TIME: Almanac 1995

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<text id=94TT0379> <title> Apr. 11, 1994: Rich Man, Poor Man </title> <history> TIME--The Weekly Newsmagazine--1994 Apr. 11, 1994 Risky Business on Wall Street </history> <article> <source>Time Magazine</source> <hdr> LABOR, Page 42 Rich Man, Poor Man </hdr> <body> The reformist Teamster boss has a real estate horde that strains his blue collar image By Edward Barnes and Richard Behar The teamsters union embraced him as a blue collar hero, but lately the troops have begun to wonder if President Ronald Carey is mostly crusading for himself. Nowadays his calls for reform get no respect. Not even when Carey called his four regional headquarters "fertile ground for corruption and Mob influence" and sent a small army of agents to audit their books last month. One regional office in Maryland simply changed its front-door lock. A Chicago office kept Carey's agents waiting in the lobby, where the music was cranked up and the phones were switched off. Last week the rank and file handed Carey his worst embarrassment so far. By 3 to 1, the members rejected his call for a dues increase of 25%, or about $6.25 a month, to bail the union out of a financial crisis that deepened on Carey's watch. His image as a white knight is fading fast among the 1.4 million members. Carey spent the first year of his presidency--along with millions of the members' dollars--fighting government efforts to kick out the Mob. Now investigators are examining whether Carey misled his followers about his own finances. According to records examined by TIME, Carey owns substantial real estate around the U.S. At the least, those holdings challenge the working-class persona he cultivated to become the first directly elected president in the union's history. Carey's campaign literature portrayed him as a humble family man, a truck driver who married the girl next door and "still lives in the same small house that he and his wife moved into 30 years ago." His $45,000 salary, the literature insisted, was "less than the salary of the Chef who works at the Teamster headquarters [for Carey's predecessors]." Press accounts trumpeted similar blue collar images: the beat-up car, the suits off the rack from Macy's, the five kids to support, the vacations spent in his Queens backyard. This appeal to a scandal-weary membership galvanized thousands of union volunteers to donate money, some of it borrowed, to Carey's $500,000 campaign. He put up only $6,000 of his own cash. "He moaned and cried about needing money to pay off his campaign debts," recalls Gene Giacumbo, a member of Carey's executive board. "And everybody was tapped out." After his election, Carey announced that "this is no longer a union that's going to be run by millionaires." He promised to sell the perks of power--the Teamster jets, the limousine, the condominium in Puerto Rico. However, Carey had personally begun accumulating hundreds of thousands of dollars' worth of property, most of it in sunny vacation spots. Weeks after taking office in 1992, Carey bought some posh beachfront property on Lower Matecumbe Key, Florida, for $340,000. The purchase, which included a $125,000 down payment, is under investigation by the Independent Review Board, the three-member federally created agency that polices the Teamsters. Carey started humbly in 1958 with a $16,000 duplex in Queens, New York. He bought another one in 1979, and acreage in New Jersey in 1982. Then his investments grew more ambitious, even though his salary averaged about $40,000 during the 1980s and his wife earned a modest income as a clerk at Macy's. In 1984, in partnership with a companion named Rosalie L'Abbate, Carey began a series of condominium deals involving two units (total cost: $181,000) in the Palms of Islamorada, an elegant complex in the Florida Keys. In one case, a recorded contract, signed by Carey, identifies him falsely as a "single man." Carey also plunked down $65,500 in 1984 for a condo in Scottsdale, Arizona. In 1986 he paid $96,000 for a house in Rockland County, New York, which he sold the following year. Last December Carey bought an apartment in Virginia. While no one has accused Carey of any crime, some critics openly wonder whether he has received payoffs. Says Giacumbo, who was elected to the Teamsters board on Carey's ticket: "I believe he's been dancing with more than one partner--the Federal Government and the underworld--just like ((former Teamster boss)) Jackie Presser." Carey's aides, who have begun investigating Giacumbo's financial dealings, insist that Carey is the victim of a smear campaign. But according to an FBI report disclosed last November, Carey may have ties to a former Mafia boss currently in the federal witness-protection program. Carey says his investments are legitimate. "Not one cent of this money comes from an outside source, a union, a Mob guy or anywhere but my savings or my family," he said. "What is wrong with trying for the great American Dream?" Carey says that he was able to afford the properties because he paid off the mortgage on his home in 1973 and because his children who went to college paid their own way. For the down payment on the Florida property in 1992, Carey says, he put up $75,000 of his savings and borrowed $50,000 from relatives. As Teamster boss, his salary is $150,000, which he has cut from $225,000 because of the union's financial trouble. Even so, Carey seems to run his own finances much more astutely than his union's. Since he took office, the union's treasury has plummeted from $154 million to $40 million, partly because the Teamster boss increased strike benefits for members from a maximum of $55 a week to $200 a week without any new mechanism to pay for it. At this rate, the Teamsters could run out of operating cash by January. </body> </article> </text>