NCJ Number
81128
Date Published
1981
Length
197 pages
Annotation
This report by the Permanent Subcommitee on Investigations presents findings and recommmendations from an assessment of the Labor Department's investigation of the Teamsters Central States Pension Fund.
Abstract
Although the agreed-on strategy for investigating the Teamsters Central States Pension Fund involved a comprehensive examination of borrowers and third parties as well as Fund trustees and senior union officials, the Labor Department eventually narrowed its investigative focus to Fund trustees and senior union officials. Further, the proposed strategy was to emphasize cooperation between the Labor Department and the Justice Department with a view toward bringing both civil and criminal action against parties believed culpable in Fund mismanagement. In practice, the Labor Department's communication with the Justice Department was sporadic and insignificant. This was largely due to the investigation's deemphasizing criminal matters. Also, inexperienced personnel were permitted to control the investigation. Despite the fact that the Department of Labor succeeded in removing the Fund trustees, it left the Fund vulnerable by failing to take part in or require the approval of the selection of the new trustees. Although Labor forced the Fund to hire independent asset managers, it left the Fund vulnerable by limiting that contractual arrangement to a 5-year period. Recommendations include (1) the enactment of legislation directing the Labor Department to work closely with the Justice Department in investigating violations of Federal law relating to employee welfare benefit trust funds; and (2) ensuring that the new leadership of the Labor Department take steps to reverse those habits, traditions, and inclinations within the department which have tended toward avoidance of adversarial encounters with large labor unions and the management of their employee benefit funds. Five other recommendations designed to improve the Labor Department's effectiveness in countering corruption in the management of union employee benefit funds are presented.