Hoffa: Teamsters’ Finances Misused

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Teamsters President Jim Hoffa said an internal audit revealed significant abuse and mismanagement of union funds over the past seven years by his predecessor, Ron Carey.

Hoffa announced the findings, and offered some ideas for fixing the situation, on the eve of his inaugural ceremony at Teamsters headquarters in Washington, D.C., on May 1. Hoffa also was to attend a reception at Local 745 in Dallas on May 2, and is slated to appear at receptions in Chicago May 16 and in Los Angeles May 22.

Accusations of financial mismanagement at the Teamsters are not new. A 16-month investigation by a House subcommittee on oversight and investigations headed by Republican Peter Hoekstra of Michigan recently came to the same conclusion.

“Corruption existed on a significant scale during the regime of Ron Carey,” the subcommittee said in report to Congress.

The House panel recommended giving union trustees greater power to review financial records, establishing an office of inspector general and increasing financial disclosure to members and the Department of Labor.

In essence, Hoffa accuses Carey and his staff of operating without regard to budgetary constraints, spending heavily on misguided political campaigns and squandering assets to push the union to the brink of bankruptcy.

Between 1991 and 1998, Teamsters’ net assets declined from $154 million to $3.2 million, Hoffa said.

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The union also spent close to $600 million in dues income over the same period.

“Our investigation shows that the previous administration instituted a structural spending program that guaranteed deficits,” Hoffa said. “There was no accountability in the budgetary process. There were no ramifications for overspending and there was no tracking of spending.”

Carey was ousted from the union after federal officials found that he funneled union contributions to political parties and liberal interest groups in exchange for donations to his re-election campaign in 1996.

The federal election overseer ordered a new election, which Hoffa won with 55% of the ballots cast in December 1998. Tom Leedham finished with 39% of the vote and John Metz had 6%.

The rerun election was funded in part by the federal government, which has had oversight over the Teamsters union under terms of a consent decree signed in 1989 to rid the union of corruption.

Hoffa said the international union “essentially broke even” in 1998 and he offered a number of budgetary reforms to “re-establish the financial health and security of the Teamsters.”

For the full story, see the May 3 print edition of Transport Topics. Subscribe today.