Teamsters Pension Fund

Jimmy Hoffa

The Central States, Southeast and Southwest Areas Pension Fund was formally set up on March 16, 1955, designed to hold millions (and later billions) of dollars in trust for pensions, life insurance, and disability of Teamsters union members. By 1961, it had assets of approximately $200 million. Infamous IBT leader Jimmy Hoffa used the fund to assist friends in various deals and, more importantly, to court organized criminals who were pleased (and indebted) to have this resource available for their investments. As one observer, Ronald Goldfarb, wryly noted, “the pension fund had become the mob's savings and loan.”

Hoffa was convicted of diverting $20 million from the pension fund in a 1964 Chicago case, and sentenced to five years in jail. Teamster corruption did not end with the imprisonment of Hoffa, and underlings took on more prominent roles in the scheme. Furthermore, the fund's value continued to grow. In the mid 1970s, the fund's assets totaled approximately $2.2 billion, and pension payments were almost $325 million per year.

Throughout the 1960s and early 1970s, the Department of Labor, the Internal Revenue Service (IRS) and the U.S. Senate's Permanent Subcommittee on Investigations (PSI) investigated the fund. By 1975, the Department of Labor was the lead investigative body, and thus created its Special Investigations Staff for the sole purpose of exposing the pension fund scandal. Technically, the Labor Department was to coordinate with the IRS and then refer founded cases to the Department of Justice for prosecution. For a variety of reasons, including ambivalence (and possibly corruption) within the Labor Department and the IRS, the investigations stalled as documented in the fall of 1980 by the PSI.

During the 1980 presidential election campaign between Democrat Jimmy Carter and Republican Ronald Reagan, each candidate courted the IBT for its weighty support. The pension fund became a focal point in the IBT's decision on whom to endorse. Following several private meetings with such notorious IBT officials as Frank Fitzsimmons, Roy Williams, and Jackie Presser, the Reagan camp was delighted to know they had won the IBT's support. As described by F.C. Duke Zeller, a Teamsters public relations staff member, the key to their support was Reagan's promise to stall or end the Labor Department's pension fund investigation.

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