June 19, 1998
VIA UPS OVERNIGHT
Joel LeFevre
June 19, 1998
Page 1
Joel LeFevre, Secy. - Treas.
Teamsters Local Union 840
345 West 44th Street
New York, NY 10036
Anthony Rumore, President
Teamsters Local Union 812
202 Summerfield Street
Scarsdale, NY 10583
Board of Trustees
Teamster Affiliates Pension Fund
International Brotherhood of Teamsters
25 Louisiana Avenue, NW
Washington, DC 20001
Tom Sever, Gen. Secy. - Treas.
International Brotherhood of Teamsters
25 Louisiana Avenue, NW
Washington, DC 20001
General Executive Board
International Brotherhood of Teamsters
25 Louisiana Avenue, NW
Washington, DC 20001
Aaron Belk, Vice - Pres.
International Brotherhood of Teamsters
25 Louisiana Avenue, NW
Washington, DC 20001
David L. Neigus
Deputy General Counsel
International Brotherhood of Teamsters
25 Louisiana Avenue, NW
Washington, DC 20001
Joel LeFevre
June 19, 1998
Page 1
Re: Election Office Case No. PR-062-IBT-NYC
Gentlemen:
Anthony Rumore and Joel LeFevre 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”) against former General President Ron Carey, General Secretary-Treasurer Tom Sever, each “responsible” member of the IBT General Executive Board and the trustees of the Teamster Affiliates Pension Trust Fund (“TAPF”). Mr. Rumore is the president of Local Union 812. Mr. LeFevre is the secretary-treasurer of Local Union 840.
Joel LeFevre
June 19, 1998
Page 1
The protest filed by Mr. Rumore and Mr. LeFevre is 25 pages in length, not including 40 exhibit references and a “bibliography” containing 6 additional references.[1] The protesters allege that Mr. Carey and his supporters misrepresented the financial condition of the IBT in order to trigger an “emergency” dues assessment pursuant to a provision of the IBT Constitution. The additional revenue, according to the protesters, was used to support Mr. Carey’s candidacy in violation of the Rules. The protesters allege that this improper result was achieved by the following means:
(1) Mr. Carey and his supporters caused the IBT to list as a debt on the financial statements an amount owed to the TAPF for unpaid pension contributions. In the opinion of the protesters, the debt should not have been listed as a valid obligation of the IBT because “the amount is not needed by the TAPF to fund the accrued liabilities of the Fund to the participants” and because the amount owed by the IBT to the TAPF is a debt that “will never” require payment since the TAPF’s investments have performed so well.
(2) The listing of the debt caused the assets of the IBT to fall below a minimum specified in the IBT Constitution, causing the “emergency assessment” provisions contained therein to become operative. As a result of the “emergency assessment,” the IBT received additional monies.
(3) Having deceitfully contrived the activation of the “emergency” assessment provisions to produce additional funds, Mr. Carey and his supporters used the extra revenue to create employment vacancies and finance the hiring of over 60 persons. The protesters admit that these employees and contract workers performed legitimate services for the IBT, but claim that the actual reason for the hiring was to further a scheme to campaign for Mr. Carey at the expense of the IBT. In the words of the protesters, Mr. Carey hired these persons “for the purpose of using their ‘incidental to Union work’ presence throughout the United States to campaign for the re-election of the Ron Carey slate.”
Joel LeFevre
June 19, 1998
Page 1
(4) The protesters do not allege that any funds were paid out by the TAPF for use in any election campaign activities. However, it appears to be their position that the TAPF made an improper contribution to the Carey Campaign. This conclusion is based on the fact that the TAPF is an employer within the meaning of the Rules and that Mr. Carey and his supporters are members of the TAPF Board of Trustees.
The IBT challenges the timeliness of the protest and denies that an emergency assessment was triggered on false grounds. Neither Mr. Carey nor the Carey Campaign has responded to the protest.
The protest was investigated by New York City Protest Coordinator Barbara C. Deinhardt.
The Election Officer has reviewed the protest on the merits, but declines to resolve it on that basis. The protest, filed on or about February 12, 1998, is not timely. The Rules at Article XIV, Section 2(b) state that pre-election protests “must be filed within two (2) working days of the day when the protester becomes aware or reasonably should have become aware of the action protested or such protests shall be waived.” The requirement to promptly file protests is an important part of the election process. The short time limits are designed to quickly bring alleged violations of the Rules to the attention of the Election Officer. The Election Officer’s remedies are most effective when applied to a Rules violation filed in a timely manner. Mee, PR-048-LU70-PNW (May 28, 1998), aff’d, 98 - Elec.App - 338 (KC) (January 28, 1998).
All of the alleged factual bases for the protest were matters of public knowledge for years before the filing. The imposition of the “emergency assessment,” an event central to the theory of the protest, was announced over four years ago and was well publicized. The IBT’s reporting of the unfunded pension amounts owed to the TAPF has been included on every IBT annual financial statement since the obligation came into existence. The number of persons hired by the IBT in each calendar year, as well as the number of persons who have terminated IBT employment, are disclosed in the LM-2 reports filed with the Department of Labor. The IBT’s LM-2 reports for calendar years 1995 and 1996 show that 111 new employees were hired during the period and that 53 terminated employment.
The annual financial statements for the previous year are reprinted in the Teamster magazine in its June issue. The LM-2 reports must be filed with the Department of Labor on March 31 of each year and are made available for public inspection soon after receipt.
The protesters admit to having a working knowledge of the financial statements, the
Joel LeFevre
June 19, 1998
Page 1
LM-2 reports and Form 5500 tax returns filed annually by the TAPF long before the protest was filed. Mr. LeFevre states that despite the availability of this information, he did not begin “investigating” the protest until after he inspected the TAPF’s Form 5500 tax return on or about October 15, 1997. Mr. LeFevre further states that his review of this document caused him to perform lengthy additional research into the matter resulting in this protest. According to Mr. LeFevre, his research was necessary to forma a basis for the filing.
The Election Officer concludes that explanation provided by Mr. LeFevre is insufficient to justify his admitted four-month delay in filing the protest (from October 15, 1997). Even if this were not the case, the Election Officer would conclude on this record that the protesters had constructive knowledge of the matters and facts relevant to the protest long before October 15, 1997, given the general availability of the necessary information. Hoffa, PR-112-LU206-EOH (June 2, 1998).
The detrimental effect of a late filing on the Election Officer’s practical ability to render an effective remedy is underscored by this protest because the allegations relate only to the initial election. The Election Officer has determined that the initial election must be rerun and it is therefore unnecessary to resolve such allegations absent extraordinary circumstances. Cheatem, Post 27-EOH (August 21, 1997) aff’d in rel. part, 97 - Elec. App. - 322 (KC) (October 10, 1997);[2] In re Cheatem, Post-27-EOH (KC) (November 17, 1997).
Accordingly, the protest is DENIED.
Any interested party not satisfied with this determination may request a hearing before the Election Appeals Master within one (1) 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
Joel LeFevre
June 19, 1998
Page 1
Copies 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 G. Cherkasky
Election Officer
MGC:chh
cc: Kenneth Conboy, Election Appeals Master
Barbara C. Deinhardt, New York City Protest Coordinator
[1] In addition to violations of the Rules, the protesters have alleged that sections of the Employee Retirement Income Security Act (“ERISA”), the Labor-Management Reporting and Disclosure Act (“LMRDA”) and the IBT Constitution have been breached as well. A copy of the protest was also sent to the IBT Financial Monitor, the Internal Review Board, the United States Department of Labor (Pension and Welfare Department), Representative Peter Hoekstra, the United States Attorney for the Southern District of New York, and Judge David N. Edelstein.
[2] In Cheatem, the Election Officer stated that “other adequate forums” exist “in which any continuing claims of improper conduct can be pursued.”