By MARK MAREMONT

Staff Reporter of THE WALL STREET JOURNAL

December 23, 1997

When he worked for far-right politician Lyndon LaRouche, Richard Leebove spread conspiracy theories about a left-wing plot to take over the Teamsters union.

Later, he was hired to drum up publicity for a group of Teamsters who, at times, beat up members advocating more democracy within the union.

More recently, Mr. Leebove pulled off his greatest coup. As a union political operative, he was the person most responsible for toppling Teamsters President Ron Carey.

Mr. Leebove, a 46-year-old Detroit public-relations consultant, served as an aide and spokesman for James P. Hoffa in last year's bitterly contested campaign for the Teamsters leadership.

Although Mr. Hoffa lost narrowly when the ballots were counted, his side was convinced the election had been stolen. Mr. Hoffa put Mr. Leebove and a small group of loyal supporters on the case.

The Leebove team soon uncovered a trove of information, including the first solid evidence that more than $700,000 had been siphoned from the union's treasury to benefit Mr. Carey's campaign.

To get the goods, Mr. Leebove's group employed some unusual tactics.

They recruited a cadre of informants at Teamsters headquarters in Washington, who furnished sensitive internal documents and computer files.

Mr. Leebove somehow obtained private details of a Carey contributor's brokerage account. He lied about his identity to gather information about other donors.

He also worked hand-in-glove with federal investigators and reporters digging into the Carey campaign.

Getting Results

Information the Leebove team provided in early March to the U.S. Attorney in New York City sparked a federal criminal probe the following day.

Since then, three people, including a former Carey campaign manager, have pleaded guilty to charges related to misappropriation of union funds.

Federal officials have overturned the election and barred Mr. Carey from running again.

Mr. Carey says he didn't know about the scheme, and he hasn't been charged with any criminal wrongdoing.

However, he took a leave of absence last month, hours before a panel that oversees the Teamsters accused him of financial impropriety relating to the union election.

"None of this would have come to light without" Mr. Leebove's group, says a government investigator. "They're very good, and also very persistent."

As Mr. Leebove sees it, "Two or three of us brought down the sitting president of the Teamsters."

Mr. Carey, the purported Teamsters reformer, has been shown to have been aided by crooked dealings. And Mr. Hoffa, who was derided by his opponents as the flag-bearer of the union's old gangster mentality, is now claiming the anticorruption mantle.

Although his campaign financing also is being investigated, Mr. Hoffa is the front-runner in the new election, which hasn't yet been scheduled.

But does the Hoffa camp deserve its claim to the moral high ground? Put another way: Is the rift inside the Teamsters so intractable that both sides are willing to use questionable means to keep the other out of power?

Hoffa's Role

"Hoffa knows exactly who Leebove is and what he's done," says Kate Bronfenbrenner, a professor at Cornell University's School of Industrial and Labor Relations, who has followed Teamsters issues for years and sympathizes with the Carey faction. "He hired Leebove to do his dirty work, to dig up dirt and to intimidate and manipulate people."

"That's absolutely not true," Mr. Hoffa responds. He says Mr. Leebove has "done a great service in exposing the criminal element in our union," which, Mr. Hoffa adds, would never have come to light otherwise.

Mr. Leebove describes his role as "digging up the truth and exposing corruption."

Mr. Leebove operates from a modest suite of offices in a nondescript hotelworkers' union building in Southfield, just outside his hometown of Detroit.

Several rooms are stacked with documents about the Carey scandal, in seemingly haphazard order. Every so often, he picks up a headset to take a call from a congressional staffer, union official or reporter.

Mr. Leebove dropped out of college in the early 1970s to join Mr. LaRouche's group.

Mr. LaRouche was obsessed with the Teamsters, believing that foreign interests, Jews and Kennedy left-wingers were conspiring to take over the right-leaning union as part of a plot to weaken the U.S. industrial base.

Mr. Leebove, who ran for Illinois attorney general in 1978 on Mr. LaRouche's U.S. Labor Party ticket, says he spent much of his time in the late 1970s combating the dissidents within the Teamsters.

Although he calls some LaRouche rhetoric "overheated nonsense," he says he believed then, as now, that liberal "outsiders" back the dissidents as part of an effort to keep blue-collar workers from controlling their own destinies.

One of those to whom he provided research and public-relations help was John Cody, a New York City Teamsters leader who was running for re-election in his construction-workers local.

According to a 1978 Newsday article, Mr. Leebove addressed union members about "a conspiracy in which money from London, Wall Street, the Rockefellers and the Kennedys" was funding a Teamsters dissident group to which Mr. Cody's opponent belonged.

The conspiracy was never proved. Mr. Cody, who won, was later convicted of labor racketeering and tax evasion.

Mr. Leebove says he "might have said" what Newsday reported but notes that "rhetoric in a campaign gets overheated." He says he had no idea at the time that Mr. Cody was corrupt.

Mr. Leebove says he left the LaRouche group in the early 1980s after he found it had grown "too wacky."

But his LaRouche experience provided a launch pad for his career. He founded a union-oriented consulting firm, RL Communications Inc.

Today the firm has one other employee and publishes newsletters for Detroit-area locals, including unions representing utility workers and police officers.

Blast From the Past

All along, Mr. Leebove has continued to help Teamsters traditionalists.

One of his early clients was a group called Brotherhood of Loyal Americans and Strong Teamsters, or Blast, formed in the early 1980s to combat the

leading dissident group, Teamsters for a Democratic Union, which was campaigning for an end to corruption and greater democracy.

Mr. Leebove says he published Blast's newspaper and publicized its demonstrations.

Those demonstrations sometimes turned violent.

At TDU's 1983 convention, a crowd of Blast members broke into a hotel, roughed up a police officer and several TDU members and took over meeting rooms.

A staff report of the President's Commission on Organized Crime later said Blast had been organized with the backing of Jackie Presser, then the Teamsters president, and used "violence against dissenters."

Mr. Leebove acknowledges that Blast members were involved in violence but says it was occasionally provoked by TDU members.

In any case, he says, it is unfair to hold him responsible for others' acts.

Although Blast later disbanded, the union's leaders kept the reformers at bay through the 1980s. But in 1989, the Teamsters reluctantly agreed to a consent decree in which the federal government obtained strong oversight of the union.

Government officials described the move as an attempt to end the corruption and mob influence that had pervaded the union for decades, including when it was run by Mr. Hoffa's late father, James R. Hoffa.

Mr. Leebove and his clients vehemently opposed the consent decree, calling it an unwarranted government intrusion.

They also viewed Mr. Carey, who quickly emerged as the dissident wing's standard-bearer, as the government's hand-picked ally. Mr. Carey became Mr. Leebove's prime target.

Attacking Carey

In the 1991 election, Mr. Carey ran for the union's leadership on a reform ticket, opposed by a slate that included one of Mr. Leebove's longtime clients, Michigan Teamsters boss Larry Brennan.

In the prelude to the campaign, union members allied with Mr. Brennan's slate circulated a newsletter charging that Mr. Carey might have presided over "some of the worst corruption in our union."

It cited "informed sources" to suggest he might be thrown out of the union for this.

Although the newsletter purported to be from a group called Teamsters for an Informed Membership, Mr. Leebove says that the group didn't exist and that he wrote it.

He says he did so to earn money, not to help any candidate. He says he didn't use his name because "people might think it's more authoritative" if the information came from a group.

A few years later, Mr. Leebove again went after Mr. Carey, this time teaming up with George Geller, a Michigan lawyer he had known since the 1970s, when both were LaRouche supporters.

The two made a series of detailed allegations to the government's Independent Review Board, an oversight body set up in the consent decree, about supposed Carey mob ties and improper real-estate deals.

Mr. Geller says he made some of his allegations in anonymous calls to IRB investigators.

The board found that the allegations couldn't be substantiated. But the Detroit pair succeeded in generating a lot of unfavorable press for Mr. Carey.

Union Goes After Leebove

Teamsters headquarters started viewing Messrs. Leebove and Geller as a threat. The union hired outside lawyers, aided by private detectives, to investigate the pair.

Union officials then circulated to the press findings of this investigation -- which included Messrs. Leebove's and Geller's past LaRouche links and their alleged political "dirty tricks" -- hoping to dissuade reporters from using the Detroit duo as sources.

Mr. Leebove, who had known Mr. Hoffa for several years, was among those urging him to seek the Teamsters presidency. When Mr. Hoffa became a candidate, he made Mr. Leebove his spokesman.

As the 1996 campaign was heating up, Mr. Leebove phoned Ronald Seeber, associate dean of Cornell's labor-relations school, noting that two Cornell professors -- Ms. Bronfenbrenner and Michael H. Belzer -- were being widely quoted as favoring Mr. Carey.

Mr. Leebove "reminded me that they have long memories," Mr. Seeber says, and said "that if Hoffa won, our school wouldn't be treated favorably" by the union.

The school relies on unions for students for its training classes and also for cooperation in its research. Mr. Seeber says the call seemed "a straight-out threat."

Mr. Leebove followed with an official election protest, signed by Mr. Hoffa. It claimed that Cornell was making improper campaign contributions by paying to send Mr. Belzer to a Teamsters convention, where, it said, he spent hours "spinning" the media in favor of Mr. Carey.

The protest was dismissed by the election officer. David Lipsky, then dean of the Cornell school, terms Mr. Leebove's efforts "an attempt to silence or intimidate the professors."

Mr. Leebove calls his Cornell maneuver a "brushback pitch" and adds: "I don't think there was a problem letting them know they were taking sides. And there's no requirement the Teamsters have to send people to that school."

Tracing the Funds

In the campaign's waning days in November 1996, Mr. Carey's camp launched a blitz of mailings to Teamsters members, some attacking Mr. Hoffa's integrity.

Mr. Leebove recalls being puzzled, because election filings had indicated the Carey campaign lacked the funds for such mailings. "We knew, sooner or later, we'd find out where they got the money," he says.

On Jan. 30, 1997, following Mr. Carey's narrow victory, Patrick Szymanski, one of Mr. Hoffa's lawyers, joined John F. Murphy, a Hoffa supporter who

heads a Teamsters local in Boston, to review Carey campaign filings in the election officer's Washington headquarters.

They were amazed by what they found.

A newly formed group dubbed Teamsters for a Corruption-Free Union had spent $200,000 on the mailings, and all of it had been raised from seven people-- none of them Teamsters.

During a lunch break, Mr. Murphy called Mr. Leebove with the list of names. By dinner time, Mr. Leebove had made some connections using on-line databases.

One contributor, Barbara Arnold, had given $95,000.

She was listed as a Carlisle, Mass., student.

Mr. Leebove quickly ascertained that she was married to Michael Ansara, a former activist of the 1960s radical group Students for a Democratic Society, who ran a Boston-area telemarketing firm.

Later, Mr. Leebove went to work on the phone, employing pseudonyms to determine who the donors were and whether any were employers.

Teamsters rules say nobody who employs even a secretary may solicit or donate campaign funds.

Flynn, Here

Claiming to be a "Mr. Flynn," he called Gwendolyn Grace, a California philanthropist who had given $50,000 to Teamsters for a Corruption-Free Union, or TCFU. He demanded information and wanted to know why she was interfering with the union's affairs.

After Ms. Grace complained to the federal officer overseeing Teamsters voting, Barbara Zack Quindel, Ms. Quindel wrote to Hoffa attorneys. Singling out Mr. Leebove, she said: "I will not tolerate harassment of any participant in this election."

Mr. Leebove admits using fake names when he spoke to people in the Carey camp. "I don't think I'm going to get very far saying 'I'm Richard Leebove calling from the Hoffa campaign,' " he says.

He says he has also claimed to be a free-lance reporter to gather information.

Another, much smaller donor, Shanti Fry, is a Democratic activist and part-time bank executive.

Mr. Leebove says he called her, claiming to be

somebody interested in doing business with the bank, and gathered enough information to determine that Ms. Fry might be an employer.

Eventually, after a spate of newspaper articles and the opening of investigations, the Carey campaign returned all of the TCFU money.

Later, Ms. Quindel ruled that the donations were improper under Teamsters rules. Ms. Fry, whose donation was ruled ineligible because it was solicited by an employer, says her lawyer advises her she did nothing improper. Ms. Arnold's lawyer says she has no comment. Ms. Grace didn't return phone calls.

Recruiting 'Moles'

Early on, the Hoffa team realized it needed help from inside Teamsters headquarters in Washington.

Many workers there predated the Carey administration and privately supported Mr. Hoffa. Mr. Leebove turned to a veteran Chicago Teamsters organizer, Danny Moussette, who had many contacts at headquarters.

One of Mr. Moussette's first calls was to Gregory C. Mullenholz Sr., a midlevel administrator whose father had worked for the union under Mr. Hoffa's father.

"Greg didn't take much persuasion" because he had seen some suspicious activities during the campaign, Mr. Moussette says. Mr. Mullenholz happened to be in charge of issuing checks for the Teamsters' political-action committee and knew where its money was going.

Mr. Moussette says he soon was receiving notes and copies of documents from Mr. Mullenholz and others he won't name, usually in unmarked envelopes.

Mr.Moussette says his sources also sent him "a bunch of computer disks" containing, among other things, copies of memos from William W. Hamilton Jr., head of the Teamsters' government-affairs department. He later also received personal notes of Mr. Carey's scheduling secretary. Everything was passed on to Mr. Leebove.

Mr. Mullenholz declines to be interviewed. But he has testified to Congress that he helped the Federal Bureau of Investigation and also gave some Teamsters documents to his lawyer, who was also a Hoffa lawyer.

Money Trail

In late February, information provided by one of the informants led to a breakthrough: Mr. Hoffa's investigators learned that just before Ms. Arnold made her $95,000 Carey contribution, her husband's telemarketing firm got payments from the Teamsters treasury totaling $94,000.

They suspected Mr. Ansara had funneled Teamsters money into the Carey campaign by laundering it through his wife.

Mr. Murphy, the Boston Teamsters leader, outlined the Leebove team's findings and suspicions to Mary Jo White, the U.S. attorney in New York City, who was helping enforce the consent decree. "His letter basically provided the information that started this investigation," says a person familiar with the probe.

The group also gave information to Ms. Quindel, the federal election officer, and fed the news media and Congress, where two committees started Carey investigations.

Mr. Leebove says these channels were important because he still feared that the U.S. attorney's office and the election officer were part of a pro-Carey conspiracy. "Coming up with our own evidence made it impossible for them to keep covering it up," he says. "We needed the news media, Congress and the FBI to provide checks and balances."

Mr. Hoffa, asked about Mr. Leebove's use of false names, says he wasn't kept abreast of that. But as for using "moles" inside the Teamsters, Mr. Hoffa says, "We had to have whistle-blowers. There was tremendous theft of Teamsters money."

In his view, his side's "investigation did a great service to the taxpayers, who were fleeced of the $22 million it cost to oversee this election, and to the union members, whose dues money was embezzled."

In May, Mr. Leebove wrote the election officer with another juicy tidbit: Ms. Arnold had received a deposit in her PaineWebber Inc. brokerage account of $90,000 at almost the exact time that she made her similar-sized TCFU donation. He even included Ms. Arnold's account number and the dates of the transactions.

To Mr. Leebove, it was further proof that her husband was laundering Teamsters money through her account.

How did Mr. Leebove obtain such information? He says it came to him in an unsolicited, anonymous fax, which he won't provide.

What Was Happening

As it turned out, Mr. Ansara did route Teamsters money through his wife's account, although not in quite the fashion that the Hoffa camp first believed.

Mr. Ansara has pleaded guilty to conspiracy and is cooperating with U.S. authorities. His lawyer says he has no comment.

Eventually, federal authorities unraveled various Carey campaign misdeeds.

In one central scheme, money from the Teamsters had been donated to various liberal interest groups, on condition that those groups find donors to give smaller amounts of money to Mr. Carey's campaign.

Some of the funds had been funneled through TCFU, but there was more to it than that. In essence, Teamsters' dues money had been illicitly used to benefit Mr. Carey's campaign.

In late July, Mr. Mullenholz at Teamsters headquarters apparently made a mistake. He faxed to his lawyer -- the lawyer who was also a Hoffa lawyer -- a Teamsters memo about a grand-jury subpoena probing possible improper Teamsters donations to the Democratic Party.

The memo's contents showed up almost immediately in a Washington Times article. Teamsters officials, who had long suspected a leak, pinpointed Mr. Mullenholz's transmission through fax records.

They suspended and later fired him. Gerard Treanor, Mr. Mullenholz's current attorney, says his client is "a classic whistle-blower. He was troubled by what had occurred."

Mr. Leebove, asked if he has any qualms about the investigative techniques he used to uncover the scandal, looks startled. "I haven't thought of all the ethical issues here," he says. "We didn't encourage anyone to do anything wrong. We just received information and forwarded it to the authorities."

He says he feels vindicated by the finding of corruption in the Carey camp. "They have said I'm a conspiracy theorist," Mr. Leebove says with a laugh. "But sometimes even paranoid people are right."

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