After 10 months of official backtracking over the Justice Department's handling of the investigation, Teamsters union President Jackie Presser was indicted yesterday on federal racketeering charges involving the alleged embezzlement of more than $700,000 in union funds.
An FBI agent who headed the organized crime squad in the Federal Bureau of Investigation's Cleveland division, Robert S. Friedrick, 42, was accused in a separate indictment of lying and covering up for Presser during the original inquiry, which collapsed last summer.
Presser, 59, who escaped indictment last year as the result of his purported role as an FBI informer, was accused by a federal grand jury in Cleveland of teaming up with two other Teamsters officials to pay "ghost employes" with the funds of two local unions housed in the same building there, Teamsters' Local 507 and Bakery Workers Local 19.
The Teamsters president, who played a leading role in lining up the union's support of President Reagan in the 1980 and 1984 campaigns, said in a statement from Las Vegas that he is confident he will be vindicated.
"For five years the federal government has attempted to build a case against me, but has succeeded in building nothing more substantial than a house of cards," he said. "I welcome our day in court as an opportunity to put an end to what has been a five-year pattern of insinuations and leaks of false information.
"Equally important," Presser said, "the court of public opinion, where a man is innocent until proven guilty, will have an opportunity to see the government's case for the charade it really is."
Presser and his two co-defendants -- Harold Friedman, 64, president of Teamsters Local 507 and of Bakery Workers Local 19, and Anthony Hughes, 50, recording secretary for Local 507 and business agent at Local 19 -- face 20 years in prison, $25,000 fines and forfeiture of their numerous union offices if convicted of the racketeering charges.
The grand jury explicitly urged that Presser and the others be stripped immediately of all their union positions if they are convicted.
FBI agent Friedrick faces maximum penalties of five years in prison and a $5,000 fine on each of five counts.
Presser flew to Cleveland on a union Lear jet yesterday for a preliminary appearance this morning in U.S. District Court there. He is to return to Las Vegas for the Teamsters' national convention that begins Monday. Appointed president by the union's international executive board in 1983, he is expected to be elected to a full five-year term.
The seven-count indictment made Presser the fourth president of the 1.6 million-member union -- one of the nation's biggest -- to be accused of federal crimes in the past 30 years.
Presser was senior labor adviser on president-elect Reagan's transition team before the 1981 inauguration. He is known to have boasted of the clout he expected to wield in influencing appointments to regulatory boards.
Administration ties with the embattled Teamsters chief are expected to continue at next week's union convention, although Vice President Bush, who had been invited to speak, has decided instead to send a five-minute videotape.
Investigators, however, have found no evidence that politics influenced the scrapping of Presser's indictment last year, and Justice Department officials said they hoped yesterday's actions would "end any such gossip forever."
Justice Department spokesman Terry Eastland called the indictment "good news for people who have a loss of faith in government." He said Presser would have been indicted on the employe no-show charges last year "if we had known then what we know today."
Justice Department strike force prosecutors in Cleveland had recommended Presser's prosecution last summer, but officials here vetoed it after Presser's attorney, John Climaco, told them that FBI agents had approved Presser's employment of John Nardi Jr. and Allen Friedman, Presser's uncle, as "ghost employes."
A third alleged "ghost," George Argie, had been dropped from the case as a result of earlier FBI assurances that Argie's placement on the union payroll was "authorized" by the bureau.
In what Senate investigators have called a feeble followup to Climaco's claims, Justice Department officials questioned three key FBI agents who reportedly had dealt with Presser over the years -- Martin McCann, Patrick Foran and Friedrick. According to a Senate staff report made public last week, "The agents basically corroborated Climaco's account."
Yesterday's indictments amounted to a repudiation of claims that payments for any of the three "ghosts" had been authorized by the FBI despite assurances from the agents in Cleveland. Allen Friedman, Nardi and Argie were all named yesterday as unindicted co-conspirators in the case.
According to the indictment of FBI agent Friedrick, returned by a grand jury here, he "concealed and covered up the fact" under questioning last summer that he had met several times in June 1985 with Presser, Climaco and Hughes "to discuss a strategy regarding FBI authorizations of employment on the payroll of Cleveland Local 507 . . . for Allen Friedman and John Nardi Jr."
The purpose of that strategy, the indictment said, was "to avert an indictment of Presser in Cleveland." There was no indication why Friedrick would have taken part in such a scheme.
Friedrick, a 13-year bureau veteran, was put on 30-day suspension with pay and will be dismissed later, regardless of trial developments, sources said.
The agent also was accused of four counts of lying under oath in:
*Telling investigators last August that he had told Presser to leave Allen Friedman on the Local 507 payroll.
*Telling them last August that his last contact with Presser -- before a July 24 decision not to indict him -- was in early June 1985, when he recommended that Presser contact his attorney "regarding his relationship with the FBI."
*Telling investigators last September that he told Presser and Hughes to leave Friedman on the payroll.
*Telling them last September that he had thought FBI agents had authorized Presser and Hughes to put Friedman on the 507 payroll.
There was no explanation of how the presumably false claims of FBI "authorization" for Nardi and Argie were found to be without merit. Nor was there any mention in any of the indictments or Justice Department announcements of the roles played by McCann, now retired, or Foran, now assistant agent-in-charge in Las Vegas.
Asked about McCann and Foran, officials said only that the internal probe, prompted by the concern over Presser, is "continuing."