The Wall Street Journal, May 5, 2008, Monday

The Wall Street Journal

May 5, 2008, Monday

The Wall Street Journal

Obama Says Teamsters Need Less Oversight

By BRODY MULLINS and KRIS MAHER

Sen. Barack Obama won the endorsement of the Teamsters earlier this year after privately telling the union he supported ending the strict federal oversight imposed to root out corruption, according to officials from the union and the Obama campaign.

It's an unusual stance for a presidential candidate. Policy makers have largely treated monitoring of the International Brotherhood of Teamsters as a legal matter left to the Justice Department since an independent review board was set up in 1992 to eliminate mob influence in the union.

UNION SUPPORT


The Issue: Barack Obama, who has received the endorsement of the Teamsters, has agreed to support less oversight of the union.
The Background: The Teamsters have been under strict government oversight for nearly two decades due to the union's past connection with organized crime.
What's Next: Tuesday's Indiana primary could be a test of the effectiveness of the Teamster endorsement.Sen. Obama's rival for the Democratic nomination, Sen. Hillary Clinton, has declined to take a stance on Teamsters oversight. During his eight years in office, President Bill Clinton took no action to end the special board. Democratic presidential nominees in 2000 and 2004 -- Al Gore and John Kerry -- didn't address the issue, according to Teamsters officials.

Neither Sen. Obama nor Teamsters President James P. Hoffa has spoken publicly about easing up federal oversight, a top priority for Mr. Hoffa since he became union president in 1999. On the campaign trail, Mr. Hoffa stresses Sen. Obama's criticism of the North American Free Trade Agreement as the big factor in winning the 1.4-million member union's support.

But John Coli, vice president for the Teamsters central region, who brokered the Teamsters endorsement, said Sen. Obama was "pretty definitive that the time had come to start the beginning of the end" of the three-member independent review board that investigates suspect activity in the union. Mr. Coli said that Sen. Obama conveyed that view in a series of phone conversations and meetings with Teamsters officials last year.

Obama spokesman Tommy Vietor confirmed the candidate's position in a statement to The Wall Street Journal, saying that Sen. Obama believes that the board "has run its course," because "organized crime influence in the union has drastically declined." Mr. Vietor said Sen. Obama took that position last year.

'More Wishy-Washy'

Sen. Clinton was "more wishy-washy" than Sen. Obama in discussions on the issue, said Mr. Coli. "Sen. Clinton is making no promises about lifting the consent decree," said her spokesman, Phil Singer.

Officials at the Obama campaign and the Teamsters say there was no quid pro quo between the union endorsement and Sen. Obama's position on ending federal oversight.

Bret Caldwell, a Teamsters spokesman, said the union's endorsement was "predicated in no way, shape or form" on the consent decree. Mr. Caldwell said that only a court can do away with the oversight, not the president. "The only way that this is going to be resolved is through the court system, there can't be a political solution," he said.

But Mr. Caldwell said the president could appoint people to the Justice Department and courts who also favored ending the consent decree.

"It certainly wouldn't hurt to have a president who came out and said that they would support getting the oversight out of our union," Mr. Caldwell said.


Mr. Obama decided to support the Teamsters' position in July or August 2007, according to Mr. Vietor. Former North Carolina Sen. John Edwards also agreed with the union, according to the Teamsters' Mr. Coli. Eric Schultz, spokesman for Sen. Edward's presidential campaign, when contacted last week, said he was unable to confirm that or reach staffers he said would be able to. When Mr. Edwards dropped out of the race in January, the union endorsed Sen. Obama in February.

Sen. Obama was able to win the Teamsters' endorsement while maintaining his disagreements with them on other issues, his spokesman, Mr. Vietor, said. The Illinois senator opposes the expanded drilling for oil in Alaska that the union backs. He backs, over the Teamsters' objections, broad immigration reform that would provide a path to citizenship for illegal immigrants. And while he generally shares the union's skepticism on free trade, he does back some smaller agreements the Teamsters oppose.

Officials at the Teamsters oversight board share Sen. Obama's assessment that mob influence has dramatically fallen. But they say the union would have trouble continuing the anticorruption effort without the board. "When we have a case involving a member of organized crime and we send that to the union, the union automatically sends that back to us because they can't handle it," said John Cronin, who has been the administrator for the review board since it was created.

NEW MUSCLE



• See more data on unions' involvement in political campaigns.And, board members say, it would be extraordinary for a president to try to alter the oversight. "Presidents very rarely try to tell the Justice Department what is the right thing to do in matters of judicial administration," said William Webster, a member of the board since 1992 and a former director of both the Federal Bureau of Investigation and the Central Intelligence Agency.

The Teamsters' backing has been particularly important for Sen. Obama, who is struggling to win over the white working-class voters who dominate the union's core membership of truckers and warehouse and port workers.

Mr. Hoffa has spent much of the past month campaigning for Sen. Obama in Pennsylvania and Indiana, which holds its primary Tuesday. Mr. Hoffa has toured the state in a noisy brigade of 18-wheel trucks, stopping at warehouses and distribution centers along the way to praise Sen. Obama.

Political Force

While the union says it has cleaned up its act, its reputation remains tarnished among detractors by a history of mafia ties, and the mysterious 1975 disappearance of former union President Jimmy Hoffa, the current president's father.

As the nation's fourth-largest labor union, the Teamsters are a powerful political force. Since 1990, the Teamsters' political action committee has spent $25 million on political elections. That puts them No. 12 on the list of top campaign spenders in recent years, $4 million shy of investment bank Goldman Sachs Group Inc., according to the nonpartisan Center for Responsive Politics.

Since endorsing Sen. Obama on Feb. 20, Mr. Hoffa has sought to be an ambassador for the candidate to his membership, which is 81% male and 76% white. He often talks to Sen. Obama, offering advice and tactics. He's sent out rounds of automated phone calls to Teamsters members for Sen. Obama in key states. In April, he joined an Obama teleconference with reporters when the campaign needed someone to tout the senator's record on trade.

On the campaign trail, Mr. Hoffa fits right in with his members. He greets fellow Teamsters as "brothers" with handshakes and bear hugs.

Shortly before the April 22 Pennsylvania primary, Mr. Hoffa visited a York Peppermint Pattie plant in Reading that is slated to be closed. He blamed free-trade agreements negotiated by Sen. Clinton's husband when he was president. Mr. Hoffa tells workers that trade agreements enacted recently have made is easier for companies to move jobs to Mexico and China.

Sombrero Posters

"What they're saying is they're going to take this thing and put a sombrero on it," he told workers, pointing to their Peppermint Pattie plant. Mr. Hoffa handed out giant posters of a bright yellow sombrero and told workers at the Teamsters-organized plant to hang them up inside the plant. "This is the kind of crap they're doing," he told one worker as he signed his sombrero poster.

Just before the Peppermint Pattie stop, Sen. Obama called Mr. Hoffa, as the union leader sat at a diner eating eggs sunny-side-up and toast. Mr. Hoffa says he told Sen. Obama about the plant and suggested he include it in his stump speech.


On the campaign trail, Mr. Hoffa (left) stresses Sen. Obama's criticism of the North American Free Trade Agreement.
Later that day, Sen. Obama issued a statement saying that working families can't wait "while the same old Washington players play the same old Washington game, while factories like the York Peppermint Pattie plant in Reading move to Mexico in search of cheap labor."

Getting rid of the federal oversight on the union has been a top priority of Mr. Hoffa's tenure as general president of the union.

Shortly after the union's founding a century ago, ties emerged to organized crime. "The Teamsters are in the kind of industries that the mob would be," such as transportation and garbage hauling, said Kate Bronfenbrenner, a labor expert at Cornell University. By the 1950s, the union had begun diverting assets of its pension plans to help organized-crime members fund development of Las Vegas, and the AFL-CIO expelled the union. U.S. Attorney General Robert F. Kennedy aggressively investigated Mr. Hoffa's father, who was convicted of witness tampering in 1964.

As corruption allegations continued, the Teamsters agreed to federal oversight in 1989, signing a consent decree to settle a racketeering lawsuit brought by the Justice Department.

The consent decree required the direct election of the union president and other officers by rank and file members, in an election overseen by a court-appointed election officer. (Before, the president was elected by delegates.) It also set up a three-member independent review board to investigate corruption within the union. These elements of the decree are in effect today, while others, like oversight of union finances, have ended.

Teamsters officials say that over the past 16 years, the influence of organized crime has been largely eliminated from the union, and the consent decree is now an unnecessary burden. The union says it spends $6 million a year to comply with the decree.

The review board's caseload has dropped significantly over the years, to eight cases in 2007, from 70 in 1992. In 2006, one union member was permanently barred from the union for associating with a known member of organized crime.

The independent board's mission "has shifted from preventing mob influence to a focus on matters that other government agencies should handle," Mr. Vietor, the Obama spokesman, said in his statement. "This holds the Teamsters to a different standard than other unions that has nothing to do with organized crime."

But the Teamsters still face skeptics. In 1999, Mr. Hoffa hired Edwin Stier, a lawyer with experience fighting union corruption, to create an internal program to root out mob ties and help end the consent decree. Mr. Stier quit in 2004, saying Mr. Hoffa wouldn't fully support his efforts. "I haven't seen anything that the union has done internally that comes close to self-policing," Mr. Stier said in a recent interview.

A Teamsters spokesman says the union doesn't want to duplicate efforts of the oversight board. But if the board were no longer in place, he says the union would handle such matters itself.

Negotiations With Justice

To formally end the consent decree, the Teamsters and the Justice Department would have to file a joint application with a judge in the Southern District of New York. The union entered into negotiations earlier this decade with the U.S. attorney's office about ending the consent decree, but no deal was reached, according to people familiar with the matter. A spokeswoman for the U.S. attorney's office in the Southern District of New York declined to comment.

Sen. Obama wasn't always the Teamsters favorite. When he ran for Senate in 2004, Mr. Coli and many Teamsters locals endorsed one of his opponents in the Democratic primary. When Sen. Obama prevailed, the Teamsters endorsed Sen. Obama in the general election. Mr. Coli met with Sen. Obama to smooth things over. Mr. Hoffa met Sen. Obama for the first time in late 2006, as Sen. Obama was preparing to launch his presidential campaign.

At the outset of the 2008 race, the Teamsters declined to endorse any of the Democratic candidates as internal factions prevented the union from forming a solid majority for any candidate. Teamsters officials in New York lobbied for the union to endorse Sen. Clinton. Officials in North Carolina pulled for that state's former senator, Mr. Edwards. Mr. Coli led the effort for Sen. Obama.

Meanwhile, Mr. Coli was talking with Sen. Obama and his campaign about reducing the union's federal oversight. Mr. Coli lobbied Sen. Obama and his staff on the issue in a series of phone calls and face-to-face meetings over the course of more than a year, according to Teamsters officials.

"I think it was an educational process," Mr. Coli said in an interview. Mr. Hoffa wasn't involved in the discussions.

Write to Brody Mullins at brody.mullins@wsj.com and Kris Maher at kris.maher@wsj.com