Protest Decisions

November 27, 1996

VIA UPS OVERNIGHT

Gene Shiflett

November 27, 1996

Page 1

Gene Shiflett, Trustee

Teamsters Local Union 557

6000 Erdman Avenue

Baltimore, MD  21205

Duke Zeller

Potomac Associates International

1025 Thomas Jefferson Street, N.W.

East Lobby, Suite 700

Washington, DC  20007

Cliff Johnson

Craig Shirley & Associates, Inc.

122 S. Patrick Street

Alexandria, VA  22314

Sam Theodus, President

Teamsters Local Union 407

3150 Chester Avenue

Cleveland, OH  44114

Gene Giacumbo

15 Village Road

Sea Bright, NJ  07760

Leslie Schwartz

Carol Publishing Group

120 Enterprise Avenue

Seacaucus, NJ  07094

Susan Davis

Cohen, Weiss & Simon

330 W. 42nd Street

New York, NY  10036

James P. Hoffa Campaign

c/o Bradley T. Raymond

Finkel, Whitefield, Selik, Raymond,

  Ferrara & Feldman

32300 Northwestern Highway, Suite 200

Farmington Hills, MI  48334

Gene Shiflett

November 27, 1996

Page 1

Re:  Election Office Case No. P-1273-JHS-NYC

Gentlepersons:

A pre‑election protest was filed pursuant to Article XIV, Section 2(b) of the Rules

Gene Shiflett

November 27, 1996

Page 1

for the 1995-1996 IBT International Union Delegate and Officer Election (“Rules”), by Gene Shiflett, International trustee for Local Union 557, against IBT employer Carol Publishing Group (“Carol Publishing”) and its alleged publicists, Craig Shirley & Associates, Inc. (“Shirley”).  In essence, the protest claims that Carol Publishing has made a campaign contribution, in violation of the Rules, by faxing a press release to IBT local unions attacking Ron Carey, IBT general president and a candidate for reelection.  At the time the protest was filed, the protester requested that the Election Officer enjoin a press conference scheduled for Thursday, November 21, 1996, which would allegedly focus on attacks on Mr. Carey.

The Hoffa campaign denies any violation of the Rules and asserts that the activities alleged in the protest are protected by the First Amendment and the media exception.

New York City Protest Coordinator Barbara C. Deinhardt investigated this protest.

Duke Zeller, a former IBT communications director, served under several IBT

general presidents prior to Mr. Carey.  Mr. Zeller has authored a book about the Teamsters, released in November 1996 by Carol Publishing, entitled, Devil’s Pact: Inside the World

of the Teamsters Union.  Carol Publishing is a small press which employs a publicist,

Leslie Schwartz.  On November 18, Carol Publishing faxed a press release to all IBT local unions to promote the book.[1]  The heading on the release says that it is from Carol Publishing and gives Leslie Schwartz as the contact person.  The headline states:

              EVERY TEAMSTER SHOULD READ THIS NEW BOOK

              BEFORE VOTING FOR TEAMSTER OFFICERS

              INSIDER ACCOUNT BY IBT DIRECTOR

              OF COMMUNICATIONS OF 14 YEARS WILL ENLIGHTEN

              TEAMSTER MEMBERS WITH SHOCKING

              FACTS ABOUT THEIR UNION

              NOW AVAILABLE IN BOOKSTORES OR BY

              CALLING 1-800-447-BOOK (2665)

The release states that the book reveals that the IBT “illegally funneled as much as $56 million into Bill Clinton’s 1992 effort to win the presidential election.”  The release continues that according to Mr. Zeller’s book, “President Ron Carey nearly bankrupted the once richest union coffers by setting up a secret slush fund for Clinton in exchange for the government not investigating Carey’s own mob ties.”  After repeating these themes again, the release closes with the following:

Gene Shiflett

November 27, 1996

Page 1

DEVIL’S PACT is an explosive book that is being published as rank-and-file Teamsters prepare to elect their president in an open, democratic election on November 5, 1996.  The contest pits incumbent Ron Carey against Jimmy Hoffa, the son of the legendary Teamster president, in what promises to be a free-for-all election certain to make headlines.

A previous press release, sent to book reviewers by Carol Publishing on October 21, made no mention of the 1996 International officer election or of Mr. Carey.  Instead, it portrayed the book as the “sometimes startling, often shocking, and altogether gripping story of America’s most controversial labor union, the men who ran it and the lives ensnared by

it.”  In six bullet points of information, the release describes some of the highlights in the book, such as the following:  “the fearful reign of Jimmy Hoffa;” the rise of former General President Jackie Presser “and the mob domination that led to a federal crackdown;” “the present clash of ‘reformist’ leaders;” stories of celebrities; an alleged deal made by

Ronald Reagan “to ignore the Mafia’s control of the Teamsters in order to get the union’s endorsement;” and how the union set up a “multi-million dollar slush fund to help elect

Bill Clinton president.”

Mr. Zeller personally retained an outside public relations firm, Shirley, to publicize his book.  Mr. Zeller states that he is paying $10,000 to 12,000 to Shirley for three months’ work of publicizing his book, obtaining speaking engagements, and handling any movie rights. 

Mr. Zeller says he pays all of the expenses.  A press conference was scheduled to help sell the book.  Shirley sent a media advisory to the labor press and other media contacts, announcing the press conference at the National Press Club on November 21.  The advisory advertised the speakers as Mr. Zeller, Sam Theodus and Gene Giacumbo.  Mr. Theodus is identified as a current member of the General Executive Board (“GEB”); he is also a candidate for reelection as International vice president on the Jim Hoffa-No Dues Increase-25 & Out Slate (“Hoffa slate”).  Mr. Giacumbo is identified as a former member of the GEB.  He is an opponent of Mr. Carey.

The advisory contained the following headline:

              TEAMSTER UNION BOARD MEMBERS CHARGE UNION HEAD

              RON CAREY WITH FINANCIAL MISMANAGEMENT, MAKING

              ILLEGAL $56 MILLION CAMPAIGN CONTRIBUTION TO 1992

              CLINTON/GORE CAMPAIGN.

The advisory then stated that a press conference would take place at which present and former GEB members would “question the unethical dealings” of Mr. Carey.  The advisory identified Mr. Zeller as the union’s former communications director and author of the book described above.  The next paragraph quotes Mr. Zeller accusing Mr. Carey of “repeatedly betraying the trust of the rank-and-file . . .”

Carol Publishing says it knew nothing about the press conference.  Mr. Theodus informed the Election Office investigator that he did not plan to be at the press conference.

Gene Shiflett

November 27, 1996

Page 1

The press conference took place on November 21.  Mr. Zeller, reading from a statement, mentioned his book and its allegations of corruption against six IBT presidents.  He repeated allegations from the book that the IBT, under Mr. Carey, spent millions of dollars from the union treasury to support the 1992 election of President Clinton, and announced that he and Mr. Giacumbo intended to file a complaint with the Federal Election Commission (“FEC”).  Mr. Giacumbo then spoke, initially reading from a prepared statement, also focusing on Mr. Carey’s alleged spending for political purposes and financial mismanagement of the IBT.  During a question-and-answer session, Mr. Zeller denied having any favorite candidate in the election.  Mr. Giacumbo, by contrast, expressly talked about the election, stating that polls showed Mr. Hoffa winning and criticizing the government and the Court-appointed officers for allegedly trying to rig the election.[2]  At some point, Mr. Zeller called on Ken Paff, organizer for the Teamsters for a Democratic Union (“TDU”), who called

Mr. Giacumbo an embezzler.  Shortly thereafter, Mr. Paff was told to be quiet.  It appears that some Carey supporters attended the press conference and handed out Carey literature, attacking Messrs. Zeller, Giacumbo and Theodus, while Mr. Giacumbo was seen handing out literature in support of Mr. Hoffa.

Article XII, Section 1(b)(1) of the Rules states, in pertinent part:

No employer may contribute, or shall be permitted to contribute, directly or indirectly, anything of value, where the purpose, object or foreseeable effect of that contribution is to influence, positively or negatively, the election of a candidate.  No candidate may accept or use any such contribution.

The Rules define “campaign contribution” quite broadly:

The term “campaign contribution” means 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 . . . International Officer position.  Campaign contributions include but are not limited to:

              . . .

(h) The performance of personal services or the making available for use of space, equipment, supplies or advertisements . . .

Rules, Definitions (p. xii).

Gene Shiflett

November 27, 1996

Page 1

The Election Officer has recognized a broad exception for “publications intended for and disseminated to the general public,” as to which “[t]he First Amendment of the U.S. Constitution requires . . . the greatest latitude in exercising the right to communicate.”  Hoffa, P-743-IBT-SCE (May 23, 1996).  Thus, under a “media exception” to the regulation of campaign contributions, the Election Officer does not exercise jurisdiction over “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.”  Pressler, P-365-LU705-CHI (February 22, 1996); Brennan, P-971-IBT (October 16, 1991); Scott, P-969-IBT (October 18, 1991).  The media exception also applies to cable and broadcast media.  See, e.g., Pressler (applying media exception to radio broadcast).

In Rockstroh, P-1003-JHC-EOH (November 5, 1996), the Election Officer reaffirmed that the media exception applies to editorial decisions about the coverage given to International officer candidates, even where a media entity publishes or broadcasts an opinion related to the IBT election.  “The fact that coverage was friendly in tone [to one candidate] was an editorial decision outside the scope of the regulations under the Rules.”  The decision further noted that “commentaries and editorials are also legitimate media functions.”

A publication does not lose the protection of the media exception simply because it then promotes itself through materials that highlight the election or the campaign.  In Reader’s Digest Ass’n v. Federal Election Comm’n, 509 F. Supp. 1210, 1215 (S.D.N.Y. 1981), the FEC was investigating promotional materials distributed by Reader’s Digest that portrayed a reenactment of Senator Edward Kennedy’s 1969 accident at Chappaquiddick.  The materials were distributed in 1980 while Senator Kennedy was running for the Democratic Party nomination for president.  The FEC was trying to determine if these materials constituted an illegal corporate campaign contribution, while Reader’s Digest claimed the protection of the statutory press exception, 2 U.S.C. § 431(9)(B)(I).  The Court noted that the exception should apply if the company was acting in its magazine-publishing function and was disseminating the materials to publicize the issue of the magazine containing the Kennedy article.  Id., 509 F. Supp. at 1214.  See also Federal Election Comm’n v. Phillips Publishing, Inc., 517 F. Supp. 1308, 1313 (D.D.C. 1981).

1.              Carol Publishing Press Release

Gene Shiflett

November 27, 1996

Page 1

Although Carol Publishing is not a newspaper, magazine or broadcaster, book publishing implicates the same First Amendment considerations as do communications of the traditional press.  Carol Publishing is communicating the ideas, factual conclusions and opinions of Mr. Zeller; it should make no difference whether these ideas and opinions are communicated through the medium of a newspaper, a television program, or a book.  A book publisher, no less than a magazine publisher, is protected by the First Amendment and needs to be free to publish ideas and opinions as it sees fit.  Further, book publishers, like the traditional media, should be free to advertise their publications by associating them with timely events.  In Hoffa, P-1216-JHC-EOH (November 19, 1996), the Election Officer found no violation in a CNN broadcast about corruption in the IBT simply because the show was timed to coincide with the election.  “Given the desire to be commercially successful, it is hardly surprising that a program would be timed to coincide with the greatest amount of interest in the subject matter.”  Id.

Based on the above, the Election Officer finds that the press release from Carol Publishing falls within the media exception because it was a legitimate attempt by an independent book publisher to promote sales of one of its products.  Hence, while the press release expressly mentions the election and contains attacks on Mr. Carey, it does not constitute a prohibited employer contribution, in violation of the Rules.

2.              The Shirley Media Advisory

The protester has asserted that the media advisory distributed by Shirley, as well as the Carol Publishing release, are not covered by the media exception.  The Hoffa campaign asserts that both statements are permitted first amendment activities and cannot be construed as prohibited contributions.

As noted above, the Election Officer has found the Carol Publishing release to be covered by the media exception. Arguably, the Shirley media advisory is different from the Carol Publishing release.  The Shirley media advisory was issued on behalf of Mr. Zeller, not a publisher. There is no evidence that Mr. Zeller is acting as an agent for his publisher; to the contrary, Carol Publishing disclaimed any knowledge of the advisory or the press conference.

The Election Officer finds that it is not necessary to determine whether Mr. Zeller’s issuance of the media advisory would be covered by the media exception because there is no evidence that its distribution violated the Rules.  Even if it were established that the advisory issued on behalf of Mr. Zeller was not intended to sell Mr. Zeller’s book, but to attack

Mr. Carey as a candidate in the International officer elections, campaigning by non-members is not prohibited by the Rules unless the person is an employer.  There is no evidence that

Mr. Zeller employs anyone.[3]  Further, while Shirley is presumably an employer, it did not engage in campaigning when it issued the advisory.  As a media consultant, Shirley was acting as Mr. Zeller’s agent in issuing the media advisory, just as a printer acts as a candidate’s agent when it prints leaflets.  Mr. Zeller retained Shirley individually and is solely responsible for the costs of the media advisory and press conference.  Shirley took no independent action to support or attack any candidate.  There is no basis for finding a violation against Shirley.

3.              The Press Conference

Gene Shiflett

November 27, 1996

Page 1

The conduct of the press conference did not constitute a violation of the Rules for the reasons described above.  Even if statements made by Messrs. Zeller and Giacumbo attacked Mr. Carey, there was no employer involved in making a campaign contribution.  Mr. Theodus did not participate in the press conference, and no one apparently campaigned for him.  Shirley acted only as a paid agent of Mr. Zeller and did not make an employer contribution.  Thus, there is no violation of the Rules.

For the above reasons, 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

Barbara C. Deinhardt, New York City Protest Coordinator

Leroy Ellis, Jr., Stand Up for Teamsters Slate