IN RE: HOFFA UNITY SLATE,
Protest Decision 2001 EAD 526
Issued: October 25, 2001
OEA Case No. PR100411NA
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 Teamsters for a Democratic Union ("TDU"). The protest alleges violations of the Rules' provisions concerning campaign contributions and disclosures.
Election Administrator representative Jeffrey Ellison investigated the protest.
Findings of Fact and Analysis
1. The protestor alleges TDU failed to report airfare, lodging and meals expenses related to attendance at the IBT convention of TDU/TRF staff members.
Investigation shows that nine such staffers attended the IBT convention. All attended using vacation time they had earned in advance of the convention. Further, TDU paid the airfare for the staff members from properly solicited funds in its campaign account, a fact that is reported on CCER #5 under entries for America West Airlines, National Air, and Travelocity. Our forensic auditor has verified this payment.
The staff members paid their own meal expenses and shared rooms with delegates. Aside from airfare, therefore, no staff member's travel expense was reimbursed by TDU, a candidate, slate, or another independent committee.
None of the staff members is a member of the IBT.
Article XI, Section 1(b)(4) bars a candidate, slate or independent committee from "accept[ing] financial support, or any other direct or indirect support of any kind, from any nonmember." Lodging and meals expenses incurred while traveling for the purpose of campaigning constitute an indirect campaign contribution. They may permissibly be paid by the individual, provided that individual is a member and the expenses are reported as an in-kind contribution. However, such expenses incurred for campaigning may not permissibly be paid by a non-member.
TDU agrees that the staffers engaged in some campaign activities while at the IBT convention. However, it argues that such activities were incidental to the principal purposes for their attendance, which included educating them about the IBT as an institution, making them more effective TDU organizers because of such enhanced knowledge, boosting their morale by permitting them to witness the convention that was a focus of their work, and assisting delegates with work on proposed amendments to the IBT constitution. TDU acknowledges that some staffers engaged in campaign activities supporting the Leedham slate, including leafleting and chanting, but it denies that any staffer traveled to the convention to engage in campaign activities, pointing out that the Leedham slate had at least four campaign staff to perform such functions.
We are not persuaded by these factual arguments. The staffers were observed engaged in campaign activities each day the convention was in session, including leafleting, attending rallies, distributing slate cards during nomination voting, and the like. Further, that TDU paid the airfare from its campaign account is sufficient proof that the campaign activities the staff engaged in at the convention were central to their travels, and that there travel expenses thus allowed them to carry out their campaign activities.
Accordingly, we GRANT this aspect of the protest. In doing so, we also find that, since no lodging expense was incurred because staffers shared rooms with delegates, no prohibited employer or union contribution occurred with respect to lodging. Bally's/Paris, where the convention was held and delegates were housed, charged flat rates for rooms regardless of whether they were occupied by one or two guests. Therefore, there was no additional or incremental cost associated with a staffer rooming in. While a place to sleep was of course a "thing of value" from the staffers' viewpoint, the hotel, acting in a commercially reasonable manner in a competitive market, assessed the monetary value of the second guest in a room at $0.
2. The protestor alleges that TDU accepted an improper contribution from an employer because it has an outstanding balance with Pitney Bowes, a vendor of postage, of $9,993.31. TDU's CCER #6 shows an extension of credit in this amount.
Investigation shows that TDU pays interest on its outstanding balance at 16% annually, a rate we deem commercially reasonable. Moreover, its CCER #7 shows $3,000.00 was paid toward the balance. Investigation further shows that the remaining balance has been paid off.
Our Advisory on Campaign Contributions and Disclosure (September 27, 2000) states that extensions of credit are campaign contributions, "except where obtained in the regular course of business of a commercial lending institution and on such terms and conditions as are regularly required by such institutions." Because of the interest rate charged by Pitney Bowes on the outstanding balance, we determine that the extension of credit to TDU does not constitute a campaign contribution under the Rules. Accordingly, we DENY this aspect of the protest.
3. The protestor alleges that TDU accepted an improper loan or contribution from TRF for the expense incurred with the Pittsburgh Hilton related to TDU's September 21 to 23 convention. In its CCER #5, TDU anticipates paying its share of the bill November 1. According to the protestor, "[i]t is obvious that TRF has already paid the bill and is waiting until after the election to collect from TDU." Investigation shows that when the Hilton bill was received October 2, it contained numerous errors. TDU has undertaken to correct those errors before paying the bill. Under these circumstances, the November 1 date for anticipated payment, coming within 30 days of receipt of the bill, appears commercially reasonable. Accordingly, we DENY this aspect of the protest.
Remedy
When the Election Administrator determines that the Rules have been violated, he "may take whatever remedial action is appropriate." Article XIII, Section 4. In fashioning the appropriate remedy, the Election Administrator views the nature and seriousness of the violation as well as its potential for interfering with the election process.
Within 5 days of receipt of this decision, TDU is directed to reimburse from its campaign account the actual meals expenses of each staff member who attended the June 2001 IBT convention. An affidavit of compliance shall be filed by November 1, 2001.
We decline to order any additional remedy such as a notice distribution or fine for three reasons: first, this is a case of first impression construing the prohibition on non-member indirect campaign contributions; second, our investigation shows the violation found here was unintentional; and third, the likelihood is strong that similar, but not protested, indirect campaign contributions were made by other nonmembers, particularly IBT retirees, who incurred and paid for their own travel, lodging and meals expenses to attend the convention where a purpose of that travel was to campaign.
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 526
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 3060
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
Teamsters for a Democratic Union
7437 Michigan Avenue
Detroit, MI 48210
Jeffrey Ellison
65 Cadillac Square
Suite 3727
Detroit, MI 48226