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Office of the Election Supervisor for the International Brotherhood of Teamsters

IN RE: CERTAIN CAMPAIGN CONTRIBUTIONS BY OFFICERS AND EMPLOYEES OF LOCAL UNION 853
Protest Decision 2006 ESD 341
Issued: August 23, 2006

Pursuant to authority granted under Article I, Article XI, Section 2(b)(2), and Article XIII, Section 4, the Election Supervisor conducted an investigation of certain campaign contributions made by officers and employees of Local Union 853.

Election Supervisor forensic accountants Bruce Dubinsky and Keith Neus and representatives Christine Mrak, Maureen Geraghty, and Jocelyn Yee investigated this matter.

Findings of Fact

1. The Rules' Framework.

The Rules prohibit contributions to the campaign of any candidate or slate of candidates by employers, unions, and non-members. The Rules permit campaign contributions only by members; each member who is not a candidate for International office may contribute no more than $2,000 for use in the International officer election. Only contributions properly solicited, made, accepted and reported under the Rules may be spent or used by candidates for the 2005-2006 International Union Delegate and Officer Election.

Every candidate for International office is required to file periodic reports that disclose, among other things, the name, local union number and other identifying information of each person who makes a contribution to that candidate and the amount of each such contribution. Candidate slates are subject to the same reporting requirements as individual candidates. Independent committees that have received or expended more than $1,000 for the purpose of influencing the International officer election must also file contribution and expenditure reports.

We routinely conduct investigations to verify that contributions reported by candidates and slates were actually made by the members to whom the contributions have been attributed. In this case, we mailed a series of letters in late June 2006 to members identified on filed campaign finance reports as having made campaign contributions to one or more candidates. Each letter listed the campaign contribution(s) reported for that member, including the reported contribution date, amount, candidate, and method of payment. The letter requested that the member either affirm or correct the information.

Information received in response to these contribution inquiries caused us to investigate contributions made by full-time officers and business agents of Local Union 853. The investigation included extensive document requests and interviews and sworn depositions of witnesses.

2. The "Rome A. Aloise Campaign '98" account.

2.a. History and practice of the Campaign '98 account.

Local Union 853 maintains offices in San Leandro, California. Rome Aloise is secretary-treasurer of the local union, a position he has held since 1991. Officers of the local union are elected every 3 years. Business agents who are not local union officers are appointed to their positions by the local union secretary-treasurer, subject to confirmation by the local union executive board. Business agents may be removed from their positions by action of the executive board.

Aloise told our investigators that, pre-dating his tenure as principal officer of Local Union 853, officers and business agents made periodic contributions to a bank account established for the purpose of funding the re-election campaigns of incumbent local union officers. When Aloise assumed the post of secretary-treasurer, he continued the practice by establishing a bank account in his name. The first such account Aloise established was held by Bank of America. The second and current account is held at United Labor Bank under the name "Rome A. Aloise Campaign '98" ("Campaign '98 account"). The funds in the account do not accrue interest. Aloise and local union president John Becker, Sr. are the only signers on the Campaign '98 account, although Becker has never made a deposit to or signed a check drawn on the account.

Investigation showed that the Campaign '98 account receives funds from elected officers and full-time business agents of the local union. The bulk of funds contributed to the account are in the form of local union payroll checks issued for vacation pay and made payable to a particular full-time officer or business agent, who then endorses the back of the check and turns it over to Aloise for deposit in the account.

Aloise stated that contributions to the Campaign '98 account are voluntary, but further characterized the contributions by business agents as "job insurance." Aloise elaborated that when a new business agent is hired, he "explain[s] what we do politically and how we do it."

Q And what do you explain to them? … [W]hat do you tell them?
A That they basically serve at the pleasure of the executive board, and as long as they do their job and the executive board gets re-elected, they're going to have a job. If the executive board does not get re-elected, they may not have a job.
Q How does that play in with the campaign account?
A Well, it behooves them to make sure that the current executive board that hired them gets re-elected.

No full-time officer or business agent has declined to contribute to the campaign account.

2.b. Purpose of the Campaign '98 account.

Aloise stated that the purpose of the Campaign '98 account was to collect funds for use in local officer elections:

Q [T]he purpose of the Campaign '98 account was for local elections, was that correct?
A That was the reason for its inception and its … continuance.

Although collected for the purpose of supporting the election of local union officers, Aloise used funds contributed to the account to make a charitable contribution and to contribute to the Hoffa slate in the 2001 IBT international officer election.

Although each local union election since Aloise was first elected in 1992 had been uncontested, Aloise stated that funds from the Campaign '98 account were spent in the run-up to local union nominations meetings to gather endorsements from members and to print slate cards and campaign flyers in the event the local union election was contested. Accordingly, funds have been collected from officers and full-time business agents through the 1990s and the current decade

Aloise further contended that, although the money is pooled in the Campaign '98 account, it nonetheless belongs to the individuals who contributed it. However, Aloise does not maintain records that demonstrate the total amount contributed by each individual over time or the portion of each individual's total contributions that has been expended. Further, our investigation revealed no instance in which an amount deposited in the campaign account was refunded to the person who contributed it. In particular, no retiring or resigning full-time officer or business agent who contributed to the account has received a refund of the unspent portion of his contributions. For example, Mike Killean, former principal officer of Local Union 921 who became a business agent of Local Union 853 after the 2002 merger of the 2 unions, contributed $826.84 to the Campaign '98 account on January 30, 2003. He retired in April 2003 and received no refund of his contribution.

Investigation showed that Aloise, on one occasion, permitted Pete Easton, a full-time business agent of Local Union 853, to borrow the equivalent of 1 week's vacation pay from the account because of personal financial exigency. Easton confirmed to our investigators that he asked to borrow $1,000 or less from the fund "6 or 7 years ago" and that he repaid the amount he borrowed over several months. No interest was assessed on the sum Easton received and repaid.

John Becker, Sr., a full-time business agent since 1994 and local union president since 1995, told our investigators that the practice among officers and business agents employed full-time by the local union was to contribute 1 week's vacation pay the year before and again the year of local union elections. Local union elections are held every 3 years. Becker characterized the year following the election year as a "bye" year in which no contributions of vacation pay were expected or made. Since the time Becker commenced employment with Local Union 853, local union elections have been held 4 times, in 1995, 1998, 2001 and 2004. Becker's description of the practice for contributing vacation pay was that such contributions were made in 1994 and 1995 for the 1995 election, 1997 and 1998 for the 1998 election, 2000 and 2001 for the 2001 election, and 2003 and 2004 for the 2004 election. According to the practice Becker described, 1996, 1999, and 2002 were "bye" years during which no contributions were expected or made.

Becker's description of the practice for contributing vacation pay to the Campaign '98 account indicated that 2005 was to be a "bye" year as well. Despite this practice, the fund participants contributed vacation pay in 2005, our investigation showed, because of the pending International officer election.

Aloise testified that he recognized the tremendous need candidates for International office had to raise funds, and he focused on the political benefits that would come to Local Union 853 and to himself from making contributions to a variety of candidates for International office. Accordingly, Aloise stated that he and contributors to the Campaign '98 account discussed using the funds from that account to make campaign contributions to candidates for International office:

[W]e had discussed the fact that we wanted to spread our contributions around to the various candidates because we thought that politically it was better for the local to do that and frankly better politically for me.
***
Q … You said a few minutes ago when you were deciding which candidates to give to that it would be better politically for you guys to spread the contributions around. What did you mean by that?
A Just what I said. It's better politically for us to do so.
***
Q Tell me what do you mean by that, tell me how it would help you.
A We are a very political organization as you are well aware and everybody on the national campaign has pressure to raise money. So as in any other political campaign, contributors probably garner more favor than people that don't contribute. So within the politics of our organization there's people that may be influential in one form or another for the local and for our members and for what we do that would be important to the local so spreading it around makes more sense than dumping it into one candidates' fundraising, although ultimately it all goes to the same place as I understand it any way.
***
Q Let's talk about that for a second. You said that there's pressure to raise money. What do you mean by pressure to raise money?
A Well, all the candidates are - have expenses associated with the campaign so there's natural pressure, it's an unpleasant task for any politician to raise money so I'm characterizing it as pressure. Maybe people like to do it. I wouldn't.
***
Q [T]ell me about the process that you went through in deciding … which candidates would get money from the Campaign '98 account when you were spreading it around?
A I work quite often with many of these -- the incumbent candidates in any event and some of them had various divisions, some of them are influential in certain departments. Local 853 is a very diverse, multi-industry local union so we cross almost every department with the exception of UPS and freight, car haul and the International. So there's times where we need assistance from either the division or the department. In some cases that was a consideration. In other cases if they were from the West might make a difference, things of that nature.
Q So these incumbent candidates, these are the ones that you personally worked with?
A Yes.
Q And then did you come up in your mind with a list of who this money was going to go to?
A Yes.
Q And then was that communicated to anybody at Local 853?
A I think I discussed very generally with all of these people that that's what we were going to do.

Contemporaneous with the decision to use Campaign '98 funds to contribute to candidates for International office, 2 things happened. First, the local union executive board voted to add one week to the annual vacation entitlement all officers and business agents employed full-time by the local union received. Second, despite the practice indicating that 2005 would be a "bye" year for contributions to the Campaign '98 account, most full-time officers and business agents contributed 1 week of vacation pay to the Campaign '98 account in 2005.

2.b.1. Increase in vacation schedule. The executive board action increasing vacation entitlement took place November 8, 2004. Minutes of the meeting showed the following:

9. Motion made by Secretary-Treasurer Rome Aloise and seconded by Trustee Jeff Belunza to grant all full time officers and Business Agents who have worked full time for the Local, other locals, or within the industry, for six (6) years or more an additional week of vacation, for a maximum of five (5) weeks per year. Motion carried.

Investigation showed that, in 2004 and preceding years, the vacation schedule for full-time officers and business agents of Local Union 853 was graduated by years of service as follows: employees with fewer than 5 years of service were granted 3 weeks of vacation; employees with greater years of service were granted 4 weeks. The executive board action taken November 8, 2004 added a tier to the vacation schedule that granted employees with 6 or more years of service 5 weeks of vacation each year. Before the November 8, 2004 executive board action, all current full-time officers and business agents of Local Union 853, based on their individual years of seniority, were already receiving the maximum benefit level of 4 weeks' vacation. As a result of the resolution, their benefits increased to 5 weeks. Local union policy permits employees to accept pay in lieu of time off.

Aloise denied that the vacation allotment was increased to ease the impact of donating one week's vacation pay to the Campaign '98 account in 2005, a year that by practice would have been a "bye" year for such contributions. Instead, Aloise stated that the increase in vacation entitlement was justified by three reasons. First, it was intended to restore certain employees of the local union to the vacation schedule they had previously enjoyed while employed by other local unions. In the past 15 years, Local Union 853 absorbed by merger 4 other local unions and hired at least 4 business agents from those local unions. The earliest pertinent merger, with Local Union 860, occurred in 1994, and resulted in Local Union 853 hiring John Becker. Becker was subsequently elected president of Local Union 853 in 1995, a position he has held since. Becker was allotted 5 weeks of vacation annually at Local Union 860 but when hired by Local Union 853, fell under Local Union 853's vacation policy, which had a maximum allotment of 4 weeks annually. Becker continued at 4 weeks' vacation allotment until the local union executive board changed the policy in November 2004, nearly 11 years after his employment with Local Union 853 began.

The second reason Aloise cited for the increase in vacation entitlement to 5 weeks was his assertion that Local Union 853 lagged behind other local unions in Joint Council 7 in this regard. Aloise said he "called around, I don't recall, I think Local 70, probably Local 490, maybe [Local] 78. I think that's who I would have called, maybe Local 350." Our survey of the local unions Aloise identified showed that full-time officers and business agents at Local Unions 70, 78 and 490 grant a maximum of 4 weeks of vacation annually. Local Union 350 follows the vacation schedules of 2 refuse haulers that employ most of its members and grants 5 weeks of vacation at 15 years of service. None of the local unions Aloise identified grants 5 weeks vacation at 6 years of service.

Finally, Aloise asserted that the local union had recently negotiated 5 weeks of vacation entitlement for some members under its jurisdiction. Aloise cited these improvements in benefits as justification for increasing the vacation allotment for the officers and business agents who won the improvements at the bargaining table.

Review of collective bargaining agreements submitted to us by Aloise did not support that the increased vacation benefits obtained through collective bargaining were recent or comparable to the increase the local union executive board granted in November 2004. Thus, a contract between Teamsters Local Unions 78, 287 315, and 853 and the Aggregates and Concrete Association of Northern California, signed July 27, 2001, provided 3 weeks' vacation after 5 years of employment, 4 weeks' vacation after 10 years, and 5 weeks' vacation after 20 years. A contract between Teamsters Locals 78 and 853 and Berkeley Farms, effective September 1, 2000, provided a 2-tier vacation schedule. The more favorable schedule, for employees hired before September 1985, granted vacation allotments of 3 weeks after 3 years, 4 weeks after 10 years, and 5 weeks after 15 years. The second tier, for later hired employees, granted 3 weeks after 5 years, 4 weeks after 15 years, and 5 weeks after 20. A contract extension signed in June 2003 did not alter the vacation schedule. A third contract, between Local Unions 78, 150, 166, 542, 853, and 986 and Costco, effective February 1, 2004, provided 3 weeks after 5 years, 4 weeks after 10, and 5 weeks after 15. A contract between Local Union 853 and Gillig Corp., effective January 1, 2002, provided 3 weeks of vacation after 5 years' service, 4 weeks after 15, and 5 weeks after 25. The vacation entitlement in the Gillig contract was identical to those in the contracts between Local Union 853 and Southern Wine & Spirits of California, and between Local Union 853 and Young's Market, both of which were effective June 1, 2002.

The final collective bargaining agreement Aloise provided in response to our request for Local Union 853 collective bargaining agreements granting 5 weeks or more vacation was a labor contract covering office clerical employees at Local Union 853. Executed in September 2005, 10 months after the local union executive board approved the increase in vacation entitlement for full-time elected officers and business agents, it provided 3 weeks' vacation after 4 years of employment, 4 weeks after 10 years, and 5 weeks after 14 years.

No collective bargaining agreement Aloise provided gave employees 5 weeks of vacation after only 6 years of service.

Business agents Bob Strelo and Pete Easton told our investigators that they routinely take vacation pay in lieu of time off because they are too busy to take the time off.

2.b.2. The 2005 contributions to the Campaign '98 account.

Officers and business agents employed full-time by Local Union 853 contributed vacation cash-outs to the Campaign '98 account in 2005. These contributions deviated from the practice prevailing historically that no such contributions were expected or made in the year following the year of local union elections.

3. Campaign '98 Account Activity in 2005 and 2006.

3.a. Vacation Cash- Outs and Contributions to International Officer Candidates.

We examined the bank statements for the Campaign '98 account for the past 2 years. That evidence showed that the last deposit to the account in 2004 was made August 23, 2004, 2½ months before the local union executive board raised the vacation entitlement. The balance in the Campaign '98 account after the August 2004 deposit was $15,273.02. Commencing with the first deposit in the Campaign '98 account that occurred after the decision was made to make campaign contributions with Campaign '98 funds to candidates for International office in the 2005-2006 election cycle and after the local union executive board increased the vacation entitlement for all full-time officers and business agents, the activity in the account through July 2006 was as follows:

Date

Vacation Cash-Outs

Campaign contributions to International officer candidates

 

Vacation cash-outs less campaign contributions

3/21/2005

 

 

 

$0.00

3/21/2005

$2,039.33

 

 

$2,039.33

5/12/2005

$794.80

 

 

$2,834.13

5/19/2005

 

$2,500.00

 

$334.13

7/21/2005

$946.08

 

 

$1,280.21

9/14/2005

 

$750.00

 

$530.21

9/29/2005

$895.38

 

 

$1,425.59

9/29/2005

 

$250.00

 

$1,175.59

10/26/2005

$943.49

 

 

$2,119.08

10/27/2005

 

$500.00

 

$1,619.08

10/31/2005

 

$1,000.00

 

$619.08

11/9/2005

 

$1,220.00

 

-$600.92

12/21/2005

$2,023.93

 

 

$1,423.01

1/17/2006

 

$1,000.00

 

$423.01

1/17/2006

 

$1,000.00

 

-$576.99

1/18/2006

 

$1,000.00

 

-$1,576.99

1/18/2006

 

$1,000.00

 

-$2,576.99

1/18/2006

 

$1,000.00

 

-$3,576.99

1/18/2006

 

$1,000.00

 

-$4,576.99

1/18/2006

 

$1,000.00

 

-$5,576.99

1/19/2006

 

$1,000.00

 

-$6,576.99

3/3/2006

 

$1,000.00

 

-$7,576.99

5/1/2006

$2,069.53

 

 

-$5,507.46

6/15/06

$836.81

 

 

-$4,670.65

6/?/06

 

$2,000.00

 

-$6,670.65

7/10/06

$3,823.40

 

 

-$2,847.25

All deposits of vacation cash-outs made to the Campaign '98 account during the 17-month period of March 2005 through July 2006 consisted of checks for vacation pay issued to full-time officers and business agents and signed over by those persons to Aloise for deposit in the account. Thus, the handwritten deposit register Aloise maintained for the Campaign '98 account attributed the March 21, 2005 deposit of $2,039.33 to John Becker, Sr. ($1,280.73) and Antonio Christian ($758.60), the May 12, 2005 deposit of $794.80 to Jesse Casqueiro, the July 21, 2005 deposit of $946.08 to Stu Helfer, the September 29, 2005 deposit of $895.38 to Dan Harrington, the October 26, 2005 deposit of $943.49 to Bo Morgan, and the December 21, 2005 deposit of $2,023.93 to Phil Tarantino ($1,036.34) and Bob Strelo ($987.59). Vacation cash-outs deposited to the Campaign '98 account in 2006 consisted of the following: the sum of $2,096.88 deposited May 1, 2006 was comprised of 2 vacation checks signed over to the account by Jesse Casqueiro ($753.26) and John Becker, Sr. ($1,316.27), the June 15, 2006 deposit of $836.81 was attributed to a vacation cash-out for Pete Easton, and the July 16, 2006 deposit of $3,823.40 was comprised of vacation pay checks from Rome Aloise ($1,746.86), Dan Harrington ($1,171.98), and Stu Helfer ($904.56). The total amount of vacation cash-outs contributed to the Campaign '98 account from March 2005 through July 2006 was $14,372.75 and was funded by vacation cash-outs from 9 full-time officers and business agents.

Expenditures from the Campaign '98 account after May 1, 2005 were as follows.

 On May 19, 2005, Aloise wrote a check in the amount of $2,500.00 to "cash." He gave it to Ronald Horner, the treasurer of the Hoffa-Mack campaign, who cashed it that same day and immediately deposited the cash in the Hoffa-Mack campaign account at the same bank. Aloise stated that he gave the check to Horner for the purpose of paying expenses associated with a fundraiser the Hoffa-Mack campaign had scheduled to conduct on June 7, 2005. The ticket price for the fundraiser was $250 per person. After receiving the cash contribution of $2,500.00, Horner gave Aloise 10 tickets to the fundraiser. Horner filled out the ticket stubs on the fundraiser tickets with the names of 10 officers and business agents of Local Union 853, viz. Rome Aloise, John Becker, Sr., Jesse Casqueiro, Antonio Christian, Pete Easton, Dan Harrington, Stu Helfer, Bo Morgan, Bob Strelo and Steve Zucker and attributed a contribution of $250 to each of these 10 persons. Only 3 of the 10 (Becker, Christian and Casqueiro) had made a contribution to the Campaign '98 account in 2005. Six of the 10 persons to whom the Hoffa-Mack campaign attributed contributions (Aloise, Easton, Harrington, Helfer, Morgan and Strelo) had contributed to the Campaign '98 account at some point in 2001, 2003 or 2004, but all such contributions had been made when the Campaign '98 account's purpose was to support local union elections and before any decision had been made to pool funds in the account for contribution to International officer candidates in the 2005-2006 election cycle. The final person to whom the Hoffa-Mack campaign attributed a $250 contribution, Zucker, was a part-time local union business agent and had never contributed to the Campaign '98 account.

 On September 10, 2005, Aloise wrote a check on the Campaign '98 account in the amount of $750.00 to "Hoffa-Mack." In the memo line of the check, Aloise wrote "5 Dinner Tickets." The Hoffa-Mack campaign held a $150-per-plate dinner on September 23, 2005. The tickets were attributed as campaign contributions from Aloise, Becker, Christian, Easton, and Strelo, although only Becker and Christian had made a contribution to the Campaign '98 account to support International officer candidates. Asked whether, in advance of writing the check, he had discussed with Strelo, Easton, Becker or Christian whether they wanted to attend the fundraiser, Aloise testified that he had "probably" done so. Aloise had no contemporaneous record of those names: he prepared a list noting those individuals as the purported donors shortly before his sworn interview on July 18, 2006. Aloise could not recall if those individuals actually went to the dinner.

 On September 24, 2005, Aloise wrote a check on the Campaign '98 account in the amount of $250.00 to "Hoffa Mack." On the memo line, Aloise wrote "9/24 - Hoffa Breakfast." Ten ticket stubs for the breakfast event bear Aloise's name and local union number. The tickets were attributed as a campaign contribution from Aloise, although Aloise had not contributed to the Campaign '98 account since 2001.

 On October 25, 2005, Aloise wrote a check on the Campaign '98 account in the amount of $500.00 to Antonio Christian, a business agent of Local Union 853. The memo line on the check read "Henry Perry Contribution." Perry is a candidate for International trustee on the Hoffa 2006 slate. Christian's personal check in the same amount was sent to the Perry campaign, which recorded the contribution as made October 26, 2005 and attributed to Christian. Although Christian had turned over a vacation cash-out check of $758.60 to Aloise for deposit in the Campaign '98 account on March 21, 2005, campaign contributions funded by that account and attributed to him by the Hoffa-Mack and the Perry campaigns totaled $900 as of October 26, 2005 ($250 for the June 7 dinner, $150 for the September 23 breakfast, and $500 for the Perry contribution), exceeding his vacation cash-out by $141.40.

 On October 28, 2005, Aloise wrote a check on the campaign account in the amount of $1,000.00 to himself. He wrote "Legal & Defense" on the memo line on the check. He deposited the check in his personal checking account and wrote a check on his personal account to Hoffa 2006 in the amount of $1,000.00, designating it as a contribution to the Hoffa campaign's legal and accounting fund. Hoffa 2006 reported the contribution as received on November 18, 2005. Aloise made no contribution to the Campaign '98 account that served as the funding source for the legal and accounting contribution to Hoffa 2006 after the decision was made in Fall 2004 to use Campaign '98 funds to contribute to International officer candidates in the 2005-2006 election cycle.

 On November 3, 2005, Aloise wrote a check on the Campaign '98 account in the amount of $1,220.00 to "Hoffa-Mack-2006." Aloise purchased 40 raffle tickets for a Hoffa-Mack raffle to be conducted in Reno, Nevada on November 19. All of the raffle ticket stubs bore the name "Rome Aloise" and the last 4 digits of Aloise's Social Security number. Aloise was thus credited with a campaign contribution in the amount of $1,220.00, although he had made no contribution to the Campaign '98 account since 2001. The cost of the raffle tickets was $1,200.00. Aloise was unable to state what the remaining $20 in the check was for.

 In January 2006, Aloise distributed 8 checks drawn on the Campaign '98 account to officers and business agents of Local Union 853 (Becker, Casqueiro, Harrington, Helfer, Morgan, Strelo, Tarantino, and Zucker). Each check was in the amount of $1,000. In exchange for the $1,000 check from the campaign account, each recipient gave Aloise a personal check in the same amount, with the payee line left blank. Aloise repeated the process one additional time in February 2006 by issuing a check in the amount of $1,000 to Christian and receiving Christian's personal check in the same amount in return. With the 9 personal checks in the amount of $1,000 each, Aloise filled in the payee line with the name of a candidate for International office or that candidate's campaign organization and mailed or otherwise distributed the campaign contributions. Although the source of the contributions was the pooled Campaign '98 account maintained by Aloise, the contributions were attributed to the individuals who tendered the personal checks. Between the time the decision was made to contribute to International officer candidates using Campaign '98 funds, and the February 2006 date by which Aloise completed the distribution of the $1,000 checks to these persons, only Becker and Tarantino had contributed to the Campaign '98 account in an amount equal to or exceeding $1,000, although 6 others (Casqueiro, Christian, Harrington, Helfer, Morgan and Strelo) had turned over vacation cash-out checks in amounts less than $1,000. The campaign contributions to International officer candidates attributed to Becker totaled $1,400 ($250 for the June 7 dinner, $150 for the September 23 breakfast, and $1,000 for the check swap), exceeding the vacation cash-out check he turned over to Aloise in March 2005 by $119.27. Of Easton and Zucker, the 2 remaining persons with whom Aloise exchanged $1,000 checks in January 2006, Easton had not turned in a vacation cash-out check since early 2004 and Zucker, as a part-time business agent, had never contributed to the Campaign '98 account. Aloise distributed the $9,000 in personal checks to the Hoffa campaign or to individual candidates who are on the Hoffa slate: $3,000 to Hoffa 2006, $1,000 to Al Hobart, $1,000 to Hoffa Mack, $1,000 to Fred Gegare, $1,000 to John Murphy, $1,000 to Jack Cipriani, and $1,000 to Hoffa-Johnson.

 In May 2006, Aloise conducted another contribution swap, writing a check on the Campaign '98 account in the amount of $500 to Bo Morgan in exchange for Morgan's personal check in the same amount. Morgan's check was subsequently contributed to Ferline Buie, a candidate for International Trustee on the Hoffa 2006 slate. Morgan's campaign contribution to Buie exceeded the vacation cash-out checks he had turned over to Aloise in 2005 and 2006 ($250 for June 7 dinner, $1,000 January check swap, and $500 May check swap against $943.49 vacation cash-out check deposited October 26, 2005).

In June 2006, Aloise withdrew $2,000.00 from the Campaign '98 account. He told our investigators that he took the funds to the 27th IBT convention in Las Vegas for convention related expenses, including meals for Local 853 delegates, alternates, retirees and guests. Aloise has no receipts to verify such expenditures.

The total campaign contributions made to International officer candidates or campaigns in the current election cycle, for which an accounting can be made from the Campaign '98 account, is $15,720.00, through July 2006. In the aggregate, these expenditures exceed the amount of vacation cash-outs deposited the Campaign '98 account in 2005 and 2006 by $2,847.45.

Investigation showed that funds from the Campaign '98 account had been contributed to International officer candidates twice in 2001. Thus, a check was drawn to "Ron McClain Campaign" in the amount of $500.00 on August 18, 2001. McClain was a candidate for International Trustee on the Hoffa 2001 slate. A second check was drawn to "Hoffa Slate Re-Election Team" in the amount of $2,361.04 on August 30, 2001. The 2005-2006 contributions to International officer candidates from the account exceeded those of 2001 by $12,858.96, a factor of 5.

With respect to campaign contributions attributed to individuals in the current election cycle, the contributions identified in the following table were made from Campaign '98 funds that were deposited in that account after the decision was made to contribute to International officer candidates.

Date

Name

Contribution amount

5/21/2005

John Becker, Sr.

$250.00

5/21/2005

Antonio Christian

$250.00

5/21/2005

Jesse Casqueiro

$250.00

9/10/2005

John Becker, Sr.

$150.00

9/10/2005

Antonio Christian

$150.00

10/25/2005

Antonio Christian

$358.60

1/12/2006

John Becker, Sr.

$880.73

1/12/2006

Jesse Casqueiro

$544.80

1/12/2006

Stu Helfer

$946.08

1/12/2006

Dan Harrington

$895.38

1/12/2006

Bo Morgan

$943.49

1/12/2006

Phil Tarantino

$1,000.00

1/12/2006

Bob Strelo

$987.59

2/28/2006

Antonio Christian

$358.60

 

 

$7,965.27

The balance of the campaign contributions made to International officer candidates from Campaign '98 funds ($7,754.73) were made from funds previously deposited in the Campaign '98 account for a different purpose, i.e., to accumulate funds for the purpose of local union officer elections. Some untraceable portion of this sum consists of contributions from business agents dating back fifteen years.

All vacation cash-outs deposited in the Campaign '98 account in 2005 were made during what the practice showed was a "bye" year when no such deposits historically were expected or made. Further, the 2005 vacation cash-outs deposited in the Campaign '98 account were made from the additional week of vacation entitlement the local union executive board granted in November 2004.

The deposits made to the Campaign '98 account in 2006, which practice indicates is a year during which officers and business agents employed full-time by the local union would contribute vacation cash-outs to the account, occurred after all International officer campaign contributions discussed above had been made.

3.b. Tarantino's raffle win.

The Hoffa-Mack campaign conducted a $50 per ticket fundraising raffle at Local Union 287 on May 1, 2006. Tarantino's $1,000 personal check, for which Aloise had reimbursed him from Campaign '98 funds in January 2006, purchased 20 tickets to that raffle. The winning ticket Chuck Mack's granddaughter drew from the raffle barrel bore Tarantino's name. By prior agreement among Local 853 business agents, Tarantino delivered the first prize, some $10,000, to Aloise, who deposited it in the Campaign '98 account on May 1.

3.c. Stephen Zucker.

Zucker works full-time for the San Francisco Chronicle and part-time as a business agent for Local Union 853. He told our investigator that he averages 10 hours per week performing business agent duties, for which the local union pays him a wage and provides car allowance and cell phone expense reimbursement. He receives no other benefits from the local union, including vacation pay. He told our investigator that he had never contributed to the Campaign '98 account or knew it existed.

Zucker stated that in January 2006 he wrote a personal check in the amount of $1,000 to the Hoffa 2006 campaign. He further stated that, on a day that month he could not recall, Aloise gave him a check in the amount of $1,000 when he was at the union hall. Zucker told our investigator that he stuck the check in his pocket "without really looking at it or asking any questions." When he got home, Zucker pulled the check from his pocket and concluded that Aloise "was giving me my money back" for the Hoffa contribution Zucker had made. Zucker said he next discussed the check with Aloise in March 2006 at the union hall. Zucker asked Aloise why he had given Zucker the check. Aloise said it was a "mistake" but, according to Zucker, did not explain the nature of the mistake or request reimbursement. Zucker has not paid the money back.

Aloise told our investigator that he gave Zucker the check in January 2006 in exchange for Zucker's personal check with blank payee in the same amount. Aloise stated that some 2 weeks later, he realized that Zucker was not a contributor to the Campaign '98 account; he characterized his epiphany as a "2 in the morning thing." Aloise stated that he asked Zucker to repay the $1,000 but that Zucker has yet to do so. Aloise explained that Zucker was in active treatment for cancer in January, February and March 2006, and Aloise therefore did not press for reimbursement at that time.

4. Local union administration of contribution scheme.

Investigation showed that the Campaign '98 account was administered using local union personnel, equipment and material. Local Union 853 maintains a direct-deposit system for its employees. Under this system, paychecks are deposited by electronic funds transfer to the bank account each employee designates. Employees who accept pay in lieu of vacation time off are also paid for the vacation cash-out by direct deposit. However, full-time officers and business agents who sign over vacation pay to the campaign fund are issued paychecks for this purpose.

Prior to our investigation, the bookkeeper for Local Union 853 maintained a record in the local union's computerized accounting system that identified the employees who had made contributions of vacation pay to the Campaign '98 account in a given calendar year. Thus, the bookkeeper characterized the purpose of each vacation cash-out paycheck that was used to contribute to the Campaign '98 account as "1 Week Vac. Cash Out F." Aloise received our notice of inquiry in this matter on July 13, 2006; that same day he spoke to the bookkeeper about the records related to vacation cash-outs. Forensic analysis of Local Union 853's computerized accounting system showed that, on the afternoon of July 13, the bookkeeper went into the computerized accounting system and changed the characterization of the purpose of the paycheck to read "1 Week Vac. Cash Out," deleting the "F." Vacation cash-outs that full-time officers and business agents did not contribute to the campaign account did not carry an "F" designation in the bookkeeper's characterization of the transaction. Aloise told our investigators that he did not know whether the "F" referred to the campaign fund. However, he assumed that the reason the bookkeeper maintained a record of which vacation cash-out checks were contributed to the campaign account was to insure that employees did not mistakenly contribute more than 1 week of vacation pay each year.

Investigation also showed that the address and telephone number listed on the Campaign '98 account's checks and bank statements are those of Local Union 853 and that bank statements are received at the local union's offices.

5. Involvement of Hoffa campaign in investigation.

At the outset of our investigation, counsel for the Hoffa campaign sought to appear as co-counsel for Local Union 853 and all witnesses to be interviewed and deposed. We rejected the appearance, citing the apparent conflict of interest of counsel's continued representation of the Hoffa campaign and his attempt also to represent the contributors to that campaign in our inquiry. Counsel thereafter appeared as co-counsel only for Ronald Horner, the treasurer of the Hoffa-Mack campaign, whom we deposed. In addition, counsel presented the position of the Hoffa campaign as follows:

[A]t this time, we are unaware of any funds received by Hoffa 2006 General or Legal and Accounting that were not completely verified through the CCER system set up by your office. At this time, we have no reason to believe that there are any issues with any funds provided by all funds are verified.

That being said, if your investigation determines otherwise, (i.e., funds that were improperly raised, held, accounted for or verified), then Hoffa 2006 will cooperate fully and completely with any process that will resolve any such situation, including without limitation, return of such funds.

In return, we would expect a "heads up" on any related developments so that any possible situation can be rectified quickly and without drama.

Analysis

On the facts presented here, we find as follows. First, we conclude that all contributions made to candidates for International office directly from the Campaign '98 account or from individuals who were simultaneously or subsequently reimbursed for their contributions from Campaign '98 funds violated the Rules. Second, on a basis independent from the first, we conclude that all such contributions were impermissible under the Rules because they were Local Union 853 funds. The rationale supporting these conclusions follows.

The Rules mandate that only campaign contributions to candidates for International office that "are properly solicited, made, accepted and reported under these Rules may be expended or used by candidates, slates or independent committees" for the 2005-2006 election. Funds may not be contributed to a candidate for International office in the current, 2005-2006 election cycle that were not solicited or made for that purpose. This point is emphasized by the Rules' definition of "campaign contribution" as the "direct or indirect contribution of money or other thing of value where the purpose, object or foreseeable effect of that contribution is to influence, positively or negatively, the election of a candidate for … International Officer position." Definition 5, in relevant part. Implicit in this definition is that funds solicited or raised for a purpose other than election of a candidate in the current election may not be converted to permissible campaign contributions under the Rules.

The Rules became effective May 1, 2005, per Article XVI. Funds solicited from and contributed by members on or after that date are presumptively permissible under the Rules. Funds solicited from and contributed by members before the date the Rules became effective may be permitted, but only if they were solicited from and contributed by members in order to influence the election of a candidate for International office in the current election cycle, are documented in accordance with the Rules, and meet the source and amount limits the Rules impose.

The principle that current campaigns may be supported only by current contributions made for the purpose of providing that support serves an important democratic objective by reducing the advantage an incumbent might otherwise enjoy in the effort to raise funds to conduct a campaign for International office. Were a candidate permitted to use funds in the current election cycle that were, for example, raised for but not spent in the previous election, the candidate would reap two distinct advantages not available to candidates who lacked such a resource. First and most obviously, the candidate able to draw on previously raised funds would have greater financial wherewithal to carry the campaign, build support, develop and deliver the message, and engage members, when compared with the ability of non-incumbent or insurgent candidates. Second, the effect of such a "head start" in fundraising would be anti-democratic in that it would tend to foreclose an electoral run by a would-be candidate who lacked the resource of a ready-made campaign fund. Electoral choice was established in the Consent Order as a principal means to free the IBT from the influence of organized crime, and the Rules' requirement that campaign contributions be solicited and made to influence the election of a candidate in the current election cycle serves to enhance and protect electoral choice for the purpose the Consent Order first envisioned.

Just as the Rules do not allow a candidate in the current cycle to use funds raised but not spent in the previous election, so too the Rules prohibit contribution of funds to a candidate from a pool of funds that was initially raised for a different purpose. The Rules' definition of "campaign contribution" as a financial contribution that has the purpose of electing a current candidate makes this point. As only members are permitted to make contributions under the Rules, the contribution is made when the member releases the money from his/her control for the purpose the member intended when the funds were released.

Central to this case is the funding and use of the Campaign '98 account, which we term a pooled account. The Rules do not prohibit pooled accounts. Indeed, Article XI, Section 1(b)(9) permits candidates to accept contributions from "caucuses or groups of Union members [and] independent committees, … provided that such caucus, group of Union members [or] independent committee … is itself financed exclusively from contributions that are permitted and properly reported under these Rules." To be permissible under the Rules, then, contributions from a pooled account must 1) be from members permitted to make campaign contributions (i.e., members in good standing who have not exceeded the maximum individual contribution amount), and 2) be "campaign contributions" as the Rules define them, viz., contributions made for the "purpose, object or foreseeable effect … to influence … the election of a candidate for … International Office position." If the pooled account is comprised of contributions that satisfy these twin criteria, and records are maintained that will establish this fact, a candidate may properly accept campaign contributions from the pooled account.

The Campaign '98 account fails this test. The Campaign '98 account was established and funded as a pooled account to develop and maintain a campaign war chest for the triennial election of officers of Local Union 853, not to make campaign contributions to candidates for International office in the current election cycle. The funds in a pooled account may not permissibly be contributed to a candidate for International office if they were solicited and raised for a different purpose, such as funding a local union election campaign, because the donor's purpose in contributing the funds in the first instance cannot be changed after the fact to a purpose permitted by the Rules. To permit otherwise would erase the Rules' requirement that current candidates may accept and use contributions made only for that purpose and would establish a new principle allowing candidates to receive contributions that were made for another, unrelated purpose.

Funds deposited for one purpose in a pooled account may, however, be maintained in that account with funds solicited and deposited for the purpose of influencing the election of a candidate for International office, but only if they are segregated from each other so that funds raised for the original purpose are not contributed to candidates for International office in the current election, and satisfactory records are maintained that document the segregation of the funds.

The Campaign '98 account did none of these things. Campaign contributions were made to candidates for International office that were deposited in the Campaign '98 account for the purpose of funding a local union officer campaign. Although vacation cash-outs were deposited in the Campaign '98 account after the purpose of the account was expanded to include making campaign contributions to candidates for International office, the manager of the account, Aloise, made campaign contributions from the Campaign '98 account with funds that had been deposited in the account at a time when the fund's purpose was to support local union officer election campaigns. Equally, Aloise did not segregate the funds that were deposited in the account for the original purpose from the funds deposited thereafter nor did he maintain records by which the segregation of such funds could be demonstrated. The proof establishing this conclusion is that campaign contributions made to International officer candidates were attributed to members who made no deposits to the Campaign '98 account after the purpose of the account was broadened to include the International officer election.

The chief example is Aloise himself. According to records he maintained, Aloise last contributed to the Campaign '98 account in 2001. In Fall 2004, the purpose of the account was amended to include funding International officer campaigns. Aloise made campaign contributions in his own name to the Hoffa-Mack campaign directly from the Campaign '98 account on May 21, September 10, September 24, October 28, and November 3, 2005, even though he had made no deposits in the Campaign '98 account for the purpose of supporting candidates for International office. None of these contributions was permissible because Aloise did not make any contributions to the pooled account for the purpose of supporting the campaigns of International officer candidates. There is no record basis on which Aloise could designate those contributions as his own to the Hoffa-Mack campaign because he did not maintain any records that would show the dollar value of his previous contributions to the Campaign '98 account, after subtracting previous expenditures, that remained at the time he made those contributions.

Except for Tarantino, whose January 2006 contribution to Hoffa-Mack was less than his vacation cash-out deposited in the Campaign '98 account in December 2005, the campaign contributions all participants made to International officer candidates exceeded the sums deposited in the Campaign '98 account in their names after the purpose of the account was changed in Fall 2004. Thus, Becker, Casqueiro, Christian, Easton, Harrington, Helfer, Morgan, and Strelo all had campaign contributions to International officer candidates attributed to them that exceeded the post-Fall 2004 deposits of vacation cash-outs they made to the Campaign '98 account.

This is especially true for Zucker, who never contributed anything to the Campaign '98 account and did not even know it existed. Zucker received a check for $1,000 from Aloise in January 2006 in exchange for Zucker's personal check in the same amount, payee blank. Such an exchange is a poorly disguised effort to launder funds into the Hoffa-Mack campaign that was not a contribution from but was nonetheless attributed to Zucker. Giving a member money not his own to contribute to a candidate is a way for the funding source to try to circumvent the $2,000 contribution limit the Rules impose. It is therefore a blatant violation of the Rules and will not be tolerated. We do not credit Aloise's claim that he did not recall that Zucker was not a contributor to the Campaign '98 account, nor do we credit Aloise's assertion that he wrote a $1,000 check to Zucker by mistake. Instead, we conclude that Aloise's actions in carrying out the check swap with Zucker constituted a knowing and intentional effort to add an additional $1,000 to the Hoffa-Mack campaign that Aloise was unable to contribute himself because he had reached the maximum personal contribution limit.

The use of the Campaign '98 account to reimburse members for campaign contributions reported under their own names violates the Rules. Contributions must be reported in the name of the eligible contributing member and are subject to audit to ensure that funds are not contributed from an improper source and that contribution limits are obeyed. These requirements are not new and are well known to veterans of IBT International Officer elections since at least 1995. The repeated use of this technique suggests an awareness that it is improper. To take one example, if Antonio Christian had a balance in the Campaign '98 account specifically attributed to him in detailed records of that fund, the account could have made a contribution to the Henry Perry campaign. There is no reason for Christian to have made the contribution with his own check and to have that amount reimbursed to him by the Campaign '98 account other than to have Christian appear to be the actual donor while concealing the pooled account as the true source. The reimbursement of individuals out of the Campaign '98 pooled account for contributions ostensibly credited to individual members evades accountability: it is money laundering.

This conclusion holds true for each of the reimbursements detailed in the factual findings. The technique of reimbursing members eligible to contribute could be used to conceal any number of improper funding sources - from employers to ineligible members. As explained below, this scheme was used in part to conceal the use of local union treasury funds to support International office candidates. In Local 20 Business Agents Fund, 2001 EAD 549 (November 8, 2001), aff'd, 01 EAM 108 (November 28, 2001), Election Administrator Wertheimer warned against such abuse, viz.,

[W]e note, as did Election Officer Quindel, that certain practices associated with such funds can lead to difficulties even if the use of union resources is avoided. Thus, for example, such funds can be used in an attempt to avoid the contribution limits applicable to each IBT member. This can occur when a member receives and contributes distributions from such a fund greater than the amount the member has contributed to such fund, and when the member is thus in reality contributing money that finds its source in the earnings of other IBT members who also participate in the fund. … [T]he IBT, local unions and IBT members must guard against [such evasion].

For these reasons, all contributions made to candidates for International office by checks drawn on the Campaign '98 account violated the Rules because they were funded in whole or in part by funds raised for another purpose. All campaign contributions that were reimbursed by Campaign '98 funds violated these same Rules and also are improper evasions of the basic requirement to report contributions in the name of the actual donor.

The facts of this case point to a further evil and abuse of power by local union officials. The frank characterization of the business agent contributions as "job insurance" exposes these payments as inherent in the job. While no one needed to be coerced explicitly to make these payments, it was apparently quite clear to every business agent that a price of the job was to turn vacation pay over to an account over which they had no say or control. The Rules do not prohibit contributions from member-employees to candidates for International office as each member has a right to campaign for and support candidates of his/her choice and even to amass that support in a group or caucus. But the potential for abuse and subtle, unspoken coercion is clear in the case of accounts like the Campaign '98 account. In Rockstroh, P764 (July 11, 1996), Election Officer Quindel found that a business agent fund that was funded through payroll deduction administered by local union violated the Rules. She noted that maintenance of such funds for political purposes is troublesome because of the potential for coercion of contributions:

However, whenever there is a formal fund established and administered through the local union administration, there is a greater chance that employees will feel compelled to make contributions to the fund in order to retain their positions or to curry favor with their employer. For this reason, the Election Officer believes that voluntary political contributions made directly from the [employee] to the International officer are preferable.

Election Administrator Wertheimer echoed this point in Local 20 Business Agents Fund, supra:

[W]ith such funds "there is a greater chance that [local union] employees will feel compelled to make contributions to the fund in order to retain their positions or to curry favor with their employer." We have not found such … compulsion here, but the IBT, local unions and IBT members must guard against [it].

Although no officer or business agent admitted being coerced to surrender vacation cash-outs for deposit in the Campaign '98 account, we find that the involvement of the local union administrative apparatus - use of local union payroll checks, use of local union accounting software to track which staff members had made their annual contributions, and the long hiatus between contributions made by Aloise, the administrator of the fund - suggest that contributions to the Campaign '98 account were required by Aloise, not merely requested. The Rules do not permit a union-employer to compel campaign contributions from employee-members of the union. To guard against such coercion and to assure that contributions are voluntary, campaign contributions from local union member-employees should be made directly to International officer candidates or through a group or caucus that files campaign finance reports in compliance with the Rules, and not via a fund administered by the union-employer.

On the facts presented here, all such contributions also violated the Rules as impermissible union contributions to candidates because they were derived in whole or in part from the increase in vacation allotment the local union executive board granted immediately before the campaign contributions commenced. Article VII, Section 12(c) bars use of union funds "to assist in campaigning." Article XI, Section 1(b)(3) prohibits a labor organization from contributing "anything of value" to a candidate.

We find that the increased vacation allotment the local union executive board approved in November 2004 on Aloise's motion was undertaken to fund the donation of vacation cash-outs in 2005. Several facts support this conclusion. First, none of the reasons cited by Aloise for increasing the vacation allotment withstand scrutiny. Thus, we find the increase was not approved for the purpose of restoring business agents to the vacation allotment they had previously enjoyed at other local unions since the only person to whom that rationale could have applied at the time of the raise, Becker, had been hired at Local Union 853 more than a decade earlier. Moreover, Becker as second ranking elected official in the local union since 1995 was in an advantageous position to influence decisions about compensation and benefits to be provided to staff, yet nothing was done to increase the entitlement until the eve of the 2005-2006 International officer election cycle. In addition, there is no evidence of a concerted effort or protracted debate as to whether to raise the entitlement. Accordingly, we reject Aloise's suggestion that the entitlement was raised for this reason.

We also reject Aloise's contention that the benefit was raised to bring Local Union 853 in line with other local unions in Joint Council 7. Three of the four local unions Aloise cited granted a maximum of 4 weeks' vacation; the vacation schedule of the fourth is tied to collective bargaining agreements that grant 5 weeks of vacation after 15 years of service, not the 6 years stated in Local Union 853's revised policy.

Finally, Aloise's argument fails scrutiny that the benefit was raised because Local Union 853 had negotiated 5 weeks of vacation for many of its members. None of the contracts he provided granted 5 weeks of vacation after only 6 years of service.

On the other hand, the timing of the increase coincides with two significant facts. First, Aloise's testimony shows that he was keenly aware of the need candidates for International office had to raise funds as well as the political benefit that would come to his local union and himself if he could deliver significant contributions. Accordingly, the participants in the Campaign '98 account decided to use account funds to contribute to 2006 International officer candidates. Second, to facilitate such contributions, participants would be expected to contribute vacation cash-outs to the Campaign '98 account in 2005, a year in which, according to practice, no vacation cash-outs would otherwise be expected. These facts compel us to conclude that the increase in vacation entitlement was undertaken directly to provide a funding mechanism for the campaign contributions to International officer candidates.

Such a pass-through of union funds to a candidate for union office violates the Rules. The case of Thompson, P1025 (November 1, 1996), aff'd, 96 EAM 268 (November 12, 1996), considered a scheme to generate campaign funds by granting raises to business agents, who in turn donated the raises to the candidate. The Election Officer found that the across-the-board increase "was not a bona fide raise, but was an improper scheme to use local union monies to support candidates" for International office.

In Hodgson v. UMWA, 344 F. Supp. 17 (D.D.C. 1972), the district court found that the international union's two across-the-board salary increases for officers ($1,000.00) and employees ($500.00) during the election period for international officers were intended to influence the outcome of the election and constituted improper union contributions. In reaching its decision, the court relied on the fact that a substantial majority of officers and employees made identical campaign contributions to UMWA President Boyle's campaign shortly after receiving the raises. Officers uniformly contributed $1,000.00 and staff uniformly contributed $500.00 to Boyles' campaign and many contributions were received by the campaign office on the same date. As evidence that the raises violated 401(g) of the LMRDA, the court cited evidence the UMWA had granted both raises in an 8 month period after not granting any raises for almost four years. The Court also rejected the union's argument that the impetus for the wages was contractual wage increases gained for miners from coal operators because the evidence showed miners had received several hourly wage increases over a 4 year period without a corresponding increase in wages of international officers or employees.

The Thompson and Hodgson cases control here. The across-the-board increases in vacation entitlement granted on the eve of contribution of vacation pay to International officer candidates constitute an impermissible contribution of union funds to those candidates, where evidence shows no legitimate explanation for the increase.

Finally, we find that administration of the Campaign '98 account was facilitated by union personnel and facilities, in violation of the Rules. Thus, the account's use of the local union address and phone number, the receipt of bank statements at the local union hall, and the identification in the local union's accounting software of the officers and business agents who had made annual contributions of vacation pay to the Campaign '98 account are examples of use of union facilities and personnel to assist in campaigning. The Rules do not permit such use of resources. Rockstroh, P764 (July 11, 1996); Richards, 2000 EAD 5 (August 1, 2000), aff'd, 00 EAM 1 (August 14, 2000); and Local 20 Business Agents Fund, 2001 EAD 549 (November 8, 2001), aff'd, 01 EAM 105 (November 28, 2001).

Remedy

When the Election Supervisor determines that the Rules have been violated, he "may take whatever remedial action is deemed appropriate." Article XIII, Section 4. In fashioning the appropriate remedy, the Election Supervisor views the nature and seriousness of the violation as well as its potential for interfering with the election process.

We order the following relief:

1. Local Union 853 shall rescind the increase in vacation entitlement it granted to full-time officers and full-time business agents of the local union, retroactive to November 8, 2004, the date the local union executive board granted the increase. The local union executive board shall adopt a resolution restoring the vacation schedule for full-time officers and full-time business agents to the schedule that existed on November 7, 2004. The local union is barred from increasing vacation entitlement for elected officers and full-time business agents for the balance of the period the Rules remain in effect. We order this remedy because we find that the increase in vacation entitlement was not bona fide but was implemented instead as a funding mechanism for campaign contributions to International officer candidates, in violation of the Rules.
2. We order all recipients of campaign contributions identified in this decision to refund to the Campaign '98 account the funds they received, which we identify as follows:

Candidate

General

Legal & Accounting

Hoffa 2006

$3,000.00

$1,000.00

Hoffa-Mack

$5,720.00

 

Al Hobart

$1,000.00

 

Fred Gegare

$1,000.00

 

John Murphy

$1,000.00

 

Jack Cipriani

$1,000.00

 

Ferline Buie

$500.00

 

Henry Perry

$500.00

 

Hoffa-Johnson

$1,000.00

 

As these contributions were improperly made, we require that they be disgorged.
3. Upon receipt by the Campaign '98 account of the disgorged campaign contributions identified in paragraph 2 of this remedy, we order Aloise to refund to Local Union 853 the sum of $15,720.00. This remedy returns to the local union the union funds improperly contributed to International officer candidates.
4. We order Aloise to mail the notice attached to this decision to all members of Local Union 853 and to post it on all union bulletin boards under the local union's jurisdiction through November 14, 2006. Funds in the Campaign '98 account may be used to pay the costs of the mailing. However, no authorized signer on the Campaign '98 account is permitted to remove the proceeds from Tarantino's raffle winnings from the account or otherwise spend it, until further order of the Election Supervisor. The purpose of the notice is to advise the local union membership that its elected leadership impermissibly used union funds to support candidates for International office and that those funds have been ordered returned to the local union treasury.
5. For the balance of the period the Rules remain in effect, we prohibit Aloise, Becker, Casqueiro, Christian, Easton, Harrington, Helfer, Morgan, Strelo, Tarantino, and Zucker from making any campaign contribution or legal and accounting contribution to any candidate for International office. This is a strictly remedial measure that is necessary to protect the integrity of the electoral process.
6. We order that no contributions may be made from the Campaign '98 account to any candidate for International office. This is a strictly remedial measure that is necessary to protect the integrity of the electoral process.
7. Although we regard the Rules violations we find here as very serious, we do not refer Aloise to the Independent Review Board as part of the remedy we order. At the outset of the investigation, we represented to counsel for Aloise that, provided we received complete, truthful and prompt testimony under oath and complete and prompt production of documents we requested, we would not refer Aloise to the IRB. As the decision notes, although we do not credit Aloise's explanations for the increase in vacation entitlement or the reimbursement to Zucker, with respect to the other matters investigated, we are satisfied that Aloise provided complete, truthful and prompt answers to our investigators' questions.
8. While we order the International officer candidates who received the improper contributions from the Campaign '98 account to disgorge those contributions, we recognize that simple disgorgement does not provide a complete remedy. The Hoffa-Mack campaign, in particular, received nearly $6,000 from the Campaign '98 account, most of which came early in the election cycle and provided money the Hoffa-Mack campaign used to hold fund-raising events that produced substantial campaign contributions. The Hoffa-Mack campaign was able to reap a significant harvest using the improper contributions as seed. We are conducting additional investigations of funding mechanisms in place at other local unions that produced campaign contributions for the Hoffa-Mack campaign. We reserve any additional remedy for the Hoffa-Mack campaign and other International officer candidates to the date those investigations are complete.
9. All remedies imposed by this decision that require persons to take affirmative steps must be completed within 3 working days of receipt of this decision. Affidavits of compliance must be forwarded to our office in Washington, D.C. within 2 working days of compliance.

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
885 Third Avenue, Suite 1000
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 341

NOTICE TO ALL MEMBERS OF LOCAL UNION 853
FROM IBT ELECTION SUPERVISOR RICHARD W. MARK

The Rules for the 2005-2006 IBT International Union Delegate and International Officer Election ("Rules") permit members to make campaign contributions to any candidate for International office. However, the Rules prohibit use of union funds, personnel and facilities to support any candidate for International office.

The Election Supervisor has found that Rome Aloise and the Executive Board of Local Union 853 violated the Rules by engaging in a scheme to contribute local union funds to candidates for International office. You can read this decision, and the detailed findings at www.ibtvote.org. Specifically, the Election Supervisor has found that the Executive Board, on a motion made by Aloise, increased the vacation entitlement for all full-time officers and full-time business agents of the local union by one week per year so that those persons would in turn donate the pay for that additional week of vacation to a fund to be used to make campaign contributions to candidates for International office. Accordingly, the Election Supervisor has found that the increase in vacation was a sham to conceal improper union contributions to candidates.

The Election Supervisor has found that individuals who made campaign contributions were reimbursed from the pooled account and that this concealed the true source of the reported contributions and violated the Rules that require campaign contributions to be made for the International officer election and attributed exclusively to eligible members.

The Election Supervisor has found that the campaign account into which the vacation paychecks were deposited was maintained by local union personnel using local union facilities.

The Election Supervisor will not tolerate such improper use of union funds, personnel and facilities.

Accordingly, the Election Supervisor has ordered the improper contributions to be returned to the local union treasury and the additional week of vacation entitlement the Executive Board ordered to be revoked from the vacation schedule, retroactive to the date the schedule was increased.

The Election Supervisor has also ordered this notice to be mailed to all members of Local Union 853, posted on all union bulletin boards under the local union's jurisdiction for a period through November 14, 2006.


_____________________________
Richard W. Mark
IBT Election Supervisor
Dated: August 22, 2006

DISTRIBUTION LIST (BY EMAIL UNLESS OTHERWISE SPECIFIED):

Bradley T. Raymond, General Counsel
International Brotherhood of Teamsters
25 Louisiana Avenue, NW
Washington, DC 20001-2198
braymond@teamster.org

David J. Hoffa
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

Rome Aloise
2100 Merced Street, Suite B
San Leandro, CA 94577

Duane Beeson
Beeson, Tayer & Bodine
1404 Franklin Street, 5th floor
Oakland, CA 94612
dbeeson@beesontayer.com

Christine Mrak
2357 Hobart Avenue, SW
Seattle, WA 98116
cmm@wmblaw.net

Maureen Geraghty
The Geraghty Law Firm
426 Old Salem Road
Winston-Salem, NC 27101
mg@geraghtylawfirm.com

Bruce Dubinsky
Klausner Dubinsky & Associates
4520 East West Hwy, Suite 640
Bethesda, MD 20814
bdubinsky@kd-cpa.com

Keith Neus
Klausner Dubinsky & Associates
4520 East West Hwy, Suite 640
Bethesda, MD 20814
kneus@kd-cpa.com

Jocelyn Yee
1725 K Street, NW Suite 1400
Washington, DC 20005
jyee@ibtvote.org

Jeffrey Ellison
510 Highland Avenue, #325
Milford, MI 48381
EllisonEsq@aol.com