IN RE: HOFFA 2006, Protestor.
Protest Decision 2006 ESD 54
Issued: January 25, 2006
OES Case Nos. P-05-028-110205-HQ and P-05-038-112905-HQ
Hoffa 2006 filed two pre-election protests pursuant to Article XIII, Section 2(b) of the Rules for the 2005-2006 IBT International Union Delegate and Officer Election ("Rules"). In OES case number P-05-028-110205-HQ, the protest alleged that Committee for New Leadership ("CNL") failed to account for campaign expenditures it made and in-kind contributions it received from Teamsters for a Democratic Union ("TDU"), in violation of the Rules. In OES case number P-05-038-112905-HQ, the protest alleged that CNL further failed to account for in-kind contributions it received from TDU in the form of shared office space and equipment, personnel, volunteers, and use of TDU's website, computer, and data.
Election Supervisor representatives Steven R. Newmark and Bruce Dubinsky, a forensic certified public accountant retained by the Election Supervisor, investigated this protest.
Findings of Fact
CNL was created in May 2005 and stated as an objective the assembling of "the program and leadership team that can defeat Hoffa in next year's IBT election." As such, we previously found it to be an "independent committee" within the definition of the Rules, in that it is an "entity not controlled by a candidate or slate … which has accepted any campaign contribution, as defined by these Rules, or … which has made any expenditure, where the purpose, object or foreseeable effect of the contribution or expenditure is to influence the election of International Officer candidate(s)." Hoffa 2006, 2005 ESD 3 (August 4, 2005).
As an independent committee, CNL is required to file CCERs once it receives contributions or makes expenditures in excess of $1,000. Id.; see also, Article XI, Section 2(a)(3).
CNL timely filed its CCER and Supplemental Report No. 1 for the reporting period June 1 through September 30, 2005. At the protestor's request, a redacted version of CNL's report was released to the protestor in accordance with Article XI, Section 2(e).
The protest in case number P-05-028-110205-HQ alleged that the CNL reports failed "to account for campaign expenditures on certain campaign related gatherings and picnics advertised" in the Convoy Dispatch and on TDU's website. The protest further challenged "the undocumented in-kind contributions provided by TDU/TRF to CNL and received in-kind by CNL." The protest in case number P-05-038-112905-HQ alleged that CNL failed "to report in-kind contributions it received from [TDU] through provision of staff, personnel, TDU website space and computer, data and telephone service," and through shared space, employees and volunteers.
CNL's reports listed "picnic expenses" of $108.91 under the heading of "itemized expenses" and an additional $11.20 in "picnic expenses" under the heading "not itemized" expenditures.
The reports identify no expenditures for "advertising" in Convoy Dispatch or on TDU's website. Mike Ruscigno, a CNL representative, told our investigator that CNL did not pay TDU for publicizing CNL events in either forum.
TDU told our investigator that it does not accept or run advertising in Convoy Dispatch or on its website. Thus:
TDU's articles and notices about upcoming events, whether or not they may be "boxed" on the page, are just that: articles and notices. They are not advertising. TDU promotes events that it supports. It promotes only events that it supports, without seeking permission or authorization from anyone, and such promotion is not conditional on payment by anyone. Such promotion does not constitute "advertising." It is TDU's free speech right to promote causes that it supports.
Our field audit demonstrated that TDU maintains separate accounting for campaign-related and non-campaign-related expenditures. "TDU-E" is the designation TDU gives to campaign-related contributions and expenditures. During the campaign period, TDU states that it funds all expenditures for Convoy Dispatch and its website from the TDU-E account, and our field audit bears this statement out. Expenditures for Convoy Dispatch and the TDU website are reported on TDU's CCER.
Investigation also showed that two flyers promoting CNL events were developed by a TDU staff member. The employee time expended in this endeavor was recorded to the TDU-E account and funded from permissible campaign contributions. The in-kind contribution of these flyers was not reported by TDU or CNL.
Investigation further showed no sharing of office space or equipment, as TDU is headquartered in Michigan while CNL is based in New Jersey. However, Rachel Parsons, a staff member of TDU, prepared the CCER reports of both organizations. She did so on a volunteer basis, performing the work on weekday evenings and weekends.
Analysis
Article XI, Section 2(c) of the Rules requires campaign contribution and expenditure reports from "[e]very independent committee which has received or solicited contributions in excess of $1,000, whether of money or of any other thing of value, or made expenditures in excess of $1,000, whether of money or of any other thing of value, where the purpose, object or foreseeable effect of any such contribution or expenditure is to influence the election of one or more International Officer candidates, whether or not any such candidate is as yet declared, accredited or nominated."
Only members may make campaign contributions (Article XI, Section 1(b)(4)), and such contributions may not exceed specific dollar limits. Article XI, Section 1(b)(12).
Audit revealed that CNL accounted for its expenditures for the "campaign-related gatherings" in question in this protest. CNL also satisfied its obligations by reporting its contributions and expenditures properly.
Investigation also showed that CNL and TDU do not share office space, equipment, or employees. We find that Parsons' activity in preparing the CCERs of both organizations was on her "personal free time" within the meaning of Article XI, Section 1(b)(10) of the Rules and for which no reporting is required.
Regarding the articles and notices about CNL events published in Convoy Dispatch and on TDU's website, audit found that TDU accounted for these expenditures and reported them on its CCER. TDU satisfied its reporting requirement on the contributions side of the ledger by properly reporting the contributions it received from members and assigning them to the TDU-E account. It further satisfied its reporting obligation on the expenditure side by allocating to the same campaign account the costs associated with production of Convoy Dispatch, its website, and the flyers it developed promoting the CNL events.
TDU has paid the entire expense of the publications at issue here (including all of the Convoy Dispatch) with verified, eligible campaign contributions and has reported them as campaign-related expenditures. However, on the facts presented here, it would be redundant to require that such activity by TDU, paid for with proper campaign contributions, be described again on TDU's CCER as an in-kind contribution to CNL, the subject of the publication. Article XI of the Rules requires reporting of contributions when they are first made for the benefit of a candidate, slate or independent committee, and those contributions are scrutinized for compliance with the Rules' restrictions on sources and dollar amounts. Article XI also requires candidates, slates and independent committees to report their expenditures. In this case, TDU has reported its expenditures on Convoy Dispatch and the website, and we decline to hold, as the protestor requests, that publishing information about CNL's gatherings in TDU's newspaper and website were redundantly reportable as contributions to CNL. Nothing in the Rules requires a reporting candidate, slate or independent committee to break down how much of its own campaign-related activity is allocable to the benefit of other identifiable candidates or committees.
For the same reason, it would be redundant - and therefore beyond what the Rules demand - to require that CNL report on its CCER receipt of an in-kind benefit received from TDU, where that benefit was funded by eligible, verified contributions made to TDU.
We distinguish this case from that of a member who makes an in-kind contribution to a candidate, slate, or independent committee. Had a member paid to print the notices at issue here from personal funds, the money spent on that printing would be a campaign contribution by the member, reportable on the CCER of the campaign or independent committee that received it, and chargeable against the member's contribution limitation. See Rules, Definitions, Section 5(a) and Article XI, Section 1(b)(12). Unlike the situation presented here, such an in-kind contribution by an individual member would not be using already-verified, eligible campaign contributions to print the material. In contrast, TDU here used verified, eligible contributions to publish campaign material, and it properly reported the expenditure. TDU's expenditure to promote CNL events therefore is not a contribution of new money or value into the campaign system that would require additional disclosure by TDU. Although CNL gained an in-kind benefit from TDU's activity, the Rules do not require either that CNL report receipt or TDU report contribution of that benefit because the funding source used to create the thing of value was verified, eligible contributions from members.1
We hold that TDU did not violate the Rules by failing to report as a contribution to CNL the staff time expended in developing flyers supporting CNL's events or the "value" of publication in Convoy Dispatch or on the TDU website, because TDU paid for those things of value from legitimate campaign contributions and properly reported its activities. Likewise, we hold that CNL did not violate the Rules by failing to report receipt of such transfer from TDU.
Accordingly, we DENY this protest.
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 Supervisor 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 the parties, as well as upon the Election Supervisor for the International Brotherhood of Teamsters, 1725 K Street, N.W., Suite 1400, Washington, D.C. 20007-5135, all within the time prescribed above. A copy of the protest must accompany the request for hearing.
Richard W. Mark
Election Supervisor
cc: Kenneth Conboy
2006 ESD 54
1 The facts here also have nothing in common with the situation of a contribution, cash or in-kind, from a prohibited source.
DISTRIBUTION LIST (BY EMAIL UNLESS OTHERWISE SPECIFIED):
Bradley T. Raymond, General Counsel
International Brotherhood of Teamsters
25 Louisiana Avenue, NW
Washington, DC 20001-2198
Email: braymond@teamster.org
Sarah Riger, Staff Attorney
International Brotherhood of Teamsters
25 Louisiana Avenue, NW
Washington, DC 20001-2198
Email: sriger@teamster.org
David J. Hoffa, Esq.
Hoffa 2006
30300 Northwestern Highway, Suite 324
Farmington Hills, MI 48834
David@hoffapllc.com
Barbara Harvey
645 Griswold Street
Suite 3060
Detroit, MI 48226
blmharvey@sbcglobal.net
Ken Paff
Teamsters for a Democratic Union
P.O. Box 10128
Detroit, MI 48210
ken@tdu.org
Stephen Ostrach
1863 Pioneer Parkway East, #217
Springfield, OR 97477-3907
saostrach@gmail.com
Judith Brown Chomsky
P.O. Box 29726
Elkins Park, PA 19027
jchomsky@igc.org
Michael Ruscigno
c/o Committee for New Leadership
P.O. Box 3392
Bayonne, NJ 07002
unionstarship@msn.com
Steven R. Newmark
Office of the Election Supervisor
1725 K Street, NW Suite 1400
Washington, DC 20005
snewmark@ibtvote.org
Bruce Dubinsky
Klausner Dubinsky & Associates
4520 East West Hwy, Suite 640
Bethesda, MD 20814
BDubinsky@kd-cpa.com
Jeffrey Ellison
510 Highland Avenue, #325
Milford, MI 48381
EllisonEsq@aol.com