October 25, 1996
VIA UPS OVERNIGHT
Joseph Rockstroh
October 25, 1996
Page 1
Joseph Rockstroh
6154 Old Washington Road
Elkridge, MD 21227
James P. Hoffa
2593 Hounds Chase
Troy, MI 48098
Paul Alan Levy
Public Citizen Litigation Group
1600 20th Street, N.W.
Washington, DC 20009
Nathaniel Charny
Cohen, Weiss & Simon
330 W. 42nd Street
New York, NY 10036
Bradley T. Raymond
Finkel, Whitefield, Selik, Raymond
Ferrara & Feldman, P.C.
32300 Northwestern Highway, Suite 200
Farmington Hills, MI 48334
Joseph Rockstroh
October 25, 1996
Page 1
Re: Election Office Case Nos. P-821-IBT-EOH DECISION ON REMAND P-915-IBT-EOH RE: LEGAL FEES
Gentlemen:
Related pre-election protests were filed pursuant to Article XIV, Section 2(b) of the Rules for the 1995-1996 IBT International Union Delegate and Officer Election (“Rules”). These protests were consolidated for decision by the Election Officer because they involved alleged reporting violations on the Campaign Contribution and Expenditure Reports (“CCERs”) submitted by members of the Hoffa No Dues Increase-25 & Out-Slate.
In P-821-IBT-EOH, protester Joe Rockstroh alleged that Mr. Hoffa’s campaign received in-kind contributions of legal services from the law firm of Finkel, Whitefield, Selik, Raymond, Ferrara & Feldman (“Finkel, Whitefield”) for the reporting period from
Joseph Rockstroh
October 25, 1996
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January 21, 1996 through May 20, 1996, and that such in-kind contributions were not reported on the CCER for Hoffa ‘96, in violation of the Rules. Specifically, the protester alleged that, in light of the insignificant payments of $14,000 to Finkel, Whitefield for the period ending May 20, 1996, Finkel, Whitefield either was providing a discounted rate to the campaign or not charging the Hoffa campaign for all of the time and expenses incurred on its behalf. Under either scenario, the protester asserted that the Hoffa campaign should be required to report such in-kind contributions of legal services on its CCERs.
This protest was investigated by Election Office Representatives Benetta Mansfield and Kathryn Naylor.
1. Procedural History
On September 17, 1996, the Election Officer issued a decision denying this aspect of the protest. Mr. Rockstroh appealed only the issue regarding the expenditures by the Hoffa campaign for legal services provided by Finkel, Whitefield to the Election Appeals Master. A hearing on the appeal was held on September 25, 1996. On September 30, 1996, the Election Appeals Master remanded this aspect of the decision to the Election Officer, with instructions to conduct “a more definitive and pointed investigation” regarding whether Finkel, Whitefield has made “in-kind contributions in the form of a discounted rate or the non-billing of services actually rendered” for the period ending May 20, 1996.
2. Allegation that Finkel, Whitefield Charged the Hoffa Campaign a Discounted Rate
In the original protest, Mr. Rockstroh alleged that Finkel, Whitefield was affording the Hoffa campaign a rate below the “market standard for the provision of legal services in the Detroit area.” In his submission to the Election Appeals Master, Mr. Rockstroh argued that “[f]irms in the Detroit area would charge $200 or more per hour for the services of a 20-year management-side lawyer like Mr. Raymond.” Bradley Raymond, the attorney who handles the Hoffa account at Finkel, Whitefield, has reiterated that the protester’s assertions are fallacious and maintains that the Hoffa campaign is charged at a rate commensurate with that of his labor organization clients.
In order to determine whether Mr. Raymond charged the Hoffa campaign a discounted rate less than the billable rates for his clientele of labor organizations, the Election Officer required Mr. Raymond to submit extensive documentation in the form of billing statements or invoices for his other labor clients and for the Hoffa campaign that would verify these rates. This evidence indicated that Mr. Raymond charges the Hoffa campaign $125 per hour.[1] The investigation revealed that Mr. Raymond charges his other labor clients rates between $90 and $140 per hour.
The Advisory on Campaign Contributions and Disclosure, issued December 14, 1995, provides that if:
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October 25, 1996
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the legal services are provided at less than fair market value or the professional’s normal fees or rates, an in-kind contribution has been received. The value of the contribution would be the difference in the amount paid by the candidate, slate . . . and the market value or the professional’s normal rate for such services.
The $125 hourly rate that Mr. Raymond charges the Hoffa campaign clearly falls in the middle to high end of the hourly range of $90 to $140 that Mr. Raymond bills his other labor clients. Accordingly, the Election Officer finds that Mr. Hoffa’s campaign has not been afforded a discounted rate.[2]
3. Allegation that Finkel, Whitefield is not Billing the Hoffa Campaign for all the Time and Expenses Incurred on its Behalf
The protester argues that given the “large number of hours that Mr. Raymond has devoted to the Hoffa account” and the insignificant payments of $14,000 for such services for the period from January 21, 1996 through May 20, 1996, the Hoffa campaign is not being billed for all of Mr. Raymond’s time and expenses.
In order to verify whether Mr. Raymond had billed the Hoffa campaign for all of the time and expenses incurred on its behalf for the period ending May 20, 1996, the Election Officer required Mr. Raymond to submit records reflecting, on a daily basis, hours of work performed for the Hoffa campaign by him and any other of the firm’s attorneys. The Election Officer also requested copies of the billing statements sent to the Hoffa campaign from Finkel, Whitefield from December 1, 1995 through May 30, 1996.
Mr. Raymond submitted statements which included a breakdown by date and time of the hours he and his associates expended on the Hoffa campaign.
In addition to reviewing the submitted documents, the investigation also included a comparison of the law firm’s reported hours with Election Office records which identified the protests and appeals in which Mr. Raymond was involved. Based on the investigation, the Election Officer is satisfied that Finkel, Whitefield has billed the Hoffa campaign for the time and expenses incurred on the campaign’s behalf.
Joseph Rockstroh
October 25, 1996
Page 1
The Election Officer’s investigation also confirms that Finkel, Whitefield’s billing cycle does not actually reflect the full extent of fees for the work performed during the period January 21, 1996 through May 20, 1996. The review of the firm’s billing statements to the Hoffa campaign indicate that Finkel, Whitefield sends the campaign an invoice on the first of each month for the work performed during the previous month. Therefore, Finkel, Whitefield’s ledger indicates that for the reporting period from January 21, 1996 through
May 20, 1996, the Hoffa campaign had been billed for work performed from January 1, 1996 through April 30, 1996. Finkel, Whitefield’s ledger report for the Hoffa account also confirms that for the reporting period ending May 20, 1996, the Hoffa campaign had an outstanding balance of $7,795.13; $1,580.64 of which was outstanding for more than 30 days and $6,214.49 of which was billed on May 1, 1996 and had been outstanding for less than
30 days.[3]
Based upon the further investigation undertaken by the Election Officer pursuant to the remand, she finds that Finkel, Whitefield has not made in-kind contributions of legal services in the form of a discounted rate or a reduction in actual time and expenses incurred on its behalf.
Based upon the foregoing, 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
[1]In the rare circumstances when other attorneys at Finkel, Whitefield have worked on the Hoffa account, work performed by these attorneys is also billed at the $125 hourly rate.
[2]Since Mr. Raymond provided documentation that established his “normal fees or rates” for his other labor clients, the appropriate comparison to determine whether a discounted rate has been afforded the Hoffa campaign is between Mr. Raymond’s rates for these clients and the Hoffa campaign. The protester’s suggested fair-market rate of $200 for Detroit area attorneys is not the appropriate measurement for the rate.
[3]In the original decision, the Election Officer directed the Hoffa campaign to file an additional schedule as part of its CCER for the period ending May 20, 1996 that shows the incurred fees and expenses for that period which have remained unpaid for more than 30 days.