The scandal erupted after attorneys with the United States Department of Justice initiated a prosecution of Teamsters President Jackie Presser on various charges, including fraud and labor racketeering, only to cease prosecution once it was revealed that Presser had been a criminal informant for the Federal Bureau of Investigation (FBI) since the early 1970s.
His father, William Presser, was a vice president of the international union and a known associate of Mafia figures in Cleveland, Ohio.
Presser quickly rose within the Teamster hierarchy, becoming president of Local 507, a regional elected official, and a pension trustee.
[2] Shortly thereafter, Presser allegedly received permission from two FBI agents to pad the Local 507 payroll with fake employees.
Jimmy "The Weasel" Fratianno, a former hitman in the Cleveland mob and later acting head of the Los Angeles Mafia, later testified that Chicago crime boss Joseph Aiuppa told him in 1974 that "if you need anything from Jackie Presser, he said he'll do it for you."
[3][10] In 1981, the United States Department of Labor began investigating Presser after receiving allegations he had padded the Local 507 payroll with "ghost employees."
[12] Although turncoat mob leaders and others had long accused Jackie Presser of being a government informant, the first official confirmation came on August 22, 1981.
In its August 31 issue, Time magazine reported that Presser and other Teamsters had served as government informants since the early 1970s to avoid possible prosecution.
The mob's confidence in Presser was reaffirmed a year later when the Justice Department publicly ended its investigation into an alleged kickback scheme.
[14] On April 14, 1983, Roy Williams announced he would resign as Teamsters president after being convicted for conspiring to bribe Senator Howard Cannon.
Williams and others later alleged that Mafia families in Chicago, Cleveland and various cities on the East Coast had conspired to secure Presser's election.
Department of Justice lawyers immediately began preparing a civil lawsuit to place the Teamsters under federal control.
[23] Presser vigorously opposed the Justice Department's efforts, and planned a five-year legal, public relations, legislative and political counter-attack to keep the Teamsters free from court supervision.
On May 31, 1984, attorneys with the U.S. Department of Justice sought approval to prosecute Presser for payroll padding based on DOL reports.
On July 17, the foreman of the Cleveland federal grand jury investigating Presser denounced the delay in open court.
[32] Three days later, on July 26, NBC News confirmed the June 1984 Los Angeles Times report which named Presser as a secret FBI informant.
The NBC report also said that top Justice Department officials agreed to drop the investigation after FBI agents signed affidavits saying "that whatever Jackie Presser did in the embezzlement case was done with their knowledge and consent.
"[33] The Department of Justice decision to not prosecute Presser prompted members of Congress to investigate the handling of the politically sensitive case.
[36] After a year of hearings, the Subcommittee on Investigations concluded in its report that rivalries among federal law enforcement agencies and poor supervision of the FBI by DOJ superiors led to the cancellation of the prosecution.
Subcommittee members also expressed their anger at what they termed "an overall FBI attitude of obfuscation, intransigence and delay" in the Presser case.
Investigators also claimed that senior DOJ officials failed to pass on information about Presser's role to the Attorney General's office or to DOL (a charge FBI Director Webster denied).
After just four months, the grand jury concluded that FBI and DOJ officials had illegally withheld information about Presser's role from the defense.
The grand jury also found evidence that FBI agents had failed to tell superiors that they had authorized Presser to engage in the payroll-padding scheme at Local 507.
The agent's signed affidavit that supported Presser's claim that the FBI had sanctioned the "ghost employee" payroll-padding scheme were found to be false.
The agent was fired and indicted for making false statements that led DOJ officials to shutter the prosecutorial effort in June 1985.
On December 2, 1986, government officials finally testified in open court that Presser was indeed a valuable and high-level informant who had assisted DOJ in exposing other labor racketeers.
[54] Judge White granted a delay to evaluate Presser's health, leaving the July 12 trial resumption date in jeopardy.
[57] On June 6, 1988, Judge White indefinitely postponed Presser's trial after doctors said the Teamster leader had only six months to live.
[5][57][59] Jackie Presser died late in the evening on July 9, 1988, from cardiac arrest brought on by a combination of cancer and heart trouble.