Protest Decisions

              May 23, 1996

VIA UPS OVERNIGHT

James P. Hoffa

May 23, 1996

Page 1

James P. Hoffa

2593 Hounds Chase

Troy, MI 48098

Association for Union Democracy

500 State Street

Brooklyn, NY 11217

Bradley T. Raymond

Finkel, Whitefield, Selik, Raymond,

  Ferrara & Feldman, P.C.

32300 Northwestern Highway, Suite 200

Farmington Hills, MI 48334

James P. Hoffa

May 23, 1996

Page 1

Re:  Election Office Case No. P-743-IBT-SCE

Gentlemen:

A pre-election protest was filed pursuant to Article XIV, Section 2(b) of the Rules for the IBT International Union Delegate and Officer Election (“Rules”) by James P. Hoffa, a member of Local Union 614 and a candidate for general president.  The protester alleges that the Association for Union Democracy (“AUD”) of Brooklyn, New York, made an improper contribution to the re-election campaign of General President Ron Carey.  Mr. Hoffa further asserts that Mr. Carey and his campaign are strictly liable for this improper contribution.

The protester contends that this improper contribution is in the form of the April 1996 issue of the Union Democracy Review, a newsletter published by the AUD.  The violation alleged is specifically limited to the provisions of Article XII, Section 1(b)(1) of the Rules concerning improper campaign contributions and the strict liability standards referred to in Article XII,  Section 1(b)(9) and (10).  The protest states, in pertinent part:

James P. Hoffa

May 23, 1996

Page 1

Since AUD is an employer and, on information and belief, is funded from sources which are not permitted to make contributions to candidates for IBT office, it is prohibited from engaging in conduct having the “purpose, object or forseeable [sic] effect” of influencing the outcome of the 1996 election.  In addition, Mr. Carey and his campaign are strictly liable for AUD’s improper contribution under Article XII, [Section] 1 (b) (9) and (10) of the Election Rules.

The investigation disclosed that AUD is an independent organization recognized

by the Internal Revenue Service as an educational foundation, pursuant to 26 U.S.C.

Section 501(c)(3).  The AUD is governed by an 11-member board of directors.  It was founded by Herman Benson, a retired toolmaker and its former executive director.  He serves on the board of directors and as the AUD’s secretary-treasurer and editor.  None of the 11 members of the board of directors are members, officers or employees of the IBT.  Two of the members, Paul Alan Levy of the Public Citizen Litigation Group and Alan Hyde, a professor of law at Rutgers University Law School, assist in the preparation of amicus curiae briefs for the AUD.  One other law professor and three other attorneys are members of the board.  The remaining compliment of board members have held or are holding various positions within the labor movement, none of which are in the IBT.  Although Mr. Levy has represented several IBT members who support Mr. Carey’s candidacy for re-election, no member of the AUD board of directors directly represents, is employed by or is an agent of the Carey campaign.

The Union Democracy Review is sent to AUD associates (those individuals and associations who make donations to AUD) and to subscribers.  The annual subscription rate is $15 for individuals and $20 for organizations.  Approximately 30 to 40 percent of the distribution of Union Democracy Review is to subscribers.

The April 1996 edition of the Union Democracy Review contains a lead article with the headline “Three Union Conventions To Watch.”  The article is organized into three different sections.  The first and final sections concern the elections in the Laborers International Union of North America and the International Brotherhood of Electrical Workers.  The section to which the protester objects is subtitled, “Teamsters.”  The protester cites the following passage which, he contends, promotes the candidacy of Mr. Carey and attacks Mr. Hoffa’s candidacy:

The campaign against Carey looks like the fabrications of a mad wrought iron sculptor, scraps and fragments welded together without coherence.  Or like a recipe for bouillabaisse-gumbo-goulash, everything around, including floor sweepings, into the pot.  Ironically, they charge that Carey is an organized crime associate, a charge that was considered and dismissed by the Independent Review Board.  But in an old guard PR campaign, they managed to plant stories in the press.  In Newsday,

James P. Hoffa

May 23, 1996

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Ken Crowe wrote, “the press was sold a bill of goods by a wacky investigator and two bozos from Detroit who used to work for Lyndon LaRouche.” Carey’s father, a UPS driver since the early 1930’s, accumulated UPS stock that was worth $2 million when he died.  The estate sold the stock and distributed the proceeds to five heirs, including Carey.  Into the pot.  “Carey ‘mysteriously’ inherited $2 million in UPS stock while serving as IBT president,” wrote the Hoffa supporters.  In the Teamster magazine, the Hoffaites quote what they themselves planted in the N.Y. Times:  Carey was “in partnership with a companion named Rosalie L’Abbate” in buying some resort property.  Sounds ominous?  A girl friend!

. . . .

After four years of the new Carey administration, the reform drive has been an outstanding success, one of the great events in contemporary labor history.  A union, one of the largest in the world, which was once the plaything of organized crime has been brought into the progressive mainstream of the American labor movement.  That success derives from three principal factors: decisive intervention by federal authorities, a vigorous, dedicated, and well organized Teamsters for a Democratic Union, and an experienced union leader to challenge a corrupt establishment.

The monthly newspaper contains other articles which may be of interest to its readers, but do not directly concern the IBT.  An article entitled, “Changing the guard in the SEIU” contains remarks concerning the status of the Service Employee International Union under their new International president.  Another item, “Suspect referendum in AFSCME DC 37, NYC,” reports on possible voting irregularities in a contract ratification vote.  “In the Hotel Union” discusses a hiring hall problem in a New York City local union. 

The newsletter does contain an additional item which directly relates to the IBT.  A  by-lined editorial feature appears under the headline “Debating defense funds against trusteeships.”  In this article, the reporter criticizes Mr. Carey regarding his actions concerning the issue of trustee defense funds for local unions.[1]

Other than the material the candidates or their campaigns produce to support their election, four categories of publications have been considered by the Election Officer under protests alleging violations of the Rules.  The first category is the union-financed publication or communication.  Under Article VIII, Section 8(a), these publications or communications are sponsored or paid for, either directly or indirectly, by the union or its affiliates.  Usually, the targeted audience for such a publication is quite limited--the members of a local union, a joint council or the entire IBT.  The Rules strictly prohibit such publications from engaging in campaign activity.  The protester does not allege that the Union Democracy Review is a union-financed publication and no evidence has been presented or disclosed to so establish.

James P. Hoffa

May 23, 1996

Page 1

The second category of publications or communications are those produced by independent caucuses. Such publications are subject to the limitations in Article XII,

Section 1(b)(1) of the Rules unless they are funded “exclusively from contributions made by persons or entities entitled to make campaign contributions.”  (This has been defined as IBT members or other individuals who are not themselves employers.)  Durham, Post 75-IBT (January 10, 1992), aff’d 92 - Elec. App. - 249 (SA); Halberg, P-019-LU174-PNW et seq. (decision on remand) (December 14, 1995).  An example is the Convoy Dispatch, a newsletter published by the Teamsters for a Democratic Union (“TDU”).  The Convoy Dispatch does engage in activities which, within the meaning of Article XII, Section 1(b) of the Rules, constitute contributions having the direct or indirect “purpose, object or foreseeable effect” of influencing the election of a candidate.  Such activities, however, do not violate the Rules because the campaign activities of the Convoy Dispatch, are financed solely with contributions from members and others entitled to make contributions.

The third category of entity that could produce election-related publications or communications are “employers.”  An “employer,” as defined by the Rules, includes “any individual, corporation, trust, organization or other entity that employs another.”  Definitions, 17.  The term does not include a candidate’s campaign which is financed by permissible funds, but specifically includes not-for-profit employers and employers who do not necessarily have a collective bargaining relationship with the IBT or its affiliates.  All “employer” publications are subject to review under Article XII, Section 1(b)(1) of the Rules in order to determine whether they have a “purpose, object or foreseeable effect” to influence the election of a candidate.  These publications are targeted to a limited audience (e.g., employees of a corporation).  Such publications have no subscribers.  Thus, they are not “media” communications, but rather public relations communications for employees or clients.  The Election Officer has found that such publications violate the Rules when they print material that supports or attacks a candidate for IBT office.  See Barmon, P-469-LU769-SEC (March 1, 1991) (company newsletter); Committee to Elect Ron Carey, P-291A-LU70 & P-278-CSF (March 14, 1991), aff’d 91 - Elec. App.- 106 (SA) (March 22, 1991) (pension fund newsletter); and Masters, P-096-LU348-CLE (September 13, 1995), aff’d 95 - Elec. App. - 26 (KC) (October 13, 1995) (union lawyer newsletter).

The final category of publication the Election Officer has reviewed are these publications intended for and disseminated to the general public.  The First Amendment of the U.S. Constitution requires that these publications be entitled to the greatest latitude in exercising the right to communicate.  Austin v. Michigan State Chamber of Commerce,

James P. Hoffa

May 23, 1996

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494 U.S. 652 (1990).  Similarly, the Rules must be enforced in such a manner that the regulation of publications or communications that reach a more general audience be minimal.  For this reason, publications and communications by a “media” employer constitute an exception to the “employer” category.  Articles contained in these publications do not violate the Rules unless candidates or committees acting on behalf of candidates control the editorial policies of the responsible entities.  The “media employer” exception has been comprehensively discussed in several prior cases and is well-established.  See, e.g., Brennan, P-971-IBT (October 16, 1991), where the protester objected to the reproduction, by the Detroit Free Press, of certain campaign material prepared by the Ron Carey slate.  There, the Election Officer found the Detroit Free Press to be a daily newspaper of general circulation published by Knight Ridder, Inc., a company unrelated to the IBT.  The exception has also been applied to an independently-owned radio station that broadcast an interview with

Mr. Hoffa during prime air time.  Pressler, P-365-LU705-CHI (February 22, 1996).

The media exception has also been applied to the labor press--those publications which are published by worker groups and labor organizations which target a labor audience.  Thus, the “media exception” has been specifically applied to The Labor Times, a newspaper which reports on matters of interest to labor unions in the Kansas City area, which is independently published by All American Publishers.  See Sauwoir, P-041-LU41-EOH, et seq. (August 16, 1995).  See also Hasegawa, P-161-LU41-MOI (October 24, 1995).

Common to both the media-at-large and the labor media is the Election Officer’s refusal to construe the term “campaign contribution” to include “newspaper or magazine articles published by entities which are not owned or whose editorial policies are not controlled by candidates or committees acting on behalf of candidates.”  Scott, P-969-IBT (October 18, 1991). In Scott, the Election Officer referred to the Federal Election Campaign Act.  This law contains an exception to its definition of “campaign expenditure” for “any news story, commentary, or editorial distributed through the facilities of any broadcasting station, newspaper, magazine or other periodical publication, unless such facilities are owned or controlled by an political party, political committee, or candidate.”  See 2 U.S.C.

Section 431(9)(B)(I). 

The question of ownership and control of a publication was analyzed in Scott.  At issue was the propriety of campaign coverage of a publication called Labor Notes.  The Election Officer recognized that Labor Notes could not be regulated as it was subject to the media exception unless, as an entity, it was owned or its editorial policy was controlled by candidates or committees acting on behalf of candidates.  The Election Officer found that Labor Notes was published by a tax-exempt educational foundation called the Labor Education & Research Foundation.  The Election Officer also found that:

James P. Hoffa

May 23, 1996

Page 1

LERF is a foundation as defined by the Election Rules.  It shares and is the part owner of the Detroit, Michigan building housing Teamsters for a Democratic Union (“TDU”).  None of the members of the board of directors of LERF are members of the IBT or TDU.  Labor Notes carries a list of individual and institutional “endorsers” on the second page of the publication.   Among the endorsers are members of the IBT and staff members of TDU.  Neither TDU nor the Teamsters Rank and File Legal Defense and Education Fund (TRF) are listed as endorsers.  The endorsers are simply individuals and organizations who support Labor Notes and who have agreed to permit their names to be listed as endorsers.  The endorsers do not participate in the administration of Labor Notes or of  LERF nor do they participate in the formulation of  Labor Notes’ editorial policy.

Scott, supra.  Based upon these findings, the Election Officer concluded that Labor Notes fell within the media exception and was not subject to campaign contribution regulation.

Based upon the investigation conducted in this case, the Election Officer finds that the structure of the AUD is very similar to the Labor Education & Research Foundation as recounted in Scott, supra.  In a sworn statement, Assistant Executive Director Carl Biers states that the AUD is not financed by the IBT or any of its subordinate entities.  None of the AUD board of directors are members of the IBT.  Its contributors are individuals and foundations.

Further, the Election Officer concludes that the Union Democracy Review is not owned and its editorial policies are not controlled by candidates or committees acting on behalf of candidates.  The AUD has previously been determined to have rented office space to the New York/New Jersey Chapter of the TDU.  See Halberg, supra.   The AUD admits that it has received and filled an order from an IBT local union for several AUD books and publications.  But neither these facts, or the fact that Board member Levy performs legal services for the TDU, are sufficient to show any editorial link or any indicia of control between the Union Democracy Review and that organization.

The Union Democracy Review is produced and published by a “media employer” as defined in Scott, supra, and as indicated by the evidence relating to its structure and method of operation.  Hence, even if the newsletter contains material which attacks the candidacy of

Mr. Hoffa, or supports Mr. Carey’s candidacy, the evidence before the Election Officer leads to the conclusion that no candidate, or any person or committee acting on behalf of a candidate, owns or controls the AUD or the editorial policies of the Union Democracy Review. 

Accordingly, 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

James P. Hoffa

May 23, 1996

Page 1

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

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