Chapter Thirty-six

Fishing for Piranhas

No sooner was the ink dry on Fitzsimmons' letter in The International Teamster than the peekaboo game started again. The Local 299 leaders in Detroit who had supported the anti-LaRouche (really, anti-McMaster) resolution continued to allow stacks of New Solidarity in the union hall and copies of EIR in the waiting room of the business office. McMaster continued his support of LaRouche, although in a low-profile way. In a January 1980 telephone interview, he described LaRouche as "the most intelligent of all the [presidential] candidates."As for Fitzsimmons' letter, McMaster said that ''individual locals can support whoever they like....The Teamster union is one of the most democratic goddamn outfits in America." He claimed that some locals were considering an endorsement of LaRouche and that he personally had discussed it with union officials in Florida. "People like it that he's in the Democratic Party now," McMaster explained, referring to LaRouche's decision in the fall of 1979 to jettison the U.S. Labor Party and enter the Democratic primaries.

McMaster's support for LaRouche may have had self-interested motives. A Federal Election Commission schedule of receipts and expenditures filed by Citizens for LaRouche (CFL) shows that a few days after opening LaRouche's New Hampshire campaign headquarters in September 1979, CFL began making payments to Project Consulting Services Co. of Southfield, Michigan. The firm was headed by John R. Ferris, McMaster's closest friend and--according to The Hoffa Wars--his reputed business partner in several ventures. CFL paid Project Consulting over $96,000 during 1979-80 to oversee LaRouche's New Hampshire primary bid. One of the experts sent in by Ferris was a former Michigan state senator, Edward J. Robinson, who had just been sentenced to six months in federal prison for his role in a $3 million Florida land swindle. While appealing his case (he lost the appeal in 1981), he directed CFL's volunteer operations and handled press relations.

Ferris says he was reluctant to get involved with the LaRouche campaign but they offered him a fee so high he "couldn't say no," He previously had done consulting for other candidates, but set up Project Consulting exclusively to work for LaRouche, However, the latter adopted tactics that alienated the voters instead of following Ferris1 pragmatic advice. After New Hampshire, Ferris stopped working for LaRouche. He said that CFL owed him $200,000, although he doubted he would ever collect. (The CFL's FEC filings never listed this debt.)

Ferris and Robinson were not the only colorful characters attracted to the New Hampshire campaign. According to a former top LaRouche aide, the NCLC leadership paid $100,000 to Manchester businessman George Kattar to attempt to fix the election in Dixville Notch, traditionally the first place in the state to have its election returns reported. The FBI regards Kattar as a leader of organized crime in New Hampshire. At a U.S. Senate hearing in 1971, a witness identified him as a loan shark and said that his business was nicknamed the "Piranha Company."

LaRouche later referred to the vote-fixing idea as the "have a hundred-dollar bill" plan, and blamed its failure on an aide. NCLC defectors say it had to have been LaRouche's own idea, pointing out that no policy decisions were ever made in the NCLC without his approval. The cash to pay Kattar supposedly came from a Bank Bumiputra Malaysia loan involving several LaRouche business fronts. In 1981 the bank filed suit in New York State Supreme Court after the LaRouchians defaulted on the notes--just the beginning of what would be a decade of loan defaults. Kattar was interviewed about the incident for NBC-TV's First Camera in 1984, and acknowledged that the LaRouchians had asked him for help in the primary. He said two of his employees worked for LaRouche for a month, but quit when they were not paid the full amount promised. He denied personally receiving any money from LaRouche. In 1986 Kattar was indicted in Boston on extortion charges; the victim, ironically, was the cult-like Church of Scientology. The FBI then raided Kattar's home and office as part of an arms-smuggling probe, seizing ammunition and weapons.

The Federal Election Commission audit division reported in 1981 that LaRouche had overspent his allowable maximum in New Hampshire and should pay back $112,000 of his matching funds to the U.S. Treasury. Several matters regarding LaRouche's campaign financing were forwarded to the FEC's general counsel for further investigation. Citizens for LaRouche (CFL) counterattacked with a suit in federal court in Manhattan seeking to stop the FEC from questioning LaRouche contributors. CFL's attorney in this action was Mayer Morganroth of Southfield, Michigan. According to The Hoffa Wars, Morganroth is a former business partner of Ferris and has represented McMaster in legal matters. In the mid-1970s Morganroth and Ferris (with McMaster allegedly as a silent partner) owned Leland House, a Detroit hotel where they provided living quarters and part-time jobs for two of McMaster's muscle men during the months of fierce Teamster infighting prior to Hoffa's disappearance.

In 1977 Morganroth's name surfaced in connection with a Miami Organized Crime Strike Force investigation into a dubious loan by the mob-controlled Teamsters' Central States Pension Fund to the Indico Corporation, a financially ailing Florida real estate firm in which Morganroth was a principal stockholder. This investigation was a spin-off from a strike force probe into the business dealings of the Southeastern Florida district council of the Laborers International Union. (One upshot of the Laborers union probe was a racketeering indictment of Santos Trafficante, Jr., and fifteen co-conspirators, including a Miami lawyer who had helped arrange the Indico loan.) According to The Wall Street Journal, Morganroth was also under investigation in 1977 by the Detroit Strike Force, as part of a probe into "alleged organized crime proceeds being funneled from Canada into the U.S." He denied any wrongdoing.

Morganroth became one of the LaRouche organization's chief lawyers. He defended them in the 1983 anti-racketeering civil suit brought by creditor Michael Hudson, helped them incorporate a number of fundraising fronts, and was part of their defense team in the Boston credit-card fraud trial in 1988.

Apart from the "Southfield, Michigan, advisers," as LaRouche called them, a number of Teamster officials continued to work with LaRouche. The president of an Illinois local was reported by New Solidarity to have run on LaRouche's delegate slate in the state's 1980 Democratic primary, and a "Special Teamster Edition" of CFL's Campaign News that spring showed a picture of LaRouche with Bill Bounds, president of Illinois' Joint Council 65. Bounds was quoted as saying, while introducing LaRouche to a monthly council meeting: "I want you to meet my dear friend Lyn LaRouche, who's been a friend of labor and of the Teamsters for years....He deserves your support for the Presidency." The back of the newsletter contained a picture of Rolland McMaster and the full text of his May 1979 endorsement.

LaRouche also sought campaign support from the mob-dominated Laborers Union. In his initial approach he addressed the legitimate economic worries of the Laborers and other construction unions, as well as the special problems of indicted leaders. As in his support for the Teamsters on the question of trucking deregulation, he seemed to make sense in a demagogic way. He talked about the slump in housing starts due to high interest rates (chairman of the Federal Reserve Board Paul Volcker's fault) and the slowdown in nuclear power plant construction (the fault of hippies, Yippies, Quakers, and Communists). LaRouche suggested he'd string up Volcker, crush the environmentalists, and build hundreds of nuclear plants. Several weeks before the Democratic convention, a group of California building trades officials, including several from the Laborers, announced their support for LaRouche and launched a campaign committee. New Solidarity reported a similar committee being formed in Ohio. This triggered a memo from Alexander E. Barkan, national director of the AFL-CIO's Committee on Political Education (COPE), to union leaders around the country. Noting the reports that "some local union and local council officials not only have attended meetings convened by LaRouche, but have permitted their names to be used," Barkan warned that the LaRouche organization was "anti-labor, anti-Catholic, anti-Semitic and anti-minorities."