Honorable Thomas S. Zilly
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
U.S. SECRETARY OF LABOR,
MEMORANDUM IN SUPPORT OF PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
The plaintiff in the above-captioned case, Edgar Hanson, submits this memorandum in support of his Motion For Summary Judgment.
The Labor-Management Reporting and Disclosure Act, (LMRDA at 29 U.S.C. §§ 401 et seq.) was enacted by Congress to protect the rank-and-file of the very abuses addressed in this lawsuit. Unfortunately, the U.S. Secretary of Labor through
her mid level bureaucrats, chose instead to protect the entrenched and corrupt union incumbents. Her failure to enforce Title IV of the LMRDA has allowed election fraud to become institutionalized at Local 302. An unholy alliance between corrupt union officials and those bureaucrats within the U.S. Department of Labor (DOL) has been allowed to develop. This is very dangerous and counter to the spirit of the Act.
As a bonafide candidate for the office of business manager of Local 302 of the International Union of Operating Engineers (IUOE), Edgar Hanson observed the election rules of the union's bylaws and constitution, as well as the federal laws under the LMRDA, when he ran for office.
The entrenched union incumbents, however, cheated by violating the bylaws, the union constitution and Title IV of the LMRDA. The violations were borne out of the incumbents' desire to remain in power and continue to inflict punishment on those who opposed them during important union elections.
Edgar Hanson presented his evidence against the incumbents to the appropriate DOL investigators. The Secretary dismissed all charges against the incumbents after finding that no violations occured Hanson's evidence, which includes evidence taken from the investigative files of the DOL's own investigators, speaks directly to acts of conspiracy by the incumbents to commit election fraud and violate federal labor law and union rules.
The Secretary's Statement of Reasons, which is
controverted by the actual evidence and does not rationally flow from the factual findings contained within investigative reports and interviews by DOL investigators, now serves as the basis for the Secretary's argument that no violations occured. this is evidence in and of itself to show that the Secretary's ~ctions (or the actions of her subordinated bureaucrats) ~ere, and continue to be, an effort to politically cover-up the misdeeds of the entrenched union incumbents.
Fortunately, the new Secretary of Labor may realize that the indiscretions of the former Secretary and her subordinates might be rectified. A re-examination of the ~vidence by the new Secretary may correct a horrific problem that continues to persist at Local 302.
The union incumbents, their attorney, their accountant and others, continue to enjoy an unjust enrichment that comes at the expense of Edgar Hanson and the general membership of Local 302. The current business manager, Allan B. Darr, was hastily selected (he was not elected) to his position by the incumbents so that they would remain in power. Allan Darr is not the legitimate business manager. This is entrenchment at its lowest form and it operates against the democratic principles to which the LMRDA speaks.
Edgar Hanson should be retained as the legitimate business manager. If a fair and honest election was conducted, Hanson would have won. However, acts of fraud and election violations by the incumbents affected the outcome of the
election. The incumbent's positions within the union should be automatlcally forfeited and they should be removed from office for their misdeeds involving fraud.
Edgar Hanson was harmed by the actions of the incumbents and their protector, the Secretary of Labor. The cheating ways of the incumbents has allowed them to be economically and politically rewarded, while being protected from prosecution by the Secretary and her subordinates. This is grave miscarriage of the law and amounts to an obstruction of justice.
Hanson is requesting damages as well as a new election. Hanson's honesty and willingness to observe the rules forced him to file this suit. Hanson believes that this suit and motion for summary judgment in his favor will allow the DOL under the New Administration to properly investigate the racketeering activities of the incumbents. Hanson further believes that a favorable ruling by this Court will commence the necessary actions required for Local 302 to be cleansed of corruption and to put an end to institutionalized election fraud. A non-favorable ruling will only exacerbate the persisiting problems within this union.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
The facts in this case have been well documented in earlier briefings. (See Plaintiff's Opposition to Defendant's Motion To Dismiss, or in the Alternative, for Summary Judgment;
pages 4 14). In the interest of space and convenience, all factual material indicated in this briefing will be properly referenced to the plaintiff's opposition brief to the Defendant's Motion For Summary Judgment. Reference will also be made to the plaintiff's Record of Exhibits which are annexed to the Declarations of Edgar Hanson, also part of Hanson's earlier opposition briefing.
A remainlng fact from the administrative record must be addressed. Approximately one-third of the votes cast in the 1999 election were counted manually. This means that approximately 1100 votes were hand-counted. (See Exhibit "K", page 4, paragraph 3 under "Addendum" of the Exhibits of Record, annexed under the Declaration of Edgar Hanson. Exhibit "K" is the U.S. Department of Labor's "Report of Interview of Edgar Hanson"). This fact was addressed through Hanson's attorney and chief election observer, Kevin Peck, and is extremely relevent to Hanson's case.
I. THE SECRETARY'S DECISION TO NOT FILE SUIT WAS ARBITRARY, CAPRICIOUS, AND OTHERWISE CONTRARY TO LAW
a. reviewing the "whole" record
"As one court has observed, the only issue is 'whether
the Secretary's conclusions flow rationally from his factual findings,’” Donovan v. Local 998, Amalgamated Transit Union, 570 F. Supp. 716, 721 (E.D. Wis.1983). This is a a quote and case citiation taken directly from the defendant's briefing
in the instant matter. (See Memorandum in Support of Defendant's Motion to Dismiss or, in the Alternative, for Summary Judgement, page 5, line 9).
Plaintiff Hanson's argument is that the Secretary's conclusions found in her Statement of Reasons do not flow rationally from her factual findings. And this is the basis for his suit against the Secretary.
Hanson was told to bring the "smoking gun" to DOL investigators. He did. He also delivered the "Hanson Report," which chronicled union fraud and violations. These submissions by Hanson became part of the administrative record because they were requested of Hanson by the DOL as part of his election complaint.
Then, Hanson obtained the DOL's factual findings of his case through a Freedom of Information Act (FOIA) request. Those findings included evidence previously submitted by Hanson. The DOL investigative reports also showed major contradictions between material witnesses. Taken cumulatively, the evidence in the whole record should have caused the Secretary to rationally conclude that there was probable cause to sue Local 302 for an election set aside, because the violations committed by the incumbents may have affected the outcome of the election.
Instead, the Secretary acting through her subordinate bureaucrats, devised a legal theory to support her irrational decision. Under that theory, the Secretary argues that the Court may only examine her Statement of Reasons as a basis of
review. Of course, her Statement of Reasons are conclusory and tailor-made to fit her decision, irrespective of the facts. Her source of authority is Dunlop v. Bachowski, 421 U.S. 560, and her reliance is on the dictum of that case, which discusses reviewability of the record.
Actually, in Bachowski the Supreme Court held that the Secretary's decision was so irrational as to constitute being arbitrary and capricious and otherwise contrary to law. That case was remanded back to the District Court and the Secretary was ordered to provide a Supplemental Statement of Reasons. The District Court ordered that the Supplemental Statement of Reasons by the Secretary, without more, evinced the Secretary's decision as so irrational as to be arbitrary and capricious. See Bachowski v. Dunlop, D.C. 413 F.Supp 147 (Penn) 1976.
In reality, no court can make an accurate review of any agency decision if that court is restricted to an examination of the Secretary's Statement of Reasons. This would be akin to being queued by a prosecutor's decision not to prosecute.
Hanson has brought this case for review under the Administrative Procedure Act (APA). The scope of the Court's review is generally limited to asking: (1) whether the agency went outside the authority granted to it; (2) whether the agency followed proper procedure in reaching its decision; and (3) whether the agency's decision was so clearly wrong that it must be set aside. The APA allows federal courts to overrule agency
action that is found to be "arbitrary, capricious, and an abuse of discretion, or otherwise not in accordance of law." In order for a court to make these determinations, it must review the "whole" record. (See West's Encyclopedia of American Law, Vol.1, 1998). Otherwise there is no logical method from which to rely in determining whether the Secretary's conclusions were irrational, and whether the agency's decision was so clearly wrong that it must be set aside. Only a review of the "whole" record will make that possible.
Plaintiff Hanson has submitted the record for review to the Court. (See Exhibits of Record, annexed under Declaration of Edgar Hanson in Support of Plaintiff's Opposition to Defendant's Motion to Dismiss, or in the Alternative, for Summary Judgment).
Here, the conclusions contained in the Secretary's Statement of Reasons do not comport with the material facts presented in the whole administrative record. Hanson's evidence to support his allegations of election fraud, LMRDA violations, and violations of the union bylaws is so convincing that a reasonable court would conclude that the Secretary was irrational and clearIy wrong in not finding probable cause to sue the union. Her decision must be set aside.
b. the rare case exception
The Court has another option. Even if the Court was bound to a limited review of the Secretary's decision through her Statement of Reasons, an exception is permitted under the
"rare cases" doctrine when the Secretary acts plainly beyond the bounds or in clear defiance of the LMRDA. Dunlop v. Bachowski, 421 U.S. at 572-74. Hall v. Marshall, 476 F.Supp 266 (E.D. Pa. 1979) aff'd 622 F.2d 578 (3rd Cir. 1980).
Plaintiff Hanson raised the rare case exception in his initial pleading. (See Plaintiff's Complaint for Judicial Review of Secretary's Decision; Costs and Damages; page 12, line 5).
In this instance, the rare case exception involves a situation where the Secretary, or her subordinate bureaucrats, acted plainly beyond the bounds or in clear defiance of the LMRDA because they failed to find probable cause to sue the union when Hanson's and the DOL's combined evidence clearly demonstrated that the incumbents committed LMRDA and bylaw violations that affected the outcome of the election.
Furthermore, this is not the first time Hanson has sued the Secretary. Hanson ran for union office in 1996 and in 1993. Each time he lost. His exhaustive investigation and research into election fraud has covered an eight year period. His two union friends who helped him investigate election fraud in earlier years were both expelled from the union. Hanson pressed on and had many discussions with the DOL investigators. In each discussion, he was told to bring in the "smoking gun." In 1999, Hanson brought in the smoking gun with plenty of other evidence against the incumbents. Still, the DOL would not act against the union to straighten out the entrenched incumbents
and put an end to their corruption.
The "whole" administrative record of Hanson's case must be reviewable under the rare case exception, as this is a rare exception case.
II. VIOLATIONS THAT MAY HAVE AFFECTED THE OUTCOME OF THE ELECTION
a. evidence from the administrative record
1. BALLOT TAMPERING
The incumbents needed the services of David Clements and Chris Gianelli to assist them in a fraudulent scheme to affect the outcome of the election. What better arrangement exists? The union accountant/auditor has been conducting internal audits and elections for Local 302 for three decades. The printer has been making the ballots and all election materials, as well as printing the union newspaper and printing campaign brochures for the incumbents for at least a decade.
Clements knew that he was surrounded by controversy regarding Local 302's elections. As a CPA in the Seattle community, he should have declined an offer to bid on supervising the 1999 election. Also, Clements' professional training should have provided him with the sense to not serve as the Election Supervisor. His dual role as union accountant and Superviser is an obvious conflict of interest. But apparently, Clements couldn't wait to supervise the 1999 election. And the incumbents couldn't wait to have him.
Incumbent business manager Clyde Wilson accepted three
independent bids by qualified persons to supervise the election and Clements was the high bidder. Nevertheless, Wilson hired Clements citing Clements for his "experience." Now there are two conflicts. Clements and Wilson: the incumbent hiring the Election Superviser, who accounts for the business manager's use of funds at Local 302.
David Clements recommended Chris Gianelli of Service Printing to print the ballots and election materials. The union incumbents heeded Clement's advice and hired Gianelli.
A standard one-page ballot was printed after Gianelli consulted by telephone with the KCED. The ballot had to meet very specific dimensional parameters in order to be scanned properly by the KCED's Accu-Vote scanner. The ballot required that timing marks be printed along the border of each ballot so that the scanner could accurately tally the votes. (see Exhibit A annexed under Declaration of Edgar Hanson).
Gianelli purposely printed a ballot that was too wide for the scanner. (see Exhibit C, 1/31/00 Interview of Gianelli).
On election day, the ballots needed to be trimmed to fit through the scanner. All of Hanson's observers objected to the trimming. Wilson had no obervers and needed none. His people were running the entire election. There was "chaos" in the election room. (see Exhibits G, K, L, M).
David Clements decided to trim the ballots so that they would fit into the scanner. (see Exhibit H). The KCED
recommended trimming only a very small portion off of the ballot. They also told Clements not to trim more than 25% off of any of the timing marks, or the ballot would not be scanned for an accurate vote tally. (see Exhibit D, Interview of Julie Anne Kempf).
Hanson observers noticed that there was no uniformity to the ballot trimming procedures. Some ballots were trimmed in such a manner as to eliminate the entire timing mark, thereby rendering the ballot unscanable. The unscanned ballot resulted in no tally and the ballot would fall to the bottom of the AccuVote to be counted by hand at a later time. Other ballots were trimmed narrowly, where enough of the timing mark remained to render an accurate scan and tally. (see Exhibit B, evidence recovered by Hanson observers and referred to later as the "smoking gun").
Clements was in a position to see the face of the ballots before he trimmed them, and therefore which candidate received a vote. (see Exhibit A). (note: the seat of business manager is arguably the only seat that matters in the race because the business manager has the power to place or unplace every other officer from the payroll, as well as hire or fire the service providers).
Clements claimed that the over-trimmed ballots that couldn't be properly scanned were later hand counted. But this explanation defeats Clement's earlier statements that the electronic election would eliminate the need for hand counting.
Another question persists: when Clements contracted for the electronic scanners from KCED, why did he have his own hand counters on standby to manually count if he didn't have previously knowledge that the ballots were too large and needed to be trimmed on election day?
According to Kevin Peck, a Seattle labor attorney and Hanson's chief election observer, approximately one-third of the ballots required hand-counting. This amounts to approximately 1100 ballots. That means that about 1100 ballots were trimmed too wide so that they could not receive an accurate tally by the Accu-Vote machine. How could an experienced CPA such as David Clements allow this number of votes to be handcounted when Local 302 went through such pains to install an electronic vote counter? The answer is simple. David Clements could control the outcome of the election with a hand-count.
When Hanson requested that David Clements allow a running total to be continuously announced during the tallying of votes, he was turned down by Clements.
Hanson lost by 168 votes, but 1100 votes required hand-counting. Those votes could have been easily manipulated. The ballot tampering and ensuing chaos could have affected the outcome of the election.
2. DISHONEST BALLOT PRINTER
Perhaps the most compelling evidence to prove election fraud (besides the "smoking gun") is the apparent lies of Chris
Gianelli. According to the DOL's own documents, Chris Gianelli provided the following statements to investigators on 1/31/00:
"Miller (KCED) approved Gianelli's sample ballot. The county typeset the ballots." (see Exhibit C).
But a DOL interview of KCED Superintendent Julie Anne Kempf on 2/7/00 contradicts Gianelli. Kempf stated:
"Miller (KCED) had only one brief telephone conversation with Gianelli regarding the ballot layout. The KCED did not receive a copy of the ballot from Gianelli. The KCED did not approve or test the union's ballot in any way after it was printed. Gianelli did not provide the ballot printing plates or negatives to the KCED." (see Exhibit D).
Julie Anne Kempf is a respected individual who is the Superintendent for all of King County's elections. She has no interest in the outcomes of Local 302's elections and she has no reason to lie to DOL investigators. Chris Gianelli has proven himself in the past to be a person not to be trusted. His motivation to lie is for economic rewards by union incumbents. The DOL investigators must have thought something was wrong with the initial Gianelli interview because they reinterviewed him on March 15, 2000 when he stated:
"The two (KCED) worked back and forth on the phone checking candidate names and their spellings. He (Gianelli) printed several sample ballots and sent them to Miller (KCED). Miller tested them on the counting machine. Miller approved the sample ballot." According to Kempf, Gianelli's statements are false.
When Hanson saw copies of the interviews and the apparent
discrepancies and contradictions, he wrote to DOL investigator Heaney and showed him the evidence. (see Exhibit Q). The DOL took no action, but told Hanson he could sue the Secretary of Labor.
1999 wasn't the first time Chris Gianelli was caught up in election mischief. In 1996, at the very time Gianelli was printing the ballots for that year's election, he was making private phone calls to an incumbent officer at the officer's home. (see Exhibit F). That officer was Allan Darr who was actively campaigning for Trustee. There are no phone records of other calls placed to Darr by Gianelli. This behavior is suggestive of ballot tampering mischief. Today, Darr is the business manager of Local 302. He was appointed by the Executive Board to replace Clyde Wilson, who mysteriously resigned from his position. When Gianelli was shown a copy of his phone records, he immediately hired an attorney.
When examined cumulatively, a picture begins to emerge that Chris Gianelli was hired to knowingly play a role in election fraud. His role, and David Clement's role was to work together to "rig" an election process that would affect the outcome of the election in favor of the incumbents. Then, Gianelli and Clements could continue to receive employment contracts through the union.
3 BYLAW VIOLATION
Section 4 of Article XIV "Elections" of the bylaws
of Local 302 provides:
"All election records, including but not limited to the ballots cast and all challenges and challenged ballots and the certificate of the certified public accountant, shall be preserved by the Recording-Corresponding-Financial Secretary for a period of at least one year." (see Exhibit I, bylaws).
As Election Superviser who supervised 11 previous elections for Local 302, David Clements knew not to discard the election records for at least one year. The trimmed ballot strips legally constitute a portion of the election records, including but not limited to the ballots cast, or in this instance, a portion thereof. Yet, Clements personally admits that the trimmed ballot strips were thrown away immediately after the votes were tallied. (see Exhibit H, Interview of David Clements).
Recording-Corresponding-Financial Secretary Jack Jackubiec was officially responsible for preserving the ballots and the ballot trimmings for a period of one year. Jackubiec suddenly and mysteriously resigned three months after being re-elected to his post in 1999.
The election bylaws were violated, presumably to destroy evidence.
Edgar Hanson has the only remaining strips from the ballot trimmings of the 1999 election (see Exhibit B).
When the union incumbents learned that some ballot strips were in Hanson!s possession, they argued to the DOL that the strips were out of scope in the investigation
because that topic wasn't previously raised by Hanson. The DOL ruled that the strips were in scope, presumably because they were detailed in the "Hanson Report."
Finally, the DOL investigators examined the portion of the ballots that were retained by the union incumbents. The examination occured in January 2000, five months after the election. This period provided the union incumbents with plenty of time to neatly alter ballot records to reflect their own version of an official tally on election day. The ballots were always in physical possession and control by the incumbents.
The violation of the union bylaws to retain all election records for one year may have affected the outcome of the election, because without the evidence, the union can't prove that the hired Election Superviser didn't purposely cut the ballots too wide to favor the incumbents in a hand-count.
4. INCUMBENT'S MISCONDUCT
When Hanson presented the "Hanson Report" to DOL investigators, he included evidence to show of the misconduct by the incumbents and the 1996 Election Committee Chairman. This demonstrated a tendency by the incumbents to continue their LMRDA and bylaw violations. (see Exhibit U, a "timeline of Election Chairman Barry Riedesel's outgoing calls placed to incumbent officers during the election). DOL investigator Donald Logsdon stated that the phone record evidence involved "a damn good bit of investigative effort on behalf of Hanson."
Also, union newspaper editor Allan Darr violated the LMRDA in 1996 when he published an edition just prior to the election. The incumbents were heavily featured in the paper, but no mention was made of any challenger. (see exhibit T). This is a vital safeguard violation. Hodgson v. Liquor Salesman's Union, 444 F.2d 1344 (2nd Cir. 1971). Strangely, the DOL denied that a violation occured.
Today, Darr is the business manager. He never ran for this position, nor was he elected to it. He was appointed by other incumbents in an emergency effort to buoy Local 302 when evidence demonstrated that a vast network of corruption existed within the local. The incumbents knew that the pressure was on them.
Sudden resignations of incumbents also provide additional suspicion. Incumbent business manager Larry Johnson resigned in 1997, eight months after winning the 1996 election. Incumbent Secretary Jack Jacubiec resigned after three months into his new term in the 1999 election. Incumbent business manager Clyde Wilson resigned after 15 months into the 1999 election in which he beat Edgar Hanson. Incumbent Vice-president Ron Knight resigned after a few months from his re-election in 1996. And incumbent Secretary Charlie Barton resigned after three months into his re-elected term in 1993.
A very strange but discernable pattern begins to emerge. Many incumbents stick around only long enough to get re-elected, then they mysteriously resign. The incumbent
controlled Executive Board appoints new persons into positions of power. But amazingly, the DOL officials in Washington, DC see nothing wrong with the manner in which this union conducts its internal affairs.
III. DEFIANCE BY AN ILLEGITIMATE BUSINESS MANAGER
Allan B. Darr was selected by the incumbent-controlled Executive Board to become the new business manager in January 2001. He was not elected. Interestingly enough, Mr. Darr himself doesn't appear to be fond of selected leaders.
In the May 2001 edition of the union's newspaper, "Loadline," uses his own words to describe the President of the United States, George W. Bush;
"His record is clear. We know that he was selected, not elected."
(See Declaration of Edgar Hanson, Exhibit #1)
As the Executive Editor of the union newspaper, Darr also positions himself well as the chief political propagandist. Here is what else he had to say about George W. Bush;
"The shrub (not developed enough to be a bush)..."
(See Declaration of Edgar Hanson, Exhibit #1)
Darr's true motivation for power is probably captured best in his quote in the May 2001 "Loadline;"
"Politics is all about rewarding your friends and punishing your enemies."
(See Declaration of Edgar Hanson, Exhibit #1)
Plaintiff Hanson has wondered what is in store for
himself if this case is dismissed.
Allan Darr is not only the illegitimate business manager of Local 302 (selected, not elected), he is also a known liar, as his deposition under sworn oath indicates. During his deposition in 1999, he stated that he wasn't the editor of the "Loadline." In fact, the records show that Mr. Darr was the editor for about eight years.
Additionally, telephone records taken of outgoing calls from the union's ballot printer, Chris Gianelli, show that he called Allan Darr at Darr's personal residence several times during the week that the ballots were being printed prior to the 1996 election. Darr was a candidate for Trustee that year. This kind of behavior gives further support to past allegations of election fraud. Moreover, it supports the theory that Darr was false to his trust, a violation of the bylaws.
Finally, Mr. Darr continues to reward the friends that put him in power. The new union hall was recently dedicated to Russell C. Conlon, the man who helped cheat Val Albert out of an honest election in 1990. Mr. Conlon's son is currently a money manager of the union's $2.5 billion dollar pension fund.
(See Declaration of Edgar Hanson, Exhibit #2).
Edgar Hanson has been harmed, as both a bonafide candidate for union office, and as a member of the rank-and-file. He never asked for, nor sought anything more than a fair,
honest union election with adequate safeguards to ensure fairness. He received none of the above.
Hanson's evidence and the evidence from the DOL's own investigative file tell a story of vast corruption within Local 302. When the evidence is examined cumulatively, there can be no rational conclusion other than the Secretary acted arbitrarily and capriciously and otherwise contrary to law when she dismissed Hanson's complaint and stated that no violations occured. In the wake of the evidence, the Secretary's decision not to prosecute is irrational. The Secretary's conclusion from her Statement of Reasons does not square up with the facts presented by her own investigators in Seattle. The Statement of Reasons is so irrational as to be deemed arbitrary and capricious.
This is the time to clamp down on corrupt union activities. Hanson's case opens the door for the new Secretary to conduct a criminal investigation into Local 302 activities. Hopefully, this Court has the courage to help open that door and begin a new chapter for Local 302.
Finally, Hanson hopes that the Court will use some reasonable and rational discretion to cause a new election for Hanson and the members of Local 302. They deserve it.
The harm inflicted on Hanson by the incumbents, and by the DOL for not prosecuting the incumbents, has taken its toll on him. But Hanson can be made whole with a new election and damages awarded to him for all of the pain and suffering
he has had to endure.
The plaintiff, Edgar Hanson, respectfully requests that the Court order summary judgment in his favor, complete with a new election and full damages awarded to him.
DATED this 11th day of December, 2001.