual-assistance pact between the Teamsters and the Democratic National Committee.

Davis, with the agreement of Nash, sought to use potential contributions from the union to induce the DNC, in exchange, to raise money for Carey’s campaign.


According to the court papers, Davis had several conversations with a former official of the Clinton/Gore 96 Reelection Committee and with an official of the DNC, who agreed to find a donor for Carey’s campaign in return for Davis’ help. The Democratic officials were not identified.

After that scheme fell through, court papers charged that Davis spoke with others, including the former official of the Clinton/Gore campaign and the DNC official about finding other donors for Carey in exchange for Teamsters Union contributions. It was not indicated if any of the plans with the Democrats ever were carried out.

DNC officials Thursday distanced themselves from the illegal contribution scheme. “No plan to raise money in exchange for Teamsters’ contributions to the DNC was approved by the DNC,” said DNC spokesman Steve Langdon. “If any action was taken, it was without the authority of the DNC leadership.”

The White House said Thursday that it was following the court matter but found no connection to any of its officials. “As best as we can determine, no one in the White House knew of or participated in any of the alleged plans in this matter,” said White House special counsel Lanny J. Davis.

In a separate plot, court papers say, Davis, through Nash, directed a Teamsters official to contribute $150,000 to the AFL-CIO. In exchange, the papers said, the No. 2 official of the AFL-CIO, Secretary-Treasurer Richard Trumka, agreed to donate $150,000 to Citizen Action, a liberal lobbying group. Of that sum, $100,000 ultimately was funneled back through Davis’ firm to Carey’s direct mail campaign for the union presidency.

Denise Mitchell, a spokesman for Trumka and other top AFL-CIO leaders, said the labor federation, which has hired Citizen Action on occasion, made no payment to the group as a way to aid Carey. She said an AFL-CIO internal investigation has turned up no wrongdoing by labor federation officials.


If the growing investigations lead to Carey’s disqualification to run in the new election, Hoffa, son of the legendary Teamster leader Jimmy Hoffa, is considered nearly certain to win.

Sentencing of Davis, Nash and Ansara was delayed in connection with their cooperation with prosecutors, but the three have agreed to pay fines totaling more than $900,000 to help pay for a new Teamsters election.

Goldman reported from New York and Silverstein reported from Los Angeles. Times staff writer Marc Lacey in Washington also contributed to this story.