Reuters Limited

Jan. 20, 1998

Carey in Court; Lawyers Say Carey Unaware of Campaign Scandal

By Peter Szekely

Jan 20, 1998

WASHINGTON (Reuters) - Lawyers for embattled Teamsters Union President Ron Carey tried to show Tuesday he knew nothing of an illegal 1996 fund-raising scheme his campaign aides concocted until the scandal erupted last March.

With Carey's dwindling future in the union at stake, his lawyers tried at a special hearing to paint a picture of a busy union leader distracted by bad knees and a tough re election campaign who delegated authority to subordinates and was easily manipulated by his unscrupulous, greedy campaign aides.

Testifying before the union's court-appointed Independent Review Board (IRB), attorney Susan Davis, who represented Carey's campaign, said she had no reason to believe Carey knew of the scheme when she learned of it and told him on March 12, 1997, two months after he was declared the winner in the election.

``He was very upset,'' Davis told a packed hearing conducted by the three-member panel. ``He sat down in his chair and said 'Jesus Christ,' or words to that effect.''

Asked by Carey defense attorney Reid Weingarten if Carey could have faked his reaction to the news, she said: ``I don't think so. I mean, I've known the man for 15 years.''

Carey's re-election in early 1997 was nullified by a court appointed election officer after it was discovered that his campaign aides had laundered hundreds of thousands of dollars from the union's treasury into Carey's campaign coffers through a complex network of contribution swaps.

Despite Carey's vehement denials that he knew of the scheme, another court-appointed officer barred him last autumn from running in a new election of the 1.4 million-member International Brotherhood of Teamsters after finding that he knew of the scheme and took part in some aspects of it.

U.S. District Court Judge David Edelstein, who oversees the union under a 1989 settlement of a federal racketeering lawsuit, on Dec. 30 upheld the decision to bar Carey from the rerun election. Carey's lawyers said they will appeal.

Carey, who has been on unpaid leave from his post for about two months, is battling charges by the IRB's investigator that could result in his permanent ouster from the union if upheld.

Such a finding by the IRB would disqualify him from serving as an officer of the New York City local he has headed for 30 years and would bode badly for him in the ongoing criminal investigation of the scandal by New York federal prosecutors.

Davis and attorney Michael Smith who represented the union, testified that Carey did not hesitate to order incriminating information turned over to the government and to waive attorney-client privileges for his campaign staff when he learned of the financial improprieties last March.

In his opening statement, Weingarten portrayed the evidence against Carey as ``extremely thin'' and based on the testimony of his former campaign aides who are awaiting sentencing for their part in the plan and who would not appear at the hearing for cross-examination.

The aides, Jere Nash and Martin Davis (no relation to Susan Davis), pleaded guilty to charges stemming from the scandal.

``If Ron was a co-conspirator with Nash and Davis, the last thing he would ever do is instruct his attorney to waive the (attorney-client) privilege,'' said Weingarten.

Lawyers for Carey and former Teamsters Union Government Affairs Director William Hamilton, who is also fighting charges before the IRB, complained that they were unable to compel Nash and Martin Davis to appear at the hearing, even though charges against their clients are based on their statements.

``I can't confront the accuser,'' said Hamilton attorney Robert Gage. ``I can't say it more directly than that.''

Much of the case against Carey is based on his approval of union donations of more than $700,000 to certain liberal groups. Other donors then were instructed to make payments to the Carey campaign instead of those liberal groups.

Carey's administrative assistant at the union, Theresa Sherman, testified that his executive secretary Monian Simpkins told her she approved some of the payments while Carey was out campaigning and difficult to reach because Nash had told her Carey did not want to be bothered about them.

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