A TEAMSTER TEMPEST

SEVENTY-FOUR-YEAR-OLD FREDERICK B. Lacey is America's leading justice-for-rent. The retired federal judge has been hired to lead investigations of sensitive cases ranging from the Iraq-gate scandal to Michael Jordan's gambling activities. But Lacey 's handling of his most challenging role, federal supervision of the 1.4 million-member International Brotherhood of Teamsters, has provoked debate about whether Lacey and his justice Department employers have gone soft in their handling of America's most corrupt union.

Criticism of Lacey's judgment has been building since last July, when he issued a 79-page report exonerating Teamsters boss Ron Carey, a self-styled reformer, from allegations that he is linked to organized crime. Lacey conducted his probe as the leader of the Independent Review Board, the three-member federally created agency that polices the union. While the board's report criticized Carey for some dishonesty in matters relating to his real estate dealings, it accepted his denials regarding the Mob. Critics in the union described Lacey 's report as a whitewash, while Carey claimed he was the victim of a smear campaign.

Now TIME has obtained a private letter written by Lacey in April 1994, amid his investigation of Carey, that raises questions about his impartiality. The letter was a warning to Thomas Puccio, one of two court-appointed trustees of a Teamsters local (the other: Michael Moroney, a labor-racketeering investigator) who were threatening to go public with materials allegedly linking Carey to a former Mafia boss. During a conversation in March 1994, Lacey reminded Puccio in the letter, "I told you that I thought you and Mr. Moroney ought to have in mind what would happen if you brought Carey down in that there were `old guard' Teamsters throughout the country that were hoping that Carey would be eliminated as a candidate in 1996 so that the clock could be turned back to what it was when I first came on the scene as Independent Administrator. You indicated that you had not given any thought to that but you would keep it in mind."

Puccio declines to discuss the letter, which he considers "confidential," but he, appears satisfied with Lacey 's report. Says he: "I don't have any doubt that the investigation was sufficient enough to satisfy the standards they were trying to satisfy."

Justice Department officials privately applauded Carey's climb to the Teamsters helm, viewing him as the union's best chance for reform and publicly promoting him as almost squeaky clean. Four of the union's past eight presidents had been indicted on criminal charges; three of them went to prison. In 1989 the union finally settled an epic racketeering suit in which the feds accused its leadership of forging a "devil's pact" with the Mafia. Under the settlement, the Teamsters agreed to allow the members to elect their president freely. Since then, Lacey and his team have booted out more than 200 union members on a wide range of corruption charges.