May 20, 1998

BY FRANCINE KNOWLES BUSINESS REPORTER

Edward T. Hanley, head of the 300,000-member Hotel Employees and Restaurant Employees International Union, which has been dogged by allegations of organized crime ties, plans to retire July 31 under a settlement agreement.

The announcement comes 2 1/2 months after federal monitoring of the union, designed to investigate and weed out mob allegations, ended and after Hanley's attorney denied that Hanley would be forced out this summer as part of a deal that would allow him to avoid facing civil charges.

The politically connected Hanley said after leaving an executive board meeting here Tuesday that he has ``entered into a settlement agreement'' to retire.

But Hanley, who refused 35 times to answer questions at a Senate subcommittee hearing on organized crime in 1984, will continue to receive $250,000 a year for life from the union--his current salary--as a pension. He also will continue for at least a year as chairman of the union's multimillion-dollar welfare and pension funds.

The union, which was founded in Chicago, has said it expects the final report of Kurt Muellenberg--who served as federal monitor--to ``conclude that the international union and its general officers are not controlled or influenced by organized crime.''

But Muellenberg, part of a new union-paid public review board that includes former Illinois Gov. James Thompson, declined to comment on what that final report will say. Muellenberg, who is also former chief of the Justice Department's organized crime and racketeering section, declined to comment on a Chicago Sun-Times report in February in which sources said Hanley and others were considering stepping down this summer as part of a deal to avoid civil charges of abuse.

The Sun-Times report cited sources familiar with the union investigation who said civil charges were being prepared against Hanley that included allegations his international ran a ``ghost'' local in Rhinelander, Wis., near which Hanley and others have vacation homes.

The civil charges would also accuse him of abusing a union jet and signing off on questionable auto-lease deals that personally benefitted union bosses, the sources said.

In February, attorney Robert Rotatori of Cleveland, who represented Hanley, denied any wrongdoing by Hanley and denied that the monitor's office was trying to force Hanley out in exchange for any deal. Rotatori said then that Hanley would step down only ``if he decides to retire or if he gets hit by a bus.''

The union's general executive board elected John W. Wilhelm, the union's general secretary-treasurer, to succeed Hanley effective Aug. 1.