NCJ Number
76446
Date Published
1981
Length
527 pages
Annotation
During 4 days of hearings in August and September 1980, officials from the General Accounting Office (GAO), the Department of Labor (DOL), and the Internal Revenue Service (IRS) testified on DOL's investigation of the Teamsters Union Central States Pension Fund for misuse of funds and possible ties with organized crime.
Abstract
Opening statements by two Senators reviewed congressional concern over allegations of misconduct and mismanagement in the Central States Pension Fund which resulted in a special DOL investigation initiated in 1975 under the Employee Retirement Income Security Act (ERISA). Although the committee was assured in 1977 that this investigation was progressing and management of the pension funds had improved, a 1978 GAO review uncovered several shortcomings and deficiencies in DOL's efforts. The Comptroller General and several associates involved in the GAO study opened the hearings by summarizing their findings and investigative methods. GAO concluded that DOL's investigation was disrupted by lack of IRS cooperation and was incomplete because of its narrow focus on real estate mortgage and collaterial loans. Furthermore, subpoena powers authorized under ERISA were not used, third party loans were not examined, and investigative positions funded by Congress were never filled. The individuals who were in day-to-day charge of the DOL investigation described their frustration in attempting to pursue vital third party investigations of pension fund loan transactions and then being ordered by high level DOL officials to stop these activities. In the hearings' second day, a committee staff investigator described ties between organized crime figures and a former trustee of the Teamsters pension fund. When subpoenaed to appear before the committee, this man declined to answer questions on the basis of the Fifth Amendment privilege. Representatives from the IRS addressed the alleged lack of cooperation with DOL and commented on the timing of the IRS 1976 decision to revoke the pension fund's tax exempt status. After remarks from committee members regarding difficulties they encountered in arranging for DOL personnel to testify, the final days of hearings revealed the DOL had attempted to destroy an internal report which contained allegations of misconduct and illegal practices by DOL officials. The Secretary of Labor and other associates who had been involved with the pension fund investigation then responded to charges made by committee members and previous witnesses. Exhibits which were used during the hearings are listed.