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Ex-Teamsters boss pleads 'not guilty'

Carey was ousted as president of the Teamsters in 1996, following a fundraising scandal re-election.

From CNN Producer Phil Hirschkorn

NEW YORK (CNN) -- -- Former Teamsters Union president Ron Carey pleaded not guilty Thursday to charges of perjury and making false statements during an investigation of fundraising improprieties during his 1996 re-election campaign.

Carey, 64, a one-time United Parcel Service truck driver, had promised to clean up corruption in the union before his scandal-driven ouster and eventual replacement by James P. Hoffa -- son of a legendary Teamsters boss who spent years in prison and later disappeared.

Carey entered the plea during his arraignment before Magistrate Henry Pitman in U.S. District Court in lower Manhattan.

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Pitman agreed to the government's request to release Carey on his own recognizance so long as Carey surrendered his passport, which he agreed to do. Carey was fingerprinted and photographed by U.S. marshals before leaving the courthouse.

Carey was indicted one week ago on seven counts of lying to government-appointed officials and to a grand jury investigating a scheme by Carey's campaign to divert $885,000 from the Teamsters treasury to groups that arranged for reciprocal donations back to the Carey campaign.

After Carey beat Hoffman in a mail-in vote that ended in December 1996, investigators discovered the illegal fund diversion. They voided Carey's victory, ordered a re vote, and barred Carey from participating.

Hoffman won the new election and assumed leadership of the 1.4 million member union in May 1999.

Carey has maintained that he knew nothing about the fundraising scheme.

"If I did, it would have been stopped dead in its tracks," Carey told the election monitor in 1997, one of 18 statements prosecutors says was false. The indictment also identifies 39 false declarations before the grand jury.

The Teamsters, the nation's largest private sector union, has been operating under government supervision since 1989, when the Justice Department dropped it racketeering case against the union, and the union agreed to sever ties to organized crime.

Carey, running as a reformer with a track record leading Queens Local 804, won the union's first direct election by rank and file members in 1991. In his first term, he slashed his own salary, cut leaders' perks, and ousted officials seen as corrupt.

His 1996 campaign manager, Jere Nash, a political consultant, Martin Davis, and a mail order operator, Michael Ansara, pleaded guilty in September 1997 to charges stemming from the fundraising scheme. They still await sentencing and could testify against Carey.

The Teamsters' former political director under Carey, William Hamilton, is serving a three-year sentence for his conviction on charges in connection to the scheme.

Carey would not comment on the case against him. If convicted, he faces a maximum sentence of five years in prison for each of the seven counts.

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