A federal jury convicted Teamsters union President Roy Lee Williams today of conspiring to bribe Sen. Howard W. Cannon (D-Nev.).
After four days of deliberation, the jurors also returned guilty verdicts against all four of Williams' co-defendants: Chicago insurance executive Allen M. Dorfman, reputed Chicago mobster Joseph (Joey the Clown) Lombardo, and two officials of the Teamsters Central States Pension Fund, Amos Massa and Thomas G. O'Malley. They and Williams are to be sentenced in February.
Cannon, 70, who was defeated for a fifth term in the Senate in last month's elections, was never indicted in the case after the Carter administration, in a decision later approved by President Reagan's Justice Department, judged the evidence against him to be insufficent. Cannon has categorically denied any wrongdoing.
Williams, 67, is the third president of the powerful truckers' union to be convicted of a federal crime in the past 25 years. Dave Beck was found guilty of income tax evasion in 1957, and James R. Hoffa was convicted of jury tampering and, later, fraud in connection with $20 million in Teamsters Central States Pension Fund loans. Both served time in prison.
Williams, looking pale and subdued, fingered his tie nervously and looked down at the floor as the judge announced "each of the defendants guilty of each and every count in the indictment." Under provisions of the Landrum-Griffin Act, Williams could be forced out of his $225,000-a-year post as Teamsters president, but not until all appeals are exhausted.
Besides the bribery conspiracy charge, the five defendants were convicted of traveling interstate in furtherance of a bribe and nine charges of scheming to defraud the pension fund by trying to transfer real estate it owned in Las Vegas to Cannon at a cut-rate price. Each of the 11 counts carries a maximum penalty of five years in prison and fines ranging from $1,000 to $10,000.
U.S. District Court Judge Prentice H. Marshall said he would hold two days of hearings before sentencing on Feb. 10. Government prosecutors said they will press for severe sentences and may introduce tape-recorded evidence of other illicit activities and testimony about some of the defendants' alleged links to the underworld.
Williams, who in the past had been indicted three times on various charges of misusing union money but never convicted, and the two Teamsters pension fund officials, Massa, 65, and O'Malley, 46, remain free without bail until sentencing.
But chief prosecutor Douglas Roller, who heads the Justice Department's Organized Crime Strike Force here, asked Marshall to jail Dorfman and Lombardo immediately because "both of them pose a danger to the community." Roller cited a pending indictment against them for the 1979 bombing of a real estate developer's home and what Roller described only as "activities that have taken place in this case that the court is aware of."
Marshall decided instead to set bail of $5 million for Dorfman, 59, a millionaire, and $2.5 million for Lombardo, 53, who has been described in court affidavits as the man who "controls" Dorfman for the Chicago crime syndicate. Saying there was a risk they might flee, the judge ordered Dorfman and Lombardo to post those amounts in cash or endorsed negotiable securities by Friday afternoon to remain free.
Lombardo "is an absolute enigma. Nobody knows his business," the judge said, while "Mr. Dorfman is in the process of liquidating his holdings" and "has boxcar bucks."
Teamsters President Williams, a burly but ailing man who suffers from emphysema, told reporters that "certainly we'll appeal." He predicted that "we'll beat it eventually."
Lombardo had no comment. A reporter who approached Dorfman said all he got was an elbow in the stomach. Massa and O'Malley were surrounded by tearful relatives, some of whom had been standing outside in a hallway outside the overcrowded courtroom.
The jurors, a predominantly blue-collar panel of six men and six women, apparently decided on the verdicts Tuesday afternoon and returned to court this morning to finish the paperwork. The judge suggested they not talk to reporters. "My advice to you is to stand unanimous with your verdict and let it be done with that," Marshall told them.
The 12 jurors and four alternates had been sequestered under guard at a downtown hotel since Dec. 1, when five of them reported early-morning telephone calls about the case to their homes from a gravelly voiced man. The judge received a similar phone call last week, in which some of the jurors were mentioned by name although they had not been identified outside the courtroom.
Roller refused to say whether an investigation of this was under way, or to elaborate on his courtroom comment about "activities that have taken place in this case" when asking the judge to jail Dorfman and Lombardo.
Dorfman, whose insurance agency still handles Teamsters central states health and welfare fund claims, was convicted and sentenced to a year in prison in 1972 for taking a bribe in connection with a pension fund loan. He also was indicted in 1974 with Lombardo and five other men on charges of defrauding the Teamsters pension fund in connection with more than $4 million in loans. Lombardo was dropped as a defendant and Dorfman was acquitted after a key government witness was murdered.
An FBI affidavit in the court record here quoted one of its confidential informants as asserting: "Allen Dorfman is controlled by Joseph Lombardo, who answers to Joseph Aiuppa, the street boss of the Chicago organized crime family. Dorfman is consulted frequently on financial matters of interest to organized crime entities. Dorfman has an active role in establishing and managing numerous business investments on behalf of organized crime interests."
The trial grew out of an investigation begun in 1978, in which the FBI tried to "penetrate" hidden interests in Las Vegas casinos that Dorfman had allegedly bought or sought to buy for organized crime figures. "Operation Pendorf" led in late January, 1979, to court-ordered wiretapping of the phones in Dorfman's insurance agency offices at the Teamsters pension fund building in northwest Chicago.
Within a short time, the FBI began picking up allusions to "the senator" and a piece of Las Vegas property that Cannon and his neighbors wanted to buy from the Teamsters pension fund to block high-rise development across the street from their homes.
The 18-page indictment accused Williams and the others of conspiring to bribe Cannon by promising him a below-market price of $1.4 million for the 5.8 acres in return for the senator's help in stopping legislation to deregulate the trucking industry, which the Teamsters opposed. As it turned out, the property was sold to someone else and Cannon later introduced trucking deregulation legislation that Congress enacted.
Central to the government's case was a Jan. 10, 1979, meeting in Cannon's office, which Williams testified he attended at the request of then-Teamsters president Frank Fitzsimmons, who "told me that he had arranged the meeting through Mr. Dorfman" to discuss the union's apprehensions about trucking deregulation.
On five separate occasions following the Jan. 10 meeting, Cannon's son-in-law, Robert Bjornsen, made $1.4 million bids for the property, first on behalf of Cannon and his neighbors, then for a Las Vegas business associate of Dorfman. But a real estate company, which controlled the property for the Teamsters pension fund as a condition set by the government for the fund to regain tax-exempt status, rejected the bids and sold the property to someone else on May 24, 1979, for $1.6 million.
Cannon was heard by the jury indicating his disappointment during a taped May 21, 1979, phone conversation with Dorfman.
Dorfman: " . . . That deal has been screwed up more times than I can think of."
Cannon: "Boy, it sure has."
The FBI's tape recorders kept rolling as Dorfman hung up the phone and talked in his office to aide William Webbe and Chicago Teamsters official Don Peters.
"Sen. Cannon," Dorfman said.
Peters: "How's he doing?"
Dorfman: " . . . We have f----d him around like no man has ever been f----d around . . . . "
Peters: "He took care of deregulation, didn't he?"
Dorfman: " . . . Of course, but we ain't fulfilled our commitment to him yet. You know, I'm surprised he still even talks to me . . . . I keep going to him for favors, he keeps performing, we keep delivering him s--t.
" . . . If we had said to him Cannon , 'Well, let's look into it, you know, because it's really not under custody and control of the fund any more,' and so on and so forth. But Ray Williams just unequivocally came right out and says, 'You got the property, senator, don't worry about it. It's our property, you own it.' "
Webbe, who had been waiting in an outer office during the Jan. 18 meeting with Cannon in Las Vegas, testified that he overheard Williams talking to Cannon on the way out:
"Roy said, 'You take care of your end and we'll take care of our end for you. You don't have to worry about a thing.' Then the senator says, 'Well, you know, on this deregulation thing, if you can give me some of your input . . . you tell me what you want and I can come around, and we can work this thing out together. Because we all admit, something's gotta be done.' "
The FBI taped a telephone call Williams made April 26, 1979, to Webbe to check on the proposed property purchase. The Teamsters president said he "wanted to find out what in the hell was wrong, 'cause I got whistled in by the senator . . . to find out what was wrong. And uh, of course, I know what he done with deregulations."
Webbe: "That's right."
Williams: "He put 'em on the back burner."
Webbe: "That's exactly right."
Williams: "And then was willin' to take on a fight with Kennedy . . . . "
Webbe: "And he did."
Williams: "Yeah, and he got that bill out of Kennedy's hands."
Webbe: "That's right. He--he did everything that he said."