Senate investigators said yesterday that the government's labor fraud investigation of Teamsters union President Jackie Presser was impeded by FBI sniping and limp supervision of the bureau by the Department of Justice.
In a report to be made public today at a hearing before the Senate permanent subcommittee on investigations, the panel staff said that its nine-month inquiry into the case was hindered by what it called an overall FBI attitude of "obfuscation, intransigence and delay."
The 59-page review is the first public assessment of the Justice Department's controversial decision last July to reject a recommendation by an organized crime strike force in Cleveland that Presser be indicted for embezzling more than $700,000 from his hometown Teamsters local to pay "ghost employes."
Presser, whose role as a Federal Bureau of Investigation informant led to the decision, is expected to be reelected to a five-year term this month at the Teamsters' national convention in Las Vegas. The Justice Department, meanwhile, is reportedly nearing the end of a revived investigation into the matter.
The subcommittee staff said its inquiry focused essentially on two issues: whether the Justice Department's decision last year not to prosecute Presser was improperly motivated, and what kind of problems arose that caused the investigation "to be aborted at the 11th hour."
The investigators said they found "no evidence to support allegations of political influence," despite widespread speculation stemming from the Teamsters' support of President Reagan in the last two campaigns and the appearance of high-ranking administration officials with Presser at various social and political functions.
"The decisions not to prosecute in this case," the report emphasized, "were made by career government attorneys and concurred in by mid-level political appointees. These is no evidence of any effort to influence the decisions of the career attorneys."
Instead, the subcommittee staff said, the indictment was rejected because of information that FBI agents in Cleveland had "authorized" Presser's conduct. The claims could not be documented and the study noted recent reports indicating that the agents may have fabricated their stories.
The Senate investigators were not able to explore that question directly. The report noted that both the Labor Department and the Criminal Division of the Justice Department had been generally cooperative in the inquiry, but it said the FBI had consistently refused to allow any interviews of FBI employes.
Time and again, the report said, the Justice Department treated the FBI with kid gloves, dealing with the bureau as though it were "an autonomous entity" rather than a part of the department. Instead of conducting a hard-hitting, formal probe into the FBI relationship with Presser, the report said, "The department appeared mostly content to let the FBI tell it what the FBI wanted it to know."
The report warned that the problem could well extend to other labor racketeering cases. "Unless the department exercises its authority and responsibility to direct the FBI and demand a full accounting of the FBI's activities as they impact on other work of the department," the report warned, "the same types of problems that occurred during the Presser case may well recur."
The so-called ghost worker investigation of Presser began in Cleveland in 1982 as an offshoot of an earlier probe that fell through. It focused on reports that several men, including Presser's uncle, Allen Friedman, and Jack Nardi, the son of an organized crime figure in Cleveland, had been drawing salaries from Presser's Local 507 for years without doing any work.
Friedman and Nardi were indicted and convicted in separate proceedings, and by mid-1984, strike force attorneys in Cleveland were recommending an indictment of Presser and several others on conspiracy and related charges. Justice Department attorneys in the organized crime section here, however, recommended that only Presser be prosecuted.
Then, last July, despite earlier expressions of enthusiasm, officials here decided against prosecution after Presser's attorney, John Climaco, told them that FBI agents had approved Presser's employment of Friedman and Nardi.
The Justice Department tried to check out the claims with interviews of three key FBI agents -- Martin McCann, Patrick Foran and Robert Frederick. "The agents basically corroborated Climaco's account," the report said.
According to the report, the agents said Nardi was put on the Local 507 payroll in 1972 "to prevent warfare between competing organized crime factions in Cleveland." Friedman, who allegedly had an unpredictable temper, was said to have been hired as a ghost employe on the advice of Foran, who reportedly told Presser "not to rock the boat."
The subcommittee investigators found evidence "that the agents' authorization claims were not credible." For instance, the report said, "There is no written record of the Friedman and Nardi authorizations in the FBI's files." Earlier interviews of the same three FBI agents in 1984, the report said, produced information about "authorization" for a third ghost employe, George Argie, but the agents "made no mention whatsoever of the authorizations for Friedman and Nardi."
The ghost worker investigation in Cleveland was conducted by strike force attorneys and Labor Department investigators. During its probe, the report said, "officials of the Cleveland FBI office may have, on several occasions, misled Cleveland strike force attorneys when asked about Jackie Presser's relationship with the FBI."
The report also said that in June 1983, Cleveland FBI agent-in-charge Joseph Griffin sent a message to FBI headquarters reportedly suggesting that the Presser case be dropped, even though the FBI had no part in the investigation.
There were also allegations from David Williams, the chief Labor Department investigator in Cleveland, that the FBI office there had deliberately tried to obstruct the Presser investigation.
In a 1983 memo, Williams told his boss at the Labor Department that FBI agents since 1981 "have actively interfered with and obstructed progress on the U.S. government investigation of organized crime labor racketeer Jackie Presser."
Williams charged that at one point FBI agents implied that the bureau would not bother examining allegations of improper conduct against Labor Department investigators "if the ghost workers case was dropped." Justice Department officials were apprised of the allegations, the report said, but no further action was taken.