State Of The Union

By Ed Barnes/New York

Washington never cared for his father, and JAMES P. HOFFA, the newly elected president of the Teamsters Union, knows Washington will not care for him--not when Democratic Party leaders find out what he plans to do: reopen the campaign-finance scandal, take on the D.N.C. and scrutinize its fund-raising apparatus.

How does Hoffa propose to go where Congress wouldn't? Sources close to Hoffa say his first act as president-elect was to give the go-ahead for a multimillion-dollar civil-racketeering suit against, among others, the D.N.C. The suit would primarily target disgraced former Teamsters president RON CAREY and other Teamsters officials for allegedly embezzling nearly $1 million in cash from the union. But it would also cite top Democratic fund raisers, including TERRENCE MCAULIFFE, who was recently appointed chief fund raiser for Al Gore. A federal probe into Carey's 1996 election as union president found that he and representatives of the D.N.C. set up an illegal contribution swap scheme in which the Teamsters would contribute $10 for every dollar the Democrats steered from wealthy donors into the Carey campaign. As a result, federal overseers nullified Carey's election. A new contest led to Hoffa's victory almost two weeks ago with 55% of the vote.

As part of their case, Hoffa's lawyers plan to detail the "work product" of CHARLES RUFF, now White House counsel, who briefly worked for the Teamsters under Carey. In 1993 Ruff allegedly paid Jack Palladino, a San Francisco private detective, more than $150,000 out of Teamsters funds for unspecified services. A House subcommittee that had tried to investigate the payment was stymied by legal objections from Ruff and Carey. There have been allegations that the money was for work Palladino did for Clinton in his 1992 campaign to keep stories of sexual misconduct from becoming public, or that the money was used to suppress Teamster dissidents. Ruff has denied the allegations as "false and nonsensical." (Calls to McAuliffe's attorney were not returned.) The proposed lawsuit will contend that government monitors failed to do their job overseeing the Carey administration and, "as a result," says a source close to the suit, "more than $20 million of taxpayer money was wasted on one election and the union went bankrupt." If Hoffa is successful, the Teamsters may be in for a windfall. Under racketeering statutes, successful plaintiffs can recover as much as triple the damages.

--By Ed Barnes/New York