IN RE: TOM LEEDHAM SLATE, Protestor.
Protest Decision 2006 ESD 339
Issued: August 29, 2006
OES Case No. P-06-311-072106-HQ
Stefan Ostrach, a member of Local 206, filed a pre-election protest on behalf of the Tom Leedham Slate pursuant to Article XIII, Section 2(b) of the Rules for the 2005-2006 IBT International Union Delegate and Officer Election ("Rules"). The protest alleged that 4 members of the Hoffa slate failed to file timely Campaign Contribution and Expenditure Reports ("CCERs"), in violation of the Rules.
Election Supervisor representative Steven R. Newmark and forensic accountant Keith Neus investigated this protest.
Findings of Fact
Under Article XI, Section 2 (d)(1)(iv) of the Rules, CCER #4 was due on June 15, 2006 and covers the period from February 1, 2006, through May 31, 2006. The protest alleged that as of July 21, 2006, Kenneth William Wood, Randy Cammack, Jim Santangelo, and Frank Gallegos had not filed CCER #4. All 4 candidates are members of the Hoffa slate.
Kenneth William Wood
Wood, a candidate for South Region Vice President on the Hoffa slate, requested and was granted a filing extension for CCER #4 until June 26, 2006.
Investigation found that Wood received campaign contributions for the time periods covered by CCER reports #2 and #3, and that he timely filed those reports. Forensic accountant Keith Neus stated that Wood made no attempt to provide any CCER #4 information prior to the extended deadline of June 26. At the campaign's request made on June 26, Neus emailed campaign contribution and expenditure transactional information to Wood's treasurer, Robert Meeks, that same day. Neus stated that he spoke to Meeks again in early July. At that point, Meeks stated that substantial work remained to be done on the report. Meeks said that some data had been entered inaccurately, other data entered twice, and still other data not entered at all. Meeks claimed that he had not received the transactional information Neus emailed on June 26. Neus had confirmation that the email had been received on June 26, but resent the June 26 email to Meeks with the transactional information nonetheless. Thereafter, Meeks had no further contact with Neus until after he filed Wood's CCER #4 on July 27, 2006, 42 days after the June 15 deadline and 31 days after the extended due date.
Meeks claimed he attempted to submit the CCER in a timely fashion electronically but was not able to do so because the numbers did not add up. Meeks stated that he worked diligently with Neus from late June through all of July to complete the CCER, and that the delay was caused by his inexperience in accounting and by our CCER software. We do not credit this claim because Meeks said that data entry for the CCER had not been completed even as of early July, after the extended due date.
Randy Cammack
Cammack, a candidate for At-large Vice President on the Hoffa slate, requested and was granted an extension to file CCER #4 until June 21, 2006. Cammack filed CCER #4 on July 28, 37 days after the extended due date.
Investigation found that Cammack timely filed his first three CCER reports. Our forensic accountant, Keith Neus, stated that he and Cammack worked together to file CCER #4. Neus indicated that Cammack made several efforts to file his CCER #4 prior to the extended deadline, all of which were unsuccessful for technical reasons.
Jim Santangelo
Santangelo, a candidate for West Region Vice President on the Hoffa slate, requested and was granted an extension to file CCER #4 until June 21, 2006. Santangelo filed CCER #4 on July 28, 2006, 37 days after the extended due date.
Investigation found that Santangelo timely filed his first three CCER reports. Our forensic accountant, Keith Neus, stated that he and Santangelo worked together to file CCER #4. Neus indicated that Santangelo made several efforts to file his CCER #4 prior to the extended deadline, all of which were unsuccessful for technical reasons.
Frank Gallegos
Gallegos, a candidate for International Trustee on the Hoffa slate, did not request and was not granted an extension to file CCER #4. Gallegos filed CCER #4 on July 31, 2006, 46 days after it was due.
Investigation found that Gallegos did not file CCERs for any previous reporting periods because Gallegos only received contributions during the CCER #4 reporting period.
Gallegos' treasurer, Oscar Rios, told our investigator that he was aware that he had to file a CCER but that he was delayed because he did not obtain the proper software and login information in order to file in a timely fashion. Rios further claimed that he spoke with someone named "Bruce" and was told that his CCER was done properly. Rios took this to mean that Gallegos' CCER report was filed. The only "Bruce" connected to the Election Office is Bruce Dubinsky, one of our forensic accountants. Dubinsky did not recall talking to Rios about the Gallegos CCER, but nevertheless indicated that he would not have indicated to any candidate or treasurer that a CCER was properly filed unless it was, in fact, properly filed.
Gallegos filed his CCER 10 days after this protest was filed.
Analysis
Article XI, Section 2(a) of the Rules states:
A Campaign Contribution and Expenditure Report ("CCER" or "Report") and a Supplemental Form No. 1: Permitted Employer and Labor Organization Contributions and Associated Expenditures for Legal and Accounting Services ("Supplemental Form No. 1") shall be filed with the Election Supervisor, by certified or registered mail, or by such other method specified by the Election Supervisor in a Supplemental Rule, on the schedule set forth in this Article, by each of the following:
(1) Every Union member who is a candidate for International office, including any member who has received or solicited any contributions, whether of money or of any other thing of value, or made any expenditures, where the purpose, object or foreseeable effect of any such contribution or expenditure is to influence the election of that member as an International Officer, whether or not such member is as yet declared, accredited or nominated as a candidate.
Here, Cammack and Santangelo made significant efforts and worked directly with our forensic accountant to submit their CCER #4. Although their reports were filed more than one month late, Cammack and Santangelo were actively engaged with our accountant in attempts to file their CCER #4 timely.
In Ostrach, 2006 ESD 154 (March 20, 2006), Hoffa slate member Fred Gegare failed to file by the deadline set forth in the Rules or by an extension we granted; we responded by guiding Gegare's report preparer through the filing process, and the report was filed 30 days late, and 11 days after expiration of the extension we granted. We deemed the protest filed by Ostrach resolved and imposed no penalty. In that circumstance, we were aware of the technical difficulties the preparer faced in completing the report, and knew that the preparer was working diligently day by day to complete the report.
In contrast, in Hoffa 2006 (after remand), 2006 ESD 331 (July 19, 2006), we fined East Region Vice President candidate Don DiLeo a sum equal to 15% of the contributions reported on untimely filed CCER reports. We did so because DiLeo failed to file CCER reports for 2 consecutive periods and did not request an extension or otherwise contact us to seek assistance.
We find that Cammack and Santangelo worked actively to submit the required reports by the extended deadline. Although they ultimately were unsuccessful in achieving a timely filing, we find that they demonstrated diligence to complete and file the reports. We find the facts with respect to Cammack and Santangelo are comparable to those presented in Ostrach, supra, where we deemed the protest resolved and imposed no penalty. Accordingly, we do the same here, deem the protest RESOLVED with respect to Cammack and Santangelo, and impose no additional penalty or sanction.
Unlike Cammack and Santangelo, we find that Wood did not make an adequate effort to submit his CCER #4 report timely. Although we granted him a filing extension until June 26, his CCER preparer conceded to our forensic accountant in late June that the report had been started and contained duplicate transactions and transactions entered incorrectly. In early July, the treasurer acknowledged to Neus that transactions for the reporting period had yet to be entered. Wood's untimely filing was not due to technical difficulties with the CCER program or minor reconciliation problems involving entered data; rather, the filing was late because the transactions to be reported were not timely entered. Such conduct fails to demonstrate the minimum diligence required to satisfy the Rules' filing requirements. We cannot allow such conduct to continue, for to do so may suggest to candidates that the CCER filing requirement "is nominal, trivial and not especially material to the integrity of the election process." Hoffa 2006, 06 EAM 55 (July 11, 2006). Accordingly, we GRANT the protest with respect to Wood.
With respect to Gallegos, we find that he demonstrated even less effort to file timely than Wood did. While Wood contacted our office to request an extension through June 26, Gallegos ignored the filing requirement altogether, made no effort to seek assistance from our forensic accountant if such assistance was needed, and did not alert our office that he was having difficulties with filing the report. Therefore, we GRANT the protest with respect to Gallegos.
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.
As noted above, where candidate DiLeo failed to file CCER reports timely for 2 consecutive reporting periods, we imposed a fine of 15% of the contributions reported on the delinquent reports. Hoffa 2006 (after remand), supra. We also ordered the candidate to file timely for the balance of the electoral period. We stated that the decision would serve notice that similarly situated candidates will be treated similarly.
Wood and Gallegos are similar to DiLeo in that they failed to file timely, whether measured by the Rules' deadline or any extension we granted, and failed to show the diligence necessary to meet their obligations under the Rules. Wood and Gallegos are dissimilar from DiLeo in that they missed 1 filing period, not 2 as DiLeo did.
Accordingly, we order Wood and Gallegos each to pay a fine to the Office of the Election Supervisor equivalent to 7.5% of the amount of contributions reported on the untimely report. This percentage is one-half the rate imposed on DiLeo. For Wood, who reported contributions of $31,375 on the untimely filed report, the fine is $2,350. For Gallegos, who reported $5,000 in contributions, the fine is $375. The fines must be submitted to our office within 5 working days of receipt of this decision and may be paid with campaign contributions.
We further order Wood and Gallegos to meet each CCER filing deadline for the balance of the International officer election, unless they apply to our office in advance of any such deadline for an extension of time to file. Any such application for extension of time may be granted only for good cause.
A decision of the Election Supervisor takes immediate effect unless stayed. Lopez, 96 EAM 73 (February 13, 1996).
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. 20006-1416, 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 339
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
Daniel E. Clifton
Lewis, Clifton & Nikolaidis, P.C.
275 Seventh Avenue, Suite 2300
New York, NY 10001
dclifton@lcnlaw.com
Stefan Ostrach
1863 Pioneer Parkway East, #217
Springfield, OR 97477-3907
saostrach@gmail.com
Kenneth William Wood, President
IBT Local Union 79
5818 E. Martin Luther King Boulevard
Tampa, FL 33619
Randy Cammack, Secretary-Treasurer IBT Local Union 63
845 Oak Park Road
Covina, CA 91724
Jim Santangelo, Secretary-Treasurer
IBT Local Union 848
818 S. Oak Park Road
Covina, CA 91724
Frank Gallegos, President
IBT Local Union 890
207 N. Sanborn Road
Salinas, CA 93905
Keith Neus
Klausner Dubinsky & Associates
4520 East West Highway, Suite 640
Bethesda, MD 20814
kneus@kd-cpa.com
Steven Newmark
Office of the Election Supervisor
International Brotherhood of Teamsters
1725 K Street, NW, Suite 1400
Washington, DC 20006
snewmark@ibtvote.org
Jeffrey Ellison
510 Highland Avenue, #325
Milford, MI 48381
EllisonEsq@aol.com