Protest Decisions

January 15, 1998

VIA UPS OVERNIGHT

Gene Moriarty

January 15, 1998

Page 1

Gene Moriarty

c/o Ron Carey Campaign

P.O. Box 77067

Washington, DC  20013

James P. Hoffa

2593 Hounds Chase

Troy, MI  48098

James P. Hoffa Slate

c/o Patrick J. Szymanski, Esq.

Baptiste & Wilder

1150 Connecticut Avenue, NW

Suite 500

Washington, DC  20036

Chuck Mack, Sec.-Treas.

Teamsters Local Union 70

70 Hegenberger Road

Oakland, CA  94621

John F. Murphy, Sec.-Treas.

Teamsters Local Union 122

650 Beacon Street

Boston, MA  02215

Betty Fischer, Sec.-Treas.

Teamsters Local Union 538

R.D. No. 1, County Line Road

Worthington, PA  16262

Donato J. DeSanti, President

Teamsters Local Union 701

2003 U.S. Route No. 130, Suite B

North Brunswick, NJ  08902

James Potter

Teamsters Local Union 19

223 Wood Street

Grapevine, TX  76051

Bradley T. Raymond, Esq.

Finkel, Whitefield, Selik,

  Raymond, Ferrara & Feldman

32300 Northwestern Highway

Suite 200

Farmington Hills, MI  48334

Richard Brook, Esq.

Cohen, Weiss and Simon

330 West 42nd Street

New York, NY  10036

Dotty Malinsky

9409 Yukon Avenue South

Bloomington, MN  55438

Gene Moriarty

January 15, 1998

Page 1

Re:  Election Office Case No. PR-049-IBT-EOH

Dear Gentlepersons:

Gene Moriarty

January 15, 1998

Page 1

Gene Moriarty, a member of Local Union 677, filed a pre-election protest pursuant to Article XIV, Section 2(b) of the Rules for the 1995-1996 IBT International Union Delegate and Officer Election (“Rules”).  The protester alleges multiple violations of the Rules, Rerun Plan and Advisory on Campaign Contributions and Disclosure (“Advisory”) on the Campaign Contribution and Expenditure Reports (“CCERs”) filed by various International officer candidates on the Hoffa slate.  The alleged violations will be addressed separately below.

The protest was investigated by Election Office Representative Kathryn Naylor.

1.              Late Filing of CCERs by James Hoffa, James Potter, Betty Fischer and Randall Copeland

The protester claims that as of December 9, 1997, the Carey campaign had not received copies of the first CCER for the rerun election that was due on December 1, 1997 for the Hoffa Slate, James Potter, Betty Fischer, and Randall Copeland.

Under the Rules, every candidate and slate must file a CCER and Supplement Form No. 1 regarding legal and accounting funds.  The investigation revealed that the CCER and Supplemental Form No. 1 that was filed on behalf of the “Hoffa Rerun” were inadvertently mislabeled as the filings for Mr. Hoffa as an individual candidate when it was actually for the Hoffa slate.  The CCER and Supplemental Form No.1 for Mr. Hoffa as an individual candidate has been submitted to the Election Office and opposing slate representatives.

As of December 16, 1997, the Election Office had not received CCERs from Hoffa slate members James Potter and Betty Rose Fischer.  Mr. Potter is a new candidate for Southern Region Vice President.  In light of Mr. Potter’s lack of familiarity with the CCER filing process for the initial election and the additional reporting requirements imposed by the Rerun Plan and the Advisory, the Election Office granted Mr. Potter’s request for an extension on his first CCER until December 31, 1997.  Mr. Potter’s CCER was received on January 5, 1998.  If the Election Office had been open on January 2, 1998, the reports would have been delivered then.  The Election Officer considers this filing, although technically beyond the extension due date, substantially in compliance.

On December 16, 1997, the Election Officer sent a letter to Ms. Fischer and other late filers advising them to file the first CCER by December 19, 1997, or the Election Officer would take appropriate action.  Upon receipt of this letter, Ms. Fischer informed the Election Office that the accountant who prepares all her CCERs was out of town until the weekend, but he would prepare and submit the forms to the Election Office by Monday, December 22, 1997.  Ms. Fischer’s CCER was faxed to the Election Office on Sunday, December 21, 1997.  The Election Officer considers such filing substantially in compliance with his directive.

Randall Copeland has informed the Election Officer that he is not a candidate in the rerun election.  Therefore, he is not obligated to file any CCERs in the rerun election.

Accordingly, this portion of the protest is DENIED.

Gene Moriarty

January 15, 1998

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2.              Late Exchange/Receipt of Reports for Hoffa Slate

The protester also alleges that the CCER was shipped via UPS ground to the Carey campaign and was not received until after December 4, 1997, the date the Hoffa campaign filed a protest on the Carey slate’s CCER.  The protester notes that the Advisory states “failure to provide copies of CCERs and Supplement No. 1 to opposing slate representatives and independent candidates at the same time and manner as CCERs are provided to the Election Office, will be treated as a serious violation of the Rules.”  The protester requests that the Advisory be enforced.

The Election Office received the CCER and Supplemental Form No. I for the Hoffa slate on December 2, 1997.  In accordance with the Advisory, the slate representatives for the Carey campaign and the Stand-Up slate should have also received copies of these reports on the same date.

Accordingly, this aspect of the protest is GRANTED.  The Election Officer directs the Hoffa Slate to send all subsequent CCERs by overnight, express mail or hand delivery to opposing slate representatives.  The Hoffa Slate and all other slates and independent candidates shall submit an affidavit in the form of a certificate of service with all subsequent filings to the Election Office that attests to the transmittal, the name and address of each slate and independent candidate receiving the CCER and the form of delivery.

An order of the Election Officer, unless otherwise stayed, takes immediate effect against a party found to be in violation of the Rules.  In Re: Lopez, 96 - Elec. App. - 73 (KC) (February 13, 1996).

3.              Alleged Violations of James P. Hoffa

A.              Compliance with PR-012-LU705-NCE

The protester claims that Mr. Hoffa’s CCER provides no indication of compliance with the remedy ordered in McCormick, PR-012-LU705-NCE (November 17, 1997).  Although this case is now pending decision due to a remand, Mr. Hoffa complied with the remedy ordered and by check dated November 24, 1997, paid the Local Union 705 United Slate $305.55.  The first CCER covered contributions received and expenditures made through November 19, 1997.  Since the expenditure to the United Slate was made on November 24, 1997, the Hoffa campaign was not required to report it on this CCER.

On December 10, 1997, Election Appeals Master Conboy granted the Deputy Election Officer’s application for a remand of McCormick for further investigation.

Accordingly, this aspect of the protest is DENIED.

Gene Moriarty

January 15, 1998

Page 1

B.              Alleged Violation of Mr. Hoffa’s Contribution Limit

The protester notes that in McCormick, the Interim Election Officer stated that “Mr. Hoffa paid his own travel expenses to and from the [Maywood] event.”  The protester argues that by paying these expenses, Mr. Hoffa violated his contribution limit of $5,000 since Mr. Hoffa has contributed $5,000 to his campaign, as reflected on the slate’s CCER.  The protester contends that the Hoffa campaign must reimburse Mr. Hoffa for these expenses and the campaign should be sanctioned for its failure to observe the contribution limits.

By letter dated December 22, 1997, sent to all candidates, the Election Officer indicated that when a candidate or member travels by air or other carrier, and personally pays the travel costs, such costs will not count toward the member’s or candidate’s contribution limit.  Therefore, even if Mr. Hoffa did pay for his travel expenses to and from the Maywood event, such expenses would not count toward his limit.

Accordingly, this aspect of the protest is DENIED.

C.              Alleged Violation of Contribution Limits by Dotty Malinsky and the Hoffa Campaign

The protester notes that the Hoffa slate’s CCER reports a $5,000 contribution from Dotty Malinsky on September 8, 1997, and a transfer of $4,000 to Hoffa ‘96 on October 25, 1997, for debt retirement “per Dotty Malinsky.”  The protester contends that such transactions appear to violate the requirement in the Rerun Plan and Advisory that funds for debt retirement be expressly solicited and earmarked for that purpose at the time the contribution is made.  The protester also alleges that Ms. Malinsky has violated her $1,000 contribution limit as a member since Mr. Keegel reports an in-kind contribution from Ms. Malinsky valued at $208.  The protester argues that the campaign should return $4,208 to Ms. Malinsky with interest and should be appropriately sanctioned for its failure to observe the contribution limits. 

The investigation confirmed that Ms. Malinsky made a contribution on September 9, 1997, of $5,000 to the Hoffa campaign for the rerun election.  On October 27, 1997, Ms. Malinsky directed the Hoffa campaign, in writing, to allocate $1,000 to the rerun and $4,000 to retiring the debt from the initial election. 

The Rerun Plan provides that any contributions solicited from members or non-members to retire debt from the initial election must be earmarked by the contributor for this purpose.  Such contributions may not be used for expenditures in the rerun election.  Candidates and slates must segregate such contributions from funds solicited for the rerun election.

Gene Moriarty

January 15, 1998

Page 1

The United States District Court approved the Proposed Rerun Election Plan with modifications on September 29, 1997.  The Rerun Plan provided that the limits and requirements pertaining to Campaign Contributions and Disclosure in Section V became effective on September 29, 1997, and applied retroactively to August 21, 1997.  On September 29, 1997, when the contribution limits took effect retroactively, Ms. Malinsky’s $5,000 contribution violated the Rerun Plan by exceeding the $1,000 limit for a member, and the Hoffa campaign was obligated to return $4,000 to Ms. Malinsky at that time to avoid any violations.[1]  The Election Officer finds that Ms. Malinsky’s allocation in writing of $4,000 to retire debt for the initial election and the campaign’s transfer of such funds to their Hoffa ‘96 account for the initial election does not violate the Rerun Plan’s requirement that contributions for debt retirement must be earmarked for that purpose.  However, such allocation does not fully address the Hoffa slate’s use of $4,000 in impermissible contributions for rerun activities for approximately a month and a half from September 9, 1997 until October 27, 1997. 

Accordingly, this aspect of the protest is GRANTED.  Within three (3) days of this decision, the Election Officer orders the Hoffa campaign to pay interest at the prime rate in the amount of $57 from its general rerun campaign fund to the Hoffa ‘96 account used to retire debt from the initial election.  This amount reflects interest on $4,000 at the rate of 8.5 percent for September 1997 through October 1997.  Within one (1) day of making this payment, the Hoffa slate shall file an affidavit of compliance, along with documentation of this transaction.

An order of the Election Officer, unless otherwise stayed, takes immediate effect against a party found to be in violation of the Rules.  In Re: Lopez, 96 - Elec. App. - 73 (KC) (February 13, 1996).

D.              Alleged Violations Regarding Rent

The protester alleges that the only office rent listed by the Hoffa slate for the rerun is for an office in Washington, D.C.  The protester argues that the CCER should list rent and expenses for (1) an office on Roosevelt Boulevard in Berwyn, Illinois which has been reported in the press as the new Hoffa campaign headquarters and (2) an office in the Detroit area in light of Mr. Hoffa’s extensive campaign activities.  The protester requests that the Election Officer require a full accounting of all expenditures for the Hoffa campaign’s Illinois campaign office and a full accounting of the resources utilized by Mr. Hoffa for his extensive Detroit campaign activities.

Gene Moriarty

January 15, 1998

Page 1

The investigation indicated that the Hoffa rerun campaign has leased space for its campaign office at 6811 West Roosevelt Road in Berwyn, Illinois.  The lease, dated October 1, 1997, is on a month-to-month basis with utilities included for $300 per month.  The lease provides that the rent shall be paid “monthly in advance, until termination of this lease.”  The campaign claims that rent for this space was inadvertently not paid during the reporting period.  The evidence indicates that by check dated December 6, 1997, back rent for October through December 1997 was paid.  This payment will be reflected on the next CCER.

The Election Officer finds that the untimely payment of rent in early December for October and November constitutes an in-kind contribution in violation of the Rules. 

The Hoffa campaign stated that there is no campaign office in the Detroit area.  The protester has not provided/submitted any evidence that indicates that the Hoffa campaign has a campaign office in the Detroit area.  On the basis of these allegations, the Election Officer does not find that the protester’s request for a full accounting of the Illinois campaign office and Detroit campaign activities is merited.

Accordingly, this aspect of the protest is GRANTED as to the failure to make timely payments for the space in Berwyn, Illinois.  Within three (3) days of this decision, the Election Officer orders the Hoffa campaign to pay interest at the prime rate in the amount of $9 to the landlord, Tom Ferguson.  This amount reflects interest on $600 at the rate of 8.5 percent for October through November 1997.  Within one (1) day of making this payment, the Hoffa slate shall file an affidavit of compliance, along with documentation of this transaction.

An order of the Election Officer, unless otherwise stayed, takes immediate effect against a party found to be in violation of the Rules.  In Re: Lopez, 96 - Elec. App. - 73 (KC) (February 13, 1996).

E.              R.L. Communications

The protester claims that without additional information, he is unable to reconcile the payments to R.L. Communications reported on Schedule B, and Schedule C of the Hoffa Slate’s CCER and Schedule B-1 of the Hoffa Slate’s Supplemental Form No. 1.  The protester requests the Election Officer to seek clarification on how the expenditures reported on Schedules B and B-1 relate to the debt owed to R.L. Communications reported on Schedule C, Part 2.

Gene Moriarty

January 15, 1998

Page 1

The investigation revealed the following: On Schedule B of the CCER, the slate reports a total of $6,250 in expenditures/payments to R.L. Communications during the reporting period ending November 19, 1997.  This figure represents three checks written to R.L. Communications during this period: (1) check dated November 5, 1997, for $2,500 for services that were initially paid out of the campaign’s Legal and Accounting Fund;[2] and (2) checks dated October 27, 1997 and November 7, 1997 for $1,750 and $2,000, respectively, for partial payments on the invoice from R.L. Communications for services provided from August 21, 1997 through October 31, 1997.

On Schedule C, Part 2, the slate reports:  1) $6,750 for the services invoiced during the reporting period;[3] 2) $3,750 in payments made during the reporting period that are included in the expenditures reported on Schedule B; and 3) the $3,000 outstanding balance owed to R.L. Communications after the $3,750 is applied toward the invoice for $6,750.

Schedule B-1 of the Supplemental Form No. 1, the slate reports a $2,000 payment to R.L. Communications from the Legal and Accounting Fund on July 15, 1997, and a notation that this amount was returned to the Legal and Accounting Fund during the next reporting period.

The payments to R.L. Communications are appropriately reported on Schedules B, Part 1 and C, Part 2 of the CCER and Schedule B-1 of the Supplemental Form No. 1 as described above.

Accordingly, this aspect of the protest is DENIED.

F.              Incomplete CCERs

The protester alleges that the CCER for the Hoffa slate and Dan DeSanti inadequately identify contributors.  The protester claims that many of the contributors are listed with only an initial for the first name and/or list the address of a local union instead of the full name, mailing address and zip code as required by the CCER Form.  The protester contends that such inadequate reporting precludes full review of the list of contributors and that the slate and Mr. DeSanti should file amended reports with complete and accurate information.

A review of the Hoffa slate’s CCER reveals that the slate has reported only an initial for the first name of some contributors and listed a local union’s address for numerous contributors whose membership status had not yet been verified by the slate as of the filing of the CCER on December 2, 1997.  A review of Mr. DeSanti’s CCER reveals that Mr. DeSanti’s campaign reported the address of Local Union 701 for numerous contributors.  Mr. DeSanti’s CCER also listed numerous contributors in care of “Yellow Freight Systems, Elizabeth, NJ” instead of a mailing address. 

Gene Moriarty

January 15, 1998

Page 1

The Hoffa slate acknowledges that numerous contributors were reported in the manner described above.  Since filing the initial CCER, the Hoffa slate has provided submissions to the Election Officer which indicate that the slate is updating the names and addresses of contributors as they are verified with the IBT membership list.  The initial list of contributors and social security numbers submitted only to the Election Office contained some of these corrections.  In accordance with the Advisory, the Election Office did not direct the Hoffa slate to transmit this list containing social security numbers to opposing slate representatives.

The Instructions for Preparing the CCER indicate that the full name and complete mailing address of contributors should be reported on the CCER.  In this regard, the Election Officer directs the Hoffa slate to submit an amended CCER with corrected names and addresses for the first reporting period to the Election Office and opposing slate representatives by Friday, January 23, 1998.

Mr. DeSanti has submitted an amended list of contributors with better addresses taken from the IBT membership list to the Election Office and opposing slate representatives.

Accordingly, this aspect of the protest is RESOLVED.

4.              Alleged Violation of Chuck Mack

The protester notes that the CCER for Chuck Mack’s campaign lists three expenditures that total $10,000 that are described as “Prize Money, Hoffa Dinner Rally” without any other detail.  The protester argues that the Mack campaign should be required to file an amended report identifying the individuals who received the prize money.

Chuck Mack, by letter dated December 31, 1997, filed an amendment to his CCER that provides the names and address of those individuals who purchased the winning raffle tickets and received the prize money reported on Schedule B.  Mr. Mack has indicated to the Election Office that copies of this amendment has been sent to opposing slate representatives.

Accordingly, this aspect of the protest is RESOLVED.

5.              Alleged Violations of John Murphy

The protester alleges that a review of Mr. Murphy’s CCER suggests that he has not opened a new bank account and has commingled funds from the initial election with rerun funds.  The protester argues that if Mr. Murphy has not commingled funds, there is no explanation for the decrease in his bank balance from $5,137 at the start of the period to $4,616.50 at the end of the period when the total of his contributions and loans exceeded the expenditures made during the reporting period.

Gene Moriarty

January 15, 1998

Page 1

The investigation revealed the following.  In early September 1997, Mr. Murphy received $552 in campaign contributions for the rerun that were deposited in his account for the initial election.  On September 24, 1997, Mr. Murphy opened a new bank account for the rerun and deposited $5,137.  This deposit was comprised of:  1) Mr. Murphy’s loan of $4,500 to his campaign; 2) $552 in rerun contributions from his initial campaign account; and 3) other campaign contributions received for the rerun prior to September 24, 1997.  The $552 in rerun contributions that were initially deposited in the old account were itemized appropriately on Schedule A, Part 1 of the CCER.  The $5,137 reported as the balance at the start of the period represents the opening deposit for the rerun account on September 24, 1997, not funds from Mr. Murphy’s initial election account as alleged by the protester.  Moreover, during the reporting period, Mr. Murphy had $11,217 in available funds[4] from which $6,620.50 in disbursements were made.  Due to a mathematical error, Mr. Murphy reported $4,616.50, instead of $4,596.50, as the account balance at the end of the period.

Accordingly, this aspect of the protest is DENIED.

6.              Reporting Payments or In-Kind Contributions from Spivak, Lipton, Watanabe, Spivak and Moss

The protester claims that the Hoffa slate’s CCER fails to list either a payment to or in-kind contribution of legal services from the firm of Spivak, Lipton, Watanabe, Spivak and Moss (“Spivak”) that has served as counsel to the slate in various filings in the United States District Court for the Southern District of New York.

The investigation revealed that Spivak provides local counsel services in New York to the firm of Baptiste and Wilder on behalf of the Hoffa campaign.  Spivak bills Baptiste and Wilder for fees and expenses incurred in connection with such local counsel work in New York.  Baptiste and Wilder then invoices the Hoffa campaign for Spivak’s fees and expenses. 

The Instructions for Preparing the CCER requires candidates to itemize disbursements on Schedule B of the CCER or B-1 of the Supplemental Form No. 1:  if the aggregate total for expenditures to any person or entity exceeds $100.  Under the arrangement with Baptiste and Wilder and Spivak, the Hoffa campaign does not make any expenditures directly to Spivak, therefore, the campaign’s CCER does not reflect payments that are made to Spivak.  Similarly, in-kind contributions from Spivak to the Hoffa campaign will be reflected as in-kind contributions from Baptiste and Wilder.  The arrangement between Baptiste and Wilder and Spivak does not violate the Rules or Advisory.

Accordingly, this aspect of the protest is DENIED.

Gene Moriarty

January 15, 1998

Page 1

7.              Addendum No. 1 for Dallas Fundraiser

The protester also alleges that the Hoffa CCER fails to include an addendum no. 1 for the Dallas fundraiser that is referenced repeatedly on Schedule A, Part 1.  The Hoffa slate responds that this Addendum was not initially included with the slate’s CCER since this event was not conducted by the Hoffa slate, but by J.D. Potter, and that this addendum would be filed with Mr. Potter’s CCER. 

Candidates and slates are required to submit an Addendum No. 1 for any fundraiser at which the candidate or slate receives campaign contributions, including but not limited to campaign rallies, raffles, beer or cocktail parties, cash bars and dinners.  The Hoffa campaign has submitted Addendum No. 1 for the fundraiser that was held in Lewisville, Texas, on November 9, 1997.  This addendum reflects the total amount of contributors and contributions that the slate collected at the event.  The Hoffa campaign has indicated that other than setting up a table for selling campaign paraphernalia at the event, the slate did not incur any costs and therefore has not reported any on the addendum.  The Hoffa Campaign has submitted the addendum to opposing slate representatives.

Accordingly, this aspect of the protest is RESOLVED.

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

Gene Moriarty

January 15, 1998

Page 1

opies of the request for hearing must be served on the parties listed above as well as upon the Election Officer, 444 North Capitol Street, NW, Suite 445, Washington, DC 20001, Facsimile

(202) 624-3525.  A copy of the protest must accompany the request for a hearing.

Sincerely,

Michael Cherkasky

Election Officer

MGC:chh

cc:               Kenneth Conboy, Election Appeals Master

Jeraldine Cheatem for the Stand Up Slate