A federal judge has ended the 40-year-old consent decree over the Central States Pension Fund. The decision follows the recommendation of the court-appointed Independent Special Counsel. No changes are expected in the operation of the pension fund.
As predicted by TDU a month ago, a federal judge has ended the 40-year old consent decree over the Central States Pension Fund. The decision follows the recommendation of the court-appointed Independent Special Counsel. No changes are expected in the operation of the pension fund; judge Thomas Durkin noted that there have been no violations of the decree by the Fund in the past 40 years.
The consent decree was ordered in 1982 to end corrupt practices by the Fund trustees involving loans and investments with mobsters. Teamster president Roy Williams was imprisoned in 1983 for his role in that corruption; mobster and pension consultant Allen Dorfman was murdered that same year, presumably to keep him from turning states’ evidence after his conviction along with Williams. Williams later admitted under oath that he received monthly payoffs from organized crime during his entire tenure as a fund trustee.
The consent decree was successful in ending corrupt practices; management of investments was transferred to independent investment managers, just as with all other Teamster pension funds.
This decision comes just months following the infusion of $35.8 billion into the fund as a result of the Butch Lewis Act. The Central States Fund is now 97.5% funded. David Coar, the Special Counsel appointed by the court, noted that in 40 years there has been full compliance with the consent order, and Judge Durkin agreed. The Department of Labor urged the continuation of the consent decree, but Judge Durkin declined to do that.
[Note that this consent decree covers only the Central States Pension Fund, and is unrelated to the consent order of 1989 which required that Teamster members directly elect our International officers and convention delegates. The Final Consent Order governing IBT elections remains in effect.]
The pension fund consent order worked as intended. The trustees were no longer involved in making individual loans or investments; instead, the fund’s trustees retained professional money managers, like other Teamster funds do.
Many Teamsters have been led to believe the government took over investments or benefits, but none of that was part of the consent order. The trustees retained control of pension policy, and investments were made in line with those of other pension funds.