HEARING ON TEAMSTERS INVESTIGATION

Thursday, April 30, 1998

House of Representatives,

Subcommittee on Oversight and Investigations,

Committee on Education and the Workforce,

Washington, D.C.

TABLE OF CONTENTS……………………………………………………………...iii

 

OPENING STATEMENT OF CHAIRMAN PETE HOEKSTRA, COMMITTEE ON EDUCATION ON THE WORKFORCE, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS *

APPENDIX A- WRITTEN STATEMENT OF CHAIRMAN PETE HOEKSTRA, COMMITTEE ON EDUCATION AND THE WORKFORCE, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS *

APPENDIX B- WRITTEN STATEMENT OF CHAIRMAN BILL GOODLING, COMMITTEE ON EDUCATION AND THE WORKFORCE *

APPENDIX C- WRITTEN STATEMENT OF MR. JOHN SWEENEY *

APPENDIX D- COPIES OF EXHIBITS 9-18 *

APPENDIX E- COPY OF CHART PRESENTED AT HEARING *

TABLE OF INDEXES *

The subcommittee met, pursuant to notice, at 9:37 a.m., in Room 2175, Rayburn House Office Building, Hon. Peter Hoekstra [chairman of the subcommittee] presiding.

Present: Representatives Norwood, Hilleary, Scarborough, Ballenger, Schaeffer, McKeon, Mink, Scott, Kind, Ford, Clay, Owens, Roemer, Payne, Miller of California.

Staff present: Robert Borden, Professional Staff Member; Jay Diskey, Communications Director; Patrick Lyden, Staff Assistant; Bill McCarthy, Press Secretary; Mark Rodgers, Workforce Policy Coordinator; Mike Quickel, Staff Assistant; Mike Reynard, Staff Assistant; Joe diGenova, Counsel; Victoria Toensing, Special Counsel; Fred Smolen, Forensic Auditor; Philip Smith, Media Specialist; Joe Pittrizzi, GAO Detailee; Bill Outhier, Counsel; Becky Campovorde, Professional Staff Member; Lisa Rich, Counsel; Dan Anderson, Staff Investigator; Dan Sullivan, Staff Investigator; August Stofferahn, Professional Staff Member; John Loesch, Counsel; Chris Donesa, Counsel; Brian Connelly, Counsel; Steve Silbiger, Staff Investigator; Gail Weiss, Staff Director; Mark Zuckerman, General Counsel; Cheryl Johnson, Legislative Associate/Education; Brian Kennedy, Labor Counsel/Coordinator; Maria Cuprill, Legislative Associate/Labor; Pat Crawford, Legislative Associate/Labor; Shannon McNulty, Staff Assistant/Labor; Brian Compagnore, Staff Assistant; Jim Jordan, Special Counsel; Cassandra Lentchner, Special Counsel; Michael Berlin, Counsel; John W. Lee, Senior Investigator; and Lisa Lotkin, Executive Assistance.

Chairman Hoekstra. [presiding] Good morning. The subcommittee will come to order.

Let me just briefly reiterate what I believe we heard in yesterday's hearing with the Federal Election Officer and the Independent Financial Auditor. I think we found that hearing to be very informative but not all that comforting.

We heard about a disturbing lack of internal financial controls with the International Brotherhood of Teamsters, at least within their headquarters. The closest analogy that I can think of for what might have been going on there--and remember, we're talking about an institution that over a period of five to six years had a cashflow of somewhere in the neighborhood of $600 to $750 million--what might have gone on there was the equivalent of moving money in and out of a shoebox without a lot of control.

The disturbing thing about what we heard yesterday is that even though people have identified the lack of controls, even though we have seen the results of a lack of internal controls, it does not appear that any changes have taken place within the internal structure of the Teamsters to prevent that from happening again.

We continue to have serious concerns about the potential of wrongdoing that could occur in the upcoming reelection. I appreciated the energetic and enthusiastic remarks yesterday by Mr. Cherkaskey, the new election officer, and I think on both sides of the aisle we have a pretty high degree of confidence that he is going to approach his task with a lot of energy. He has indicated that, you know, he is expanding his investigation to cover a number of areas that were not covered by the election officer in 1996 and that increases our degree of confidence. But, there are still many questions about what happened and whether even this election officer is being put in a position where he will be successful in 1998.

As Mr. Cherkaskey said yesterday, he found the Jere Nash memo of January 1997 to be perhaps one of the most disturbing documents that he saw in his review of what happened in 1996. I agree with that. When you overlay the names and the discussion and the implications of the Jere Nash memo with who is currently in charge of the Teamsters, you get an incredible degree of overlap. That should all cause us to step back and say, is this one more element that is going to create serious problems in having a fair, democratic election in 1998? There are about 30 Carey loyalists who are still in power and positions of influence of the Teamsters' leadership.

We'll be hearing, in a few minutes, from Mr. Sweeney, who is the President of the AFL-CIO. Mr. Sweeney has referred to the illegal contribution or the allegations of an illegal contribution swap involving the AFL-CIO as a blight on the labor movement. I agree with him. A lot of appreciation, Mr. Sweeney, to you for working with us on this issue in a very constructive way. I appreciate the fact that you are here voluntarily this morning, I appreciate the dialog and the work that we have had and the discussions that we have had between our staffs over the last couple of weeks to make sure that we could have this meeting today in a constructive format. We are also very appreciative that the AFL-CIO has worked with us in responding to our requests for documents so that we would not have to go through the process of a subpoena and that have successfully--we have been successfully working through that. So, we very much appreciate your cooperation and working in good faith with us.

I also very much appreciate the discussion that we have had with you and your staff about finding a way--in a constructive way--to involve the AFL-CIO in cooperating with us on the American Worker Project as we take a look at labor law and how that perhaps needs to be modified or revised in the future.

We very much appreciate the AFL-CIO's support on my personal efforts to address the issue of prison industries. Again, that is an issue that--you know--we have had a lot of good dialog on with Peggy Taylor and other people within the AFL-CIO to really put together a bill that addresses the needs that I felt were important and addresses the needs that the AFL-CIO had identified as being important and really the work that the AFL-CIO has help put together a coalition of unions that have supported that effort.

So, I think in a number of areas we have shown that we can work together and move the process forward and also recognize that no, we don't always agree. But, at least, I think, we have created a process where we can recognize that we disagree but that we can move the process forward in a constructive way. So, thank you very much for helping build that kind of a relationship.

I'd also like to announce that today we are going to have a change in the witnesses that are scheduled for today. We were anticipating that Mr. Burton, who is the executive assistant to the AFL-CIO secretary-treasurer, Richard Trumka, and Sue Mackie, who is a comptroller of the AFL-CIO--we thought that they would be appearing here today.

We have acceded to the request of the Justice Department in consultation after yesterday's hearing with the Minority as to what would be appropriate for us to do today. In discussion with our legal counsel, we decided that at this point--at this time--that we agreed with the Justice Department in that they would not be requested to testify. They were going to answer questions about their knowledge of the serious and potential criminal improprieties that occurred in the fall of 1996 involving the alleged swap of money between the IBT and the campaign of president Ron Carey. But, again, we have decided and acceded to the Justice Department's request not to have them testify today.

There has been a lot that has happened. Three Carey campaign aides have pleaded guilty. Earlier this week, Mr. Bill Hamilton, the former director of governmental affairs for the Teamsters--he was indicted. That was the first indictment in eight months. So, I think that we are satisfied that there is progress that is being made in the case in New York. Mr. Hamilton stands accused of multiple felonies, including conspiracy, embezzlement, fraud, for allegedly laundering close to $1 million at the behest of--and in coordination with--the Democratic National Committee. Therefore, we believe that at this time the Justice Department's request is appropriate. We do, however, reserve the right to recall Mr. Burton and Ms. Mackie at a future time.

Another key figure in the disturbing pattern of apparently illegal activity that is associated with the AFL-CIO is secretary-treasurer Richard Trumka, who is Mr. Burton's boss. Mr. Trumka also will not be here this morning. As we had discussions with Mr. Trumka, he indicated to us in writing through his attorney that had he been asked or forced to testify, he would have taken the Fifth Amendment, which is his right under the Constitution, and he would have refused to answer our questions out of fear of incriminating himself. That is why Mr. Sweeney is here to answer questions in Mr. Trumka's place.

We appreciate Mr. Sweeney's testimony and willingness to cooperate. We are disappointed that Mr. Trumka is unwilling to participate and we're concerned about Mr. Trumka's role in the events of two years ago and we believe that it is very unfortunate and it leaves a dark cloud potentially over the AFL-CIO.

It is also personally troubling that Mr. Trumka, in taking the Fifth with this committee, remains a key top official of the AFL-CIO, when evidence of his involvement in this illegal scheme is corroborated by witnesses and documents. We heard yesterday from Mr. Cherkaskey, the Federal Election Officer overseeing the current Teamsters' election process, who called that illegal fundraising scheme in 1996 a ``terrible tragedy.'' I agree with that assessment and Richard Trumka appears to bear a significant burden of responsibility for what occurred there.

The people who designed and carried out that illegal money swap in which $150,000 was taken out of the Teamsters' treasury, potentially laundered through the AFL-CIO and then redeposited into the Carey campaign, shows an astonishing arrogance towards the rank-and-file members of that union. This wasn't Richard Trumka's money, it wasn't Ron Carey's money, it was money paid into the union's treasury by hard-working men and women who had a right to believe that the IBT leadership was operating in their best interests, not in their own. This money-laundering operation took place despite seven years of Federal supervision and the efforts of a great many people to clean up the IBT and instill democratic principles into the way that union would conduct its affairs.

Mr. Cherkaskey spoke passionately about the progress that he believes has been made in the Teamsters union and I think, again, on a bipartisan level we agree--that there has been tremendous progress that has been made since the union and the Justice Department signed the consent decree in 1989 that established Federal supervision of the union.

In terms of freeing the Teamsters from the grip of organized crime, he's correct. But, it's clear to me that there's plenty of room for improvement, both inside the union and in the way the Executive Branch carries out this supervision. There is less there than meets the eye.

In 1996, the union campaign and election--despite Federal supervision--federal laws were broken, millions of taxpayer dollars were wasted--because, remember, the American people paid for this failed election--internal would-be reformers were denied access to documents and were later shunned and punished. The union's treasury has gone from a robust $150 million to, basically, zero in terms of net worth during these years of Federal supervision.

I'm skeptical that the re-run election later this year will be much better. Ron Carey's team of people still run the Teamsters. They were in place in 1996, they're still in place today. We also heard from the Justice Department's so-called Independent Financial Auditor, who is in a critical position to detect and stop potential illegal actions at the Teamsters headquarters--at least, that's what the position was intended to be.

But we now know that this gentleman, Mr. Marvin Levy, who's a very qualified and talented individual, merely reviews or monitors Teamsters finances but does not aggressively question the purposes for which the money is spent.

I look forward to hearing from Mr. Sweeney this morning because the more we can root out the details of what went on illegally at the Teamsters, potentially at the AFL-CIO, in this 1996 union campaign and election, the better we will understand and appreciate the scope of the work that we have to do--the scope of the work that we have to do to prevent this kind of wrongdoing in the future.

SEE APPENDIX A FOR THE WRITTEN STATEMENT OF CHAIRMAN HOEKSTRA

SEE APPENDIX B FOR WRITTEN STATEMENT OF CHAIRMAN BILL GOODLING, COMMITTEE ON EDUCATION AND THE WORKFORCE

I now recognize Mrs. Mink.

Mrs. Mink. Thank you, Mr. Chairman. I join the committee in welcoming you, Mr. Sweeney, to this hearing and appreciate also, on behalf of the minority members, your willingness to cooperate with the investigations that have ensued after the fraud and corruption was discovered in the Teamsters election. It's a very complicated situation and we have to proceed very carefully on behalf of this committee, I believe, to make certain that nothing that we do jeopardizes the ability of the Justice Department to fully prosecute those that were involved in that incident.

While there are tremendous pressures on the Teamsters because of what occurred in 1996, I think we have to be very careful that we don't indict everybody involved in that organization. There are individuals obviously who are culpable and who need to be prosecuted and that's the job of the Justice Department and the attorneys there and the courts.

Our job, hopefully, is to define in what way the Congress can set up a mechanism that would prevent and protect the unions and union organizations from this kind of development in the future and I think that's the exclusive jurisdiction that we have; we're not here in the business of indictments and that type of investigation. So, I appreciate the Chair's decision to withhold calling the witnesses who are primarily parties to the criminal aspects of the investigation being conducted by the Justice Department and, while they might be called later, it seems to me appropriate this time to defer to the requests of the Justice Department. So, I appreciate your decision in that regard.

There are appropriate matters for our inquiry and we welcome the opportunity of this committee to explore them and I'm sure, Mr. Sweeney, that you will have information to impart to this committee which will help us clear the matter for the appropriate and proper pursuit of a Congressional inquiry and oversight in these matters. Thank you very much, Mr. Chairman.

Chairman Hoekstra. The Chair recognizes Mr. Norwood.

Mr. Norwood. Thank you, Mr. Chairman. I move, pursuant to Clause 2(j)(2)(c) of House Rule 11, that counsel be permitted to question each panel of witnesses for one hour prior to questioning by the members with the time to be equally divided, Mr. Chairman, between the Majority and the Minority counsels and that counsels be permitted to further question the panel of witnesses after questioning by the members for one hour, with that time to be equally divided between the Majority and the Minority counsel.

Chairman Hoekstra. The question is on the motion. All those in favor, say aye.

Those opposed?

Chairman Hoekstra. The ayes have it. The motion is agreed to.

Mr. Sweeney, welcome and we look forward to hearing your testimony this morning.

Mr. Sweeney. Thank you, Mr. Chairman, and thank you, members of the subcommittee

Chairman Hoekstra. Excuse me. Mr. Sweeney, excuse me.

Mr. Sweeney. I'm sorry.

Chairman Hoekstra. I haven't gotten this down pat yet. I've got to do this procedural stuff because, if I don't get it right, Mrs. Mink calls me on it and we need to do this. So, I focus on the procedural stuff and I have one more procedural thing that I need to do.

Before receiving your testimony, the Chair will ask you to take an oath. The witness should be aware that making a false statement to Congress, while under oath, may be prosecuted under law. In light of this, will the witness please rise and raise your right hand?

[Witness sworn.]

Chairman Hoekstra. Thank you, Mr. Sweeney; you're free to proceed.

Mr. Sweeney. Thank you.

Mr. Chairman and members of the subcommittee, I won't be insincere and say that I appreciate the opportunity to appear before you this morning. But, I do believe we do share some concerns and I appreciate your agreement to accommodate my schedule to make a plane to give a speech to the operating engineers convention that I was supposed to give first thing this morning.

I think we all agree that serious and disturbing issues have been raised by the allegations arising out of the Teamsters election. There is no room in the union movement for corruption or wrongdoing of any kind. These issues are especially tragic for the members of a proud and important union, such as the Teamsters--men and women whose courage the entire Nation witnessed during the UPS strike and I hope and trust their interests will be best served through this process.

The allegations are all the more disturbing because, at a time when so many women and men all across the country are doing so much to reinvigorate the union movement and strengthen the voice of working families, some of the adversaries of the working people are attempting to use the issues that have been raised to cast a cloud over all the positive work that is underway.

I want to say from the outset that I hope no member of this committee has any intention of using this committee's work to further the nationwide effort to intimidate the union movement and silence working families. I can't think of a greater sign of disrespect for working men and women or a greater abuse of power and taxpayer resources.

Let me set out a couple of other points, if I may. It is an article of faith that the AFL-CIO does not interfere in internal union elections, and that is a commitment that I take very seriously. I made every effort to be strictly neutral in the Teamsters election, while unequivocally supporting the union, its members and their struggles. As I have informed the U.S. Attorney's office, I had no involvement in any fundraising activities for the Carey campaign and no involvement in any of the transactions cited with respect to the AFL-CIO. Since the AFL-CIO was first contacted by the U.S. Attorney, we have instructed our lawyers to cooperate fully with the U.S. Attorney's investigation and we have--and as you have, Mr. Chairman, acknowledged--with your own investigation and we will continue to do so.

I'm especially disturbed that the AFL-CIO has been connected in any way to the allegations arising out of the Teamsters election. First, because we must do everything we can to protect the interests of union members and the integrity of the union movement. Second, because what working women and men all across the country accomplish by joining together in strong, effective unions is so important to their well-being and their families' futures. Nothing we do should jeopardize that.

Men and women in unions have a real voice on the job; they earn higher wages, they are more likely to have good health care coverage and pensions. But, we see our mission not just as helping our members improve their lives but as helping all working families have a stronger voice in their workplaces, their communities, their governments and the global marketplace.

That's why, in 1995, I ran for president of the AFL-CIO, a federation of 72 national unions with about 13 million members. After secretary-treasurer Rich Trumka, and executive vice president Linda Chavez-Thompson and I were elected, we made far-reaching changes to strengthen the AFL-CIO. I am especially proud of our recommitment to organizing and we launched an unprecedented effort in 1996 to engage our members in holding our elected leaders in government accountable around working family issues.

We asked our members what issues were most important to them. We polled and surveyed to find out how important members felt it was for their unions to work for them through legislative and political action. And, a large majority said, it was very important. We held a special convention with delegates from all the unions and all the states to vote on bringing together resources to underwrite this unprecedented, legislative and political effort, which we call Labor 96. And then we went out and addressed the issues our members said were most important to them.

We reported how elected leaders voted on health care and Medicare and pensions and college loans. We helped pass a minimum wage increase and make working family issues the issues of 1996. That activity has brought attacks from some quarters.

Let me address the issue of the $150,000 transaction that is a subject of this committee's inquiry. I first learned of this transaction as a result of a document subpoena that the AFL-CIO received from the U.S. Attorney's office. Upon receiving that subpoena, the AFL-CIO hired outside counsel, whom I instructed to cooperate fully with the U.S. Attorney's investigation and to voluntarily produce all relevant documents and witnesses. I also instructed counsel to keep me informed of what they found in the course of their representation and to be sure that no wrongdoing was ignored or swept under the rug.

Obviously, there are limitations to any investigation that the AFL-CIO conducts. We do not have access to the witnesses or documents of the other entities allegedly involved in this transaction. We are not in a position to conduct the kind of comprehensive investigation that the U.S. Attorney's office can conduct.

Nevertheless, based on those documents and witnesses to which we do have access, I can state the following: first, the AFL-CIO received a check dated November 1, 1996 in the amount of $150,000 from the Teamsters which, according to the documents, was for use in connection with the Labor 96 campaign; second, the AFL-CIO sent a check dated November 4, 1996 in the amount of $150,000 to Citizen Action and prior to that payment, the AFL-CIO had, as part of Labor 96, made other sizeable contributions to Citizen Action, the legitimacy of which is not in question; third, although there is evidence that these two $150,000 checks were connected, we have found no basis to conclude that anyone at the AFL-CIO knew or was told that those checks were part of a scheme to launder Teamster treasury money into the Carey campaign through Citizen Action.

I should note that in November 1996, Citizen Action was generally known to those active in political affairs at the AFL-CIO as one of the best--if not the best--grassroots organizations doing voter education.

I am aware that allegations of wrongdoing have been made against Secretary-Treasurer Trumka in connection with this transaction. I have no knowledge of what evidence, if any, others may have to support such allegations. Rich Trumka is someone I have known and trusted for years. I do not believe that Rich Trumka would knowingly participate in a scheme to launder union treasury money into the campaign coffers of a candidate for union office. I know that both Rich and Linda share the sense of responsibility I feel to the working men and women we are so privileged to represent.

Two days ago, I met in Chicago with about 600 rank-and-file union members at one of a dozen issues forums that we're holding around the country to answer questions and get advice about our working families agenda. One man stood up--it turned out he was a UPS worker and a Teamster--and he said, ``it felt so great to have the entire labor movement behind me when I was on strike at UPS.'' He continued, ``and now we have to keep it up, we've got to mobilize and fight back against these bills to limit union members' role in politics, against corporations that want to take away our pensions, against politicians who want to cut health and safety on the job,'' close quote. I feel a tremendous responsibility to our mission to represent workers like that man forcefully and well.

Very troubling issues are being addressed here today. Let's get to the bottom of them. But, let's not allow legitimate issues to be used to smear good people doing good work. For our part, we're more determined than ever. We're going to continue to speak up, we're going to continue organizing, and we're going to reach our goal of restoring the voice of America's workers in our workplaces, our communities, our government and the global economy. That's a promise and a commitment.

I'm available to answer any questions, Mr. Chairman, and, as we have discussed, the AFL-CIO general counsel John Hiatt will--is here and may be called upon to provide some technical information about AFL-CIO policies.

SEE APPENDIX C FOR WRITTEN TESTIMONY OF JOHN J. SWEENEY

Chairman Hoekstra. Good. Thank you very much.

Majority counsel will be recognized for 30 minutes. Ms. Toensing.

Ms. Toensing. Good morning, Mr. Sweeney. I'm Victoria Toensing, Special Counsel for the subcommittee.

Mr. Sweeney, unlike the Teamsters, the AFL-CIO voluntarily provided the subcommittee documents and we appreciate those. One of the principle areas of those documents and, as you recognized in your statement--

Mr. Miller of California. Mr. Chairman--

Ms. Toensing. --is the--

Mr. Miller of California. Mr. Chairman--just, before we begin, is there any documents that we should have so we can follow the line of questioning or is that necessary or not? I don't know.

Chairman Hoekstra. I believe all documents that Ms. Toensing will be referring to have been--

Mr. Miller of California. --are in the packet that we have--

Chairman Hoekstra. --put in the packet already--

Mr. Miller of California. --before us? Okay. Thank you very much.

Ms. Toensing. Are we okay?

Chairman Hoekstra. Ms. Toensing can continue.

Ms. Toensing. Thank you.

I want to get back to the $150,000 check from the Teamsters to the AFL-CIO and the money laundering trail of that amount of money flowing through several organizations.

Within five days in 1996, the check went from the IBT and then landed in the November Group. Within five days from the IBT to the November Group, which was the main vendor and, really, actually ran Ron Carey's campaign. In other words, it became a money laundering contribution swap.

So, I'd like to go over those documents with you and we have provided you a packet that you have and we've tried to number in the numbers that I'm going to refer to. I hope it works. It's just for your convenience that we have them numbered.

I want to start with exhibit 9 and that is the November 1 Trumka letter. Nobody else has their exhibits numbered, so I believe everyone one the panel does have the November 1 Trumka letter. Now, that letter is dated November 1 and is sent from Richard Trumka to Bill Hamilton, who was just indicted this week by the southern district of New York, requesting the IBT to donate $150,000 to the AFL-CIO. Our copy is unsigned. Do you know whether that letter was sent?

SEE APPENDIX D FOR COPIES OF EXHIBITS 9-18

Mr. Sweeney. I don't know, personally, whether the letter was sent but I'm assuming that it was sent.

Ms. Toensing. Did you ever ask Richard Trumka whether that letter was sent?

Mr. Sweeney. No.

Ms. Toensing. You've never asked him?

Mr. Sweeney. No.

Ms. Toensing. Have you seen this letter before today?

Mr. Sweeney. During the course of this investigation, I've seen--

Ms. Toensing. --that was one of the documents that you became aware of—

Mr. Sweeney. Yes.

Ms. Toensing. --after the U.S. Attorney's subpoena?

Mr. Sweeney. Yes.

Ms. Toensing. I'd like to refer you to exhibit 10, which is the Teamsters $150,000 November 1, 1996 check. Do you have that?

Mr. Sweeney. I have it; yes.

Ms. Toensing. And have you seen that before today?

Mr. Sweeney. During the course of this investigation, yes.

Ms. Toensing. Okay. And to whom is the $150,000 check issued by the Teamsters made out to?

Mr. Sweeney. It's a check to the AFL-CIO.

Ms. Toensing. Who signed that check?

Mr. Sweeney. It's signed by Ronald Carey and Tom Siever.

Ms. Toensing. And the date of that check is November 1, 1996?

Mr. Sweeney. That's correct.

Ms. Toensing. Were you ever aware near the time of that check being received by the AFL-CIO that it was, in fact, received--that you received a payment of $150,000 from the Teamsters?

Mr. Sweeney. Prior to the investigation?

Ms. Toensing. Right.

Mr. Sweeney. No.

Ms. Toensing. Do you recall about what time of year--when it was--that that investigation started that you did become aware of this check?

Mr. Sweeney. I believe it was during the summer of 1997.

Ms. Toensing. So, not quite a year ago?

Mr. Sweeney. Right.

Ms. Toensing. Were you aware in November of 1996, at the time the check was received--even if you weren't aware of the time that the check was received--were you aware in November of 1996 that the Teamsters had borrowed over $5 million from the AFL-CIO within a two-year period and not repaid any of it?

Mr. Sweeney. I don't believe that that's correct.

Ms. Toensing. Well, let's--did they borrow $5 million--

Mr. Sweeney. You said during the two-year period?

Ms. Toensing. Within a two-or three-year period, right. Had the Teamsters borrowed over $5 million from the AFL-CIO?

Mr. Sweeney. In what timeframe?

Ms. Toensing. 1996, about that timeframe. I have--I can go over it with you very specifically. It was--the first loan--

Mr. Sweeney. I believe that the substantial part of what you are referring to, which is loans from the AFL-CIO, all took place prior to my being elected president of the AFL-CIO.

Ms. Toensing. I appreciate that because you became president in October 1995, I believe.

Mr. Sweeney. Right.

Ms. Toensing. But in 1994--April 1994, there was as $5 million loan?

Mr. Sweeney. Yes.

Ms. Toensing. Correct.

And then in August of 1995, there was $100,000 loan?

Mr. Sweeney. I'm not sure of that date but there was a subsequent loan, yes.

Ms. Toensing. And then in March of 1996, $185,000 loan?

Mr. Sweeney. Yes.

Ms. Toensing. So, by November of 1996, which is my question--I'm sorry if I didn't make it clear--by that time, the Teamsters had borrowed over $5 million from the AFL-CIO. I didn't mean it to be during your tenure necessarily--

Mr. Sweeney. Right--

Ms. Toensing. --but within a two-year period--

Mr. Sweeney. Yes.

Ms. Toensing. --there had been over $5 million borrowed. If you had been aware of the $150,000 check coming in from the Teamsters in November--you weren't but you had been aware--and you were aware of the over $5 million in debt, would that have raised some question in your mind about the Teamsters sending you this amount of money?

Mr. Sweeney. I'm not aware of the background or the reason for the $150,000 contribution. I'm assuming from the letter that--in the first exhibit--that this was a contribution to supplement contributions for political activities.

Ms. Toensing. Did you ever ask Richard Trumka about the $150,000 check?

Mr. Sweeney. I didn't learn of until the course of this investigation and--

Ms. Toensing. Right, and then--so, at that time, did you ask Mr. Trumka about the check?

Mr. Sweeney. We have had conversation about several matters that are being investigated and Rich Trumka has advised me that he has been advised by his counsel not to discuss the matters with anybody.

Ms. Toensing. I understand that, so I'm asking you what he had talked to you about this check. You had asked him some questions about the $150,000 check. We're not asking him because we understand that he's asserted his Fifth Amendment but you're not. You're voluntarily appearing here.

Mr. Sweeney. And I'm telling you about my conversation with Rich Trumka in which he claimed that he had been advised by his attorneys not to discuss any of these matters with anyone.

Ms. Toensing. So, when you talked to him and asked him about it, he said he wouldn't talk to you about it?

Mr. Sweeney. That's correct.

Ms. Toensing. Do you remember when you did that?

Mr. Sweeney. In the--sometime subsequent to the subpoena of documents. I believe that the first conversation was sometime mid-September 1997.

Ms. Toensing. Last fall, then, you asked Mr. Trumka about this and he said I'm not going to talk to you about it?

Mr. Sweeney. Yes.

Ms. Toensing. I'd like to point out exhibit 11 for you, which is a memo from Brad Burton to Sue Mackie. These are the two witnesses who we said to the Justice Department we would not call today.

In that memo dated November 4, which is three days after the checks started going, Brad Burton--by the way, who is Brad Burton?

Mr. Sweeney. He's the assistant to the secretary treasurer.

Ms. Toensing. To Richard Trumka?

Mr. Sweeney. Yes.

Ms. Toensing. Brad Burton is Richard Trumka's executive assistant, correct?

Mr. Sweeney. Yes.

Ms. Toensing. And who is Sue Mackie?

Mr. Sweeney. She's the comptroller for the director of our accounting department.

Ms. Toensing. And Brad writes a memo to Sue and says, please issue a check immediately in the amount of $150,000 payable to Citizens Action from the political department, thanks for your assistance.

What is the political department and why would it be important to state that that's where the money comes from?

Mr. Sweeney. The political department is responsible for all of the political activities of the federation and works closely with the political departments of the affiliates of the AFL-CIO.

Ms. Toensing. Is that the only place that a check to Citizens Action would come from? If you were going to issue a check to Citizens Action, it would only come from your political department?

Mr. Sweeney. Not necessarily. I could see where the request for a check to an organization such as Citizen Action could come from the legislative department, depending upon the work that was being done in conjunction with Citizen Action.

Ms. Toensing. So, you would have some kind of an agreement with Citizens Action ahead of time as to what the money is to be spent for by Citizens Action and then that would depend on from where you--

Mr. Sweeney. We have worked closely--

Ms. Toensing. --wrote the check?

Mr. Sweeney. --with Citizen Action in political campaigns in campaigns to educate voters on the issues, in grassroots mobilization. I mean, there's been a long history of working closely with Citizen Action, both in my own personal experience--in my own union when I was president of the Service Employees--as well as the AFL-CIO.

Ms. Toensing. Well, and you stated in your testimony that the AFL-CIO has given other, I believe you said, sizeable contributions to Citizens Action, certainly during your tenure. Do you know how much, in what amounts?

Mr. Sweeney. I believe that it has been in the neighborhood of $1,800,000 or $1,900,000, I'm not sure.

Ms. Toensing. Is that total over--since 1995--total in the almost three years--two-and-a-half years?

Mr. Sweeney. No, that was for the year 1996, I believe.

Ms. Toensing. In 1996, you gave a million? Just to--

Mr. Sweeney. Oh, it was more than a million. I said $1,800,000 or $1,9000,000.

Ms. Toensing. Alright. I thought you were saying a million or $800,000 or $900,000--

Mr. Sweeney. No, no, no.

Ms. Toensing. It's almost $2 million.

Mr. Sweeney. I'm sorry?

Ms. Toensing. Almost $2 million--

Mr. Sweeney. Right. Yes.

Ms. Toensing. --in 1996.

Would you turn to exhibit 12, please? That is the November 4, AFL-CIO, $150,000 check to Citizens Action, correct?

Mr. Sweeney. Yes.

Ms. Toensing. Just want to be checking that we have the same exhibit that we're looking at.

Who signed that check?

Mr. Sweeney. Rich Trumka.

Ms. Toensing. Did you ever ask Mr. Trumka about this check specifically?

Mr. Sweeney. No.

Ms. Toensing. And did you become aware of this check for the first time last summer when the U.S. Attorney's office issued the subpoena?

Mr. Sweeney. Yes.

Ms. Toensing. Did Brad Burton have the authority to issue an AFL-CIO check for $150,000 in November of 1996?

Mr. Sweeney. He didn't the check. He made a check request to the comptroller. I'm just--

Ms. Toensing. So, he would not have had the authority or are you just pointing out he didn't issue--

Mr. Sweeney. Oh, no, he had the authority as the executive assistant to the secretary-treasurer to request a check and to advise the accounting department.

Ms. Toensing. In any amount? Brad Burton could just send a memo and ask for a check to be sent in any amount? Or was there a ceiling?

Mr. Sweeney. No, there was--the whole political program for the year 1996 was something that was developed under my leadership at the beginning of 1996 and, at that time, there was a budget developed for the different components of the political program. And, included in that budget were support for activities, support groups that we worked with in the past, including Citizen Action. So, the accounting department would be monitoring the amount that had been budgeted for Citizen Action, as well as other groups, and would be--would call to our attention if any of those expenditures were in excess of what had been originally budgeted.

Ms. Toensing. So--

Mr. Sweeney. Brad Burton was operating within the limitations of the overall budget.

Ms. Toensing. Would he have asked for that check to be disbursed without going through Richard Trumka?

Mr. Sweeney. I believe that he would be doing that only with the approval of Richard Trumka.

Ms. Toensing. What were the AFL-CIO finance disbursement rules in November of 1996? Were--did you have a manual or a book that said what the rules were? Let me just give you an example: like, every check over $100,000 has to be signed by two people--some kind of real basic bookkeeping like that?

Mr. Sweeney. The typical way is for a request to be made by a department director and the accounting office is under the supervision of the secretary-treasurer. He's the principal financial officer of the federation and the process--the paperwork would come from the political department to the secretary-treasurer's office into the accounting department.

Ms. Toensing. So, was it pretty much the secretary-treasurer's discretion what checks were issued? He had the authority to issue checks in just about any amount?

Mr. Sweeney. No, he had the authority to issue checks within the limitations of the budget that we had recommended and approved by our executive council on the overall political program.

Ms. Toensing. And, are you--what was the budget in 1996?

Mr. Sweeney. I don't have the specific numbers.

Ms. Toensing. We won't hold you to the exact dollar but you have it in terms of general, like $3 million, $4 million, $5 million?

Mr. Sweeney. Well, there are different components, I mean, involved in the political campaign. They don't want to mislead the operation of the political department itself with several million dollars. But, in addition to that, there was a budget for media, and a budget for other major components that could be separated out.

Ms. Toensing. So, as long as Mr. Trumka stayed within whatever these budgets of these various programs were, he really was not checked on any check that he wrote, is that correct? There was nobody to oversee his check-writing, except himself, so long as he stayed in the budget?

Mr. Sweeney. Yes, and within the framework of the program that we had developed and approved by our executive council.

Ms. Toensing. Yes.

Is January of this year the first time that the AFL-CIO has ever had any rules, a procedure book, on check-writing authority and on financial disbursements?

Mr. Sweeney. We have been--since we were elected two-and-a-half years ago, we have been reviewing the procedures and the structure of the AFL-CIO thoroughly and have made a significant number of changes, have structured a completely different policy in terms of a number of areas, and, in January, we recommended to our executive council that we change the approval process and we have a very detailed approval process now--that I will be happy to share with the committee--which does require a more critical kind of approval process--

Ms. Toensing. I believe it is. We have it and we thank you for it. I believe it's something like two signatures for any amount over $20,000. It's pretty basic.

But, at that time, back in 1996--

Mr. Sweeney. But it's also--I mean, it's more detailed than just--

Ms. Toensing. Oh, yes.

Mr. Sweeney. --signatures for--

Ms. Toensing. Yes.

Mr. Sweeney. --any check that's--

Ms. Toensing. Many pages.

Mr. Sweeney. --$20,000.

Ms. Toensing. Yes, I know.

But, prior to this, you didn't have any such manual, is that correct? You didn't have any rules written down like that--

Mr. Sweeney. There was--

Ms. Toensing. --would that be correct?

Mr. Sweeney. --written policy in terms of the approval process but the approval process that had been in practice for a number of years was for most of the major expenditures to be coming through individual departments to the secretary-treasurer's office with--and then generating the check from the accounting department.

Ms. Toensing. I'd like you to turn now to exhibit 13 which is a November 4, 1996 cover letter to Citizens Action regarding this $150,000 check that the AFL-CIO was sending to the Citizens Action. And I'll wait until you have it. It should be--

Mr. Sweeney. I have it.

Ms. Toensing. --numbered for you.

Mr. Sweeney. I have it.

Ms. Toensing. Do you?

In the letter, Mr. Trumka requests an agreement that the funds will not be used for candidate contributions or political expenditures. What does that mean? Does it mean Republican-Democrat political or union-contribution political?

Mr. Sweeney. No, Republican-Democrat political.

Ms. Toensing. Okay.

So, I'm confused because this came out of the political fund and it's to be used for political expenses. Is there an explanation for that?

Mr. Sweeney. It's not to be used--

Ms. Toensing. Because then it says, not--

Mr. Sweeney. --as a contributions or political expenditures, it's to--

Ms. Toensing. Right.

Mr. Sweeney. --and the hope is that it's to be used for grassroots mobilization and voter education on the issues.

Ms. Toensing. So, that kind of politicalness is permitted?

Mr. Sweeney. Yes.

Ms. Toensing. Now, did you have a procedure in place in November of 1996 to ensure that such a large amount of money would not be used for political contributions? You have a follow up so that once you give this $150,000 check to Citizens Action, you knew what it was being used for?

Mr. Sweeney. Oh, yes.

Ms. Toensing. And did you put that in place?

Mr. Sweeney. Our staff--our political department staff worked with--directly with Citizen Action as well as other groups in the whole area of registration campaigns, get out the vote, voter education--

Ms. Toensing. Do you know if your staff followed up on this particular check to see that it was being spent for the appropriate purpose?

Mr. Sweeney. I can't say that they followed up or what followup there was on this--on any particular check. But, on the overall campaign and the total amount of Citizen Action contributions, it was clearly defined in terms of what work Citizen Action was going to be doing.

Ms. Toensing. Okay. Somehow somebody missed something there on this check, I think. You'll agree with me. You probably already agree with me because--

Mr. Sweeney. I don't know.

Ms. Toensing. --of knowing where these checks went.

Let me turn to exhibit 14 and before--actually, before we get to that, there is an exhibit that we just received last night so it's not marked in there and it's the last exhibit and let me point it out for the record. And that is the Citizens Action fund check to the November Group. We just received a copy of that and it should be the very last one, if--you don't have a copy of that?

SEE APPENDIX D FOR A COPY OF THE CITIZEN ACTION FUND CHECK TO THE NOVEMBER GROUP DATED NOVEMBEMBER 6, 1996

Mr. Sweeney. No, I have a copy.

Ms. Toensing. You have it.

Mr. Sweeney. I'm sorry.

Ms. Toensing. And that check is Citizens Action Fund, signed by Rochelle Davis. So, it's a check by Citizens Action payable to the November Group, $100,000 and dated November--

Mr. Sweeney. I'm missing something. What was your--

Ms. Toensing. This is prior to exhibit 14--

Mr. Sweeney. What were you citing about exhibit 14?

Ms. Toensing. I'm going to get to that in a minute but we--I just wanted to--

Mr. Sweeney. So, now you're jumping to the last exhibit.

Ms. Toensing. I jumped. I'm sorry I jumped.

Mr. Sweeney. Go ahead.

Ms. Toensing. Yes. The Citizens Action Fund check dated November 6 in the amount of $100,000 to the November Group--

Mr. Sweeney. Right.

Ms. Toensing. --five days after the Teamsters sent the November 1 $150,000 check to the AFL-CIO.

Mr. Sweeney. Right.

Ms. Toensing. Now, if you would look at exhibit 14 which is the Sue Mackie memo to James Perry regarding the depositing of the Teamsters check to the AFL-CIO. So, this is an AFL-CIO memo talking about how to deposit that $150,000 and it says, ``please deposit it in our general fund and it is to be recorded as a special assessment income.'' What does that mean?

Mr. Sweeney. I don't know other than that my interpretation would be that it was to be included in the income from the special assessment that had been approved by a special convention raising the monies from the affiliates for the political campaign of 1996.

Ms. Toensing. You have--have you ever asked Richard Trumka about that, about what that check would mean--

Mr. Sweeney. No.

Ms. Toensing. --if it was a special assessment?

Mr. Sweeney. No.

Ms. Toensing. It also states--Sue Mackie's memo states that the Teamsters, quote, ``have made an additional contribution over and above the amounts they are paying in monthly installments.''

But, I go back to the fact that, at that time, there was a $5 million loan taken out in April 1994. Had any payments been made on that loan?

Mr. Sweeney. There have been interest payments.

Ms. Toensing. Was debt forgiven on that $5 million loan?

Mr. Sweeney. No. There may have been--

Ms. Toensing. Was a $1.5 million debt forgiven? Didn't you forgive them $1.5 million on that $5 million loan?

Mr. Sweeney. That was prior to my becoming president--

Ms. Toensing. I'm sorry. The AFL-CIO forgave--

Mr. Sweeney. There have been several transactions in the loan history and including a request from the Teamsters to--for forgiveness and including a request for deferment at different periods over the whole lifespan of the loan.

Ms. Toensing. But, in November of 1996, the Teamsters had borrowed approximately $5 million and made no payments, is that correct on the capital?

Mr. Sweeney. It's my recollection that there were only interest payments made.

Ms. Toensing. Let me read you a relevant part of testimony by Martin Davis who pleaded guilty to embezzling, fraud and conspiracy charges in the southern district arising out of his role in arranging the illegal diversion of union funds. And he says to the court, when he was pleading guilty, ``in the fall of 1996, I attempted to raise an additional $100,000 to help pay for the work that the November Group was doing for the Carey campaign. In late October of 1996, a representative of the Citizen Action agreed that if I raised $150,000 for the Citizen Action, Citizen Action would pay $100,000 to the November Group. I told Mr. Nash I wanted the Teamsters to make a second donation to Citizens Action which would also benefit the Carey campaign. Mr. Nash told me that the Teamsters could not justify additional contributions to Citizen Action. I then went to the AFL-CIO secretary-treasurer''--that's Mr. Trumka, right?

Mr. Sweeney. Yes.

Ms. Toensing. --``and asked him to donate $150,000 to Citizen Action and told him that it would help Ron''--meaning Ron Carey. ``He said the AFL-CIO was overbudget and could not make the contribution so we agreed that if I was able to persuade the Teamsters to give the AFL-CIO $150,000, he''--Mr. Trumka--``would have the AFL-CIO pay $150,000 to Citizen Action. I then asked Jere Nash to have the Teamsters make a contribution of $150,000 to the AFL-CIO to benefit Carey. I learned that this contribution had been approved and it was made. The Teamsters gave $150,000 to the AFL-CIO, the AFL-CIO gave $150,000 to Citizen Action, and Citizen Action paid the November Group $100,000, which I applied to the November Group's Carey campaign direct mail charges.''

Now, you just stated Mr. Trumka is still a member of the AFL-CIO and he still remains secretary-treasurer, is that correct?

Mr. Sweeney. Yes.

Ms. Toensing. And you said that you tried to discuss this illegal scheme with him but he refused to talk to you, is that correct?

Mr. Sweeney. On the advice of his counsel.

Ms. Toensing. Did you ever conduct an internal audit or investigation regarding this illegal scheme and Mr. Trumka's involvement?

Mr. Sweeney. Oh, sure.

Ms. Toensing. And did--was Mr. Trumka interviewed?

Mr. Sweeney. You have--I mean, you're aware that we have retained outside counsel since we first learned about this and that we have been continuing an ongoing investigation internally and--

Ms. Toensing. My question is, was Mr. Trumka interviewed in this internal investigation?

Mr. Sweeney. I believe that the counsel has spoke to Mr. Trumka.

Ms. Toensing. So, Mr. Trumka spoke to counsel in the internal investigation but is taking the Fifth Amendment as to the Justice Department?

Mr. Sweeney. That's correct.

Ms. Toensing. Mr. Trumka took the Fifth Amendment last year, right?

Mr. Miller of California. Mr. Chairman?

Ms. Toensing. And he took the Fifth Amendment--

Mr. Miller of California. Mr. Chairman?

Ms. Toensing. --this year?

Chairman Hoekstra. I believe your time has expired under the time arrangements and since--

Mr. Miller of California. The time shows two minutes remaining.

Ms. Toensing. And that's just about what I have.

He took it again--

Mr. Miller of California. Well, you're five minutes over.

Ms. Toensing. --this month when he informed this subcommittee in a letter when he was asked to testify.

Mr. Sweeney. Going back to your prior question, I've been advised by counsel that they did not interview Mr. Trumka for the same reason that I state earlier, that he had been advised by his own counsel.

Ms. Toensing. I just have one more question, Mr. Sweeney. You see the checks that we presented here today and you were aware of them before that and you have seen the memos that we talked about today. You were already aware of that and I assume that you were aware of Mr. Davis's testimony implicating Mr. Trumka?

Mr. Sweeney. I'm aware of the testimony but I don't believe it.

Ms. Toensing. I see. And so, is that the reason that Mr. Trumka is still secretary-treasurer?

Mr. Sweeney. No. Mr. Trumka is an elected officer of the AFL-CIO and his office is spelled out in the constitution and we are abiding by our constitution and by-laws. I'm aware of the transactions that you have cited here today. I have no knowledge of the conclusions that have been drawn and I have tremendous confidence in Mr. Trumka. I've known him for many years, as I said in my opening statement, and I don't believe that he would participate in any laundering scheme for any internal union election.

Ms. Toensing. Thank you, Mr. Sweeney.

Mr. Sweeney. Thank you.

Chairman Hoekstra. Minority counsel will be recognized for thirty minutes.

Yes, Mr. Miller?

Mr. Miller of California. Thank you, Mr. Chairman.

Mr. Chairman, I'd like to raise a point, I guess, of personal privilege of parliamentary inquiry and that is that this morning I read in the paper that the counsel who has just finished--

Chairman Hoekstra. Regular order, Minority counsel--

Mr. Miller of California. --the question--this is very regular order. This goes to the questions of the documents and the powers of this committee to subpoena documents, I'm deeply concerned that we now have a situation where we have the staff of this committee, the counsel has just raised these--the questions--having access to information as a paid member of the media.

And I think it raises a very serious question since the release of any documents, outside of this committee, takes a vote of the committee to so release those documents, except that we now have someone that has full access to all those documents and is a paid member of the media and, as a paid member of the media, to comment on the various actions taking place with respect to investigations by various branches of the government. I think it raises a very, very serious, ethical and confidentiality question--

Chairman Hoekstra. There has been no documents released--

Mr. Miller of California. --with respect to how this committee conducts itself.

Chairman Hoekstra. The gentleman is out of order--

Mr. Miller of California. No, the gentleman is not out of order, I deserve--

Chairman Hoekstra. --this is an evidentiary hearing--

Mr. Miller of California. --an answer to the question about how you plan to--

Chairman Hoekstra. Minority counsel will--

Mr. Miller of California. --build a firewall between a paid--

Chairman Hoekstra. --be recognized for 30 minutes.

Mr. Miller of California. --media consultant and the documents of this committee. Would you mind responding to tell us how you're going to do that?

Chairman Hoekstra. Minority counsel is recognized for 30 minutes.

Mr. Miller of California. Mr. Chairman, you know, you just continue to refuse to answer questions about how you were going to conduct the conduct of this committee with respect to confidentiality and the documents and the information--

Chairman Hoekstra. The gentleman is out of order--

Mr. Miller of California. --received through the subpoena power of this committee.

Chairman Hoekstra. --and will suspend and we will go to minority questioning for 30 minutes.

Mr. Miller of California. So, you don't have a provision to build a firewall between the media and information received by this committee?

Chairman Hoekstra. This is an evidentiary hearing. We are in constant dialog with--

Mr. Miller of California. This is an evidentiary hearing--

Chairman Hoekstra. --the Minority--

Mr. Miller of California. --based upon the subpoena power of this committee.

Chairman Hoekstra. Minority counsel.

You're using Minority counsel's time--

Mr. Miller of California. I'm not using, I asked--

Chairman Hoekstra. Minority counsel is--

Mr. Miller of California. --you recognized me on my time for the--

Chairman Hoekstra. --recognized for--

Mr. Miller of California. --purpose of--

Chairman Hoekstra. The gentleman--

Mr. Miller of California. --an inquiry and I would like to have a response.

Chairman Hoekstra. Minority counsel is recognized for 30 minutes.

Ms. Lentchner. Good morning, Mr. Sweeney. My name is Cassandra Lentchner and I just have a few questions for you here this morning.

Majority counsel has shown you a series of checks here in your testimony and now, am I correct in understanding that you were not aware of any of these checks at the time that they written in the fall of 1996?

Mr. Sweeney. That's correct.

Ms. Lentchner. Since the allegations became public and there became investigations into this matter, you have had an opportunity to learn as to the existence of some but not all of these checks, if I am correct. As a result of the investigation that was done and the review of the AFL files, you have learned that on November 1, 1996 the AFL-CIO received a check in the amount of $150,000 from the International Brotherhood of Teamsters, is that right?

Mr. Sweeney. That's correct.

Ms. Lentchner. You have also learned that on November 4, 1996 the AFL-CIO sent a check in the amount of $150,000 to Citizen Action, is that correct?

Mr. Sweeney. That's correct.

Ms. Lentchner. You were aware of the existence of these two checks because AFL-CIO employees documented those transactions and retained the documents in the AFL-CIO records, is that right?

Mr. Sweeney. That's right.

Ms. Lentchner. Majority counsel asked you some questions regarding Citizen Action's use of the money and showed you a check with respect to--Citizen Action wrote to the November Group. Do I correctly understand that you have never seen the check from Citizen Action to the November Group until today?

Mr. Sweeney. I have never seen it until this investigation.

Ms. Lentchner. And is it correct that you have no knowledge of how Citizen Action spent the $150,000 that was given to it by the AFL-CIO?

Mr. Sweeney. That's correct. But, my assumption was that that money was being spent on the grassroots mobilization and the voter education campaigns that we were working closely with them.

Ms. Lentchner. And, while you didn't have any knowledge of the specific $150,000 check that was written on November 4, you do know that there were in the neighborhood of $1.5 to $2.0 million worth of contributions made by the AFL-CIO to Citizen Action for political activity and grassroots organization, is that right?

Mr. Sweeney. Yes; that's right.

Ms. Lentchner. And, to your knowledge, does the AFL--to your knowledge and based on your and your counsellor's review of AFL-CIO records, do you have any basis to conclude that anyone at the AFL-CIO knew or was told that any AFL-CIO money was being used as part of a scheme to launder money to the Teamsters--

Mr. Sweeney. No.

Ms. Lentchner. --to the Ron Carey fund.

Mr. Sweeney. There has been no evidence so far that we have found that any employee or any officer of the AFL-CIO participated in any laundering scheme in terms of any of these transactions.

Ms. Lentchner. Thank you very much and I waive the remainder of my time so members will have an opportunity for questions.

Chairman Hoekstra. Great. Thank you.

Mr. Sweeney, the--I think we've got a--you have to explain something to me. You have been very aggressive in the labor movement, I think, at bringing in and restoring and maintaining integrity within the labor movement and that is to be applauded.

The--I think we have a statement from you that you've submitted to us October 7 and it's a letter where you indicate to AFL-CIO executive council members, presidents of national and international unions, principal officers of states and federations and in there you state, ``once we were informed of the U.S. Attorney's inquiry concerning a specific financial transaction, we began our own internal review''--

Mr. Sweeney. Can I see a copy of that, please?

Chairman Hoekstra. Yes.

The question that I have is, if Mr. Trumka is refusing to answer your questions, how can you conduct an effective investigation? And, how can you have--well, let's begin with that. Go ahead.

Mr. Sweeney. What is your question?

Chairman Hoekstra. How can you conduct an effective investigation if you go to Mr. Trumka and he says, I can't talk to you on advice of counsel?

Mr. Sweeney. I--

Mr. Kind. Mr. Chairman, would you yield for a second? Was there any reference to the letter that you just handed to President Sweeney that you want him to address right now? I'm a little confused. Is there something specifically that you wanted him to look at with that letter?

Chairman Hoekstra. I'm asking Mr. Sweeney a question. I think we'll get to the letter.

Mr. Kind. Okay.

Chairman Hoekstra. Okay.

Mr. Kind. It doesn't have anything to do with the letter.

Chairman Hoekstra. Thank you.

Mr. Kind. Thank you.

Mr. Sweeney. Your question, please.

Chairman Hoekstra. The question is if, when you go to Mr. Trumka and ask him about what has happened and the allegations, you know, and these types of things and he tells you that he can't answer on advice of counsel, how can you conduct an effective investigation?

Mr. Sweeney. Well, as I said in my opening statement, we have been conducting an investigation and we have been cooperating with both your committee as well as the U.S. Attorney and that investigation is still going on. Mr. Trumka has been advised by his counsel that he should not discuss the issues until the investigation is concluded.

I have had discussions with Mr. Trumka where I have pointed out how important it was that we get to the bottom of all this. He has assured me that he has done nothing wrong and that, at the end of this investigation, I will have that same conclusion.

I have known Rich Trumka, as I've told you, a long time. We've worked together as presidents of our respective unions. We've worked very closely as executive officers and I have never had any situation where I found his integrity to be questioned and I believe that he's entitled to his own legal advice and he also has the protection of the constitution and by-laws of the AFL-CIO as an elected officer.

Chairman Hoekstra. You have--have you put any restrictions at all on his duties or responsibilities within the Teamsters? Excuse me, within the AFL-CIO?

Mr. Sweeney. He has no restrictions on--and there is no reason for him to have any restrictions at this point.

Chairman Hoekstra. He's rumored to have taken--pleaded the Fifth in front of the southern district, he has indicated in writing to this committee that he would take the Fifth against concern for self-incrimination--

Mr. Sweeney. And you can repeat that as often as you want. I mean, that's a fact, we all know it, and I have given you the clearest explanation that I can give you.

Chairman Hoekstra. And it's not a cause of concern?

Mr. Sweeney. Of course it's a cause of concern. I'm concerned about the institution, I'm concerned about all of this. I was pretty clear in my opening statement about my concern. I'm concerned about the perception and the image as it relates to the AFL-CIO. This isn't about personalities. I'm concerned about the workers that we represent.

Chairman Hoekstra. The--and you're doing an internal investigation parallel to what's going on with the Justice Department, is that correct?

Mr. Sweeney. We are working as closely as they have asked us to.

Chairman Hoekstra. Okay. But are you running a separate internal investigation as to what happened--

Mr. Sweeney. We have retained outside counsel and they are conducting that investigation and they are complying with the requests from the U.S. Attorney's office for documents, witnesses, everything.

Chairman Hoekstra. Do you have any idea as to when that internal investigation may be completed?

Mr. Sweeney. When the U.S. Attorney's investigation is completed.

Chairman Hoekstra. Okay.

The Teamsters are not cooperating. There have been a number of charges or concerns there about their decline in their general treasury about the money laundering and about concerns for what has happened with their pensions. You, as president of the AFL-CIO--do you have any responsibility to the members of the AFL-CIO or the Teamsters to help facilitate getting to the bottom of those issues and finding out, you know, what has happened inside the Teamsters, what might be happening to their pensions?

Mr. Sweeney. We have no authority over investigations of any individual unions. Those unions are autonomous bodies, as I said in my opening statement. There are 72 such unions and I think that the government investigation that is going on is the investigation that we have to cooperate with and supply whatever information we have regarding that as it pertains to the AFL-CIO.

Chairman Hoekstra. Great. Thank you.

Ms. Mink?

Mrs. Mink. Thank you very much, Mr. Chairman.

President Sweeney, I think you have responded to the questions clearly and explicitly that you had no prior knowledge of the transfer of the $150,000 check to the AFL-CIO nor did you know anything about the writing of the check in November of 1996 to Citizens Action. Is that correct?

Mr. Sweeney. That's correct.

Mrs. Mink. In raising the size of the Citizen Action check of $150,000, I have heard many people allude to the fact that this was a very large check and yet, you've testified today that in the overall plan that you developed for the Congressional gubernatorial elections nationwide--where you spend over $30 million through individual union assessments--that you had more or less made a plan for grassroots education, for voter registration and, in part of that plan, that Citizen Action was to receive perhaps as much as $2 million in the course of that campaign period. Did I hear your testimony correctly on that?

Mr. Sweeney. Yes; you did.

Mrs. Mink. So, in the whole plan, it would not have been extraordinary that at the very last week of the election, which is what you were concerned about--the Congressional elections and the national elections--that there would have been a concerted effort to try to get more information out to the public through an educational effort sponsored by Citizen Action. Isn't that the overall situation that AFL-CIO was in in the early days of November of 1996?

Mr. Sweeney. Yes, that's correct; and I think all of us who are involved in political campaigns understand that.

Mrs. Mink. I mean, I've been through many--dozens--and it is those last frantic weeks where the polls are going up and down, where the funds are so critical and educational efforts, getting out the vote after you've registered is a tremendous part of our overall activity.

So, it would not--the $150,000 check to Citizen Action being part of your program should not have elicited any particular red flags calling attention to the propriety of such a check. Is that a fair conclusion of what you have testified to today?

Mr. Sweeney. That is a fair conclusion and it all was a part of an overall plan that had been adopted by the executive council of the AFL-CIO in the early part of 1996.

Mrs. Mink. So, if some vendor in some document given to the court states that his intention of the receipt of these monies by Citizen Action was to pay bills that had been incurred by another group, that's something wholly outside of any ability on your part to have had any information. Is that correct?

Mr. Sweeney. I don't have any information about that or--

Mrs. Mink. So, to try to make that connection here today is really completely outside the realm of the exercise of your authority and of your responsibility. Isn't that correct?

Mr. Sweeney. Yes.

Mrs. Mink. So, it seems to me that the efforts to try to connect the AFL-CIO--yourself in particular as the national president--is really not shown by any of the materials that we have seen today.

And, I totally agree with you, President Sweeney, that insofar as any other individual's involvement in criminal activity, which is under the investigation by the courts of the U.S. Attorney or the courts in New York, that that is their responsibility and you have indicated time and time again of your full cooperation and that's what you mean, that the AFL-CIO is joining in the investigation because you're in full cooperation. Is that correct?

Mr. Sweeney. We have cooperated and we are committed to continuing to cooperate until this investigation is concluded and it's really in the best interest of the AFL-CIO to get this investigation concluded as quickly as possible and to show that no officer or employee of the AFL-CIO was involved in any laundering scheme involving any of these transactions.

Mrs. Mink. So, if in the final analysis, the Justice Department, U.S. Attorneys and so forth do indict Mr. Trumka, what would be then the status of his position with the AFL-CIO?

Mr. Sweeney. That would be a situation that would have to be addressed under our constitution before the executive council of the AFL-CIO.

Mrs. Mink. And they would then make a decision, at that moment?

Mr. Sweeney. And it would be a very serious matter.

Mrs. Mink. Thank you very much, President Sweeney.

Chairman Hoekstra. Thank you.

The gentleman from Georgia, Mr. Norwood, is recognized for five minutes.

Mr. Norwood. Thank you, Mr. Chairman.

Mr. Sweeney, I want to tell you that I never have considered this to be a hearing that anyone that I know of feels you are culpable personally in any way about any of this. I think you're here for the right reasons; you're concerned about the $20 million of taxpayers money. I know you're got to be concerned that the members of the Teamsters union have gone from a very large war chest of $150-plus million down to less than a million. I know that you have to be concerned that there are apparently illegal activities that have been going on there; perhaps pinching funds, manipulations, money laundering schemes.

And I know you've got to be concerned about that, and I'll be honest with you. I don't see any reason we would have even called you here--which you came voluntarily--had Mr. Trumka come and not been--and not taking the Fifth Amendment. So, I think really our questions are not so much about you, Mr. Sweeney, but we're just--what we'd like to do is talk to Mr. Trumka, of course, so we have to ask you questions to see if you can answer some of the questions that we might have wanted to ask Rich Trumka, who, I understand, is a very old friend of yours and I would suspect from that you know him very well. So, we hope you can shed some light on this.

I want to go back, Mr. Sweeney, to the memorandum of 1997, that I believe you now have a copy of, where you told the members of your executive council that, when you were informed about the U.S. Attorney's inquiry concerning these financial transactions, you began your own internal review, which I presume was somewhere around seven months ago. And I presume that review is going on now. Or are you--it is a continuing, on-going operation.

Mr. Sweeney. That's correct.

Mr. Norwood. Do you expect--is this being done for you by outside counsel or is this--

Mr. Sweeney. Yes; we have retained outside counsel.

Mr. Norwood. Who is doing that for you?

Mr. Sweeney. They are both here. Bob Muse and Bob Weinberg.

Mr. Norwood. Do you expect that they will at some point in time end this investigation and furnish you a report about what they think actually went on?

Mr. Sweeney. I expect that they would, but the investigation is still going on and as matters come to their attention--such as some of the exhibits today--they have shown those to me and that's an ongoing process.

Mr. Norwood. So, basically, their job is to investigate on your behalf and the behalf of the members you represent, not necessarily the U.S. Attorney?

Mr. Sweeney. They represent--they're conducting an investigation of the AFL-CIO in relation to these matters and complying with the request for cooperation with the U.S. Attorney's office.

Mr. Norwood. Can you give us any kind of idea perhaps what kind of review this is?

Mr. Sweeney. It's really a review of all of the transactions--it's a review of all of the correspondence and interviews with members of the staff as it relates to requests from the U.S. Attorney's office.

Mr. Norwood. Is there--if it's an internal investigation, is there any reason that the conclusion of this review would be tied to the activities of the U.S. Attorney's office?

Mr. Sweeney. That's how it originated.

Mr. Norwood. Well, I understand that the problems were brought forth by the U.S. Attorney's office, but I'm just trying to see if there couldn't be a conclusion for you to know precisely what went on. I'm sure it must be pretty hard for you to not be able to turn to your good friend, Mr. Trumka, and say, Rich, are you guilty or are you not? I mean, have we--have you asked him that question?

Mr. Sweeney. Sure.

Mr. Norwood. And what was his answer?

Mr. Sweeney. As I've stated previously, he has advised me that on the advice of counsel he should not discuss any of these matters.

Mr. Norwood. So, he wouldn't tell you whether he was innocent or guilty of the charges?

Mr. Sweeney. He tells me that he is innocent and that I will come to that same conclusion when the investigation is completed.

Mr. Norwood. It's hard for me to understand that your good friend and your secretary-treasurer would be taking the Fifth Amendment internally for your information that you badly need in order, I think, to clear this up and not just, perhaps, protect your members but also protect and help the members of the Teamsters. I mean, I don't--has anyone else in your office asked Mr. Trumka any of this, kind of, what happened, Mr. Trumka?

Mr. Sweeney. I was--

Mr. Norwood. I mean, it's some pretty compelling evidence here about this.

Mr. Sweeney. Yes. I'm the president of the organization, I'm asking him.

Mr. Norwood. And he says--

Mr. Sweeney. I don't need anybody else to be asking--

Mr. Norwood. I'm not going to answer any questions about this.

Chairman Hoekstra. The gentleman's time has expired.

Mr. Sweeney. How do you--

Chairman Hoekstra. Mr. Scott?

Mr. Sweeney. How do you deal with members of the Congress who take the Fifth?

[Laughter.]

Mr. Norwood. I'd kick them out.

Chairman Hoekstra. Mr. Scott.

Mr. Scott. Thank you, Mr. Chairman.

Mr. Sweeney, good morning. I just have a few questions. Could you say again how much money the AFL-CIO contributed to Citizens Action during that year, approximately?

Mr. Sweeney. It was close to $2 million.

Mr. Scott. And--so, this check was just part of that ongoing campaign, the--

Mr. Sweeney. I believe yes, that was the final check, I think.

Mr. Scott. --special assessment, that was part of, in fact, a special assessment for the Labor 96 campaign?

Mr. Sweeney. That's correct.

Mr. Scott. So, there was nothing unusual about that check?

[Pause.]

Was the Teamsters check the only check that came in that week?

Mr. Sweeney. I don't know the answer to that.

Mr. Scott. At the end of--at close to the election, one would have expected a lot of checks to be coming in. Is that--you don't know?

Mr. Sweeney. I'm not sure. I know that some payments on the special assessment were made after the election as well.

Mr. Scott. And some

Mr. Sweeney. I mean, and some didn't pay timely, but they eventually all paid.

Mr. Scott. Did other--do you know if other groups were contributing to Citizen Action?

Mr. Sweeney. Other labor unions?

Mr. Scott. Other labor unions, other organizations, other individuals--would they have had additional money coming in to their treasury at this time?

Mr. Sweeney. I don't really know. I do know that individual unions do support Citizen Action, but I don't know any

Mr. Scott. So, it's possible that other checks were landing at the same time. The idea was that your check came in and money went out; therefore, it must have been same money. If someone else had contributed at the same time, their money might have been the money used for that purpose.

Mr. Sweeney. I'm sure they were receiving contributions from other organizations as well.

Mr. Scott. Is the AFLCIO cooperating fully with the criminal investigation?

Mr. Sweeney. Yes, we are.

Mr. Scott. Are you fully cooperating with the federal criminal investigation?

Mr. Sweeney. Yes.

Mr. Scott. Are there any documents that you're aware of that are not being made available to the criminal investigators at the AFLCIO?

Mr. Sweeney. None to the best of my knowledge.

Mr. Scott. You have--has your--you have hired outside counsel to help win this cooperation?

Mr. Sweeney. Yes.

Mr. Scott. Now, I understand that you have specifically been told that you are not a target of the investigation. Is that right?

Mr. Sweeney. I hope so.

[Laughter.]

Organized crime has been involved in union activity from time to time. What have you done to ensure that your members are not ripped off by organized crime and that the public doesn't suffer as a result of the influence of organized crime in labor unions?

Mr. Sweeney. I think the AFL-CIO has a long history of the highest integrity and support of any investigation that--any legitimate investigation--of corruption. There is no room for corruption or wrongdoing within the labor movement. It's really losing sight of the mission of the AFL-CIO, the mission of the labor movements in terms of representing our members and building a stronger labor movement. It's--I've been in the labor movement for--I've worked for about 40 years in the labor movement. I've been a member for about 45 years, and I have never been subjected to an investigation questioning my integrity or anything related to my activities.

Mr. Scott. Now how do fair elections fit into the framework of keeping criminal elements out of labor unions?

Mr. Sweeney. I'm sorry, I missed the first part.

Mr. Scott. How do fair elections--making sure the elections are fair--how does that fit into the framework of helping to keep organized crime out of labor unions? How important is it to have fair elections?

Mr. Sweeney. Oh, it's most important to have fair elections and it's most important that internal elections within unions be procedures and process and campaigns that involve only the members of that union. And I'm hopeful that soon the teamsters will have--members of the teamsters will have elected a new president and that they can get back to the business which their so well known for in terms of their organizing and their bargaining.

Mr. Scott. Mr. Chairman, I yield back.

Chairman Hoekstra. The gentleman yields back. The gentleman from North Carolina, Mr. Ballenger, is recognized for five minutes.

Mr. Ballenger. Thank you, Mr. Chairman. Mr. Sweeney, let me just as a question offered to me by some of my legal friends that are sitting behind me here. Have any affiliated unions of the AFL-CIO put into trusteeship the unions or removed individual local officers for taking the Fifth Amendment, since you've been in charge?

Mr. Sweeney. Could you repeat the question.

Mr. Ballenger. I hope I've written it down right.

Mr. Sweeney. I hope so too.

[Laughter.]

Mr. Ballenger. Have any of your affiliated unions of the AFL-CIO been put into trusteeship or have officers removed for taking the Fifth Amendment?

Mr. Sweeney. Not to the best of my recollection.

Mr. Ballenger. Okay. I've just been playing some numbers here and basically it appears from what we understand, and I'm not asking for you're expertise on this because you've got probably the same knowledge I do, but it appeared that Mr. Carey when he came in as head of teamsters had $150 million in assets. Before you became head of the AFL-CIO, they borrowed $5 million. The estimated cash flow for the union in the five years that Mr. Carey was there was about $600 million. So, if you add all that together, they had about $750,000 in cash flow and their assets went from $150 million down to maybe less than $700,000. My understanding from the loan from you--the $5 million loan from you--you forgave $1.5 million and they now owe you $3.5 million and they're not paying any interest on any of that.

Mr. Sweeney. They have made some interest payments.

Mr. Ballenger. I mean, since the forgiveness of the $1.5 million?

Mr. Sweeney. I'm not sure of the time table, but I know they have made some interest payments.

Mr. Ballenger. Right. And during the time of Mr. Carey's leadership of the teamsters--first of all you made the $5 million loan; and then in August of 1995, there was $100,000 loan interest free; and then in March of 1996, there was $185,000 loan interest free; and then in October of 1996, right before--right at the very end of the election--a deal was made with one finance company to use your name and logo--I mean everybody has done it I know--to own a credit card, probably for membership in the union. The advance payment on that was $963,000. And then in November of 1996, the AFL-CIO gave a $150,000. Now I realize--I think these are all your numbers, so unless I added wrong, during that period of time, the AFL-CIO gave to the teamsters organization $6,398,344 and they still owe you $3.5 million.

Mr. Sweeney. Approximately, that's correct.

Mr. Ballenger. These are I think pretty good guesstimates.

Mr. Sweeney. I think it should be noted that some of these--why some of these loans were granted, especially the most recent ones. One was granted to assist them and their strikers at the Detroit newspaper strike.

Mr. Ballenger. Right.

Mr. Sweeney. Which actually, five unions I guess are involved in that particular strike. The teamsters also went through a very expensive strike of UPS.

Mr. Ballenger. Right. I realize that, and I should probably have prefaced all that with the statement, but I was just trying to get my numbers to where they make some sense and it still appears that, in spite of all those difficulties that the teamsters had with the newspaper strike and their general strike, their assets shrunk from $150 million down to less than $700,000 in 5 years. And they may be on the verge of bankruptcy right now. I don't know that, but I just thought somewhere it ought to get into the news media that these numbers do exist. I'm not asking you to verify them or not verify them; I just thought I'dþ

Mr. Sweeney. And I couldn't.

Mr. Ballenger. Right, and I accept that.

Mr. Sweeney. You heard the accountant yesterday.

Mr. Ballenger. Yes, right. So Mr. Chairman, I thank you kindly.

Chairman Hoekstra. Mr. Kind.

Mr. Kind. Thank you, Mr. Chairman. And I too would like welcome President Sweeney and thank him for agreeing to testify today.

Before I get to Mr. Sweeney, Mr. Chairman, I just want to commend you on your decision not to call the two witnesses that we originally planned to call today. Obviously there was some concern when the U.S. Attorneys' Office from the Southern District informed us, when they found out we wanted to call them before our hearing, that this might inadvertently impede or hinder their criminal investigation in this matter. As a former prosecutor myself, that raised a lot of concerns for me and we had very fruitful and constructive conversation about this issue last night and we can always revisit these witnesses later.

Chairman Hoekstra. Will the gentleman yield?

Mr. Kind. Sure.

Chairman Hoekstra. Just to say thank you. I do believe your comments last night helped as we formulated a decision as to what direction we were going to go. So, thank you for your assistance.

Mr. Kind. Thank you, Mr. Chairman. Mr. Sweeney, I truly appreciate your willingness to voluntarily come before this committee and the cooperation that you personally have given this committee in the course of our investigation and members of the AFL-CIO.

And I especially appreciate your comments indicating that this isn't about personalities and it's not about individuals as far as you're concerned. It's about the integrity of the institution of the AFL-CIO. It's about the 13 million members, working men and women, that you represent throughout the country. And that's why you've agreed to cooperate the way you have. And you have a responsibility to those members, as do we, as members of Congress. And we have a responsibility to the 1.4 million member teamster organization as well to get to the bottom as to what transpired, what went wrong, what we can do to prevent it from happening again.

We also ultimately have, perhaps most of all, responsibility to the taxpayer's of this country as to why $17.5 million--their dollars--were spent to oversee the teamsters' election that went awry and now looks as if there's a possibility that more taxpayer dollars are going to be expended to see the next election cycle. So, we appreciate that.

But, so I'm clear in my mind, as far as the steps that you took when you were notified of some of these allegations in the summer of 1997--when did you initiate the investigation--the internal investigation--at the AFL-CIO to look into this matter?

Mr. Sweeney. I believe it was in the summer of 1997.

Mr. Kind. So it was shortly after you became aware of these allegations?

Mr. Sweeney. Yes.

Mr. Kind. And based on the internal investigation that was conducted, there was no basis to conclude that there was any wrongdoing that was done by Secretary/Treasurer Trumka?

Mr. Sweeney. There was no basis to show any wrongdoing on the part of any officer or employee of the AFL-CIO.

Mr. Kind. Now Secretary/Treasurer Trumka is an independently duly elected officer of the AFL-CIO. Is that right?

Mr. Sweeney. Yes.

Mr. Kind. And he is not an employee of yours and therefore not subject to your whim as to whether or not you want to keep him as an employee.

Mr. Sweeney. That's correct.

Mr. Kind. And you've had conversations with him explicitly in regards to these allegations. Is that right?

Mr. Sweeney. Yes.

Mr. Kind. And how many of those conversations have you had?

Mr. Sweeney. Oh, there have been several conversations in terms of requesting trying to get the bottom of all this, brining him up to date as to what I was hearing from individual members of the executive councils, and so on.

Mr. Kind. And during those conversations, he expressly denied any wrongdoing, but he also indicated he was going to be invoking his Fifth Amendment privilege. Is that right?

Mr. Sweeney. That's correct.

Mr. Kind. Now just as we as members of Congress are very limited in what we can do if a colleague or another member of Congress is under some investigation and invokes the Fifth Amendment, I know on review of the documents that have been produced by you, that the AFL-CIO also has an internal policy when it comes to individuals who invoke the Fifth Amendment. Is that right?

Mr. Sweeney. Yes.

Mr. Kind. And can you tell me how long that Fifth Amendment policy has been in effect at the AFL-CIO?

Mr. Sweeney. It's been in effect since 1957.

Mr. Kind. And has there been any modification of that policy since 1957? Any changes in how you address Fifth Amendment issues?

Mr. Sweeney. No.

Mr. Kind. Now, based on your interpretation of the AFL-CIO's policy involving the Fifth Amendment that was instituted in 1957þ

Mr. Sweeney. By the way, there is an exhibit in the packet here on the Fifth Amendment, which is not the current policy of the AFL-CIO.

Mr. Kind. What exhibit is that? Do we have that?

Mr. Sweeney. Exhibit 17.

Mr. Kind. Okay. I appreciate that. But, perhaps this is getting out of your knowledge area and that, but has that Fifth Amendment policy since 1957 been consistently applied by past presidents at the AFL-CIO?

Mr. Sweeney. Yes.

Mr. Kind. And can you think of any policy reasons as to why if any individual, and especially an elected officer at the AFL-CIO, invokes the Fifth Amendment, why there wouldn't be an automatic expulsion of that person?

Mr. Sweeney. Well, the Fifth Amendment is one of our bill of rights, as you well know, and is one of the rights that's central to, I think, the freedom that we cherish in our society. The AFL-CIO's policy on the Fifth Amendment does not provide a basis for any action against any officer merely because he has asserted this basic Constitutional protection. The resolution regarding the Fifth Amendment policy, which I believe has been submitted to the committee, states in clear terms that it does not provide for automatic expulsion of an officer who invokes the Fifth. The policy only provides for sanction against an officer if it can be demonstrated that the Fifth Amendment was, in fact--that it was in fact--invoked as a shield to avoid discovery of corruption and we have provided this policy to the committee. With me, as I said at the outset, it our General Counsel of the AFL-CIO, Jon Hiatt, who would be more than happy to get into the technical discussion of the Fifth Amendment policy.

Mr. Kind. Thank you. Thank you, Mr. Chairman.

Chairman Hoekstra. The gentleman yields back. Mr. Scarborough.

Mr. Scarborough. Thank you, Mr. Chairman, and thank you, Mr. President, for coming to testify today. You asked a rhetorical question to Mr. Norwood earlier on what do we do, the members in Congress, when they plead the Fifth. And I can tell you that, when there was an investigation against a certain speaker who's probably not on your Christmas card mailing list, a number of us demanded that immediately he speak out. And he did speak out and immediately, at least 55,000 documents, and ordered all those close to him to cooperate and get this behind us.

You speak about the Constitutional right--the Fifth Amendment right--and I agree with you. But certainly you recognize that, like us, you're in a political position. You're representing working men and women across the country and they've entrusted you to represent them fairly and protect them. I know you've talked to him--he's your friend--privately. But have you made any public statements asking that he move forward as quickly as possible to clear this matter up and to put all these issues behind him and if he can't do it now, then possibly resign from his position in the best interest of those men and women you represent?

Mr. Sweeney. I don't have the power to force him to do that based upon what the investigation has yielded so far.

Mr. Scarborough. Right.

Mr. Sweeney. And as you have stated and as everyone knows, he's an elected officer and I don't believe he's done anything wrong. And I think he should be allowed to have all of the--to exercise all of his legal rights. And I believe that I am complying with the Fifth Amendment policy that's been in existence at the AFL-CIO for over 40 years.

Mr. Scarborough. And I agree with you that you don't have the power to do that, any more than I have the power to tell another member of Congress to leave Congress. I'm just talking about a perception with the people that you represent on how interested you are in getting everything out, so the facts can get out to the light of day, so the people you represent recognize that you're doing everything you can to make sure that the millions and millions of dollars that are spent are being spent wisely. So, for my understanding you

Mr. Sweeney. And I wouldn't be here voluntarily if I wasn't sincerely interested in cooperating as much as I

Mr. Scarborough. Right.

Mr. Sweeney. --possibly can to get this behind us.

Mr. Scarborough. Sure.

Mr. Sweeney. I am concerned about the perception in terms of the labor movement, the AFL-CIO, and I want to see this investigation come to a conclusion and hopefully get it all behind us. I'm cooperating in every way I know how.

Mr. Scarborough. You certainly are. I mean, coming here today, I think, was positive and without being subpoenaed. My only question is regarding Mr. Trumka. Let me ask you this--there's been an impression among some members on this committee and in this House and in the media, that you were somehow indebted to the Carey campaign. And indebted because, as you know, they gave you the margin of victory back during your election--was in 1995?

Mr. Sweeney. Yes.

Mr. Scarborough. I think it was 1995. And it seems to me, you know people are drawing this conclusion and again, you aren't as you said before, you hope you're not under investigation and I certainly don't think you are.

But you understand how there could be a perception that the group of people that were responsible for your election all of a sudden had this intermingling of funds and you had people very close to you admitting that--it almost sounded like one of our meetings where we get people together to raise money and say can everybody raise x amount of dollars. And yet, in this case, you had all these groups of people--these people close to you--talking about illegally raising $50,000 a piece. You go to this organization and illegally raise $50,000, another person goes to another organization and raises another $50,000, another person goes to organization that you used to represent and raises another $50,000, and somehow raise enough money to help elect Mr. Carey.

Can you understand that there is a horrible perception among certain people in this country that it appears that there was a back room deal and it's all swirling all around your office? And how we want to get to the bottom of it as soon as possible?

Mr. Sweeney. I can understand the concern about the perception, but I think that some--it should be clarified in terms of yes, Ron Carey and others supported me in my election in 1995. And we had worked together on different issues. But I think that one has to also be mindful of the fact that once we got that very tough election behind us, we held a special convention in March of 1996 and the affiliates who supported Tom Donahue as well as the affiliates that supported me came together to develop a political program to approve a special assessment to raise the monies for that political program.

And in 1997, the three officers who had been elected in 1995, together with the executive council, were unanimously reelected. We're very conscious and mindful of our change of status in terms of coming from individual unions and now heading up the federation and we have an obligation to represent all 72 of those affiliates. If we want to get reelected, we had better not interfere in any of those affiliates' elections and I don't believe that anybody in the AFL-CIO was involved in any scheme around the teamsters' election.

Mr. Scarborough. Well, thank you. I appreciate you coming again and that little political operation that you talked about in 1996 was a very interesting political operation. I think a lot of my friends were caught in the cross hairs of that little political operation. Thanks for coming today and look forward to some more questions.

Mr. Sweeney. Thanks.

Chairman Hoekstra. Mr. Ford.

Mr. Ford. Thank you, Mr. Chairman, and thank you Joe Scarborough, my friend, who's office I now occupy in the Longworth Building. Let me thank my dear friend, my new friend, President Sweeney. We had an opportunity to get to know each other on a recent trip to South Africa, which I think both of us thought was an astonishing success for not only the President, but really for American foreign policy makers.

I share my good friend Ron Kind's passion and quest to get to the bottom of this, Mr. Chairman. Mr. Sweeney has certainly done a terrific job at representing not only the 13 million people that his union represents, but really representing all working people throughout this Nation.

I certainly--I want to be candid. I drew the ire of some of my good friends and the labor movement when I supported the fast track on the part of the President, so I certainly want my colleagues on the Republican side to know that as much as Mr. Sweeney have wonderful conversations on the trip, he did chew my ear out on a few substantive issues.

[Laughter.]

But I think it's important that we put some of this into perspective.

Chairman Hoekstra. Actually, Mr. Sweeney was very complementary about my position on the fast track, so

[Laughter.]

Mr. Ford. I wonder why, Mr. Chairman.

[Laughter.]

But let me put just some of these things into perspective that some of my colleagues have queried you about this morning. I appreciate your staying with us, Mr. Sweeney. I know you have things to do today.

It is important to note that we do have a colleague of ours who, and may God bless their soul, who has pled guilty to violations in which many members on the other side have not come forward to ask this particular member to perhaps step aside. You've been queried about whether or not the type of action you've taken against those who had taken the Fifth Amendment and have every--their Constitution right--exercising their Constitution right.

In addition, I would say to my friend the counsel on the other side, who's daughter I attended elementary school with, I wonder if she has asked her client, who is the chairman and one of the leadership of the Republican side, whether or not he is innocent of the charges or the allegations that have been inferred against him by a known payed lobbyist here in this town, as well as Mr. Gingrich.

I would also say that $150,000 check that we're talking about here this morning--let us put that into perspective. Two things. Number one, I'm a proponent of sweeping campaign finance reform. I've even drew the ire of some of my labor friends as well, for the ban on soft money that I support with members of the freshman class as an elected vice president of that class. I would also urge those who are concerned about this--certainly those who are watching--to look at the amount of money that flows between campaigns and parties or amongst parties of candidates the last week, and I would assure them that the $150,000 we're querying you about is dwarfed considerably by those in the Democrat and Republican side.

I would also remind my colleagues on the Republican side and the Democratic side, that we just spent $2 million harassing Loretta Sanchez and Hispanic voters and I'm delighted to see Miss Chavez here and applaud, despite what some conservative members in this Nation may say about the monologue with race commission--I applaud it. And would ask that you think about putting somebody young on it as well, who was born after the passage of the civil rights movement. But, that's a different--I mean, the voting rights act--that's a different conversation.

I thank you again, Mr. President, for coming before us this morning. You have answered all of the questions. You've come voluntarily. And it's my hope that your testimony today will shed some light and settle some question and then perhaps move us closer to getting back to the business of this country.

And with that, I yield just if I can, to my distinguished friend and a great Congressman from St. Louis, Mr. Clay.

Mr. Sweeney. Thank you.

Mr. Clay. I thank the gentleman for yielding and of course I welcome my dear friend, head of the AFL-CIO, to this hearing. Mr. Sweeney, my colleague from Georgia asked you, have you asked Rich Trumka if he is guilty or not. And my colleague from Florida somehow infers that something is wrong or something may be irresponsible because you have not replaced Mr. Trumka or imposed any other sanctions.

My question is two-fold and is not directed at you. It's directed at the two gentleman who have made these inquiries. One is that Newt Gingrich is presently under investigation by the IRS and the Justice Department and is being investigated for criminal tax evasion, breaking campaign laws, and illegal use of charitable contributions for political purposes. So my question to the gentleman from

Mr. Scarborough. I'll volunteer--Florida.

Mr. Clay. --from Georgia, if he asked Mr. Gingrich if he is guilty or not.

Mr. Scarborough. If the gentleman will yield. I actually spoke yesterday to Mr. Gingrich on this matter. I'm from Florida. Would you like an answer?

Mr. Clay. And what did he say?

Mr. Scarborough. Actually, he is innocent and in fact, the IRS investigation was history a long time ago, but you all can be talking about this ten years now from now if you'd like to--if it helps you gain political points.

Mr. Clay. I don't believe in history

Mr. Scarborough. But the IRS investigation is history.

Mr. Clay. And I believe that's the same answer that

Mr. Scarborough. --bring it back two years from now and we'll give you that same answer.

Mr. Clay. It the same answer that Mr. Sweeney gave when he asked Mr. Trumka and Mr. Trumka said he was innocent and he takes his word for it.

I asked the gentleman from Georgia--or I asked the gentleman from Florida--if he has asked Speaker Gingrich--has he taken any action toward Speaker Gingrich, sanction him, or remove him from office

Mr. Scarborough. Well

Mr. Clay. --since he thinks that Mr. Trumka ought to be removed from office.

Mr. Scarborough. And if I could answer that question. Again, I spoke

Mr. Clay. Yes or no

Mr. Scarborough. I spoke to

Mr. Clay. Yes or no?

Mr. Scarborough. You don't have to answer yes or no here.

Mr. Clay. When then I don't have to yield

Mr. Scarborough. Actually, I demanded answers

Mr. Clay. The record speaks for itself--he is not publicly asked; he's not publicly taken that position.

Mr. Scarborough. Because Mr. Gingrich--

Chairman Hoekstra. The gentleman's time has expired.

Mr. Scarborough. --turned over 55,000 documents the day it was requested.

Chairman Hoekstra. The gentleman's time has expired. Regular order.

Mr. Scarborough. --and he didn't plead the Fifth and he didn't

Chairman Hoekstra. Regular order.

Mr. Scarborough. --he even waived his attorney client privilege.

Chairman Hoekstra. The gentleman--

Mr. Scarborough. --if only the White House did the same thing.

Chairman Hoekstra. I thank the gentleman from Florida for suspending.

Mr. Sweeney. I'm glad I'm not the only one getting questions.

[Laughter.]

Mr. Kind. Mr. Chairman, I yield back the balance of my time.

[Laughter.]

Chairman Hoekstra I thank the gentleman for yielding. Mr. Sweeney, we're going to try to finish this up. We have a vote, so that you won't be delayed any further.

I have a couple quick questions for you. Have you asked--there have been allegations about Mr. Stern and Mr. Macantee raising funds for Mr. Carey's campaign, which would be, I believe, in violation of AFL-CIO rules--other union members or other union leaders raising funds. Is that correct?

Mr. Sweeney. Any policy or any matters that I referred to today were pertaining to the AFL-CIO. As I said earlier, each of the 72 affiliates of the AFL-CIO are autonomous and can develop their own policies. And I have no knowledge of those.

Chairman Hoekstra. It's also been alleged that Mr. Trumka raised $50,000 for the Carey campaign. Have you--is that again what you talked to Mr. Trumka about and--

Mr. Sweeney. I have no knowledge of any involvement--

Chairman Hoekstra. Have you asked--

Mr. Sweeney. --of Rich Trumka.

Chairman Hoekstra. Have you asked Mr. Burton or Ms. Mackey about the alleged fund swap?

Mr. Sweeney. No, I have not.

Chairman Hoekstra. You're a powerful individual. You have a lot of--I'm not sure--I wish you'd help us. I think you've got a great bully pulpit. I think for the rank and file--

Mr. Sweeney. You do to.

Chairman Hoekstra. Yes, you're right. And there's a responsibility. I think we've got the same objective in mind and I'm hoping that you can use your bully pulpit and would actually ask you to use your bully pulpit to help and encourage the members and the leadership of the teamsters to open up the process, find out what happened, open up to us, open up to the Justice Department, for the best interest of the rank and file and for all of us to get this behind us and to move forward.

They are behaving very differently than what you are and what the AFL-CIO has been. You are very open. You have been cooperative. I might have wished you'd be a little bit more aggressive with Mr. Trumka and some of these, but that's a difference of a policy and procedures and it's easier for me, perhaps, to say that in my job than it is for you in your job to actually do it.

But I would hope that you would begin--you would use the bully pulpit--to help us get the documents that I think we need. Specifically, we need the documents that detail the financial records of the teamsters and we need the tapes. When you

Mr. Owens. Will the gentleman yield?

Chairman Hoekstra. --when you hear this happened when the trustees were elected, representatives and trustees

Mr. Owens. The gentleman's repeating

Chairman Hoekstra. --were excluded from the executive board meetings. We need help getting that kind of information. I yield to Mr. Owens.

Mr. Owens. I just want to thank Mr. Sweeney for coming today and I hope you'll use your bully pulpit to remind everybody in this country what is was like in the teamsters union before the new regime came in. It's unfortunate that we have a problem with a $150,000 being used and an overzealous election campaign. But millions of dollars were stolen before and the whole reason that the government put the teamsters under receivership needs to be remembered. And the whole tenor of the union movement before you came in needs to be remembered. And I hope you use the bully pulpit to remind us of what is was like before you came in. Thank you very much for coming.

Chairman Hoekstra. Thank you, Mr. Owens.

Mr. Sweeney. And they have these--in the past several years there have been tremendous reforms that have taken place in the teamsters union.

Chairman Hoekstra. Mr. Owens, it's just--it's not about $150,000; it's about the taxpayer money, it's about what we heard in testimony earlier--you're not a member of the subcommittee--I'm not sure--but, you've been attending faithfully and we like having you here. But you would have heard in one of the other hearings, there's concern aboutþ

Mr. Owens. The gentleman--I was just reminding you that the reason that the taxpayers spent the money is because the teamsters were put under receivership because of a long history of corruption. You know, Mr. Hoffa went to jail for jury tampering, but jury tampering was about stealing pension funds and there's a whole lot of history there that has been corrected by the new administration, Ron Carey and the administration of Mr. Sweeney.

Chairman Hoekstra. I'm not sure about pension funds and when Mr. Sweeney uses his bully pulpit to help us get the documents, to help us get the tapes, we'll get answers to those kinds of questions and we'll all feel a little bit better.

Mr. Miller.

Mr. Miller. Thank you, Mr. Chairman. And Mr. Sweeney, I want to thank you very much for your appearance here today. And I want to thank you very much for your work on behalf of working men and women and their families in this country.

I think that you did a remarkable job in getting participation in the last election by many families who traditionally have stayed home at election time. You told members of Congress very early on, you weren't going to tell your members who to vote for. You were going to tell them about issues. You thought they'd make up their mind in the right way. And the fact is, participation by labor households rose dramatically. And I think that's really what, unfortunately, a lot of other attacks and labor are about--is trying to reduce that participation. We see it on the ballot initiative in California and elsewhere.

But I want to thank you for your personal strength, your convictions, and your integrity, and your representation of working men and women in this country. And I guess the one thing we determined in this hearing this morning is it's not about you. Thank you very much.

Mr. Sweeney. Thank you.

Chairman Hoekstra. I'll echo those comments. It's not about you, but it is about Mr. Norwood who has one final closing comment also.

Mr. Norwood. Mr. Chairman, thank you very much. And I simply ask unanimous consent the AFL-CIO resolution adopted by the executive committee be placed into the record and point out that it says, ``an investigation is required by the affiliate involved into the fitness of an official to continue to hold office,'' meaning Mr. Trumka. If it is found that the Fifth Amendment was in fact invoked as a shield to avoid discovery or corruption upon his part, he has no right to continue to hold trade union office. Now, if Mr. Trumka is indicted or pleads guilty, would that indicate perhaps that he would not be allowed to hold office?

Mr. Sweeney. That's a possibility.

Mr. Norwood. Let me

Mr. Sweeney. Let me have Jon Hiatt just for one quick second on the technical aspect here.

Mr. Hiatt. Congressman, if you are going to place in the record the statement of policy of the executive council from January of 1957, you should really put in for the record the actual policy, which is reflected in the AFL-CIO convention resolution of later that year. Because, that embodies the resolution on the Fifth Amendment policy, which makes it explicit that it is not an automatic removal policy. And that should go into the record.

Chairman Hoekstra. Without objection.

Mr. Norwood. I object to that. I haven't read that. At least let me look it over. I don't intend to object, but let's look at it before we agree to that.

One final point, I note that you are good friends with Mr. Trumka and I know that you have to admire, and I do too actually, his passion in terms of what he believes in, which is the union and the union members. I also know that sometimes you can be so passionate that you can make mistakes and you can do the wrong things and Mr. Trumka did in 1996 in many cases said some very interesting things that make me somewhat suspicious about what he was willing to do to win. By Congress and that the union--his message was that the unions are back and that you get in our way and we will knock you flat on your ass. Very passionate comments that--I admire the passion, but I hope you in your investigations will consider, even a good friend sometimes might do the wrong thing when you're so passionate about the issue.

Mrs. Mink. Mr. Chairman?

Chairman Hoekstra. Yes?

Mr. Mink. Mr. Chairman, he asked unanimous consent to have a certain resolution

Chairman Hoekstra. Yes.

Mrs. Mink. --entered into the record and we were told that there is superior document, which is in fact, majority Exhibit number 18, which I would also ask be included in the record at this point.

Chairman Hoekstra. It's in the record.

Mrs. Mink. Thank you.

Chairman Hoekstra. It's reflected in our charts. I hope you'll respond and I hope you'll to the specific question of helping--how you can help us get the information from the teamsters and how you can get them to cooperate to get this behind us.

SEE APPENDIX E FOR COPIES OF CHARTS

Mr. Sweeney. And how we can get the teamsters restored to their own autonomy and self-governance as fast as possible.

Chairman Hoekstra. Absolutely. It would

Mr. Sweeney. And how we can build a stronger labor movement together.

Chairman Hoekstra. And that will be the American worker project. But absolutely, returning the teamsters back to their own control. It's costing them a lot of money and we're not doing it all that well.

Thank you very much for being here. The subcommittee will be adjourned.

[Whereupon, at 11:43 a.m., the subcommittee adjourned subject to the call of the Chair.]