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Office of the Election Supervisor for the International Brotherhood of Teamsters

IN RE: FRED GEGARE (After Remand), Protestor.
11 Elec. App. 3 (KC)


This opinion arises out of a series of appeals from the Election Supervisor's decision 2011 ESD 73 on remand after a prior appeal. A hearing was held before me on February 10, 2011. The following persons were heard by way of teleconference: Richard W. Mark and Jeffrey J. Ellison, Esquires, for the Office of the Election Supervisor; Scott D. Soldon, Esquire, of the Soldon Law Firm, LLC for the appellant Fred Gegare, candidate for General President of the International Brotherhood of Teamsters ("IBT"); Barbara Harvey, Esquire, for the appellant Frank Halstead, member of Teamsters Local 572; Bradley T. Raymond, Esquire and General Counsel of the IBT; and David J. Hoffa, Esquire, of the Law Office of David J. Hoffa PC, for the Hoffa-Hall 2011 Campaign (the "Hoffa Campaign").

The parties present an issue of first impression: Do the Rules for the 2010-2011 International Brotherhood of Teamsters ("IBT") International Union Delegate and Officer Election (the "Rules"), which clearly prohibit the use of union resources for campaign purposes, forbid unsuccessful attempts to offer union jobs in exchange for campaign support? More specifically, do the Rules bar such attempts if they fail only because the job offers are rejected? Resolution of those questions turns in part on the threshold issue of whether the Election Supervisor may interpret the Rules and apply them beyond the four corners of their plain language.

The parties have had ample opportunity to brief and argue these issues, and I hereby conclude that the Election Supervisor has broad authority to interpret and enforce the Rules in accordance with the values and mandates of the Labor-Management Reporting & Disclosure Act of 1959 (the "LMRDA") and the March 14, 1989 Consent Decree entered in U.S. v. International Brotherhood of Teamsters et al., 88 Civ. 4486 (S.D.N.Y.) (the "Consent Decree"). I further conclude that the principles underlying the Rules compel an interpretation of the Rules that prohibits even failed attempts to exchange union jobs for campaign support. Accordingly, the Election Supervisor's decision is reversed and remanded for imposition of an appropriate remedy. I also affirm the factual findings of the Election Supervisor and deny the appeals challenging their sufficiency.

As noted, this is a case of first impression. The Election Supervisor has stated in his decision and during the hearing that his hands are tied because the Rules themselves do not, in haec verba, denounce unsuccessful attempts to bargain high union office for campaign favors. His remand decision nonetheless declares that he does not condone such behavior because it is part of a "culture or mind-set" that represents a threat to the integrity of this IBT election. Election Supervisor Decision 2011 ESD 73, Jan. 20, 2011 (the "Election Supervisor's January 2011 Decision" or the "January 2011 Decision"), at 28. The Election Supervisor proposes that IBT officials who are also candidates should police themselves so that "democratic election principles" are not imperiled. Id. The Election Supervisor's position is untenable. In fact, it is the Election Supervisor himself who possesses the authority, and the obligation, to remedy the conduct uncovered in his investigation.

I.                  Background

A.     The Initial Protest, Decision, and Appeal

On June 3, 2010, Fred Gegare lodged a protest with the Election Supervisor alleging that the Hoffa-Keegel Campaign (the "Hoffa Campaign") and several of its officials violated the Rules by circulating false and misleading campaign materials. On June 24, 2010, the Election Supervisor concluded that the Hoffa Campaign had done so by using the signature of a member without his consent. That member, IBT International Trustee Henry Perry, had been elected as part of the Hoffa slate in the 2006 campaign. According to the Election Supervisor, the unauthorized use of Perry's signature was inadvertent. As a remedy, the Election Supervisor ordered the Hoffa Campaign to stop using the misleading literature and to notify all recipients of its misconduct. See generally Election Supervisor decision 2010 ESD 4, June 24, 2010 (hereinafter the "Election Supervisor's Initial Decision" or the "Initial Decision").

The Hoffa Campaign, Gegare, and Frank Halstead (of Teamsters Local Union 572) all appealed the Initial Decision, with the Hoffa Campaign arguing that Perry did, in fact, support the Hoffa slate at the time that his signature was included on the campaign literature. My July 8, 2010 decision noted two shortcomings with the Initial Decision. First, it failed to include sufficient evidentiary findings on the issue of Perry's actual allegiance at the time his signature was used. Second, the Initial Decision referred to testimony by Perry that James Hoffa, Jr. (General President of the IBT) and Tyson Johnson (Southern Region Vice President of the IBT) offered to give Perry an IBT job if he agreed not to run for re-election. The Initial Decision did not fully explore that claim. See generally Election Supervisor's Initial Decision. In light of those two deficiencies, I remanded the matter for a full investigation of Perry's May 2010 discussions with Hoffa and Johnson.

B.     The Remand Proceedings

On remand, the Election Supervisor conducted an extensive, six-month investigation and reaffirmed his prior findings that Perry did not support the Hoffa Campaign and that the use of his signature was inadvertent. The Election Supervisor held that the remedy previously imposed was adequate. See January 2011 Decision at 26.

Of greater concern are the Election Supervisor's findings concerning the job offer made to Perry, and similar offers made to International Trustee Frank Gallegos and IBT Car Haul Director Fred Zuckerman. The Election Supervisor determined that Hoffa and his fellow IBT officers and Hoffa Campaign supporters offered union jobs to all three, each of whom was a potential 2011 candidate for elected office. As a condition of those offers, the IBT representatives demanded that the recipients support the Hoffa Campaign and not stand for election themselves. See January 2011 Decision at 26-27. If accepted, the offers would have created electoral advantages for the Hoffa Campaign. The offers to Perry and Gallegos would have created vacancies on the General Executive Board ("GEB"), which the Hoffa Campaign could then fill with supporters. The offer to Zuckerman would have removed a challenger to the Hoffa slate.

More specifically, the January 2011 Decision found that:

  • Johnson told Perry that if he did not run for re-election as Trustee but maintained his support for the Hoffa Campaign, he would be appointed to a position at the same salary and benefits he had received as Trustee. See January 2011 Decision at 26. Perry called Hoffa to discuss what Johnson told him. See id. at 11-12; 24 (crediting "Perry's version" of the call). During the call, Hoffa "made the same proposal" that Johnson had made to Perry. Id. at 3. Hoffa also mentioned that, in exchange for keeping his salary, Perry should make a campaign contribution to Hoffa, gather petitions supporting Hoffa, and promote the Hoffa slate. See id. at 12. Perry rejected the offer. However, "if that inducement [to Perry] had created a vacancy on the GEB, it would have provided the incumbents (most of whom are candidates for re-election on the Hoffa slate) with an opportunity to make a strategic choice that could serve their electoral objectives." Id. at 26.
  • IBT West Region Vice President Rome Aloise "proposed a similar arrangement" to Gallegos, also formerly a member of the Hoffa slate in 2006: Aloise "proposed that [Gallegos] resign his elected [T]rustee position in exchange for appointment to an International representative job." Id. at 27. Gallegos told Aloise that he would consider the offer, but that he wanted written assurance that he would be entitled to the representative job. See id. at 17. If Gallegos had accepted the arrangement, "the Hoffa slate could have gained an incumbent candidate for International trustee by the appointment process." Id. at 27. Ultimately, however, Gallegos declined the offer of an appointed position from Aloise but still decided against seeking re-election as Trustee.
  • IBT Vice President at Large and Package Division Director Ken Hall offered Zuckerman "an increase in salary to International representative level and enrollment in the IBT employees retirement system in exchange for supporting the Hoffa Campaign and dropping his own candidacy for International office." Id. at 27. Zuckerman turned down the offer and remains a candidate on the Gegare slate. However, the proposal "aimed to affect an individual's support for candidates in the International election." Id.

Simply put, the Election Supervisor concluded that Johnson, Hoffa, Aloise, and Hall tried - but failed - to buy electoral support and stifle opposition in exchange for salaried union jobs.

Nevertheless, the Election Supervisor's January 2011 Decision found that this conduct did not violate the Rules. According to the decision, the Hoffa Campaign representatives "approached, but did not cross, a major boundary line, and were saved from serious consequences perhaps only because their proposals were rejected by those to whom they were offered." Id. at 28. The decision observed that the Rules prohibit the use of union resources for campaign purposes or to influence the outcome of an election. Article XI, section 1(b)(3) declares that neither the IBT nor its member organizations can "contribute, directly or indirectly, anything of value, where the purpose, object, or foreseeable effect of the contribution is to influence, positively or negatively, the election of a candidate." Rules, Art. XI § 1(b)(3); see also Rules, Art. VII § 12(c) (stating that "Union funds, facilities, equipment, stationery, personnel, etc., may not be used to assist in campaigning"). However, in the Election Supervisor's view, those provisions "do not prohibit offered or proposed use of union funds." January 2011 Decision at 28 (emphasis in original). In other words, the Election Supervisor read the Rules as banning only the successful exchange of union jobs for political support. Further, as he made clear during oral argument, the Election Supervisor reads the phrase "anything of value" as excluding a job offer. (See Tr. 68:9-69:19.)[1]

As a result, the Election Supervisor found that his hands were tied. His January 2011 Decision lamented that "[t]he conduct revealed in this investigation reflects a culture, or mind-set where elected union officials do not clearly distinguish between their fiduciary responsibilities to the union and their separate political objectives of achieving election." January 2011 Decision at 27. Yet, because "none of the proposals proceeded beyond discussion, [and] no funds were expended," the Election Supervisor concluded that "there is no basis to find a violation of the ban on use of union resources" in the Rules. Id.

II.                  Claims on Appeal

A.     The Job Offers

In the instant appeals, Gegare and Halstead seek a reversal of the decision that the IBT officers discussed in the Election Supervisor's January 2011 Decision did not violate the Rules by making the unaccepted job offers. Gegare and Halstead recognize that the Rules do not explicitly prohibit attempted but unsuccessful attempts to use union resources to influence an election. However, they argue that the Rules should be broadly interpreted to prohibit such failed attempts. In support of that argument, they cite Article I, section 2 of the rules, which allows the Election Supervisor to "take all necessary actions, consistent with these Rules, to ensure fair, honest, open and informed elections." Rules Art. I, § 2. Gegare and Halsted further urge a broad interpretation of the Rules by arguing that they must be read in conjunction with three other sources of authority: The LMRDA, the March 14, 1989 Consent Decree entered in United States v. International Brotherhood of Teamsters et al., 88 Civ. 4486 (S.D.N.Y.) (the "Consent Decree"), and the IBT Consitution.

First, they point to fiduciary duties that IBT officers owe the union under the LMRDA and the Consent Decree. See United States v. I.B.T., 708 F. Supp. 1388, 1400 (S.D.N.Y. 1989) ("[E]ach [IBT] officer is a fiduciary with respect to the Union members."), overruled on other grounds, PT United Can Co. v. Crown, Cork & Seal Co., 138 F.3d 65, 71 (2d Cir. 1998) (addressing service of process and jurisdiction under RICO). Halstead cites section 501(c) of the LMRDA, which sets penalties for violating fiduciary duties. See 29 U.S.C. § 501(c) (2010) (providing for fines and jail time for misappropriating union property). He argues that Courts allow prosecutors to charge conspiracy under § 501(c), a charge which does not require the completion of an improper transaction involving union resources, even though conspiracy is not explicitly contemplated by the language of the LMRDA. (See Tr. 20:24-22:6); see also United States v. Boyle, 482 F.2d 755, 766-78 (D.C. Cir. 1973) (explaining that "[c]onsummation, or success, of the conspiracy" charged under § 501(c) "was unnecessary."). Halstead contends that the Election Supervisor should apply Articles VII and XI of the Rules in the same expansive fashion. (See Tr. 20:24-22:6.)

Second, Gegare relies on Article II, section 2(a) of the IBT Constitution, which instructs that every IBT member must "conduct himself or herself in a manner so as not to bring reproach upon the Union." (See Letter from Scott D. Soldon, Feb. 8, 2011 (hereinafter "Gegare Supplemental Brief"), at 2 (citing cases regarding Independent Review Board ("IRB") disciplinary proceedings concerning conduct that "brings reproach" on the IBT)); see also Consent Decree, Mar. 14, 1989 § F at ¶ 12(A) (granting the Independent Administrator appointed under the Consent Decree the right to enforce the IBT's Constitution); United States v. I.B.T. ("Mireles and Roa"), 315 F.3d 97, 99 (2d Cir. 2002) (recognizing that "the scope of the IRB's power under the Consent Decree is not limited to violations of federal labor or criminal law," and that the IRB may punish conduct that "brings reproach" upon the IBT). Gegare proclaims that surely a thwarted bribe "brings reproach" on the IBT and must, a fortiori, violate the Rules.

The Election Supervisor, the Hoffa Campaign, and the IBT respond to Gegare and Halstead's appeals by defending the Election Supervisor's conclusion that unaccepted job offers did not violate the Rules. They maintain that the language of the Rules is clear and, by its terms, limited to the successful misuse of Union resources. They further argue that, under the Rules, the Election Supervisor has no power to enforce the fiduciary duties defined in the LMRDA. (See Letter from Jeffrey Ellison, Esq., Feb. 8, 2011 (hereinafter "Election Supervisor's Supplemental Brief), at 4). Article XII of the Rules incorporates some provisions of the LMRDA by reference but does not mention § 501 or fiduciary duties. See Rules Art. XII. During oral argument, the Election Supervisor stated that he had been a principal draftsman of the Rules and that the decision to exclude § 501 was deliberate. He explained that the parties who drafted the Rules - including the Election Supervisor, the IBT, and the United States Attorney's Office - intended the Election Supervisor to steer clear of regulating fiduciary duties, leaving that function solely to the IRB. (See Tr. 73:8-74:12.)

The Hoffa Campaign and the IBT argue that the same logic holds true with respect to punishing conduct that "brings reproach" on the IBT. They contend that, as a disciplinary function, that too belongs to the IRB and not the Election Supervisor. Therefore, they conclude, the fact that an unsuccessful offer of a job in exchange for campaign support could "bring reproach" is irrelevant to the determination of whether any violation of the Rules occurred. (See Tr. 60:14-61:19.)

B.     Claims Disputing the Election Supervisor's Factual Findings

The parties raise two additional claims. First, Halstead contends that the Election Supervisor failed to investigate whether Hoffa and Johnson may have deliberately chosen not to inform Hoffa Campaign officials that Perry would not be on the slate in 2011 and would therefore not support the Hoffa Campaign. Halstead argues that the original remedy regarding Perry's signature would be inadequate if that were true, and he therefore seeks a remand for additional fact finding on that issue.

Second, the Hoffa Campaign requests that the findings regarding Aloise and Hall be stricken from the Election Supervisor's decision. The Hoffa Campaign contends that because the Election Supervisor strayed beyond the allegations in Gegare's protest, Aloise and Hall lacked notice that they were being investigated. The Hoffa Campaign relies on Article XIII, section 2(d) of the Rules, which, it claims, "mirrors" the due process protections embodied in § 101(a)(5) of the LMRDA for subjects of disciplinary investigations. (See Letter from David J. Hoffa, esq., Feb. 8, 2011 (hereinafter "Hoffa brief"), at 4.)

III.                  Discussion

A.     The Election Supervisor's Findings of Fact

On remand, the Election Supervisor conducted a six-month investigation into the facts at issue, taking testimony from twelve witnesses. In reaching his conclusions, the Election Supervisor prepared a detailed, twenty-nine page opinion setting forth the relevant facts, with careful citations to the record. Because his findings of fact are thus well-supported, they are affirmed.

The Hoffa Campaign's request to strike the findings related to Aloise and Hall is denied. The Hoffa Campaign's due process objection is misplaced. This is not an IRB proceeding.[2] Furthermore, despite the Hoffa Campaign's reliance on Article XIII, section 2(d) of the Rules, that section does not "mirror" § 101(a)(5) of the LMRDA. Article XIII, Section 2(d) instructs any member filing a protest to include "a clear and concise written statement of the alleged improper conduct." Rules, Art. XIII, § 2(d). It therefore addresses the content of election-related protests. It does not purport to limit the Election Supervisor's inquiry or the remedies the Election Supervisor may impose for Rules violations he discovers. In contrast, § 101(a)(5) of the LMRDA commands that "[n]o member of any labor organization may be . . . disciplined . . . unless such member" has received specified procedural protections. 29 U.S.C. § 411(a)(5) (2011). Thus, § 101(a)(5) confers substantive rights on members of the IBT, whereas Article XIII, Section 2(d) does not. Nothing in Article XIII, Section 2(d) prevented the Election Supervisor from unearthing all relevant facts surrounding Perry's allegations using the investigative procedures that he followed.[3]

As a result of affirming the Election Supervisor's findings of fact, I affirm that the use of Perry's signature was inadvertent and deny Halstead's call for further investigation into that issue. I also affirm the Election Supervisor's conclusion that the original remedy imposed was adequate, for the reasons set forth in the January 2011 Decision.

B.     The Job Offers

By affirming the Election Supervisor's findings of fact, I also accept that the job offers were made under the circumstances he described and for the reasons he cites in the January 2011 Decision. However, the Election Supervisor erred by concluding that those offers did not violate the Rules. As fully explained below, the Rules do prohibit the conduct detailed in the January 2011 Decision, because those job offers - even if unsuccessful - were a use of a union resource for a campaign purpose and that use did impinge upon the integrity of the IBT's election franchise.

As an initial matter, the Election Supervisor appears to have underestimated his authority. He has failed to recognize both the extent of the powers granted to him by the Consent Decree and his ability to interpret the Election Rules beyond their literal four corners. During oral argument, I asked the Election Supervisor to describe the sources and limits of his authority. He responded: "I believe the scope of my power is defined by the [R]ules and that's what the [C]onsent [D]ecree contemplates." (Tr. 102:2-5, Feb. 10, 2011.) In other words, based on his understanding of the Rules and the Consent Decree, the Election Supervisor can do no more than enforce the Rules exactly as written.

That belief is mistaken. Certainly, the Election Supervisor must enforce the text of the Rules. However, he also has the authority to do more than simply read the Rules as written. He has the authority and the obligation to interpret the Rules as a living document and to determine their applicability to situations that were not explicitly contemplated by their drafters. The Rules themselves allow the Election Supervisor to "take all necessary actions, consistent with these Rules, to ensure fair, honest, open and informed elections." Rules Art. I. They further enable the Election Supervisor "to interpret, to enforce, and, when necessary, to amend" the Rules. Rules Art. I (emphasis added).

The Rules also result from the exercise of the Election Supervisor's broad authority under the Consent Decree, which "generally empowered the Election Officer to 'supervise' the 1991 IBT election." United States v. I.B.T. ("Campaign Advisory Order"), 968 F.2d 1506, 1511 (2d Cir. 1992) (holding that "the Election Officer had the authority to amend the Election Rules without court approval, as he explicitly or implicitly did in the provisions of the Campaign Advisory regarding independent committees"). Consequently, the Consent Decree gives the Election Supervisor "substantial discretion to impose election rules and procedures that ensure that . . . elections are free, fair and informed," and to "supervise" such elections. United States v. I.B.T. ("1991 Election Rules Order"), 931 F.2d 177, 187 (2d Cir.1991); see also United States v. I.B.T. ("1996 Count Rules Order"), 943 F. Supp. 360, 364 (S.D.N.Y.,1996) ("[T]he Election Officer is vested with broad authority to supervise each and every facet of the 1996 IBT election.")

"[T]he term 'supervise,'" as used in the Consent Decree, "involve[s] an active and broad mandate to intervene in, and coordinate, the IBT electoral process . . . ." United States v. I.B.T. ("Hughes & Friedman"), 723 F. Supp. 203, 206 (S.D.N.Y. 1989) (quoting and adopting the argument of the United States), aff'd, 1991 Election Rules Order, 931 F.2d 177. Election officers have used this mandate to adopt election rules in the first instance, see 1991 Election Rules Order, 931 F.2d at 187, and to amend them "without court approval," Campaign Advisory Order, 968 F.2d at 1511. Moreover, the mandate created by the Consent Decree has persuaded the District Court to permit election officers to take actions not contemplated by written election rules. See, e.g., United States v. I.B.T. ("1997 Installation Request"), No. 88 Civ. 4486, 1997 WL 107431, at *4 (S.D.N.Y. Mar. 11, 1997) (granting a request to install newly-elected officers prior to election certification, and noting the "extraordinary breadth of the Election Officer's authority").

It is thus clear that the Election Supervisor could have invoked authority beyond the four corners of the text of the Rules. However, instead of doing so, he interpreted them in an overly-literal manner. Article XI, section 1(b)(3) prohibits, in relevant part, the contribution of "anything of value, where the purpose, object, or foreseeable effect of the contribution is to influence, positively or negatively, the election of a candidate." The fact that the Rule does not refer explicitly to the "offered or proposed use of union funds" convinced the Election Supervisor that it did not apply to the job offers in question. See January 2011 Decision at 28.

That literal reading is flawed in several respects. First, the Rules are not criminal statutes, and it is therefore unsurprising that they lack precise formulations about offers, attempts, conspiracies, or other violations that do not require a completed transaction. Nor must they be interpreted in accordance with the contract law notions of "offer" and "acceptance," as the Election Supervisor appears to have done here. Instead, as discussed above, the Election Supervisor has broad authority to interpret the Rules and take action to confront conduct that threatens the electoral franchise of IBT members. Here, the proposed exchange of jobs for campaign benefits clearly calls into question the integrity of the election process.

Second, and perhaps more importantly, the Election Supervisor explained during oral argument that he interprets the phrase "anything of value" as excluding job offers. (See Tr. 68:9-69:19.) By his logic, the offers in question were of no value either to the IBT or to the IBT members who turned them down. That ignores basic economics. The offers had value in the same way that an option contract has value - the value resides in the fact that the offerees could have accepted them and received jobs and financial benefits. Similarly, the offers were clearly a union resource. There are a limited number of offers to be made, and the right to make them belongs to the union and not the individual making them. When an IBT officer makes a job offer, he does so not in his individual capacity but rather on behalf of the IBT. Thus, as union resources with independent value, it is the offers themselves - regardless of whether they are accepted - that violate the Rules.

In sum, the Consent Decree, Article I of the Rules, and a reasonable reading of Article XI all provide ample authority to find that the Hoffa Campaign violated the Rules by making the job offers described in the Election Supervisor's January 2011 Decision. The manipulation of union resources for electoral advantage harms the "overriding objective" of the LMRDA to "ensure that unions would be democratically governed, and responsive to the will of the union membership as expressed in open, periodic elections." Finnegan v. Leu, 456 U.S. 431, 441 (1982) (emphasis added). That objective is memorialized in the Consent Decree, and has driven the nearly twenty-two years of effort and vast resources expended in carrying out its terms. See Consent Decree § F at ¶ 12(D) (establishing election procedures); United States v. I.B.T. ("Slemko"), 72 F. Supp. 2d 257, 262 (S.D.N.Y. 1999) (noting the "Consent Decree's goal of ensuring a fair, free, democratic, and informed election"); United States v. I.B.T. ("Funding Order"), 902 F. Supp. 40, 45 (S.D.N.Y. 1995) (adopting election officer's declaration that "a fair, free, honest and fully democratic IBT election is the linchpin in the Consent Decree's unique efforts to rid the IBT of corruption"), modified by 908 F. Supp. 143, 154 (S.D.N.Y. 1995), remanded on other grounds by 86 F.3d 271 (2d Cir. 1996). The job offers uncovered in the Election Supervisor's investigation represent exactly the type of misconduct that the Election Supervisor was charged with remedying.[4]

The IBT argues that I should be mindful of, and give deference to, elected officials' discretion to "appoint agents of [their] choice to carry out [their] policies." Finnegan v. Leu, 456 U.S. 431, 441-42 (1982). In Finnegan, the Supreme Court approved the discharge of a business agent by the incoming union president in the wake of an election. See id., 456 U.S. at 432-33. The Court found that the discharge did not violate the LMRDA, which "does not restrict the freedom of an elected union leader to choose a staff whose views are compatible with his own." Id. at 441. Unlike Finnegan, however, the present case does not involve a legitimate use of hiring power to build a management team capable of implementing leadership objectives. Rather, it involves pre-election job offers to elected officials in exchange for their resignations and promises not to run for re-election. The Election Supervisor found that the offers were not made for a legitimate purpose to benefit the IBT, but rather for an illicit purpose to benefit the Hoffa Campaign. Finnegan does not shelter such conduct. Conversely, the instant ruling does not endanger the union president's appointment power, so long as it is not used to damage the election process.

In short, an elected official may offer a job in exchange for an agreement to carry out the official's policies. Under the Rules and the Consent Decree, elected officials may not offer a job in exchange for partisan political activity, or any action designed to create an electoral advantage for the incumbent appointing officer and his campaign slate of candidates for union office.

C.     Remedy

The Election Supervisor must now fashion a remedy to alleviate the harm caused by the conduct detailed in the January 2011 Decision. Two principles should guide him in that task:

First, the remedy must be tailored to cure the harm caused by the misconduct. The harm consists of any damage to the election franchise and the union members' faith in it. The remedy must therefore be designed to address that damage. I note that the harm here is different than that in United States v. I.B.T. ("Carey"), 156 F.3d 354, (2d Cir. 1998). In that case, Ron Carey, the IBT president elected in 1996, knew of a scheme to launder hundreds of thousands of dollars of union funds for the benefit of his campaign. See Carey, 156 F.3d at 357-59. The only way to "ensure a fair rerun election and to protect the integrity of the [IBT] electoral process" was to disqualify Carey from the 1998 rerun. Id. at 358-59. Here, the damage is not on the same scale because the misconduct was limited to the offer of three jobs that were not accepted. The Carey case should therefore not be read as requiring any specific remedy here - the Election Supervisor must craft a remedy commensurate to the harm.

Second, the Election Supervisor's mandate does not include discipline or punishment. The Second Circuit has clearly differentiated between the roles of the Election Supervisor and the IRB under the Consent Decree:

The Election Officer is not assigned disciplinary responsibilities. His mandate is to supervise the reformation of the IBT's electoral processes, and, where necessary, expeditiously to investigate and rule upon protests arising out of these processes-all with a view to ensuring "fair, honest, open and informed elections." 1996 Election Rules art. I (implementing Consent Decree § F at ¶ 12(D)(ix)). Where the EO uncovers electoral abuses, he is empowered to "take whatever remedial action is appropriate," id art. XIV § 4 (emphasis supplied), in order to preserve and promote the integrity of the IBT's democratic processes.

The EO's mandate stands in contrast to that of the [IRB], which is explicitly cloaked with the union's "disciplinary authority." Consent Decree § F at ¶ 12(A) . . . In this capacity, the IRB is involved in meting out punishment in relation to the culpability of the offender for past infractions of union rules, including acts of corruption and criminal activity that bring "reproach" on the IBT.

Carey, 156 F.3d at 361-62 (internal citations and footnotes omitted). Accordingly, the Election Supervisor's remedies must be prospective and designed to ensure a level playing field for both insurgents and incumbents. Indeed, any measures serving punitive ends would violate due process because the Election Supervisor's investigations are not governed by the procedural protections built into IRB proceedings. See id. at 361-62 (finding that procedural safeguards under the LMRDA did not apply to proceedings before an election officer, but that "[d]isciplinary proceedings before the IRB follow procedures that fully comply with, and even surpass, the procedural protections [of the LMRDA]").

Thus, the claims of breaches of fiduciary duty and conduct that "brings reproach" on the IBT by Gegare and Halstead are beyond the Election Supervisor's jurisdiction to the extent they seek penalties for such conduct. To be clear, Carey does not mean that an IBT official's conduct could not, in theory, violate both the Rules and fiduciary duties. Carey and the Consent Decree only require that the Election Supervisor's response to Rules violations must be remedial and not punitive. My analysis here, however, neither explicitly nor implicitly relies on fiduciary duty concepts, components, or standards.

IV.             Conclusion

For the reasons fully explained above, the January 2011 decision is AFFIRMED in part and REVERSED in part. This case is remanded to the Election Supervisor so that he may fashion a remedy for the violations detailed in the January 2011 decision and this opinion.


Kenneth Conboy
Election Appeals Master

Dated: February 16, 2011

CC: Distribution List

Andrew Shilling, Assistant United States Attorney

Brian Feldman, Assistant United States Attorney


[1] The Election Supervisor claims that the appointments would not have increased Perry's or Gallegos's established salaries and therefore would not have benefited them financially. See January 2011 Decision at 26-27. Of course, that ignores the fact that if Perry and Gallegos had resigned their then-present positions of their own volition - or, indeed, if they had simply been dismissed - they would have had no jobs and no salaries. Thus, the quid-pro-quos proposed by Hoffa, Johnson, and Aloise clearly had value and did involve union resources.

[2] During the February 10, 2011 hearing the Election Supervisor stated that he had referred his decision on remand in this matter to the IRB. This referral was done without notice to, or approval by, the Election Appeals Master.

[3] Moreover, the Election Supervisor need not comply with the due process protections established by the LMRDA. As discussed further below, he has no jurisdiction to punish the subjects of his investigations. See United States v. I.B.T. ("Carey"), 156 F.3d 354, 361-62 (2d Cir. 1998) (finding that disqualification of a candidate was a prospective remedial measure and therefore did not constitute punishment that would have required due process protection under the LMRDA). Here, setting forth his factual findings did not amount to a form of discipline and therefore did not implicate the procedural due process safeguards of the LMRDA. See id. at 362.

[4] To be clear, this conclusion is not based on a finding that any of the IBT officials violated their fiduciary duties. As discussed above, the drafters of the rules consciously chose not to import the fiduciary duty provision of the LMRDA. (See Tr. 73:8-74:12.) Of course, that is not to suggest that the Election Supervisor cannot remediate actions that threaten the fairness of an election simply because they also happen to constitute a breach of fiduciary duty. The point is just that fiduciary duty standards are not relevant in and of themselves.