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Leaderless Teamsters union seeks new direction


By Phil Hirschkorn
CNN Producer

July 31, 1998

In this story:

NEW YORK (CNN) -- The Teamsters were staging bittersweet demonstrations around the country Friday, the one-year anniversary of organized labor's biggest victory in years.

Ousted Teamster leader Ron Carey in happier times, at his swearing-in last year   

The protests are a sweet reminder for the Teamsters of how their group, the nation's largest private-sector union with 1.4 million members, spoke briefly for working families across America during last summer's 15-day walkout against United Parcel Service.

But it is now bitter for the Teamsters to consider that a major concession of the strike settlement has yet to be fulfilled, and that their own union's future is uncertain.

The cleaned-up image of the International Brotherhood of Teamsters is newly tarnished by a scandal that, just this week, brought down self-proclaimed reformer Ron Carey, who had risen to union president.

Its finances are in a tailspin, and a special election to select a new leader is in jeopardy.

Whether the Teamsters can bounce back from all this promises to affect your pocketbook.

Your bread and butter

Though only about 15 percent of the U.S. work force belongs to a union, virtually all Americans have some stake in the Teamsters.

The union is arguably as extensive an economic force as Microsoft. With its dominance over the trucking industry, the union's activities affect the price and delivery of goods throughout the country.

The Teamsters deliver a lot of the soda and beer you drink, the bread and brownies you eat and the newspapers you read. Many pick up your garbage, get concrete to construction sites and load cargo onto 18-wheel trucks.

The union's power to strike is the power to disrupt the economy profoundly, as last year's UPS walkout proved by leaving millions of packages undelivered to homes and businesses alike.

Same song, second verse

James "Junior" Hoffa, now frontrunner to lead the Teamsters, lost to Carey in 1996   

The Teamsters now are protesting what they see as a violation of their new contract with UPS. The company promised to convert 10,000 part-time jobs into full-time over five years, starting with 2,000 by Friday, July 31.

By its own admission, UPS has produced none. But the company points to a caveat in the contract -- package volume must return to its pre-strike level before new jobs will be created.

Domestic business is still down 4 percent, with 467,000 fewer domestic deliveries per day. It doesn't matter that UPS is earning record profits -- $352 million in the first quarter of 1998, a 54 percent increase over the same period last year.

"The company's stock is not going to go up if you hire 2,000 people to handle nonexistent packages," as UPS spokesman Bob Godleswki put it. "Nobody brings in more people just because it would be a nice thing to do."

Striking Teamsters last year managed to touch a chord with the American public by standing up for full-time work.

Then-union President Carey linked their interests with broader job insecurity. He argued workers were not benefiting from the stock market surge and were left behind by skyrocketing CEO salaries. Workers, he said, suffered as part-timers in a downsized corporate world where the buzzword was "outsourcing."

But this year's cause is more specific and thus may attract less attention. And the charismatic Carey is missing from the action.

A pesky leadership vacuum

As they struggle to maintain momentum, the Teamsters find themselves in need of credible leadership.

On Monday, a court-created Independent Review Board expelled Carey from the Teamsters for life for bringing reproach on the union and failing in his fiduciary responsibilities.

The first blow against Carey had come just three days after he declared victory in last year's strike. A court-appointed overseer announced Carey's 1996 campaign for a second five-year term as president had illegally siphoned funds from the union treasury.

The monitor voided his narrow re-election over challenger James P. Hoffa Jr., only son of the legendary Teamsters leader Jimmy Hoffa.

Under the kickback scheme, Carey's aides channeled union funds to political groups, who then gave donations to the Carey effort. Evidence showed that $750,000 was diverted from the Teamsters treasury and at least $221,000 was laundered into Carey's coffers.

Carey swore he did not know what his operatives were doing and called their actions a "betrayal" of everything he worked for.

Before the scandal, Carey trimmed the bureaucracy and ousted corrupt local leaders. He ended double pensions paid to top officials. He sold the union's private jets and limousines. He cut his own annual salary from $225,000 to $150,000.

But the election officer didn't believe Carey's pleas of ignorance and disqualified him last November from the forthcoming rerun. He then took a leave of absence.

Carey is only the latest Teamster leader to run afoul of the law. Direct government supervision of the Teamsters dates back to 1989, when the union settled a racketeering lawsuit over the union's alleged ties to organized crime.

Investigations date back further. The Teamsters' illicit associations sent a string of leaders to prison, notably the elder Hoffa in the 1960s. Three consecutive Teamster presidents in the 1980s were indicted. Between 1976 and 1986, some 200 Teamster officials were prosecuted.

Carey's election in 1991 had seemed to signal an end to that era, with the union's rank and file voting directly for its leaders for the first time. It could take time for them to recover from his fall.

Trying to afford reform

The Teamsters' strike against UPS last year was considered a victory for labor   

Reformers who backed Carey say their movement was never about one person, but about tens of thousands of ordinary workers fighting to have an honest union.

"The Teamster union is in enormously better shape ethically, morally, and every way -- maybe not financially -- than it was in 1989," says election officer Mike Cherkasky.

Money may be a sticking point. The downturn in Teamster finances can be seen in a drop of $150 million in assets since 1992. During that time, the union paid out $123 million in strike benefits.

Restoring the union's financial integrity tops the agenda of "Junior," the younger Hoffa and the strongest candidate to replace Carey. Cherkasky cleared Hoffa for the contest after an exhaustive investigation of his 1996 campaign finances.

But another kind of financial stumbling block has emerged. The government office monitoring the Teamsters could shut down for lack of money.

Congressional Republicans, outraged that election fraud occurred in 1996 despite $17.5 million in supervision, blocked funding for the rerun vote, projected to cost more than $8 million.

A federal appeals court has ruled the government must foot the rerun bill, but the GOP won't loosen the purse strings.

"It would be a stunning waste of effort spent fighting organized crime and labor racketeering if the current paralysis over funding resulted in the abandonment of this law enforcement effort," Cherkasky wrote last month to the presiding judge, who may be forced to order the Teamsters to run the election themselves without supervision.

Negotiations are ongoing with Congress to free up Justice Department funds to cover about half the cost of September's scheduled race, with the union picking up the balance.

If the election occurs on time, it may elevate a fresh face into the Teamsters' top job. Whatever happens, it's good to remember that more than a few thousand truckers are bound to be affected by the outcome.

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