In re:Election Office Case Nos. JERALDINE CHEATEM: Post-27-EOH, Post-29-EOH, ROBERT H. SPEARMAN: Post-31-EOH, Post-32-EOH, JIM HOFFA - NO DUES INCREASE- Post-33-EOH, Post-35-EOH, 25 & OUT SLATE: Post-37-EOH, JERRY HALBERG: Post-39-EOH, JAMES P. HOFFA Post-40-EOH, Post-42-EOH, Post-51-EOH

SUMMARY OF DECISION*

The Election Officer for the International Brotherhood of Teamsters ("IBT") was appointed by the U.S. District Court for the Southern District of New York to supervise and conduct the rank-and-file election of International officers to ensure a free, fair and informed process. Her duties arise from the 1989 Consent Decree approved by the District Court in a case brought by the government under federal racketeering laws. The ballot count in the 1996 International officer election concluded on February 27, 1997. This decision follows the investigation of numerous post-election protests.

Part I of the decision addresses several protests which challenged the fairness and accuracy of the ballot count. Following a detailed explanation of the receipt, processing, and count of the ballots, these protests are denied.

Parts II and III of the decision address allegations that non-IBT members made $221,000 in improper contributions to Teamsters for a Corruption Free Union ("TCFU"), a fundraising committee of the Ron Carey Campaign. The Election Officer concludes that the contributions violated the Election Rules' prohibition against employer and IBT contributions.

The TCFU contributions were used by the Carey Campaign to fund approximately 40% of a direct mail get-out-the-vote program. Given the small margins between the winning candidates on the Carey slate and the losing candidates on the Hoffa slate, the TCFU-funded mailings could have persuaded at least a small percentage of Carey slate supporters to cast their ballots and therefore may have affected the outcome of the International officer election. The Election Officer refuses to certify the election and orders a rerun election for all positions except the Central Region Vice Presidents and the President of Teamsters Canada.

The Election Officer began an investigation of TCFU contributions after a review of the TCFU's financial disclosure forms. The investigation continued following receipt of the post-election protests.

The investigation revealed a complex network of schemes to funnel employer and IBT funds into the Carey Campaign. Martin Davis, a principal in the political consulting firm November Group, and Jere Nash, campaign manager of the Carey Campaign, raised money through these schemes to fund a direct mail program. Davis recruited Michael Ansara, a principal in the Massachusetts telemarketing firm Share Group, to assist these fundraising efforts. Ansara arranged for Charles Blitz, a volunteer fundraiser for the consumer watchdog group Citizen Action, to solicit funds. Blitz raised $110,000 from wealthy individuals for the Carey Campaign. In return, contributions from the IBT would be arranged for political efforts supported by those individuals.

In addition, Ansara solicited contributions from his wife, who gave $95,000 to TCFU. Ansara and Davis developed a scheme to reimburse her through improper payments from Citizen Action and November Group to Ansara's consulting firm, Share Consulting; and by having Share Consulting bill the IBT for more calls than were actually made in connection with a telemarketing contract.

TCFU received an additional $16,000 from two contributors through solicitations by Ed James, a Washington, D.C. attorney who is an employer.

In ordering a rerun election, the Election Officer recognizes the hardship on the candidates who just went through an expensive two-year campaign and the disruption to the institution as many of its leaders become diverted from the central work of the Union. The Election Officer, finds, however, that the members cannot have confidence in their union or its leaders if they see their choice of officers has been manipulated by outsiders. They cannot have confidence in the Consent Decree if the Court officers do not take effective action to prevent and remedy such misconduct. The Election Officer concludes:

The election of International Officers is the clearest expression of the control of members over their Union; it is also the key to insuring that organized crime, employers, or any other outsiders do not use the Union for their own purposes. To avoid a rerun because of the disruption it brings could allow this union to lose its most valuable resource; the support, participation, and confidence of its membership. Such a result cannot be allowed.

The protester argued that the severity of the misconduct requires that the Carey slate be disqualified and the Hoffa slate be declared the winners. The Election Officer gives serious consideration to this remedy but finds it inappropriate. Disqualification is a drastic remedy because it is undemocratic. Removing the Carey slate members form the ballot would deprive members of the opportunity to vote for candidates who had been popularly nominated under the Election Rules. Because there is no evidence that Carey or any member of his slate knew of or participated in the various improper fundraising schemes, disqualification is not warranted. Even if disqualification had been appropriate, automatic installation of the candidates with the next highest vote count would not have followed. The obligation to ensure a fair and open election would necessitate providing an opportunity for supplemental nominations.

While the investigation did not uncover any misconduct by Carey or his slate members, important questions remain unanswered. If, subsequent to the issuance of the decision, evidence is brought to the Election Officer's attention that could warrant disqualification, the Election Officer will consider it.

The decision contains numerous additional remedies, including substantial fines against Davis, Nash and Ansara, and a bar against certain vendors and organizations from any further work on behalf of the IBT, its affiliates, or any candidate for International office.

The Election Officer notes that she has not been able to fully address additional issues involving the potential use of IBT and employer funds in the campaign. She finds, however, that resolution of such claims would not affect her decision to rerun the election, and that there are other adequate forums in which claims of improper conduct can be pursued. Several specific areas of inquiry are referred to the Court-appointed Independent Review Board and the U.S. Attorney for the Southern District Court of New York for whatever investigation and action they deem appropriate under the Consent Decree. The Election Officer's attention and resources must be primarily devoted to the conduct of the rerun election. While further evidence on the issue of disqualification will be considered, the Election Officer will not consider any additional evidence or further protests related to the initial election.

Simultaneous with the issuance of the decision, the Election Officer has made an application to the U.S. District Court for approval of a Proposed Rerun Election Plan. The proposed plan includes supplemental nominations, the prohibition of non-member contributions, a $1,000 limit on member contributions and a $5,000 limit on candidate contributions, and more frequent and detailed reporting requirements.