September 6, 1995
VIA UPS OVERNIGHT
Mr. Jerry Halberg Teamsters Rank and File Education
P.O. Box 78213 and Legal Defense Fund
Seattle, WA 98178 7437 Michigan Avenue
Detroit, MI 48210
Mr. Bob Justus Association For Union
Teamsters Local Union 104 Democracy
262 N. Cholla 500 State Street
Mesa, AZ 85201 Brooklyn, NY 11217
Concerned Members of Teamsters Mr. Ken Paff
Local 492 Teamsters for a Democratic
4269 Balloon Park Road, NE Union
Albuquerque, NM 87109 7437 Michigan Avenue
Detroit, MI 48210
RE: Election Office Case Nos. P-019-LU174-PNW
P-081-LU104-RMT
P-082-LU492-RMT
Gentlemen:
Jerry Halberg, Bob Justus, et al.
September 6, 1995
Page 1
Related pre-election protests were filed pursuant to Article XIV, Section 2(a) of the Rules for the 1995-1996 IBT International Union Delegate and Officer Election (“Rules”).[1] These protests have been consolidated for decision by the Election Officer because they involve similar facts and legal issues.
Each of the protesters alleges that certain foundations have made unlawful campaign contributions in violation of Article IV, Section 4 of the IBT Constitution, as incorporated into Article XII, Section 1 of the Rules, providing: “No candidate for election shall accept or use any contributions or other things of value received from any employers, representative of an employer, foundation, trust or similar entity.”
In P-019-LU174-IBT, Jerry Halberg, a member of Local Union 174 alleges that Teamsters for a Democratic Union (“TDU”), Teamsters Rank and File Education and Legal Defense Fund (“TRF”), Association for Union Democracy (“AUD”), New Directions Movement of the UAW, the Labor Education and Research Project, the Labor Institute, and Bread and Roses have all accepted monetary contributions from private foundations, including the Charles Lawrence Keith and Clara Miller Foundation, The New World Foundation, the Harold K. Hochschild Foundation, the New York Foundation, and the J.M. Kaplan Fund, Inc. Mr. Halberg further alleges that certain of these organizations have “common ties” with each other, specifically, TDU with TRF, and TRF with AUD. Mr. Halberg does not contend that there has been any campaign activity by any these organizations he alleges to be funded by foundations, but protests “any current and continued support by [the listed organizations] . . . for any candidate in the 1996 delegate election and International Officer election.”
In P-081-LU104-RMT, Bob Justus, a member of Local Union 104, alleges that the Charles Lawrence Keith and Clara Miller Foundation is an employer-supported foundation that has funded TDU, and that TDU has contributed to the campaign of General President Ron Carey for reelection in 1996. Mr. Justus further alleges that TRF and TDU are “the same operation.” He argues that during the last election, the Election Officer found that TRF was a foundation, and since TRF is the same organization as TDU, the Election Officer should rule that TDU is prohibited from participating in the 1995-96 International Union delegate and officer elections. Mr. Justus does not allege that TRF has contributed to candidates for the 1995-96 IBT International Union delegate and officer elections.
In P-082-LU492-RMT, filed by “Concerned Members of Local 492,” the protesters allege that the Charles Lawrence Keith and Clara Miller Foundation is an employer-sponsored foundation which has donated monies to TDU and that TDU has used foundation monies to campaign for the reelection of General President Ron Carey.
The investigation was conducted by Election Office Staff Attorney Helene Boetticher.
I. Permitted Contributions under the Rules
The Rules broadly define a “campaign contribution” as
any 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 Convention delegate, alternate delegate or International Officer position.
See, Rules, Definitions at pp. viii - ix. Contributions from campaign organizations of any candidate and independent committees, including but not limited to any caucus or group of Union members, are allowed, provided that the caucus, group or organization is itself financed exclusively from contributions/sources permitted under the Rules. Id. The Election Officer has previously held that an entity otherwise prohibited from making campaign contributions under the Rules may make such contributions if: (a) it is a caucus of Union members; (b) it properly allocates and segregates resources obtained from persons or entities prohibited from making campaign contributions under the Rules from those received from persons or entities permitted to make such contributions; and (c) utilizes only the latter resources with respect to its campaign activities. In Re: Gully, 91 - Elec. App.-158 (SA) (June 12, 1991), aff’g Sargent, Case No. P-249-LU283-MGN.
II. Prohibited Contributions Under the Rules
Generally, the Rules prohibit receipt of campaign contributions by candidates for Convention delegates and alternates and candidates for International Officer positions from:
1) Employers,[2] see, Article XII, § 1(b)(1);
2) Agents/Representatives of employers, i.e., supervisory or managerial employees, see, Definitions, ¶ 17, pp. xi-xii;
3) Foundations, trusts, and similar entities, see, Article XII, § 1(a);
4) Labor organizations, including but not limited to the International Union, Local Unions and all other subordinate Union bodies. See, Article XII, § 1(b)(1);
5) Independent committees when the contribution is derived from contributions/sources not permitted under the Rules, (i.e., the other five entities listed in this paragraph). See, Article XII, § 1(b)(5); and
6) IBT employer-members when the contribution is derived from the employer-member’s business resources, assets or name.[3] United States v. IBT, No. 88 Civ. 4486 (S.D.N.Y. August 22, 1995).
Article XII, Section 1(b)(2) of the Rules provide an exception for disinterested employers and labor organizations to make contributions of financial support or services to pay for legal and accounting services, “if and only to the extent such contributions are received in response to solicitations specifically requesting such funds or services or are contributions so earmarked by the contributor at the time the contribution is made.”
III. Allegation that TDU receives Prohibited Campaign Contributions from Foundations
A violation of the Rules and Article IV, Section 4 of the IBT Constitution prohibiting foundations from making campaign contributions, as alleged by each protester here, requires proof that a candidate in the 1995-96 election has “accept[ed] or use[d] any contribution or any thing of value from any . . . foundation . . . or similar entity.” In accordance with the Rules, any campaign contributions made by TDU to candidates must be financed from contributions/
sources otherwise permitted under the Rules. Thus, if as alleged by the protesters, TDU accepted monetary contributions from any private foundations that were subsequently transferred to candidates, such a violation of the Rules would occur. However, the protesters have produced no proof that TDU has made any such prohibited contributions to candidates. The Election Officer’s investigation has not revealed any evidence that TDU has accepted contributions from any foundations. None of the protesters presented any evidence that a candidate in the 1995-96 election has accepted or used a contribution from a foundation or from an organization funded by a foundation.
IV. Alter-Ego Theory
In P-019-LU174-IBT and P-081-LU104-RMT, the protesters rely on their assertions that since 1) TDU is a foundation prohibited from making campaign contributions to candidates and 2) TDU and TRF, in substance, are the same entity, TDU should be prohibited from making campaign contributions that would influence the outcome of the 1995-1996 International Union delegate and officer elections. In Sargent, supra, the Election Officer looked at numerous financial and other records of the two organizations to determine whether TDU and TRF were “alter egos,” id. at pp. 29-30, and whether TDU’s contributions to the Carey campaign were funded, directly or indirectly, by employer or foundation contributions. Id. at pp. 30-41. The Election Officer made the following factual findings regarding TDU and TRF:
TDU is a membership organization which was founded in 1976 as a caucus within the IBT. Membership in TDU is open to all Teamsters and Teamster spouses as well as retired Teamster members and their spouses; however, the organization reserves the right to exclude those who are opposed to TDU or its principles. TDU is a political advocacy organization which is concerned with a variety of issues and positions, . . . While TDU has been consistently critical of the leadership of the IBT, it has stated that it does not seek any status other than as a part of the IBT. TDU strongly disclaims that it is engaged in “dual unionism.” See, e.g., TDU Constitution, Article Two. TDU is not, nor has it sought to become, the certified or recognized collective bargaining representative of any group of employees under any state or federal collective bargaining law or the recognized representative of any group of employees otherwise not covered by state or federal collective bargaining law. TDU has never filed reporting or disclosure forms, e.g., LM-2 forms, with the United States Department of Labor pursuant to the Labor Management Reporting and Disclosure Act, 29 USC, Section 431(b).
TDU has a number of chapters throughout the country. These chapters are largely autonomous from the national headquarters of TDU, conduct their own affairs and are responsible for their own fund-raising. TDU is governed by an International Steering Committee which meets periodically between the organization’s yearly convention. The principal officer of the TDU is its Organizer, Mr. Ken Paff, a full-time TDU employee, not presently an IBT member. In addition, the TDU has three Trustees who are IBT members.
TRF was formed in 1977 as a foundation organized in accordance with Section 501(c)(3) of the Internal Revenue Code. TRF is an educational and legal defense foundation and not a membership organization. TRF sponsors educational programs, including the publication of educational materials for IBT members . . . TRF also sponsors educational programs and publishes materials with respect to intra-union elections, specifically including educational programs and materials regarding the IBT International Union delegate and officer election as mandated by the Consent Order of March 14, 1989 and as regulated by the Rules. In addition, TRF sponsors litigation on issues of concern to IBT members. TRF is governed by a board of directors.
Sargent, supra, at pp. 6-11.
In Sargent, the Election Officer found that TRF and TDU were separate and autonomous organizations, despite sharing staff and facilities and there being some persons who sit on the governing bodies of both organizations. Id. at p. 29. In this case, the only specific claim that the two organizations are alter egos is the allegation in P-019-LU174-PNW, that TRF and TDU have the same director and that several members of TDU’s steering committee are officers, directors or trustees of TRF. Similar allegations are made with respect to the relationship of AUD and TRF. In Sargent, however, the Election Officer found:
[I]n addition to the shared employees and resources of the two organizations, a number of IBT members sit on the governing bodies of both organizations. However, the Election Officer uncovered no evidence, and no evidence was presented by the protesters, that the political positions with respect to the delegate and International Officer campaign taken by TDU was determined by TRF. TDU is a separate organization. It has separate finances, activities, governance structure, constitution, and tax status.
Id. at p. 29 (citation omitted). The protesters have neither cited nor produced any new evidence of an alter-ego relationship between TDU and TRF that would contradict the Election Officer’s findings in Sargent. There is no evidence presented that AUD is an alter ego of TRF or TDU. In the absence of any new facts indicating such a relationship, the Election Officer does not find an alter-ego relationship between TDU and TRF or TRF and AUD.
V. Ken Paff
In P-081-LU104-RMT, Mr. Justus also contends that Ken Paff, an organizer employed by TDU, is not a member in good standing in the IBT and is therefore ineligible to participate in the 1995-96 International officer and delegate elections. No evidence of any impermissible participation by Mr. Paff has been presented to the Election Officer. Accordingly, there is no violation of the Rules with respect to Mr. Paff.
Based upon the foregoing, P-019-LU174-PNW, P-081-LU104-RMT and
P-082-LU492-RMT are 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.
Mudge, Rose, Guthrie, Alexander & Ferdon
180 Maiden Lane, 36th Floor
New York, NY 10038
Fax (212) 248-2655
Copies of the request for hearing must be served on the parties listed above as well as upon the Election Officer, 400 North Capitol Street, Suite 855, Washington, D.C. 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
Christine Mrak, Regional Coordinator
Jonathan Wilderman, Regional Coordinator
[1]These “reach-back” protests were filed within the 30-day period following the final promulgation of the Rules on April 24, 1995, and alleges violations occurring prior to the issuance of the Rules. The Rules, at Article XIV, Section 2(a), state:
Protests regarding violations of the [Labor-Management Reporting and Disclosure Act, as amended] (including violations of the IBT Constitution) allegedly occurring prior to the date of issuance of the Rules and protests regarding any conduct allegedly occurring within the first twenty-eight (28) days after issuance of the Rules must be filed within thirty (30) days of the date of issuance, or such protests shall be waived.
[2]The term “employer” as defined, excludes a caucus or group of Union members, provided that such caucus or group is itself financed exclusively from contributions permitted under the Rules. See, Definitions at pp. xi - xii.
[3]Contributions from IBT employer-members that are derived from personal funds/resources separate from the employer-member’s business resources, assets, name, etc., are not prohibited by the Rules.