Trumka is a focus of an investigation by the U.S. attorney for the Southern District of New York into a scheme to launder Teamsters money into Carey's 1996 reelection campaign. Carey was then in the middle of a tight race against James P. Hoffa, and was desperately in need of cash to finance mailings and other campaign activities.
Three Carey aides have pleaded guilty to money-laundering charges. On Monday, former Teamsters political director William W. Hamilton Jr. was indicted.
Federal officials overturned Carey's election last year after concluding that union money was illegally used to benefit him. A short time later, Carey was barred from running again after federal officials said he was aware of the scheme. Carey, who has denied knowing about it, has taken a leave of absence as law-enforcement officials continue their investigation.
A SIX-MONTH PROBE Yesterday's hearing was the latest development in a six-month probe by the House oversight subcommittee into why federal election overseers - who spent $20 million in taxpayer funds to supervise and conduct the election - failed to detect the money-laundering scheme.
At the start of the hearing, the panel's chairman, Peter Hoekstra (R., Mich.), announced that he had agreed to a request by U.S. Attorney Mary Jo White of the Southern District of New York that the panel drop its plans to have Trumka's executive assistant, Brad Burton, and AFL-CIO controller Susan Mackie testify. White told Hoekstra that having them testify might disrupt her investigation.
The hearing concerned a $150,000 contribution by the Teamsters in November 1996 to the political action fund of the AFL-CIO. Within days of receiving the money, AFL-CIO officials directed that it be given to Citizen Action, a liberal interest group allied with labor unions.
Citizen Action in turn made a $100,000 payment to the November Group, a now-defunct political consulting firm that was doing direct-mail work for the Carey campaign.
Trumka had earlier declined to appear before the committee, citing his Fifth Amendment rights.
CONVINCED Sweeney, whose federation represents 72 unions with 13 million members, said Trumka had also declined to cooperate with an internal union probe. But Sweeney said he remained convinced Trumka was innocent because the union inquiry had turned up no evidence that anyone at the union knew the money was intended to benefit Carey's campaign.
In pleading guilty to money-laundering charges last year, Martin Davis said Trumka had agreed to make the $150,000 payment to Citizen Action if the Teamsters made a corresponding payment to the AFL-CIO. Davis testified that he told Trumka that Carey's campaign would benefit.
Sweeney testified yesterday that he did not believe Davis' allegation.
Under federal law, it is illegal for candidates for union office to use union funds or other resources to promote their elections. It is also illegal for employers to make contributions to the campaigns of candidates for union office.
The investigation by the Republican-controlled committee has the potential to embarrass Democrats by highlighting allegations by the U.S. attorney last year that the Democratic National Committee also sought to participate in the money-laundering scheme.
DNC officials told a Senate committee last year that they had found a prospective donor for Carey's campaign but dropped the idea when her lawyers objected to the plan. Around the same time, the Teamsters contributed $236,000 to the Democrats.
Also yesterday, House Democrats called on two outside counsels for the Republican investigation to step down because of their appearances as paid television commentators. Rep. David E. Bonior (D., Mich.) contended that Victoria Toensing and Joseph diGenova, who are married to each other, had used their position as special counsels to the Republicans on the subcommittee to promote their careers as television analysts.
Phil Smith, a spokesman for the subcommittee probe, said Democrats were simply trying to deflect attention from the Teamsters' problems.
