The Labor Department has begun a "remedial action" in connection with the Teamster union's major pension fund, it was announced yesterday.
Department officials declined to say what action was contemplated or what recent events led to the decision.
The fund has been under government investigation for nearly a year after reports of underworld influence and shaky investments by the $1.4 billion fund. Twelve fund trustees have resigned during the investigation.
A statement issued by the Labor Department and the Internal Revenue Service said that in recent weeks the government had held discussions with fund officers about reforming its practices.
"The discussions between the government and the fund have not progressed to the point of agreement at this time," the statement said. "The Department of Labor has determined to take appropriate remedial action."
While declining to specify what action is planned, spokesmen said that the department's power lay in civil litigation. It could seek to restrain operators of the fund from activities considered detrimental to the stability of the fund. It also could move to recover funds deemed improperly handled and recommend that the Justice Department file criminal charges.
The Central States, Southeast and Southwest Area Pension Fund provides pension coverage for about 450,000 trucking employees in 33 states. Its investment practices have been a subject of controversy since the fund was founded in 1955.
In June the IRS took away the fund's tax-exempt status, but it has granted temporary relief from that ruling in a series of extensions in order to benefit contributing employers, employees and beneficiaries.
Yesterday the IRS granted a fourth extension of the tax-exempt privilege, retaining it through April 30.
A spokesman said the IRS is holding meetings with the fund's executives to explain what they must do to comply with the law regulating tax exemption.
In an effort to comply last december, the fund released a list of its outstanding loans that showed that 69 per cent of them were in real estate.