IN RE: HOFFA UNITY SLATE,
Protest Decision 2001 EAD 506
Issued: October 16, 2001
OEA Case No. PR100312NA
The Hoffa Unity slate ("Hoffa slate") filed a pre-election protest pursuant to Article XIII, Section 2(b) of the Rules for the 2000-2001 IBT International Union Delegate and Officer Election ("Rules") against the Tom Leedham Rank and File Power slate ("Leedham slate"). It alleges several Article XI campaign finance violations.
Election Administrator representative Lisa Sonia Taylor investigated the protest.
Findings of Fact and Analysis
1. The first protest allegation is that the Leedham slate lists a payment to Andy & Co. of $2,470 for battle page design in Schedule D (itemized fund balances) of Leedham slate CCER #5, but that Schedule B of that filing does not set out such an expenditure. Further, the Hoffa slate alleges that the $2,470 August 2001 payment for battle page production is below market value and thus constitutes an improper employer contribution. Hoffa slate representative Richard Leebove notes that the Hoffa Slate pays approximately $4,000 for the similar production of their battle pages.
Leedham slate treasurer Ostrach states that the expenditure for Andy & Co. was entered on its CCER via the Election Administrator's automated CCER filing program, although he acknowledges that it does not appear on CCER #5's Schedule B. We have confirmed Ostrach's claim that there was an attempt to report the $2,470 expenditure on Schedule B. However, even though an apparent software problem caused this non-reporting, parties filing CCERs using our automated system still bear responsibility for ensuring the accuracy of their filing. Leedham Slate, 2001 EAD 302 (April 12, 2001). To comply with the Rules, the Leedham slate has agreed to submit an amended filing, and on that basis we deem the non-filing claim RESOLVED.
We DENY the protest allegation of under billing for the battle page design. Leedham campaign manager Matt Ginsburg states that he writes the battle pages and provides the pictures for it, i.e. he does all the "thought work." Andy & Co., in turn, does only the layout of the battle pages and charges $75 per hour for this. Ostrach provided an invoice dated July 31, 2001, showing 23 hours at $75 per hour plus other charges for a total of $1960.[1] Andy Reynolds of Andy & Co. confirmed that $75 per hour is his regular rate that he charges all but one of his clients.
2. The second protest allegation is that the Leedham slate's CCER #5 Addendum #2 (Anticipated Expenditures) list anticipated expenses of $87,545 through the end of November 2001, while at the same time the campaign has only $46,000 in cash on hand through September 1, 2001. The Hoffa slate alleges that it is unlikely that the Leedham slate will raise an additional $53,000 to cover all their anticipated expenses in the next six weeks. This protest allegation further challenges the failure of the Leedham slate to include any cost for battle page design in its list of anticipated expenditures.
Article XI, Section 2(d)(3) of the Rules provides that two weeks before the mailing of ballots those filing CCERs must "submit a budget of fund raising and expenditures anticipated through the end of the campaign on a form to be promulgated by the Election Administrator." The Election Administrator adopted its CCER form Addendum # 2 for this purpose. The form, however, mistakenly provides only for reporting of fund raising related expenditures, and has no place to enter anticipated fundraising.
The Leedham slate timely filed their Addendum #2, along with their CCER #5. The budget filing followed the Election Administrator's form, however, and did not report projected fund raising. When the slate's failure to report projected fundraising was brought to their attention, they agreed to amend their submission, which they did on October 15, 2001. That budget lists total anticipated expenditures of $98,475 and total anticipated fund raising of $99,500, including $34,000 in cash on hand, $33,000 in contributions pledged by candidates, $23,000 in anticipated contributions from fundraising mailings, on-line contributions and miscellaneous contributions, $4,000 in proceeds from fundraising events and $5,500 in anticipated proceeds from a raffle.
Both Ginsberg and Ostrach state that their original and Ocotber 15 Addendum #2 filings were best estimates at the time of filing. Of course, the Leedham slate has been and remains obligated to report any deviation of more than $1,000 in its budgeted amounts to the Election Administrator within 48 hours, as required by Article XI, Section 2(d)(3). Thus, if due to a change in circumstances it appears to the Leedham slate that they will raise more or less or spend more or less than the amounts they have budgeted, they must immediately file another amended budget. This obligation continues.
The amended filing satisfies the requirements of Article XI, Section 2(d)(3). It states anticipated expenditures of $98,475 and anticipated income that, with on hand funds of $34,000, comprise resources of $99,500 to fund these expenditures. It also remedies the failure of the original budget submission to report any planned expenditures for battle page design; $4,000 is now listed for the dates September 29 and Ocotber 29, 2001. Based on the Leedham slate's amended Addendum #2, we deem this aspect of the protest RESOLVED. The Leedham slate must, however, continue to update their budget as required by Article XI, Section 2(d)(3). In addition, all Leedham slate expenditures must be paid for by campaign contributions permitted by the Rules.
3. The Hoffa slate next alleges that Leedham slate Addendum #2 also list a projected expenditure for phone bank rental of only $1,200 for the period from October 9 through 30, 2001, but fails to account for the cost of phone calls or long distance service. Because the Leedham slate does not have the funds to cover such expenses, says the Hoffa slate, "it is obvious" that it intends either to run up debts or have its expenditures for phone-banks subsidized from prohibited sources.
In its amended budget, the Leedham slate increased the amount of projected expenditures budgeted for phone bank substantially, to $23,500, including $4,000 to be paid to Gannett Telematch for "phone-matching services," $14,000 for phone-banking rental and costs, and $9,500 for automated phone calls payable to vendor Don Powell.
The amended budget addresses the Hoffa slate allegations of deficient Leedham slate reporting of phone-bank expenditures, and we accordingly deem this protest allegation RESOLVED. We again note, however, the Leedham slate's duty to timely file any amendment to their budget for these or other items as required by Article XI, Section 2(d)(3).
4. The Hoffa slate next alleges that neither the Leedham slate's CCER #5 nor its Addendum #2 list actual or anticipated expenditures for maintenance of the slate's website including the redesign of the site in June.
According to Ostrach, Tom Sheibley, a member of Local 653 and a truck driver, maintains the website. Sheibley volunteers his services and any expenses related to the website are recorded as an in-kind contribution. Ostrach states that the website expenses were therefore not listed in Addendum #2, since the slate does not pay expenses related to the maintenance of the website.
Our records confirm $299.86 in in-kind contributions from Sheibley to the Leedham slate. The contributions are listed as follows:
8/8/00 In-kind contribution $25.11
9/6/00 In-kind contribution $24.95 website expenses
9/21/00 In-kind contribution $89.95 website expenses
11/7/00 In-kind contribution $35.00 website expenses
3/20/01 In-kind contribution $89.85 website expenses
6/12/01 In-kind contribution $35.00 renewal of Leedham.org domain name for one year
We DENY this protest allegation. IBT member Sheibley's uncompensated services are deemed to be volunteer personal services and are permitted as such under the Rules. See Advisory on Campaign Contributions and Disclosure (September 27, 2000), p. 12. The expenses borne by Sheibley for website maintenance are a campaign contribution, id. at 13, and, as noted above, were properly reported by the Leedham slate in its CCERs. Nor is there any evidence that either Sheibley or the Leedham slate used any prohibited contributions in the maintenance of the website. Finally, the minor website expenses borne by Sheibley need not be reported on Addendum #2, since they are not slate expenditures, but rather contributions received by the slate and reported elsewhere as such.
Any interested party not satisfied with this determination may request a hearing before the Election Appeals Master within two (2) working days of receipt of this decision. The parties are reminded that, absent extraordinary circumstances, no party may rely upon evidence that was not presented to the Office of the Election Administrator in any such appeal. Requests for a hearing shall be made in writing, shall specify the basis for the appeal, and shall be served upon:
Kenneth Conboy
Election Appeals Master
Latham & Watkins
Suite 1000
885 Third Avenue
New York, New York 10022
Fax: 212-751-4864
Copies of the request for hearing must be served upon all other parties, as well as upon the Election Administrator for the International Brotherhood of Teamsters, 727 15th Street NW, Tenth Floor, Washington, DC 20005 (facsimile: 202-454-1501), all within the time prescribed above. A copy of the protest must accompany the request for hearing.
William A. Wertheimer, Jr.
William A. Wertheimer, Jr.
Election Administrator
cc: Kenneth Conboy
2001 EAD 506
DISTRIBUTION LIST VIA UPS NEXT DAY AIR:
Patrick Szymanski
IBT General Counsel
25 Louisiana Ave. NW
Washington, DC 20001
Bradley T. Raymond
Finkel, Whitefield, Selik,
Raymond, Ferrara & Feldman
32300 Northwestern Highway
Suite 200
Farmington Hills, MI 48334
J. Douglas Korney
Korney & Heldt
30700 Telegraph Road
Suite 1551
Bingham Farms, MI 48025
Barbara Harvey
Penobscot Building
Suite 1800
645 Griswold
Detroit, MI 48226
Betty Grdina
Yablonski, Both & Edelman
Suite 800
1140 Connecticut Ave. NW
Washington, D.C. 20036
Tom Leedham c/o Stefan Ostrach
110 Mayfair
Eugene, OR 97404
Todd Thompson
209 Pennsylvania Ave., SE
Washington, DC 20003
Matt Ginsburg
30 Third Avenue
Brooklyn, NY 11271
James L. Hicks, Jr., P.C.
Suite 1100
2777 N. Stemmons Freeway
Dallas, TX 75207
Bruce Dubinsky
Klausner Dubinsky & Associates
4520 East West Highway
Suite 640
Bethesda, MD 20814
[1] Ostrach states and Reynolds confirms that the Leedham slate was mistakenly overcharged for services provided. The Leedham slate was sent a $510 invoice for another Andy & Co. client, which it paid. The actual cost for the August battle pages was $1960.