Teamsters' chief reportedly lied Aides contradict him, allege Carey knew of fraud in his financing


NEW YORK -- Aides to Ron Carey, president of the Teamsters union, have told government prosecutors and a federal election overseer that he had general knowledge of a fraudulent scheme in which union money was donated to several liberal groups that, in exchange, had their donors contribute to his re-election campaign last year, officials involved in the investigation say.

The accounts of the Carey aides contradict the Teamster leader's strongly worded assertion at the AFL-CIO's national convention this week that he had known nothing of the scheme and that campaign aides had betrayed him and the union.

Last week Carey's campaign manager and two campaign consultants pleaded guilty to fraud and conspiracy in fund raising for his re-election.

They said they had decided to cut corners in seeking money for the campaign because they believed in Carey as a union leader and corruption fighter, and because he had been trailing his opponent, James P. Hoffa, both in fund raising and in polls among members of the International Brotherhood of Teamsters.

The guilty pleas followed by a month the finding of the federal election overseer, Barbara Zack Quindel, that at least $220,000 had been circuitously funneled from the Teamsters' treasury into the Carey campaign.

Quindel overturned Carey's narrow victory over Hoffa in December and ordered a new election. She declined to disqualify Carey from running in that election, saying she did not have evidence thathe known of the scheme, but has since said he will be barred from running if federal officials find that he was a participant.

That question is now being investigated by the office of the U.S. attorney in Manhattan.

Under federal law, the campaign of a union candidate is to be totally separate from the union's activities. In addition, federal law bars union money from being used to advance the candidacy of a union official.

Asked whether Carey had known even generally of the scheme, his lawyer, Reid Weingarten, said yesterday: "I don't think it's true. Quindel expressly said she had no knowledge of his wrongdoing, and we have been told expressly by the U.S. attorney's office that he's not a target."

Although officials say some Carey aides have now told them that the he was generally aware of the fraud, many details of the witnesses' accounts could not be learned.

Without strong evidence to support those witnesses, the case could evolve into a matter of their word against his.

Herb Hadad, the spokesman for the U.S. attorney's office, declined to comment on what Carey's aides had told the prosecutors.

Pub Date: 9/27/97

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