By Kevin Galvin

ASSOCIATED PRESS

December 27, 1997

WASHINGTON -- The labor movement was stunned when Teamsters president Ron Carey was accused by a federally appointed board of complicity in a scheme that illegally financed his successful re-election campaign, then was barred from participating in a restaging of the election.

But the fallout from the Teamsters election scandal has barely begun.

A federal grand jury probe into the affair is continuing, and charges are

expected to spread beyond the Teamsters into the AFL-CIO and political organizations allied with labor.

Members of the AFL-CIO executive council are increasingly concerned about secretary-treasurer Richard Trumka's alleged role in a scheme to launder money for Carey's re-election.

Labor leaders fear that the charges aimed at Trumka -- who has invoked his Fifth Amendment right against self incrimination -- are overshadowing efforts to revitalize labor and clean up its image.

A handful of influential union presidents voiced their concerns directly to AFL-CIO president John Sweeney in recent weeks, urging him to take steps to remove the federation from the controversy, even if that meant Trumka taking a leave of absence.

One labor official said they just want to move on.

The most serious question: Who will federal prosecutors in New York seek to indict?

Carey's campaign manager and two consultants already have pleaded guilty to charges that they schemed to exchange Teamsters contributions to third parties for donations to the Carey campaign. About $885,000 in union treasury money was used to facilitate the schemes. Carey, who was known as a champion of union reform, denied wrongdoing. But a court appointed election overseer doubted his testimony and barred him from a rerun. Carey took a leave of absence, and a federal panel with the task of fighting corruption at the Teamsters filed charges that could lead to his expulsion from the union.

The next round of criminal charges is expected in January.

Documents filed in federal court repeatedly have asserted that the union's former political director, William Hamilton, was a key player in the scheme. Hamilton has denied wrongdoing.

Citizen Action, a liberal consumer group that was used as a conduit for the fund-raising scheme, was forced to shutter its national office.

A West Coast fund-raiser tied to Citizen Action and the organization's top officers also have been implicated. Citizen Action's attorney said the organization was cooperating and that none of its officials knowingly did anything wrong.

The slowly unfolding Teamsters scandal could have broad political consequences.

Instead of gearing up early for the 1998 congressional elections, the AFL-CIO and its Teamsters affiliate may well be distracted by federal court action.

Moreover, the scandal touched Democratic officials, including fund-raisers for the Democratic National Committee and President Clinton's re-election campaign, which sought a $100,000 donor for Carey. Ultimately, the campaign never produced a donation.

AFL-CIO spokeswoman Denise Mitchell said the controversy would only cause labor leaders to focus more energy on organizing new members and fighting for workers. The usually voluble Trumka has been virtually silent on charges that he helped pass $150,000 in Teamsters treasury money through the AFL-CIO to Citizen Action, where it allegedly was used to help Carey. A memo Trumka wrote to the Teamsters requesting the payment stated that it would be earmarked for labor's aggressive grassroots voter mobilization effort during the 1996 elections.

But Martin Davis, a political consultant who pleaded guilty in connection with the fund-raising scheme, said Trumka agreed to help pass through the money "to help Ron, meaning Ron Carey."

AFL-CIO officials said an internal review turned up no wrongdoing at the federation, and Trumka's attorney asserted that he would be exonerated.

But court documents filed by federal prosecutors single out Trumka as a participant in the tainted election.

The pressure on Trumka grew when the New York Times published an editorial calling on him to step aside. Adding to labor leaders' concerns is the confession by Gerald McEntee, president of another large union, the American Federation of State, County and Municipal Employees. McEntee confessed to having a printer with whom his union does business give $20,000 to Carey's campaign.