By Jennifer G. Hickey

09/16/97 10:21:04 PDT

The focus has been on Ron Carey and the Teamsters election. However, this story of union influence, corruption and money began not in 1996 but far earlier and with the complicity of the Clinton administration.

In February 1996, AFL-CIO President John Sweeney told a meeting of union executives in Bal Harbor, Fla., "We're going to mount a political-action effort of unprecedented scale, with every union doing its share by contributing ideas, money, staff, media and materials." From January 1995 to June 1996, according to records of the Federal Election Commission, or FEC, union political-action committees received $74 million and contributed $26 million to congressional candidates, with 90 percent distributed to Democrats. Just Sweeney's AFL-CIO spent $35 million on its own TV blitz and contributed a total of $1,180,014 to Democrats in the 1995-96 cycle, which contrasts pitifully with the $14,000 donated to Republicans, according to the Center for Responsive Politics, or CRP. That's 98 percent to 1 percent.

What did all of that money buy? While the Republicans maintained control of both houses of Congress, 10 GOP incumbents were defeated and Bill Clinton was reelected -- garnering 25 percent of his votes from union families, according to exit polls. Kenneth R. Weinstein of the conservative Heritage Foundation in Washington says that big labor has been powerful in recent campaigns because the unions are "a dedicated cadre of liberal activists whose most important mission has been to effect a social transformation of the political landscape."

The unions have, in fact, stinted on strike funds and other member benefits to make their leaders politically powerful by dipping into members' pockets. Under the Supreme Court's 1988 decision in Beck vs. Communications Workers of America, union members are entitled to a refund of any portion of their compulsory union dues used for political activities. That sum frequently is estimated at $50 million -- with estimates of in-kind contributions ranging from $300 million to $1 billion. In October 1992, President Bush issued an executive order requiring federal contractors to notify their union workers of their refund rights. Shortly after he assumed office, Clinton revoked this order and has enjoyed the benefit. The recent nullification of the 1996 Teamsters election of Ron Carey -- notorious for alleged bankrolling of Democratic Party causes with union funds -- and the hearings into the Democrats' campaign-finance abuses, may have focused further attention on the union attempts to change the political landscape in 1996, but that is not when the story began.

Heritage's Weinstein says that in recent years the unions have been able to influence national policy inordinately because of their connections both to the DNC and the Clinton White House. One such connection was Harold Ickes. While working for the New York law firm of Meyer, Suozzi, English & Klein, Ickes represented Local 100 of the Hotel and Restaurant Employees International Union from 1983 until 1991 when he left to work for Clinton. Ickes says he saw "no evidence of illegal activity whatsoever" despite the facts that Local 100 Vice President John DeRoss was convicted of corruption and Clinton's own Commission on Organized Crime listed Ickes' client local as a tool of the Gambino crime family.

In 1996, Ickes served as the main White House fund-raiser for Clinton and the Democrats, as illustrated by his release of reams of documents detailing his event-by-event and month-by month knowledge of the DNC/Clinton-Gore fund-raising machine and how much it was raising. Ickes also shared responsibility for orchestrating the joint fund-raising efforts of the White House, the DNC and related events such as the coffee klatches. And one of the most important roles assigned by Clinton to Ickes was to act as the administration's contact for Arthur Coia, president of the Laborers International Union of North America, or LIUNA, according to Coia. Indeed, the Coia union lent the first Clinton Inaugural Committee $100,000. Since 1993, the Laborers' Political League, LIUNA's PAC, has donated nearly $2 million to Democrat congressional candidates.

In turn, LIUNA received more than $15 million in federal grants between 1993 and 1996. In fiscal year 1996 it garnered $11,094,000 in further grants. In addition, LIUNA was provided with a $3.5 million contract from the Department of Housing and Urban Development just three months after it admitted in federal court to connections to organized crime.

According to the Heritage Foundation, LIUNA officials have racked up more than 80 convictions for racketeering, bribery, extortion and attempted murder. On Nov. 4, 1994, Coia was served with a 212-page draft racketeering complaint from the Justice Department's Organized Crime and Racketeering Section -- a complaint that did not charge him with a crime but tasked him with cleaning up LIUNA. On that same day, Clinton sent Coia a handwritten thank-you note for a handmade golf club Coia had given him. Furthermore, despite the fact that the head of Justice's organized crime unit, Paul Coffey, had alerted the White House to the impending draft complaint, Coia attended six events with Clinton in the intervening period, including a dinner and a breakfast at the White House. And, feeling the pain of the 1994 election losses, Clinton tapped the shady Coia to cochair a 1995 New England dinner, which aimed to raise $500,000, and a May 1996 fund raiser, which collected $12 million.

Coia continued to exchange letters with Clinton and, on Jan. 18, 1995, it was DNC Finance Chairman Alan Solomont who co chaired that New England dinner with Coia. Less than three weeks later, on Feb. 6, 1995, Hillary Rodham Clinton attended a LIUNA conference and delivered a speech -- and Coia asserts that he spoke to her about the Justice investigation. Two weeks later, Justice informed Coia that if he promised to be good and reform his union he could remain as president. LIUNA tells Insight that Justice, FBI and congressional figures have praised its compliance.

"In general, you're not going to offend a major source of support," F.C. "Duke" Zeller, who served as Teamsters communications director for 14 years, tells Insight. And Coia remained an important Clinton fund-raising fixture in 1996, earning a spot on Ickes' list of top 10 contributors. Critics are saying that, having gotten by with a not-very sophisticated selling of favors to union-boss Coia, the Clinton administration began doing the same favor for Carey by protecting him too.

According to Zeller in his book The Devil's Pact: Inside the World of the Teamsters Union, as much as $56 million was diverted illegally from the Teamsters to the 1992 Clinton Gore campaign. This alleged diversion of funds left the Teamsters as much as $52 million in debt in 1992. Zeller tells Insight that, in 1992, there were "certainly some contributions in a very strange manner," but having left the Teamsters in 1992 he would not speak about the 1996 campaign. In detailing the earlier campaign, however, Zeller points to a meeting between Clinton and Ron Carey which occurred at Madison Square Garden during the 1992 Democratic Convention. "This is when I believe the channeling [of funds] began, if not sooner," Zeller tells Insight.

During Carey's own 1996 run for reelection, Jere Nash served as his campaign manager by day; nights and mornings, Nash served as a Clinton campaign consultant. According to Barbara Zack Quindel, the elections officer appointed by a federal court to review the Teamsters election, Nash informed Carey's secretary Monie Simpkins that "the [International Brotherhood of Teamsters] was going to make contributions to certain political organizations and in return, certain individuals would contribute to the Carey campaign through [Teamsters for a Corrupt-Free Union]." Simpkins told the investigating court officer that on at least one occasion she informed Carey that a check he was approving "was one that Mr. Nash had called about."

News reports say that in the summer of 1996, Martin Davis, a Carey campaign consultant, met with Cary campaign consultant Michael Ansara (who is cooperating with federal investigators) and DNC finance official Richard Sullivan to discuss how to launder money from the Teamsters' PAC to Democratic campaigns in exchange for the DNC's requests that large Democratic donors contribute to Carey's campaign. According to the CRP, Democrat Senate candidates received $254,750 from the Teamsters, as opposed to the $10,700 given Republicans. In the House of Representatives the contrast was $2,243,080 to Democratic coffers, and $90,110 to Republicans.

On Aug. 21, after holding back her report during the Teamsters strike against UPS, Quindel released the report invalidating Carey's election and requiring a new balloting. She promptly became a focus of attention and anger from supporters of Carey's opponent, James Hoffa Jr., following the announcement, and she says she will resign. Quindel has admitted her membership in Citizen Action, which suddenly received $475,000 from the Teamsters, even though the union had awarded it an average of only $15,650 in the preceding four years. The money that went to Citizen Action was funneled through Democratic offers to several individuals, including Carey campaign consultant Ansara and his wife Barbara Arnold, who then made the donation to Carey's campaign. Furthermore, according to FEC records, Arnold contributed $1,500 to Minnesota Democratic Sen. Paul Wellstone and a further $2,000 to the DNC during the 1995-96 election cycle. Arnold's husband contributed $1,000 to the DNC and $1,500 to the Massachusetts Democratic Party. Whether that money came from the Teamsters is not known.

Zeller tells Insight he does not know if there was a Clinton effort to withhold Quindel's decision until after the UPS strike was concluded, though "she may have been an agent of the Justice Department. I have no idea what their timing was." Quindel did not return Insight's call. But an investigator tells this magazine that there is much consternation and anger among FBI officials about the decision to delay release of the court-appointed election officer's report and the special treatment labor unions have been receiving from the Clinton Justice Department.