A former Labor Department official bluntly accused the FBI yesterday of a sustained effort to disrupt the Labor Department's fraud investigation of Teamsters President Jackie Presser in order to prevent his indictment.
Testifying at a Senate hearing on the government's handling of the case against Presser, which was halted last year but has been revived, former acting inspector general Robert E. Magee told of his alarm in early 1983 when he received a report from Labor Department investigators in Cleveland citing repeated instances of "overt obstruction" of the case by FBI agents in that city.
The allegations included charges of covert FBI efforts to keep tabs on the inquiry, hints from FBI agents that they would overlook alleged improper conduct by Labor Department investigators if the probe was dropped, and a questionable sequence involving FBI investigation of one of the Labor Department's key witnesses.
Raymond Maria, deputy inspector general at the Labor Department and head of its Office of Labor Racketeering, also testified about problems between his agency and the Federal Bureau of Investigation. He said, for example, that he has been struggling since 1984, thus far unsuccessfully, to arrive at a memorandum of understanding with the FBI that would make his investigators "full partners" with equivalent criminal jurisdiction.
"We talk about organized crime," Maria exclaimed. "I think it's ironic that we never talk about organized law enforcement." He said the situation in Cleveland was symptomatic of the nationwide "lack of a coordinated, comprehensive effort."
Maria, a one-time FBI agent, said the rancor in Cleveland between the FBI and Labor Department investigators over the Presser case was extraordinary and "confrontational."
"Perhaps it's a good idea that we [Office of Labor Racketeering investigators] don't have weapons," he told Sen. Sam Nunn (D-Ga.).
The testimony capped a nine-month inquiry by the Senate Governmental Affairs permanent subcommittee on investigations.
The FBI sent no witnesses to yesterday's hearing, has refused to let the staff interview any of its agents, and produced only a few documents after long delays, the subcommittee said.
Committee Chairman Willliam V. Roth Jr. (R-Del.) said he saw no excuse for the "stonewalling."
FBI Assistant Director Bill Baker said later "the FBI was caught in a tug of war between two legitimate entities desiring information," Congress and the courts. Baker said he could not comment on the allegations against the bureau because of ongoing investigations, presumably a reference to grand jury probes here and in Cleveland.
A 59-page subcommittee staff report on the Presser case, first reported Thursday, was the first public accounting of the Justice Department's decision-making. In it, the investigators said they found "no evidence to support allegations of political influence" on the decision not to prosecute Presser, despite 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 report, by subcommittee staff lawyers Howard L. Shapiro and John F. Sopko, painstakingly avoided use of the word "informant" in reference to Presser. But it was apparent that the Justice Department's decision to drop a recommended indictment of Presser last year stemmed from his role as a prized informer whom FBI handlers were apparently determined to protect.
That Presser has been a government informer is not a new revelation. Government documents obtained by The Washington Post confirmed that he was an informant for the Internal Revenue Service years ago, and other sources have said he has performed a similar role for the FBI.
In the Presser investigation, Justice Department strike force prosecutors in Cleveland had asked that the union leader be indicted for allegedly embezzling more than $700,000 in funds from his home-base Teamsters Local 507 to pay "ghost employes." But at the last minute, the report said, Presser's lawyer told officials in Washington that FBI agents had "authorized" the hiring of the "ghosts."
The three key FBI agents in question backed up the claims, although the Justice Department lawyer who did the checking, Paul Coffey, did so in a "nonconfrontational" manner that drew sharp criticism from subcommitte investigators.
Coffey, according to the report, took hardly any of his own notes and at the final set of interviews cautioned two strike force prosecutors with him not to express any skepticism about what the agents said.
The Justice Department, the subcommittee staff report concluded, "may have a flawed supervisory relationship with the FBI."
A federal grand jury here is investigating the truthfulness of the affidavits that the agents drew up after their sessions with Coffey. Another federal grand jury in Cleveland is reexamining the question of whether Presser should be indicted in the ghost-workers' case.
One of the "ghost employes," Jack Nardi Jr., son of a reputed organized crime figure in Cleveland, told the subcommittee yesterday that Presser put him on the Local 507 payroll as a business agent in 1972 and kept him on for six years "although I performed no services for the union."
Nardi's father, an official of the Teamsters' vending machine local, was killed in a mob-style slaying in 1977. The next year, Nardi said, Presser "called me and told me he could no longer keep me on the payroll of 507 because of a government investigation. I was puzzled. I was always willing to work, but no work was offered."
Approached by Labor Department investigators in 1982, Nardi said he told them the truth about the no-show job and repeated it to a grand jury.
Later that year, Nardi said his uncle, Nick Nardi, a Cleveland Teamsters official, called him and "said it would be worth my while if I changed my testimony." Nardi said he then embarked on a scheme to get a $20,000 loan from Presser in return for a promise to recant, a promise Nardi said he never meant to keep.
Nardi said he arranged a meeting with John Joyce, a Presser associate, in Fort Lauderdale, Fla., about the loan. But by then, Joyce and Presser's lawyer, John Climaco, had gone to the FBI in Cleveland to drum up an investigation of Nardi. When Nardi met with Joyce in Fort Lauderdale, Joyce was "wired" by the FBI. Labor Department investigators handling the Presser investigation were not told.
Some Labor Department investigators still think "that the Nardi incident was planned by the FBI to obstruct the ghost-workers investigation," the subcommittee staff report said.
In 1983, while serving time in a West Palm Beach, Fla., jail on an unrelated grand theft charge, Nardi said he was visited by two Labor Department investigators, and then, several days later, by FBI agent Nelson Gordon, who asked him about his dealings with the Labor investigators.
Nardi testified that Gordon told him "it wouldn't be wise to communicate with them, because they didn't have my interests at heart."