Ed Burke is no shrinking violet in union squabbles, and Teamsters Local 705 is no rose garden. And that explains why he won his bet.
It was a simple, private bet.
Burke predicted there would be a huge turnout at a July 16 union hearing to decide whether he should keep his job as union-appointed trustee in charge of cleaning up the powerful Chicago local.
More than 500 Teamsters showed up, some of them ringing the office of the local-where former Teamsters giant Daniel Ligurotis built an empire-with their parked trucks.
And as Burke expected from word-of-mouth about an organized effort by the local’s employees, nearly all those who spoke at the hearing held by three high-ranking Teamsters officials were against an outsider like him running their 14,000-member local.
“If they (national Teamsters officials) are interested in us, then they’ll get the hell out of Chicago, ’cause we can take care of our own union,” said Angelo Jerase, an organizer of the rally at the hearing.
How the union panel rules in the coming weeks is much more than a battle of wills between Local 705 and Teamsters President Ron Carey, who took emergency control of the local in June and ousted its six top officers.
It is a closely watched skirmish in a much larger battle being waged by Carey, who became the head last year of the 1.4-million member Teamsters, the nation’s second-largest union, in its first rank-and-file election.
In many ways, Carey, who has vowed to clean up corruption, is in the same fix as the former Soviet Union’s new bosses. His true believers think he is salvation. His most fervent opponents say he is organized crime’s Manchurian candidate. And many observers, including at least one federal judge, wish the cleanup would go faster.
With Local 705, Carey and top Teamsters officials say they knew something was wrong based on a probe by the government-appointed Independent Review Board. But they didn’t know what they would find in the union’s books-and what they have found so far in the local’s files, they say, convinces them the takeover was justified.
Burke said a team of indepedent auditors and outside Teamsters officials have found a pattern of questionable expenses, hirings and work policies in a local slipping steadily into debt.
According to Burke, the local ran up $4.5 million in debt between 1986 and 1992, and it lost another $500,000 by June. Yet despite the mounting deficit, Burke said, there is no record of any discussion by officials about the losses. Nor, he added, did the local operate on a budget, and there is no sign expenses were trimmed as the deficit mounted.
When asked about Burke’s statements, Gil Valerio, who had been the local’s secretary-treasurer, replied in a written statement: “There is no basis for the trusteeship or any charges.”
In February, a federal judge upheld an order by the Teamsters’ court-appointed administrator removing Ligurotis as head of the local. Soon after, the local’s leadership shifted its responsibilities around and approved 6 percent across-the-board raises totaling $285,000, said Burke.
Those raises do not include a $133,000-a-year raise given to Valerio, the newly named secretary-treasurer, according to Burke. Valerio had previously received $92,000 a year as a trustee, federal records show.
Asked about the pay increase, Valerio replied, “That is what the job pays.” After his ouster by the national union, Valerio became head of the union’s pension fund program at a $100,000-a-year salary, according to Burke.
High salaries are not unusual for Local 705.
Before he was ousted from Local 705, Ligurotis was paid $230,000 a year by the local, according to the U.S. Department of Labor. Like other Teamster officials who receive multiple salaries for local and national union jobs, Ligurotis earned $411,427 from four union jobs in 1990, according to Teamsters for a Democratic Union, a Detroit-based reform movement.
The union hiring that Burke finds questionable includes the February employment of 10 new organizers. It is not clear, according to Burke, how or why they were hired; there are no job applications, no training programs listed and no job goals detailed, he said.
The newly hired organizers caught Burke’s eye, he said, because it is not clear how the local’s 34 business agents spend their time.
One business agent, for example, takes care of just one member at one depot, he said. There are four other agents who handle 92 Teamsters at 37 locations. And then there are four agents who take care of 7,000 workers.
Such conditions are proof to Burke that the local’s leadership is not capable of setting aside its old ways and constitute grounds for him to stay on as a temporary trustee for up to 18 months.
But some local members disagree. Most of the opponents say they do not believe the government-appointed review board’s charges and deeply resent having Carey seize control.
Rory McGinty, who was the local’s attorney until recently, says the latest charges by the government-appointed three-man monitoring board “do not amount to much.”
The board, which takes its authority from a 1989 agreement between the government and the Teamsters, said the local’s leaders had improperly given Ligurotis a $4,500 Christmas bonus last year after he had been charged previously by the union’s court-appointed monitors with embezzling $77,000 from the local and while he owed it $52,000.
The board also said the local had made questionable severance payments to three Teamsters employees who resigned either because of ties to alleged organized crime figures or before a hearing with a court-appointed investigations officer.
McGinty says the government’s charges that Ligurotis put three convicted felons on the union’s payrolls are based on policies that the local’s leadership didn’t realize were against the law.
Burke is a one-time miner from Cabin Creek, W.Va., and a former United Mine Workers official who led Carey’s winning campaign last year-hardly a lifetime Teamster. (When diehard Teamsters at Local 705 grumble about being led by a miner, Burke replies that he learned about the union by criss-crossing the country in Carey’s grass-roots, rank-and-file campaign.)
Another complaint is far more serious. It goes like this:
A flier supplied by Valerio from a group called the “Committee to Defend Local 705” points out alleged ties between Carey, a former leader of a New York Teamsters local, and organized crime figures. Specifically, it points to a June 28 New York Times article that cited federal investigators’ reports that Alphonse D’Arco, a former acting boss of the Lucchese crime family, told them about dealings many years ago with Carey.
Teamsters official Nancy Stella in Washington said Carey has repeatedly denied the allegations of mob ties-which have been widely circulated, she added, by union opponents still fighting his leadership.
Burke’s place in the allegations comes from his meeting with William F. Genoese, a high-ranking Teamsters official, whom Carey named as temporary trustee last year for Teamsters Local 295 in New York City.
Former federal Judge Frederick Lacey, a member of the court-appointed review board monitoring the union, blocked Genoese from taking the position, saying in May of last year that it would “invite further La Cosa Nostra influence” over Local 295.
Lacey explained his ruling by citing Genoese’s “history of inaction and complacency” when faced with charges of mobster domination over the union’s airline division.
Burke met briefly in February 1992 in Miami with Genoese on Carey’s orders and recommended to Carey that Genoese get the job, he said. “It seemed legitimate, and I didn’t see anything wrong.”
“As it turned out, it was a bad move,” Burke added, “but it was all within the first two weeks of Carey’s taking office.”
