Charges Filed against IBT Sec’y-Treasurer Ken Hall amid Fraught Teamsters Election

By Samuel Borgos

With all of the votes now counted, the James Hoffa – Ken Hall ticket appears to have won the Teamsters International leadership (election protests are still pending).1 While the Hoffa ticket easily won in Canada, in the United States, challenger Fred Zuckerman won a majority due to a strong showing in the Central and South regions. By winning those two regions, Zuckerman allies Tony Jones, Bill Frisky, Bob Kopystynsky, Avral Thompson, John Palmer, and Kim Schultz won vice presidential seats. In some precincts, election results are being challenged.

Nonetheless, it is the “winter of our discontent” for the International Brotherhood of Teamsters. Secretary-Treasurer of the IBT Ken Hall, Political Director Nicole Brener-Schmitz, International Vice President Rome Aloise, and Executive Assistant Willie Smith are facing a range of charges, including obstruction, embezzlement, and corruption. Hall is accused of intentionally withholding documents germane to an ongoing internal investigation into corruption within the Teamsters (relevant to the other two cases). Independent Investigations Officer Joseph diGenova and US attorney Preet Bharara took the offensive in their mutual attempt to root out corruption in the IBT, while Hoffa stands by his officers, claiming no wrongdoing. What is already a contentious issue is only made more so as it is bookended by the phasing out of a Teamster-US Government consent decree and the aforementioned leadership election.

In 1989, as a result of a settlement at the heart of The United States v. The International Brotherhood of Teamsters, direct government oversight, in the form of an Independent Review Board, was put in place by the U.S. District Court to root out corruption in the Teamsters.

The Consent Decree, pursuant to U.S. v. International Brotherhood Of Teamsters, gave every Teamster the right to vote for the union’s top officers and put in place a robust set of rules and guidelines under which the IRB would investigate and expunge any continued corruption.The board’s intent was not to interfere with the running of the union, only to ensure that the IBT’s functions were not interfered with by malignant forces, either from within or without. If it became known to the board that some form of corruption (racketeering, bribery, etc.) was taking place, the members had the power to launch a full investigation. If any action by the union regarding internal disputes or policy was audited by the IRB and determined to be in violation of the Consent Decree, the case could be taken to the Federal courts for further action. Procedures were put in place to guarantee that elections were free and fair. To this end, elections were overseen by the IRB (via the elections officer).

Most important to the story being covered here, the IRB had the right to audit any documents relating to a possible act of corruption or would further help an ongoing investigation into said acts. This is not to say that the IRB would have disproportionate power over the running of the union. Much like what the LMRDA requires of charges filed within a union, such charges brought by the board would have to be fully documented and backed up with strong evidence. Unless campaign practices were in violation of intra-union corruption standards, the IRB could not interfere with union elections in a way that unduly favored one candidate or another.

The IRB was put in place in 1991 and, to the mind of the federal courts, has performed its duties as well as possible, given the circumstances. So much so that the Consent Decree discussed above has been phased out it its most stringent form this year after 25 years of oversight, with a transfer of responsibility court approved pursuant to the Final Order of February 17th, 2015. Authority over investigations of corruption has been handed over to a Teamsters-appointed authority known as the Independent Investigations Officer (IIO). This officer will pursue the IRB’s duties until, at the very least, five years after the decree has been phased out. This exit strategy was recommended by US attorney for the Southern District of New York Preet Bharara, who admitted that practices had changed for the better within the IBT, but “…corrupt and undemocratic practices persist at all levels of the union and the objectives of the decree have not yet been achieved”2.

Certain permanent changes have been made to the IBT’s internal policies, including direct membership election of international officers and independent investigation and monitoring of matters involving corruption. And, though the IRB has already been phased out, the Justice Department reserves the right to put the full power of the Consent Decree back in place if the IBT does not tow the line with regard to its commitment to an honest and fair system.

The Current Situation

Which brings the spotlight to the recent firestorm concerning Ken Hall, General Secretary-Treasurer of the IBT, who was charged with obstruction by Independent Investigation Officer Joseph diGenova. Hall has allegedly withheld over 17,000 emails and hard documents from an investigation by the IIO into corruption in the IBT. On November 3, 2016 the US attorney requested a motion for a court order compelling the IBT to turn over all requested documents. The corruption investigation itself stems from the possibly illegal behavior of Hall and other high-ranking members of the IBT leadership. Specific charges include accepting gifts from employers, vendors, and others doing business with the union and certain other acts of patronage towards allies within the union hierarchy, with favors done for the benefactors in return.

In February 2016, for instance, Rome Aloise, an international vice president of the IBT, was accused of accepting assets/favors from union employers, including finding employment for Aloise’s step-son. Second, Aloise allegedly formed fake collective bargaining agreements with friendly (to him, at least) IBT employers. Third, the Vice-President is accused of allowing an employer to become a member of the union, thus making him eligible for union retirement benefits. If such charges are proven true, Aloise would have acted contra to the Teamsters’ own constitution, leaving aside federal law.

As well, the IBT leadership is accused of helping facilitate sweet heart contracts to sympathetic employers in exchange for tickets to a Playboy party at the Super Bowl.

According to the Teamsters for a Democratic Union, this alleged corruption on the part of Aloise and his protection by the Hoffa administration represent a continuation of common practices within President Hoffa’s Teamsters and that President Hoffa is well aware of the rules prohibiting union leadership engaging in illegal activities such as patronage towards union employers.3 The Labor Management Reporting and Disclosure Act (LMRDA) holds that union leaders who engage in such activities are to be relieved of their duties and not allowed to return to office for 13 years after the conviction or imprisonment for such conviction ends (whichever is later), unless the sentencing court reduces the time ban upon motion of the convicted person.

Hoffa’s Response

President Hoffa, for his part, dismisses the charges against Vice President Hall as baseless. The charges brought forward were, in Hoffa’s attorney’s words, “…interfering with the IBT’s ongoing election through a baseless charge of obstruction against the IBT’s General Secretary-Treasurer, Ken Hall”4. (TDU points out that in fact, by the time the Hall charges were filed, 90 percent of the ballots were mailed in). The leadership does not question the right of the IIO to investigate alleged corruption within the union, but claims that the Mr. diGenova overstepped his bounds when he requested that certain members of the union leadership produce a complete record of their emails from the last three years. Such an audit, to Hoffa’s mind, was overly burdensome for the administration and a violation of privacy.

IBT leadership cooperated to a point, releasing some of the documents requested and submitting logs rather than the emails for thousands of others, deeming them “privileged,” which it may assert if justified, in past practice under the IRB. The leadership protested that the IIO was placing an undue burden on them and they could not cooperate further without a détente of some kind. diGenova agreed to meet with the leadership back on July 20th. The leadership expressed fears that a loudly proclaimed investigation/audit would cause an impediment to carrying out a free and fair election. The IIO assured them of his intention to keep the audit of the rolled out documents an orderly and subtle one, so as not to impede the union election. Both sides having shown some accommodation with the other, the rolling out of documents and letters of explanation (for withheld documents) continued until October 31st, when General Secretary-Treasurer Hall was charged with obstruction. Hoffa, in turn, asked the court for relief, via attorney Viet D. Dinh.

U.S. Attorney Weighs In

What is missing from the leadership’s “J’accuse” against the office of the IIO is any intimation of an ulterior motive on the diGenova’s part. diGenova was handpicked by Hoffa to serve on the IRB (when there was one) and has had a good working relationship with him for twenty years. It seems unlikely, therefore, that diGenova is pursuing some sort of personal vendetta against Hoffa or his allies and speaks, instead, for the IIO’s earnest belief that Hall has some deeper motive for withholding documents. Regardless, the Final Order states, in no uncertain terms, the right of the IIO to audit all documents relevant to the particular case it is pursuing. In a memorandum in support of the IIO’s order5, US attorney Preet Bharara states that the IBT has not complied in a timely or cooperative manner and is therefore in violation of the Final Order-“the Union made its last production of documents on September 9th but remains in substantial noncompliance with all the documents requested, which has substantially hindered the work of the IIO” In the words of Bharara, “with respect to privileged documents, as described above, the union has failed to even identify the privilege it claims protects the documents withheld. This is egregious and a stark break from practice under the Consent Decree. Given that the Final Order vests the IIO with authority to examine privileged documents, and in light of the union’s contumacious conduct, the Court.”

As We Go To Press:

Just before this issue was to be mailed out, we learned that the Teamsters Independent Investigations Officer (IIO) Joseph diGenova informed the IBT General Counsel by letter dated February 17th that the obstruction charges against Ken Hall, Sec’y-Treasurer of the IBT, were being withdrawn. Says diGenova, “I am persuaded that Mr. Hall did not play a personal role in the International Brotherhood of Teamsters (“IBT”) noncompliance with my March 4 and 11, 2016 document requests” As a condition of dropping the charges, however, diGenova says that the IBT must agree to designate an officer, either Hoffa himself, or Ken Hall, to be responsible for ensuring IIO document requests are complied with. So, the IIO request for documents still stands, and the IBT must still comply with them.

Meanwhile charges against the other officers remain, and two of them (IBT V.P. Rome Aloise and Hoffa’s Executive Assistant Willie Smith) are scheduled for hearings in March.

1. Election results were certified on February 16 by Election Supervisor Richard Mark. Election appeals are being heard on February 28.

2. 2016 October 8, 2016 November 3, 2016 November 02, 2016 October 27, 2016 October 12, and 2016 October 11. “Teamsters for a Democratic Union.” November 4 2016. Accessed November 5, 2016. http://www.tdu.org.

3. “United States of America v. IBT, et al., No. 88 Civ. 4486 Barbara M. Harvey and Cathy Highet to Tara LaMorte, Esq. Assistant United States Attorney, September 12. 2016. Office of the United States Attorney, Southern District of New York, New York, NY.

4. United States of America v. IBT, et al., No. 88 Civ. 4486 (LAP), Viet D Dinh to Hon. Loretta A. Preska. November 3rd, 2016. US District Court for the Southern District of New York, New York, NY.

5. United States of America’s Memorandum of Law in Support of Motion to Enforce the Final Order of February 17th, 2015. Preet Bharara, United States Attorney for the Southern District of New York, November 3rd, 2016.

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