The future of one of the government's most extensive investigations - the probe of the billion-dollar Teamsters Central States Pension Fund - has been thrown into doubt by a recent Teamsters action shutting off free government access to fund records.
The Teamsters expelled Labor Department investigators from the pension fund's Chicago office in late March, forcing investigators to begin a drawn-out process of securing the records by subpoena top Justice and Labor department officials told a congressional committee yesterday.
The Teamsters action "may be an indication that the funds are embarking on a course of action to actively resist the government's regulatory and investigatory efforts," John C. Keeney, acting chief of the Justice Department's Criminal Division, told the House Ways and Means Committee's oversight panel.It "reflects a noncooperative attitude," he said.
The pension fund's officers had been cooperative for the past 15 months - allowing the Labor Department to set up shop in their office- only in the face of an Internal Revenue Service threat to revoke the fund's tax-exempt status. That sanction, which was imposed briefly in 1976, would bring chaos to the fund's operation.
Under the IRS threat, the fund also agreed to replace its trustees, install an independent manager of its assets and submit to a variety of audits and actuarial studies.
Since March, however, the fund has been taking steps to regain some of the control it relinquished in the agreement. In addition to the expulsion of investigators, fund trustees approved a resolution requiring the managers to screen major decisions through the trustees, from whom they were supposed to be independent.
The trustees also brought in their own actuarial firm and ordered government-installed actuaries to suspend their work, according to yesterday's testimony. In addition, the fund forced out as executive director Daniel J. Shannon, who was brought in five years ago to help revamp the operation.
These events, coupled with congressional displeasure about the government's response to them, prompted yesterday's hearing. "I am concerned about a lesseningof the government's commitment ot clean up this fund," said Rep. J. J. Pickle (D-Tex) after hearing yesterday's testimony from government officials and Teamsters dissidents.
The government has been trying to cleanse the Teamsters pension fund for a generation. Its loans to organized crime figures, gambling casinos, race tracks and risky real estate ventures, and repeated allegations of payoffsfrom people seeking such loans have made it one of thecountry's most investigated institutions.
With assets of over $1.6 billion (by Teamster's estimates), it is also the second largest pension fund in the country and the principal source of retirement security for 480,000 Teamsters.
The current federal probe involves hundreds of investigators in three different agencies: the Justice Department, the Labor Department and the Internal Revenue Service.
Assistant Labor Secretary Francis X. Burkhardt agreed that the expulsion would slow down his agency's investigation, but stressed in the face of Pickle's criticism that the department had no power to force itself back into fund headquarters in Chicago, IRS auditors are still at work there, according to spokesmen for that agency.
Pension fund officials did not testify yesterday, although they wrote committee members that they would continue to cooperate both with congressional probers and agency officials. The Labor investigators were expelled because of "the attendant continuous expenses to and burdens upon the central states fund," the letter said.