The former leader of one of Baltimore's largest Teamsters Union locals was ordered yesterday to reimburse his union and its pension and welfare funds hundreds of thousands of dollars for what a federal judge found to be excessive "perks" he received as a union officer and for breaching his responsibilities as a union trust officer.
The ruling in U.S. District Court in Baltimore, climaxing 2 1/2 years of litigation, apparently represents one of the most sweeping applications of recent legislation designed to reform the way union leaders and pension fund administrators handle members funds.
Judge Joseph H. Young ordered Leo DaLesio, former top officer of Teamsters Local 311, to reimburse the local for about $170,000 worth of benefits -- including union-paid season tickets to Baltimore Colts football games, a personal $250,000 severance pay fund and the use of an Ocean City condominium owned by a businessman who administered the union's pension and welfare funds.
In addition, the judge found DaLesio and Alfred Bell, the businessman who administered the pension and welfare funds for 14 years, are jointly liable for an additional $209,186 paid by the local to Bell's company at DaLesio's direction.
While Bell was administering the funds, he was being paid both by the union and by the insurance carriers with whom he contracted -- an arrangement that wasn't adequately disclosed to the trustees of the funds, the judge ruled. Young found that DaLlesio shared responsibility for the lack of disclosure.
Teamsters officials refused to comment on the ruling until they have read it more carefully. But several lawyers with experience in labor law termed it significant both for the amount of money the men were ordered to repay and for the standards of responsibility it sets for union officers and those who administer union funds.
Plaintiffs' attorney Arhtur Fox, a prominent advocate of Teamsters reform, said he believes the decision sets a new legal fondation for rank and file union members to challenge apparent improprieties by their officers.
Bell's lawyer, Walter Dillion, said, "It looks like it's open season on trust fund administrators . . . If this decision stands, my guess is that both unions and management are going to have extreme difficulty finding people willing to serve as trustee on these funds. Congress and the federal courts have once again screwed up an entire industry."
The DaLesio case centers around DaLesio himself, a man with a sixth grade education who used his personal drive and charisma -- along with tactics described by the plaintiffs as intimidation -- to build Local 311 to a level of 4,000 members in the mid-1970s. When allegations of his questionable dealings surfaced, membersip began to decline.
Bell was intimately tied to those dealings. In 1974, he bought an Ocean City condominium and gave the union chief unlimited use of it. A federal grand jury investigated the two men's relationship for more than a year, but returned no indictments. The judge ruled yesterday that DaLesio's use of Bell's condominium constituted a breach of fiduciary duty, and ordered him to pay the pension and welfare funds $8,750 for the value of his vacations there.
In his sharply worded ruling, Young repeatedly criticized DaLesio's conduct as union leader and the extent to which financial affairs were hidden from the rank and file. But he also criticized obliviousness and indiference" and behalf of other officers and trustee. "It does take two to tango," the judge wrote.