페이지 이미지
PDF
ePub

COMMITTEE ON GOVERNMENT OPERATIONS

ABRAHAM RIBICOFF, Connecticut, Chairman JOIN L. MCCLELLAN, Arkansas

CHARLES H. PERCY, Illinois HENRY M. JACKSON, Washington

JACOB K. JAVITS, New York EDMUND S. MUSKIE, Maine

WILLIAM V. ROTH, JR., Delaware LEE METCALF, Montana

BILL BROCK, Tennessee JAMES B. ALLEN, Alabama

LOWELL P. WEICKER, JR., Connecticut LAWTON CHILES, Florida SAM NUNN, Georgia JOHN GLENN, Ohio

RICHARD A. WEGMAN, Chief Counsd and Staff Director

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

HENRY M. JACKSON, Washington, Chairman JOHN L. MCCLELLAN, Arkansas

CHARLES H. PERCY, Mlinois JAMES B. ALLEN, Alabama

JACOB K. JAVITS, New York SAM NUNN, Georgia

WILLIAM V. ROTH, JR., Delaware LAWTON CHILES, Florida

BILL BROCK, Tennessee
JOHN GLENN, Ohio

HOWARD J. FELDMAN, Chief Counsel
DOROTHY FOSDICK, Professional Staff Director
STUART M. STATLER, Chief Counsel to the Minority

Ruth YOUNG WATT, Chief Clerk
ROLAND L. CRANDALL, Staff Edilor

(0)

MEMORANDUM

U.S. SENATE, COMMITTEE ON GOVERNMENT OPERATIONS, SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS,

Washington, D.C., May 10, 1976. To: All Members of the Permanent Subcommittee on Investigations. From: Senator Sam Nunn, Acting Chairman.

This staff study deals with the manner in which the severance trust fund and the fund's life insurance benefit were designed and managed for the Teamsters Local 295 in New York.

Information developed by the Subcommittee staff indicated that the severance trust fund and the fund's life insurance benefits were used by persons of questionable background to extract large amounts of money, contributed by management, that rightfully belonged to union members.

The life insurance purchased under the terms of the plan was individual whole life on each member. The whole life concept resulted in excessively high premiums and agent commissions. Administrative and legal fees were also excessively high. A more conventional group life insurance plan would have been far less expensive and the overall benefits to workers and their families far greater.

While this staff study concerns itself solely with the severance trust fund-life insurance benefit of Local 295, independent inquiry by the Subcommittee staff has revealed that similar fringe benefit plans have been designed for other union locals.

It is my view that the potential for abuse in the severance fund area is a subject requiring further examination by the Congress and the Department of Labor. Accordingly, as part of this Subcommittee's jurisdiction to make inquiry into alleged irregular practices in the labor or management field, the staff is continuing its investigation of severance trust funds and related fringe benefit programs in other union locals.

Copies of this staff study are being referred to the Departments of Labor and Justice, the Internal Revenue Service, and the Headquarters of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America.

CONTENTS

Pago

1 1 1

6 6 7 7 8 9 9 9 10 10 11 13 13 13

13

14 14 15

16

I. Introduction...

An agreement is reached
Origin of investigation and subcommittee's jurisdiction.-
Definition of severance trust funds...
Brief history of severance pay plans.
1974 legislation..

The potential for rapid growth of severance funds_
II. History of Teamsters Local 295.--

Senate committee investigates Teamsters in 1950's.
The importance of Joint Council 16.
Formation of the "Paper" Locals --
The union philosophy of the racketeers.

The seven "paper" locals and their leaders.
III. Criminal backgrounds of Harry Davidoff and Louis Ostrer.

Harry Davidoff's police record...
Harry Davidoff appears before the Select Committee..
The testimony of James A. Landry ----
The criminal record of Louis C. Ostrer.-

Ostrer's link with organized crime....
IV. Local 295 severance trust fund..-

The air freight industry in New York.
Davidoff controls local 295...
The Local 295 contract proposal.
Louis Ostrer promotes severance pay plan.--
Fund grows, its purpose expands..
Severance fund gets off to rocky start-

Details of the severance plan-insurance benefit.-
V. Commissions on the insurance policies ---

Without agent's license, Ostrer relied on others.
Two insurance companies provide coverage...
Fringe Programs, Inc.---
Executive Life Insurance pays advance commissions..
Interview with Cy Reeves Snyder---
The loans are guaranteed.-
Forst, Lochner sign checks--
Trans World takes over the 295 account.
Trans World pays commission advances.
Henry Brown cashes checks for Ostrer..
The Kings Lafayette Bank check is explained.-

Third-year advances are returned..
VI. Evaluations of the severance pay-insurance plan.

Subcommittee asks actuaries to examine fund.
New York insurance department examines fund.
The GAO studies fund...
A critique of the Ostrer concept.
Ostrer misled Local 295 members -
Letters are not answered..

The Belmont stock case..
VII. Corrective actions and related events.

Reforms are implemented in fund.
James Hoffa's book..
Reader's Digest article..

April 18, 1974 citation...
VIII. Findings and conclusions.-

18 18 18 18 19 19 20 20

21

22 22 23 24 25 25 25 26 28 28 29 29 32 32 32

33 35

APPENDIXES I. New York Post article headlined, "The Life & Times of Harry Page Davidoff,” December 15, 1972-

37 II. New York Daily News article headlined, "Swindler Makes

250 G Bail But Still Winds Up in Jail,” February 25, 1973... 39 III. U.S. General Accounting Office document of April 13, 1973

entitled, “Review of Plans, Programs and Financial Transac-
tions Relating to the Severance Benefit Trust Fund of Local
295”.

39 IV. Affidavit of Otto Forst, May 31, 1972.

44 V. U.S. General Accounting Office study of Local 295 severance trust fund, dated May 21, 1973..

49 VI. Report on Local 295 severance trust fund, dated June 25, 1971,

prepared for the Senate Permanent Subcommittee on Investi-
gations by Lawrence M. Hyman, Supervising Examiner, New
York State Insurance Department; George Perla, Senior
Examiner, New York State Insurance Department; and
Herbert L. Feay, Assistant Director and Actuary, U.S.
General Accounting Office...

98 VII. Findings of Fact, Conclusions and Decision by the New York

State Insurance Department, dated October 4, 1967, regard-
ing Louis Ostrer, Samuel Schienhaus and Seymour Greenfield;
press release, dated December 22, 1967, issued by New York

State Insurance Department concerning Louis Ostrer... 106 VIII. New York Insurance Department Report of Examination of

Local 295 Severance Trust Fund as of June 30, 1971, No.
0-232-0295.

108 IX. Subcommittee memorandum of November 23, 1971 entitled,

"Interview of Cy Reeves Snyder re Louis Ostrer and Sever-
ance Benefit Fund of Local 295, IBT,” from Stephen B. King
and William F. Gibney to John P. Constandy, and memoran-
dum of February 22, 1972 from King and Robert Dunne to
Constandy -

117 X. Check No. 6592, dated December 17, 1970 drawn on the account

of the Executive Life Insurance Company of New York,
payable to Cy Reeves Snyder, in the amount of $25,000;
Check No. 6593, dated December 17, 1970, drawn on the
account of Executive Life, payable to Cy Reeves Snyder, in the
amount of $50,000; Check No. 6651, dated December 21, 1970,
drawn on the account of Executive Life, payable to Cy Reeves
Snyder, in the amount of $25,000, Check No. 6945, dated
January 25, 1971 drawn on the account of Executive Life,
payable to Cy R. Snyder Agency, Inc., in the amount of
$35,000; Check No. 6944 dated January 25, 1971, drawn on
the account of Executive Life, payable to Cy R. Snyder, in
the amount of $50,000; and Check No. 6946, dated January 28,
1971, drawn on the account of Executive Life, payable to
Cy Ř. Snyder Agency in the amount of $150,000.

119 XI. Memorandum, dated December 10, 1970, from Harry O. Miller to Otto Forst.

122 XII. Norbert F. Lochner affidavit, June 12, 1972.

122 XIII. Check No. 610, dated March 1971, drawn on the account of

Executive Life Insurance Company of New York, payable
to Dina Gelman, in the amount of $2,232.47; Check No.
1063, dated April 5, 1971, drawn on the account of Executive
Life, payable to Dina Gelman, in the amount of $22, 129.87;
Check No. 1148, dated April 9, 1971, drawn on the account
of Executive Life, payable to Dina Gelman, in the amount
of $22,154.09; and Check No. 1155, dated April 12, 1971,
drawn on the account of Executive Life, payable to Dina
Gelman, in the amount of $50,000.

124

« 이전계속 »