James B. Jacobs

In a nutshell

Breaking the Devil’s Pact is a case study of the 22+ years of effort on part of federal prosecutors, federal judges and court-appointed monitors to purge organized crime influence from the Teamsters Union.

The battle began in 1988, when then (Manhattan) U.S. attorney Rudy Giuliani brought an unprecedented civil racketeering (RICO) lawsuit against the president and general executive board of the nation’s most populous and most powerful trade union, the International Brotherhood of Teamsters (IBT), and the nation’s most powerful organized crime syndicate, Cosa Nostra (LCN). Citing scores of past criminal prosecutions for violence, theft, fraud and all manner of exploitation of union members’ rights, the lawsuit alleged the existence of a “devil’s pact” between the IBT’s leadership and the LCN bosses.

Our book documents and analyzes the politics surrounding the filing of the lawsuit, the settlement on the eve of trial, the IBT leadership’s post-settlement change of heart and massive legal resistance to the settlement’s enforcement, the historic 1991 nationwide rank and file election won by the insurgent reformer Ron Carey, Carey’s “tragic” expulsion from the IBT on account of 1996 election fraud, and the emergence of James P. Hoffa, son of the notorious Jimmy Hoffa, as the IBT’s general president.

Breaking the Devil’s Pact traces the history of the most important legal attack ever launched on the LCN.

FBI investigators and Department of Justice lawyers realized in the mid 1980s that certain labor unions, especially the IBT, were LCN’s most important power base. The LCN bosses approved or actually selected IBT presidents, Jimmy Hoffa, Frank Fitzsimmons, Roy Williams and Jackie Presser. Cosa Nostra’s influence in union affairs generated a steady stream of revenue; in fact, the Teamsters Central States Pension and Welfare Fund functioned as a kind of Mafia bank. The IBT power base also gave the LCN bosses immense local, regional and national political influence. Indeed, Jackie Presser was a member of President-elect Reagan’s transition team.

The essence of labor racketeering is 1) the threat and actual use of violence to suppress dissent, 2) the sale by corrupt union officials and their organized crime partners of union members’ constitutional and contractual rights to employers (the employers pay bribes to circumvent their contractual obligations), and 3) the exploitation of the union’s financial resources.

Breaking the Devil’s Pact illuminates the complexity of reforming an immensely powerful union, both politically and economically powerful, with 1.4 million members and locals all across the United States and Canada.

The settlement of the civil RICO lawsuit, U.S. v. IBT, sought to accomplish such reform by two remedial strategies: 1) fostering union democracy—through court-officer supervised direct rank and file election of international union officials; 2) court-officers purging of LCN-connected and corrupt union officers from the union by means of the union’s disciplinary machinery. Both remedial strategies have strengths and weaknesses.

Breaking the Devil’s Pact contributes to our understanding of the potential and limits of federal courts to design and carry out organizational change.

Many books document and debate the propriety and efficacy of federal courts’ efforts to remedy unconstitutional conditions and practices in public institutions like schools, prisons and mental hospitals. But this is the first book to shine a light on federal courts’ efforts to reform a private sector organization in which organized crime wielded pervasive influence.

In the end, the government and the courts have been substantially successful in severing the devil’s pact between the IBT and LCN. Progress has often been difficult. There have been many points along the way when the whole remedial effort could have been derailed. Five presidential administrations have not interfered with the work of the court-appointed officers. All sorts of legal, financial and logistical hurdles have been overcome. The value of civil RICO as a tool for systemic reform of corrupt organizations has been demonstrated.

Despite a steady chorus of labor and political criticism, U.S. v. IBT shows that government intervention on behalf of union democracy makes for a stronger, not weaker, union.

The wide angle

Throughout my career, my specialty has been criminal law, criminal procedure, and criminology.

My interest in labor racketeering began in the mid 1980s when I served as a consultant for the NYS Organized Crime Task Force’s investigation of corruption and racketeering in the NYC construction industry. OCTF’s multi-year investigation showed that organized crime controlled or influenced many of the construction union locals in the NYC area, including Teamsters locals. (The Teamsters represent the drivers who deliver supplies to construction sites.)

I learned a great deal about the Cosa Nostra crime families, especially that what distinguished them from other organized crime groups was their position in the legitimate economy. Moreover, their position in the legitimate economy was built on their influence in a number of labor unions—Teamsters, Longshoremen, Laborers, Hotel and Restaurant Workers.

In 1994, NYU Press published my book, Busting the Mob, which documented half a dozen of the most important organized crime cases of the 1980s. One of these cases was Rudy Giuliani’s U.S. v. IBT civil RICO lawsuit. I did not imagine that the case would still be going on 15 years later. But I kept an eye on U.S. v. IBT and wrote some articles on various aspects of the case. In 2006, NYU Press published my Mobsters, Unions and Feds, a book that deals with labor racketeering generally. A couple of years after that, I realized that U.S. v. IBT was important for so many reasons that it warranted a book of its own.

A close-up

Because the book presents an historical case study of U.S. v. IBT, it would best be approached chronologically.

The Timeline (pages xix—xxi in the book) is a thumbnail overview of the most important events in the 22+ years of the life of the lawsuit.

But the Timeline does not give any sense of the analysis which the book provides.

Chapter 1, “Introducing the Litigants and the Judge,” is about the many “big personalities” who have been involved with this case, including Rudy Giuliani for the U.S. Department of Justice and the original IBT and LCN defendants, as well as the rank and file interveners, and David Edelstein, the brilliant and irascible federal judge.

Perhaps Chapter 7 is the book’s most dramatic and compelling chapter. It recounts the fall of Ron Carey, the insurgent “reformer” whose 1991 election was heralded as proof of the success of the U.S. v. IBT election reform remedial prong. The court-appointed officers charged Carey’s 1996 election campaign with embezzling union money for Carey’s re-election. Carey’s 1996 victory was voided and he was expelled from the union.

Lastly

Breaking the Devil’s Pact corrects the “fairy tale” history of the labor movement.

Organized crime figures started penetrating labor unions in the early 20^th century. Some early labor leaders, like David Dubinsky, strongly opposed gangsterism in the labor movement. In 1957, the AFL-CIO expelled the Teamsters on account of corruption and racketeering. Eventually, however, opposition (except for a small number of so-called union “dissidents”) all but disappeared until the Department of Justice (DOJ) became involved in the early 1980s. DOJ’s involvement was precipitated by its goal of eradicating LCN—not by a goal of cleaning up unions.

Breaking the Devil’s Pact contributes to our understanding of union democracy.

Teamsters For a Democratic Union (TDU), the best-organized and largest “dissident organization” in the union movement supported the government’s civil RICO lawsuit against the IBT establishment, but strenuously argued in favor of a union democracy remedy.

TDU insisted that if the government could ensure free and fair elections, the rank and file would replace gangsters and their cronies with honest and effective union officers.

This is an important hypothesis. Indeed, the same hypothesis appears in foreign policy debates—will free and fair elections bring honest and effective political leaders to power?

Unfortunately, the answer for both unions and nation states is “not always.” Free and fair elections may be a necessary, but not sufficient, condition for good government.

Breaking the Devil’s Pact sheds light on American politics.

On the one hand, there could hardly be a more cynical commentary on American politicians than that, in 1988, almost 300 Congressmen would petition the U.S. attorney general not to bring the rumored civil RICO lawsuit against the IBT on the ground that it would be a blow to a “free and democratic labor movement.”

On the other hand, that five U.S. presidential administrations, both Republican and Democrat, have permitted the lawsuit to continue evidences and reinforces the independence of the U.S. Department of Justice and the supremacy of the rule of law in the United States.