July 16, 1998
VIA FACSIMILE
Robert Baptiste, Esq.
Baptiste & Wilder
1150 Connecticut Avenue, NW
Suite 500
Washington, DC 20036
Re: Response to Request for Reconsideration of
Election Office Case No. PR-035-EOH (Post-047-EOH) (July 1, 1998)
Dear Mr. Baptiste:
I have received your July 7, 1998 request for further reconsideration of the decision regarding Jim Santangelo from In re Carey Slate, PR-035-EOH (April 27, 1998), aff’d, 98 - Elec. App. - 348 (KC) (May 15, 1998), aff’d as modified, __ F. Supp. ___ (S.D.N.Y. 1998) (“Carey Slate Protest”).
In the Carey Slate Protest, the Election Officer found that, in the initial election, Mr. Santangelo, a candidate for International vice - president and a member of the Hoffa Slate in the initial 1996 election, failed to itemize on his Campaign Contribution and Expenditure Reports (“CCERs”) 13 checks totaling $2,637. Mr. Santangelo requested reconsideration of that decision and submitted an explanation and analysis of the CCERs stating facts he believed that the Election Officer had overlooked.
On July 1, 1998, the Election Officer issued a Decision on Reconsideration finding that Mr. Santangelo had properly reported 10 of the 13 contribution checks. The Election Officer further found that, while the three remaining checks in question had been reported, the checks, totaling $2,000, were improper contributions because the campaign had collected the sums they represented by using a local union payroll deduction system. The contributions had been reported on the CCERs in the name of the individual donors, and the CCER listing did not show that the union payroll system had been used to collect the sums. The use of union services was revealed only through the investigation in the Carey Slate Protest. Because the use of payroll deduction to collect the contributions involved the use of union resources, the contributions violated the Rules for the 1995-1996 IBT International Union Delegate and Officer Election (“Rules”). The Election Officer’s reconsideration decision ordered Mr. Santangelo to pay $200 as a sanction for the improper contributions.
Robert Baptiste, Esq.
July 16, 1998
Page 1
Mr. Santangelo states that he has already paid the original fine of $263 and, therefore, he is not required to pay an additional $200. The Election Officer agrees and will therefore refund $63 to Mr. Santangelo.
Mr. Santangelo also requests reconsideration. He argues that in accepting the $2,000 in contributions through the payroll deduction system, he was acting in reliance upon letters from the 1991 Election Officer Michael Holland. In 1991, Mr. Santangelo’s counsel, Robert Baptiste, exchanged letters with Election Officer Holland concerning the status of the Local 807 Benefit Association. The Local 807 Benefit Association collected funds through payroll deduction from employees of Local Union 807. Election Officer Holland’s letters inquired whether the Local 807 Benefit Association, which had collected campaign contributions, was a labor organization or an independent committee under the Rules. See Letter of Michael Holland to Walter Shea, dated October 28, 1991; Letter of Michael Holland to Local 807 Benefit Association dated November 4, 1991. The letters do not state as a factual predicate that the contributions were collected through payroll deduction. Mr. Baptiste maintains, however, that Election Officer Holland was aware of the payroll deductions and did not find the practice in violation of the Rules. Because the 1991 Election Officer’s letters (which are not protest decisions) do not explicitly address payroll deduction amounts to a use of union resources, they do not constitute precedent on this issue.
The contributions in question were donated to Mr. Santangelo’s campaign in the fall of 1995, early in the 1996 initial election process. Mr. Baptiste advised Mr. Santangelo that the contributions were proper based on his understanding of his correspondence with Election Officer Holland. Therefore, Mr. Santangelo accepted the contributions made through payroll deduction. The CCERs reported the contributions by individual donor, and did not indicate that payroll deduction had been used to effect collection.
Robert Baptiste, Esq.
July 16, 1998
Page 1
In July 1996, Election Officer Barbara Zack Quindel found in Rockstroh, P-764-IBT-EOH (July 11, 1996), that contributions made through payroll deduction violated the Rules because they involved the use of union resources to collect campaign funds. In a letter dated October 3, 1996, the Election Office directed Mr. Santangelo to return certain campaign contributions he received from sources through the use of local union payroll deductions. The improper contributions were readily identified because Mr. Santangelo’s CCER listed the Local Union 848 Officer and Employees Fund as the source of funds. The checks in question here, three checks from Local Union 848, were not identified on the CCER as coming from the union. Instead the same were reported under the individual contributors who participated in the payroll deduction.[1] Accordingly, the Election Officer was not aware at the time that the contributions had been made through payroll deduction. Knowledge of the payroll deduction only came to light when the Election Officer audited Mr. Santangelo’s campaign contributions during the investigation of the Carey Slate Protest.
Mr. Santangelo argues that it is unfair to apply the Rockstroh standard to these 1995 contributions because when he accepted these contributions in reliance on Election Officer Holland’s purported approval of a similar contribution system in 1991, and Election Officer Quindel had not yet decided Rockstroh.
The Election Officer rejects this argument. First, Election Officer Holland’s letters do not support Mr. Santangelo’s position that collection of campaign contributions by payroll deduction was an approved use of union resources. Second, this is not a retroactive application of Rockstroh to previously disclosed facts. With the facts of these contributions found during the Carey Slate Protest investigation, application of Rockstroh to these contributions is no different than the prior application of that rule to the disclosed Local Union 848 contributions. The contributions in question came through a local union payroll deduction, resulting in the improper use of union resources. The Election Office would have ordered the return of the money along with the divestment of the money if she had been aware of the donations. The improper circumstances of these contributions, however, were not were not disclosed by the CCER. That Mr. Santangelo did not intend to violate the Rules by accepting the contributions does not alter the fact that the contributions were collected improperly. Had the Election Officer known of the source of those contributions at the time of Rockstroh, they would have been subject to the same remedy as ordered for the contributions disclosed as made through Local Union 848.
The Election Officer has not ordered the return of the full amount of the contributions in question. The Election Officer decided in In re Carey Slate to apply “[a]ppropriately proportional sanctions” for violations of this type. In re Carey Slate, PR-035-EOH (April 27, 1998) at 23. Accordingly, Mr. Santangelo has been ordered to remit only ten percent of the tainted contributions. The Election Officer rejects the argument that this sanction is unreasonable or unfair.
The request for reconsideration is hereby DENIED.
Any interested party not satisfied with this determination may request a hearing before the Election Appeals Master within one (1) 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:
Robert Baptiste, Esq.
July 16, 1998
Page 1
Kenneth Conboy, Esquire
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 on the parties listed above as well as upon the Election Officer, 444 North Capitol Street, NW, Suite 445, Washington, DC 20001, Facsimile (202) 624-3525. A copy of the protest must accompany the request for a hearing.
Sincerely,
Michael G. Cherkasky
Election Officer
MGC:chh
cc: Kenneth Conboy, Elections Appeals Master
[1] The checks from Local Union 848 were aggregated contributions from individual employees of Local Union 848. The deductions would be collected during the month and then the local union would issue one check with the contributions from a number of individuals.