November 22, 1996
VIA UPS OVERNIGHT
Jack Cox
November 22, 1996
Page 1
Jack Cox, Secretary-Treasurer
Teamsters Local Union 572
450 Carson Plaza Drive
Carson, CA 90746
HealthNet
2425 W. Olympic Boulevard
Suite 500-E
Santa Monica, CA 90404
Richard Brook
Cohen, Weiss & Simon
330 W. 42nd Street
New York, NY 10036
James P. Hoffa Campaign
c/o Bradley T. Raymond
Finkel, Whitefield, Selik, Raymond,
Ferrara & Feldman
32300 Northwestern Highway, Suite 200
Farmington Hills, MI 48334
Jack Cox
November 22, 1996
Page 1
Re: Election Office Case No. P-1272-JHC-NYC
Gentlemen:
Jack Cox, secretary-treasurer of Local Union 572 and a candidate for vice president-at-large, filed a pre-election protest pursuant to Article XIV, Section 2(b) of the Rules for the 1995-1996 IBT International Union Delegate and Officer Election (“Rules”) alleging that HealthNet, an employer in Santa Monica, California, violated the Rules when it permitted the Hoffa campaign to use its telephones to conduct an after-hours phone bank operation. Speci-fically, Mr. Cox objects that HealthNet “does not make phones available for phone banking as part of its normal course of business” and that it did so for the Hoffa campaign “at no charge or less than fair market value.”
HealthNet responds that the Hoffa campaign has used its telephones pursuant to a written contract for compensation, and that other candidates may do so on the same basis.
The Hoffa campaign states that it has paid fair-market value for the services, in conformity with the Rules.
Jack Cox
November 22, 1996
Page 1
This protest was investigated by New York City Protest Coordinator Barbara C. Deinhardt.
HealthNet representative Wende Jones states that she was contacted by Michael J. Riley, president of Joint Council 42, about the use of the company’s phones for a Hoffa campaign phone bank operation. Ms. Jones and Mr. Riley executed a written agreement, dated
November 4, 1996, for the non-exclusive lease of HealthNet’s telephones at its offices in
Santa Monica. Provisions of the agreement include, “For each person using lessor’s telephones, a fee of ten dollars ($10.00) will be charged by lessor per hour of use. Any extraordinary long distance calls will be charged separately,” and “Access to lessor’s telephones will be limited to the hours of 6:00 p.m. and 9:00 p.m.” The agreement reserves the right “to lease its telephones to other persons, at such times as are convenient to it,” and allows cancellation on 24 hours’ notice.
The investigation revealed that HealthNet has allowed non-profit organizations to use its telephones in the past without charge. The employer offered not to charge the Hoffa campaign, but Mr. Riley stated that the Rules require the payment of fair-market value.
Ms. Jones states that HealthNet will permit other candidates to have access to its telephones on the same terms as agreed between HealthNet and Mr. Riley. She further states that she subsequently encountered Mr. Cox and informed him personally of the opportunity.
Article XII, Section 1(b)(1) of the Rules states:
No employer may contribute, or shall be permitted to 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. No candidate may accept or use any such contribution.
The purchase of goods or services by a member does not constitute a campaign contribution by the vendor if the terms are commercially reasonable. See Cook, P-337-LU705-CHI et seq. (May 8, 1996) (use of AFSCME telephones for phone bank operation), aff’d,
96 - Elec. App. - 191 (KC) (May 17, 1996); Carter, P-457-LU550-NYC (1991).
The Election Officer has consistently approved the purchase or lease of employer telephone facilities for phone-bank campaigning on payment of fair-market value. See, e.g., Merritt, P-1162-IBT-PNJ et seq. (November 12, 1996) (use of telephones in state senator’s reelection office); Tiboni, P-1155-JC41-CLE (November 14, 1996) (use of telephones in conference rooms in building ultimately controlled by partners in law firm).
The protester objects that HealthNet made its telephones available “at no charge or less than fair market value.” In the absence of contrary evidence of higher value, the Election Officer has approved arrangements providing for payment reasonably related to the service provided.
Jack Cox
November 22, 1996
Page 1
In this matter, HealthNet estimated the charge of $10/hour/phone as compensation for its costs of after-hours telephone use. It further states that if its phone bills and records of actual costs subsequently show value at a significantly lower level, it will decrease the contract charge.
The Election Officer finds this arrangement to be commercially reasonable and not in violation of the Rules.
For the foregoing reasons, the protest is DENIED,
Any interested party not satisfied with this determination may request a hearing before the Election Appeals Master within one day of receipt of this letter. The parties are reminded that, absent extraordinary circumstances, no party may rely upon evidence that was not presented to the Office of the Election Officer in any such appeal. Requests for a hearing shall be made in writing and shall be served on:
Kenneth Conboy, Esq.
Latham & Watkins
885 Third Avenue, Suite 1000
New York, NY 10022
Fax (212) 751-4864
Copies of the request for hearing must be served on the parties listed above as well as upon the Election Officer, 400 N. Capitol Street, Suite 855, Washington, DC 20001, Facsimile
(202) 624-3525. A copy of the protest must accompany the request for a hearing.
Sincerely,
Barbara Zack Quindel
Election Officer
cc: Kenneth Conboy, Election Appeals Master
Barbara C. Deinhardt, New York City Protest Coordinator