Article describing the relationship of James R. Hoffa, Frank E. Fitzsimmons, Harry Davidoff, and the International Brotherhood of Teamsters Local 295 (New York, NY) in relation to New York Mafia. Reader\u27s Digest, August 1974

Velie, Lester

English

Article describing the relationship of James R. Hoffa, Frank E. Fitzsimmons, Harry Davidoff, and the International Brotherhood of Teamsters Local 295 (New York, NY) in relation to New York Mafia. Reader's Digest, August 1974.6474b1f07_03.pdf: 69 downloads, before Oct. 1, 2020

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The Mafia Tightens Its Grip on the Teamsters, 1974

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Leonard Scott Union-Prevention and Counter-
Union Campaign Consulting Files, 1966-2013 
Kheel Center for Labor-Management 
Documentation & Archives 
1974 
The Mafia Tightens Its Grip on the Teamsters, 1974 
Lester Velie 
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The Mafia Tightens Its Grip on the Teamsters, 1974 
Abstract 
Article describing the relationship of James R. Hoffa, Frank E. Fitzsimmons, Harry Davidoff, and the 
International Brotherhood of Teamsters Local 295 (New York, NY) in relation to New York Mafia. Reader's 
Digest, August 1974. 
This other memos is available at DigitalCommons@ILR: https://digitalcommons.ilr.cornell.edu/leonardscott/29 
A Readers Digest 
I liHt Ill> 1/llD IJ::!I 'if' I 
Reader's Digest 
PLEASANTV ILLE, NEW YO RK 10570 
The Mafia 
Tightens Its Grip on 
the Teamsters 
It has been 15 years since the Senate Committee on Labor Rackets, 
and the press, exposed the Teamster Union's link to the underworld under 
James R. Hoffa. Today, Hoffa's successor as Teamster president, Frank E. 
Fitzsimmons, offers a "new image" for his powerful union. 
What is the reality behind the image? Here is the first of a series of 
articles in which Roving Editor Lester Velie, aided by investigative assist-
ant Jennifer Bolch, shows that our biggest union is deeper in the grip of 
the underworld than ever. 
BY LESTER VELIE 
0 N Sunday, June II, 1972, Lloyd Hicks announced that he would run for president 
of Teamster Local 390, Miami. On 
Tuesday, gunmen killed him. 
"They can't kill all of us," Travis 
Dumas, Hicks' best friend and fel-
low business agent, announced. "I'm 
running in Lloyd's place." 
Dumas hired a guard and set out 
to win control of the local's 2700 
members, many of whom had been 
terrorized. Dumas won, but word 
soon came to him through the union 
grapevine that there was a con-
tract out on his life. So, for the 
last 20 months, Dumas has lived the 
life of the hunted. He has a shotgun 
at hand at all times and has told his 
wife not to let their three children 
out of sight. 
2 
How did he get into this fix? By 
being a man who stands in the 
way of organized crime's efforts to 
extend its hold on the Teamsters. 
Among other things, Dumas has re-
fused bribes to corral union mem-
bers into shady insurance schemes 
and, more dramatically, has been a 
roadblock in the path of a New York 
City gangster invasion of the Miami 
International Airport. 
Through control of Teamster 
Local 295, the New York Mafia 
already oversees the handling of 
freight at John F. Kennedy Interna-
tional Airport. This has enabled it 
to tap two huge rivers of tribute. 
One, according to Congressional tes-
timony, is through a gangster-domi-
nated trucking association which 
truckers must join in order to do 
business at the airport-and which 
employs mobster "labor consultants" 
THE READER'S DIGEST 
to assure labor peace. The other con-
sists of organized pillage of air car-
goes which, according to New York 
Waterfront Commission estimates, 
has reached the awesome total of 
$10 million annually. For the last 
several months, Dumas has been 
fighting Mafia raids from New York 
aimed at capturing members of his 
union-and, with them, control of 
all trucks bringing air freight in and 
out of the Miami airport. 
Two Bosses. Dumas' struggle for 
survival at the bottom of the Team-
ster pile reflects a larger struggle at 
the top-between former president 
James R. Hoffa and his successor, 
Frank E. Fitzsimmons. Many Team-
ster locals are honestly run by dedi-
cated union leaders. But because of 
the struggle above, the underworld's 
parasitic hold on the Teamsters is as 
pervasive today as it was when Sen-
ate investigators and the press ex-
posed it 15 years ago. 
To understand why, it is neces-
sary to recognize a basic fact of 
political life in the Teamsters. Its 
president must satisfy two constitu-
encies: union members and the 
organized-crime bosses of our big 
cities. This obligation was creat-
ed by Hoffa when he enlisted un-
L ESTER V ELI E has written about labor af-
fa irs fo r many years. He is the author of the 
widely read Labor USA , and his earlier series 
of Digest articles about the Teamsters (be-
ginning with "The Riddle in the Middle of 
America 's Most Powerful Union," The Read-
er's Digest, December 1955) first exposed 
Jimmy Hoffa's connections with the under-
wo rld. 
derworld support in his drive for 
delegates to the 1956 Teamster 
convention. 
Elected president, Hoffa found 
himself with two masters. He 
worked 18-hour days for his union 
members, settling grievances, build-
ing Teamster membership over the 
two million mark, and negotiating 
ever-higher pay increases and fringe 
benefits. He did well for his under-
world constituency, too, paying off 
in other people's money and misery. 
He permitted gangsters to turn Ken-
nedy airport into a pillaging pre-
serve. In Chicago, Hoffa sluiced 
Teamster welfare-fund insurance pa-
tronage to a criminal family linked 
to the old Capone mob. All over the 
country, Hoffa paid debts to organ-
ized-crime figures with Teamster 
pension-fund loans that often went 
unpaid. 
Today, the underworld holds the 
power balance that may determine 
who will be elected Teamster presi-
dent in 1976: Hoffa (providing he 
wins his legal battle against re-
straints that bar him from union 
activity) or the incumbent Fitzsim-
mons. "Without support from 'the 
boys,'" a Teamster vice president 
told me, "Fitz couldn't remain pres-
ident for one minute." So Fitzsim-
mons, as Hoffa before him, must 
also please "the boys" as well as the 
members. 
Best Girl. When Hoffa went to 
jail in 1967 for fraudulent use of the 
Teamsters' biggest pension fund, 
and for jury tampering, he assigned 
Fitzsimmons to act on his behalf. 
THE MAFIA TIGHTENS ITS GRIP ON THE TEAMSTERS 4 
But Fitzsimmons found himself in 
the classic posture of the man to 
whom a best friend has entrusted a 
best girl. He fell in love with the 
girl -the Teamster presidency-and 
moved aggressively to keep her. 
For Fitzsimmons, a phlegmatic, 
pumpkin-faced 66-year-old with a 
heavy belly, the girl had many 
attractions. First, there was the 
handsome dowry, a $125,000 yearly 
salary. Then there were three homes 
to live in-one in California, one in 
Florida and another in Washington 
-and a hs million jet plane that 
would carry him anywhere in the 
world, all expenses paid. To this, 
finally, was added the courtship of 
the President of the United States. 
Seeking labor support, President 
Nixon met with Fitzsimmons' ex-
ecutive board in the summer of 
1971, rubbed elbows with mob-
connected officials, and let it be 
known that the White House door 
was always open to Fitzsimmons. 
As the time approached for Hof-
fa to leave prison, Fitzsimmons 
decided that his own ruddy face-
basking in the favor of a President 
- was better for the Teamster image 
than Hoffa's prison pallor. But if 
Hoffa, freed, were to resume union 
activity, his first move would be a 
run for the presidency of his old 
Local 299 in Detroit. With that as a 
power base, he might well regain 
control of the entire membership at 
the 1976 Teamster convention. 
Blocking Action. At Hoffa's ele-
gant condominium near Miami, he 
recently showed reporter Jennifer 
Bolch the pardon form he signed in 
prison. It contained stipulations 
such as, "the parolee will not drink 
to excess" -but no stipulation that 
Hoffa refrain from union activity. 
Hoffa said he was astounded to 
learn on emerging from prison that 
another pardon document, signed 
by President Nixon, barred him 
from union activity until March 6, 
1980-four years beyond the next 
Teamster presidential election. Who 
was responsible? "Fitzsimmons," 
says Hoffa -with assists from inside 
the White House. 
"Colson [Charles W. Colson, ex-
Presidential counsel, who has plead-
ed guilty to obstruction of justice in 
the Ellsberg case] was the master-
mind," Hoffa added, and part of the -
payoff was Teamster legal business 
for Colson's law firm-at a report-
ed $100,000-a-year fee . Hoffa has 
spelled out his charges in a suit 
against the Justice Department, 
aimed at removing his union-activ-
ity restrictions. 
Meanwhile, Fitzsimmons is using 
his power and patronage to woo his 
two constituencies: the union and 
the big-city hoodlums. As Hoffa 
spelled it out to us, Fitzsimmons 
builds support within the union by 
returning to the regional Teamster 
barons the power Hoffa had taken 
from them. Teamster organizing 
money, some $7 million yearly, is 
going to Fitzsimmons men only. 
And he is banishing Hoffa loyalists 
to areas where they can't influence 
delegates to the 1976 Teamster con-
vention. Recently, Fitzsimmons 
5 THE READER'S DIGEST 
abolished the $46,000-a-year union 
job filled by Hoffa's wife. 
As for the underworld: Teamster 
business patronage has lately had a 
curious way of turning up in un-
clean hands. For example, when 
Fitzsimmons approved a $1.3 mil-
lion public-relations program last 
year to burnish the Teamster image, 
part of this cash flowed to two "im-
age improvers" with criminal rec-
ords, one of whom had served 20 
years on a murder charge. And 
Fitzsimmons became attentive to 
underworld get-rich-quick schemes 
at Teamster expense. Consider the 
severance-fringe-benefit scheme 
hatched by a New York underworld 
figure and pushed by Fitzsimmons' 
son, Don. 
Fitzsimmons and Son. The under-
world figure was Louis C. Ostrer, 
who had pleaded guilty in 1969 to 
swindling a Canadian insurance 
company of $338,000, and received a 
five-year suspended sentence. While 
on probation, Ostrer was convicted 
on a federal stock-swindling charge 
in company with the notorious 
"Johnny Dio" Dioguardi-thus 
linking him to the New York Mafia; 
a New York County indictment 
further linked him to Mafia loan 
sharks and charged he had discussed 
the prospective killing of a delin-
quent borrower. 
Ostrer conceived a union-insur-
ance scheme whose rich potential as 
a ripoff was dramatized by the form 
it took in one union Ostrer sold it 
to: New York Teamster Local 295, 
dominated by labor racketeer Harry 
Davidoff. Under the Ostrer plan, 
trucking employers paid $40 a week 
per employe to buy individual 
insurance policies for union mem-
bers and to build a severance-pay 
fund. Employers had to go along 
with the scheme or suffer Davidoff 
reprisals. 
As the New York State Insurance 
Department has charged, the em-
ployers' contributions were largely 
drained away by excessive commis-
sions and administration fees; for 
example, insurance which cost the 
severance fund $1,238,274 could have 
cost but $52,546. Thus the fund was 
depleted by $1,185,000. Since the 
money was paid by employers in 
lieu of wage increases, it was actual-
ly coming out of employes' pockets. 
Ostrer initially sold his scheme to 
some dozen Teamster locals in New 
York City and New Jersey. Then he 
extended his operation to Detroit, 
where, in 1972, he hired young Don 
Fitzsimmons as "consultant and 
public-relations man." Since Don 
Fitzsimmons had no insurance ex-
perience (he had been selling vend-
ing machines for a hoodlum-owned 
company), I asked Ostrer why. 
"I hired him as a conduit," Ostrer 
said, "in order to meet certain peo-
ple." One of the "certain people" 
Ostrer met was the "conduit's" fa-
ther, Frank Fitzsimmons. 
"Frank quickly saw the value of 
my plan," Ostrer recalled, "and told 
me I could go out and sell it to 
Teamster locals on its merits." 
Here Don Fitzsimmons picks up 
the story. "I was looking for some-
THE MAFIA TIGHTENS ITS GRIP ON THE TEAMSTERS 6 
thing lucrative," he told us. So, with 
Ostrer's plan in hand, young Fitz-
simmons said, he solicited unions 
in Michigan, California, Nevada, 
Massachusetts, New Jersey and 
Illinois. He estimated that some 60 
to 70 locals in those states and 
Florida eventually adopted Ostrer's 
plan. 
Two things, however, crimped 
Ostrer's operation. In New York, 
the State Department of Insurance 
put a five-percent commission ceil-
ing on insurance sold in bulk to 
employes, and threatened to force 
trustees to make restitution of 
drained funds. Elsewhere, local un-
ion leaders decided that Ostrer's 
scheme was too good a thing to 
share with the originator. Detroit 
Local 299, for example, booted him 
out and turned over the fund to the 
local's lawyer, who subsequently 
fired young Fitzsimmons. 
So Ostrer's scheme goes marching 
on-in other hands. Meanwhile, it 
is persistently reported inside the 
Teamsters that Frank Fitzsimmons 
will seek approval of a severance-
fringe-benefit plan at the next 
national bargaining session with 
trucking employers. Severance pay, 
of course, is a legitimate union bar-
gaining demand, and some unions 
have been operating severance funds 
honestly for years, usually under the 
administration of an insurance com-
pany or actuarial consultant firm. 
But since many Teamster locals ad-
minister welfare funds themselves, 
one can imagine the opportunities 
for crooked leaders and the mobs if 
severance funds become general for 
all Teamster trucking employes. 
Rivers of Cash. As these short, 
selected examples of underworld 
enterprise show, brains within or-
ganized crime are forever buzzing 
with schemes to tap the vast rivers 
of cash that employers pour out year-
ly to provide benefits for Team-
ster members. The biggest river of 
all is the $200 million that employers 
of some 430,000 Teamsters channel 
each year into the Central States, 
. Southeast and Southwest Area Pen-
sion Fund. This has created a $1-
billion reservoir of lending and 
investing money-putting it, as a 
lending institution, among the coun-
try's roo biggest banks. 
As a Teamster vice president told 
me, the big-city mobs' chief interest 
in the Teamsters lies in loans from 
the Central States fund-an interest 
underlined by the recent attempted 
assassination of the man who dic-
tated loans at the time, the Chicago 
gang's ambassador to the Teamsters, 
Allen Dorfman. Inside the Team-
sters, the word was that the Eastern 
mob was angry at not getting its 
share of the action. 
What does all this say about the 
underworld's "interest in the Team-
sters"? How has it fared during the 
Fitzsimmons reign? Very well, 
thank you. In fact, Mafia raids on 
union gold have become more bra-
zen than ever. 
In his second article, Lester Velie 
will explore the Teamsters' role as 
banl(ers to the underworld. 
REPRINTED FROM THE AUGUST 1974 ISSUE OF READER'S DIGEST 
© 1974 THE READER'S DIGEST ASSOCIATION, INC., PLEASANTVILLE, N. Y. 10570 PRINTED IN U.S.A. 


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The Mafia Tightens Its Grip on the Teamsters, 1974

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