Accusations Filed Against Teamsters Leader : Investigation: Head of union’s Southern California joint council is alleged to have covered up corruption. He is a key member of a self-described “clean-establishment” slate.

Michael J. Riley, the most powerful Teamster in Southern California, has been accused by a court-appointed investigator of covering up corruption in a Los Angeles Teamsters local, “double-dipping” into a union car-allowance fund and allowing some union staffers to keep their union-paid automobiles upon retirement.

In the two years that the Teamsters have been under federal oversight, Riley is the 98th Teamsters official to be accused of violating his oath as a union officer and bringing “reproach” upon the union.

Under a 1989 settlement with the Justice Department, the 1.6-million-member union agreed to allow an independent administrator, appointed by a federal judge, to rid the union leadership of organized-crime influence and people accused of wrongdoing.

The oversight--which includes this year’s Teamsters elections--is conducted outside normal judicial channels. Members accused of wrongdoing may be punished by fines, suspension or expulsion from the union as determined by the court-appointed administrator, Frederick B. Lacey, a retired federal judge from New Jersey.

The accusations against Riley were prepared in New York by the court-appointed investigations officer, attorney Charles Carberry.

Riley denied wrongdoing, calling the charges “overkill” and “frivolous.”

Compared to most of the cases that have been developed by Carberry, the allegations against Riley are minor. However, they could carry important political weight in this year’s Teamsters national election.

Riley, the president of the union’s 135,000-member Southern California joint council, is a key member of a slate of self-described “clean-establishment” Teamsters who have been favored to win the first rank-and-file election of national officers in the union’s history. However, that slate has been eroded over the past month by two resignations, giving more weight to rival slates, including one dedicated to radically reforming the Teamsters.

Members will vote for president by secret ballot in December.

Riley serves as an international Teamsters vice president as well as president of the joint council and secretary-treasurer of Los Angeles-based Teamsters Local 986, which represents warehouse workers and drivers.

Under the Teamsters constitution he draws salaries for each position, totaling about $240,000 a year.

Carberry’s allegations contend that:

* Riley took steps to “prevent the discovery” of an alleged $16,200 embezzlement by Earl D. Bush, who was president of Teamsters Local 399 in Los Angeles in the late 1980s. Bush was accused of the embezzlement by Carberry in a separate written allegation several months ago. Bush could not be reached for comment.

Carberry declined to comment on his written allegation against Riley, which said that as an international vice president responsible for oversight of Local 399, Riley “disregarded (his) fiduciary duty to investigate and take appropriate remedial action.”

Riley said the alleged embezzlement was brought to his attention during a power struggle within Local 399 and was eventually settled in an out-of-court agreement between Bush and the local.

* Riley improperly accepted $18,000 in car allowances during five years as international vice president, when he was already provided with a car as president of the Southern California joint council.

Riley said he was told by then-international Teamsters President Jackie Presser that it was appropriate to continue to accept the car allowance if he declared it as income and paid income taxes on it.

* Riley allowed seven retiring officers and staff members of Local 986 to keep their union-owned automobiles upon retirement.

Riley said his local followed a policy of giving staffers with long service a $5,000 retirement-gift allowance toward purchasing the cars. He said in two cases, exceptions were made and cars with a value beyond $5,000 were given as gifts to men who helped start the local.

In all three areas listed by Carberry, Riley said, he acted on the advice of lawyers retained by the union. “In my conscience there is no sense of wrongdoing,” he said.

Last fall, when international Teamsters President William McCarthy announced that he would not seek reelection, Riley was one of a number of international vice presidents who joined a slate of candidates endorsed by McCarthy and headed by R.V. Durham, a Teamsters vice president from North Carolina.

Durham has been regarded as the favorite presidential candidate. But during the past month his slate has lost its No. 2 member, Weldon Mathis, the international’s incumbent secretary-treasurer, and a key Seattle Teamster, Arnie Weinmeister, who heads the union’s Western Conference. Both resigned from the slate.

Those losses gave increased optimism to the campaigns of Ron Carey, a New York Teamsters leader who has developed an impressive grass-roots reform drive, and Walter Shea, an international vice president from Washington.