Bureau of National Affairs
Wednesday, April 25, 2001
Teamsters Election Official Orders Hoffa to Return
Improper Contributions From Union Vendors
The official overseeing the International Brotherhood of Teamsters 2001 election of top officers earlier this month found IBT President James P. Hoffa's reelection campaign received some $42,000 in improper contributions to its legal and accounting fund that it must return to the contributors.
The April 12 ruling by IBT Election Administrator William A. Wertheimer stems from a protest filed by Tom Leedham, who is challenging Hoffa for the presidency of the 1.4 million-member Teamsters union.
Leedham asserted the Hoffa reelection campaign organization received improper contributions to its legal and accounting fund from union vendors. Under court-approved rules governing the election, candidates cannot receive contributions from any vendor who has performed services for the international union or its locals within the last 12 months. Complex rules governing the union election require candidates to file periodic reports with the election administrator detailing contributions and expenditure. These reports are available for review by a candidate's opponent.
Reviewing Hoffa's submissions, the election administrator found the union president's campaign received $104,455 in contributions to its accounting and legal fund. Of this, $36,750 came from union vendors and already has been returned by the campaign, Wertheimer wrote in his decision. Another $5,000 should have been returned but has not yet been. The administrator's accounting staff still is trying to determine the propriety of another $37,200 in contributions, the administrator said.
Wertheimer pointed out that all the improper legal and accounting contributions were made prior to the May 2000 adoption of rules for the election by the union's general executive board, and were not barred as such when the contributions were made. "Nonetheless, once the rules' prohibition on union vendor contributions were adopted, the Hoffa slate had a duty to ensure that no legal and accounting fund contributions were from union vendor sources. While the Hoffa slate has taken steps in that direction, full compliance with the prohibition of union vendor contributions has yet to be achieved," he said.
Wertheimer therefore ordered the Hoffa campaign to immediately return all unreturned contributions that have been identified as improper and to establish an escrow account to cover those identified contributions where the administrator's staff still is trying to make a determination as to their propriety.
Hoffa campaign spokesman Richard Leebove said April 24 the campaign will not appeal the decision. It has returned most of the questionable contributions and is cooperating with the administrator's auditors to determine the status of others. It also is working with the administrator to develop a consistent way of identifying vendors who are potential contributors and who may have done business recently with the union.
Leebove said the election rules, which did not prohibit contributions from union vendors in union elections in 1991, 1996, and 1998, were tightened for this election.
Reacting to the ruling, Leedham said, "Hoffa is addicted to employer money. Now that he's in office, he's taking tens of thousands of dollars from vendors who do business with the union. Teamsters need a leader who is not for sale to the highest bidder."
The outcome of the Teamsters' last election of international officers in 1996 was overturned due to serious violations of election rules on campaign funding.
Former President Ron Carey was disqualified from participating in the rerun election in 1998 and ultimately barred from the union for life for his part in a scheme to divert union funds to his reelection campaign
(144 DLR AA-1, E-56, 7/28/98).
The election officer also found Hoffa committed violations of the rules during the course of the 1996 election. But he determined the violations were relatively minor and not sufficient to disqualify Hoffa from participating in the 1998 rerun contest (81 DLR AA-1, E-19, 4/28/98). In that election Hoffa also faced Leedham, a former member of the Carey administration.
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