DATE: January 28, 1994
CASE NO.: 93-SOC-5
IN THE MATTER OF
LOCAL 916, AMERICAN FEDERATION
OF GOVERNMENT EMPLOYEES, AFL-CIO,
Respondent.
RECOMMENDED DECISION AND ORDER ON MOTIONS FOR SUMMARY
JUDGMENT
The Director, Office of Elections, Trusteeships and
International Union Audits, U.S. Department of Labor, on August 26,
1993, issued a complaint charging that the election of officers of
Local 916, American Federation of Government Employees, AFL-CIO, on
December 3 and the run off election of December 17, 1992, violated
Section 401(g) of the Labor Management Reporting and Disclosure Act
(29 U.S.C. §481, etseq.). Specifically, the
complaint alleges that Section 401(g) was violated when employer
funds were used to support the candidacy of individuals in that
election.
The Respondent and the Director have respectively filed a
motion for summary judgment and an answer and a cross motion for
summary judgment. The Union subsequently filed its reply to the
Director's answer and a response to the Government's cross motion.
Findings of Fact and Conclusions of Law[1]
Local 916, American Federation of Government Employees, AFL-
CIO (Local 916), is a labor organization within the meaning of
Section 701 of the Civil Service Reform Act of 1978 (CSRA), 5
U.S.C. §7103(a)(4).
The Committee for Equal Rights is a political action
committee. (DX 9 p. 1).
The Committee for Equal Rights, Inc. (CER, Inc.), a non-profit
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Oklahoma corporation, was formed in April 1992. CER, Inc., was
founded by Larry Wallace, Philip Heid and Jerry Majors, all members
of Local 916. (RX A).
Larry Wallace was elected President of Local 916 in December
1992. He is also President and Trustee of CER, Inc. His election
and that of certain other individuals is challenged in this
proceeding.
Philip Heid is a member of Local 916. In May or June 1993 he
was appointed to a position on the Executive Council of Local 916.
He is also the Treasurer and a Trustee of CER, Inc.
In May 1992, CER, Inc. opened a bingo parlor. Messrs. Heid
and Wallace contributed funds to start CER's bingo operation. Mr.
Heid has been active in the bingo operation. (Heid affidavit
paragraph 4, Respondent's Motion for Summary Judgement p. 2).
The operating capital of CER, Inc., came from the personal
funds of Larry Wallace and Philip Heid, as well as the money
generated by the bingo operation. Messrs. Heid and Wallace agreed
that moneys they paid on behalf of CER, Inc., was to be reimbursed
by the corporation. Philip Heid maintained ledgers to keep track
of such transactions. (Wallace affidavit paragraph 9).
On November 18, 1993, Philip Heid, the Treasurer of the
corporation, wrote Check No. 1480 on CER, Inc.'s checking account
in the amount of $616.60 made out to Liberty Bank. Mr. Heid with
that check purchased a cashier's check made out to Printing, Inc.,
to pay certain campaign printing costs in the amount of $613.60.
The cashier's check cost $3.00. On the same day Philip Heid showed
a reimbursement in the amount of $616.60 to him by CER, Inc., on
the ledger he kept. Prior to this entry, CER, Inc., owed Heid
$5,626.10, according to the ledger. After this entry, the ledger
showed a balance of $5,009.50 owed to Heid. (Heid affidavit; RX G,
H; DX 4-5).
CER, Inc., is an "employer". (Admitted Respondent's Motion for
Summary Judgement p. 6).
The $616.60 withdrawn from CER, Inc.'s checking account, at
the time of withdrawal, was a contribution by CER, Inc., to the
Wallace campaign. The amount of the withdrawal matching exactly
the printing bill and cost of the cashier's check compels the
conclusion that it was earmarked for that purpose. The after the
fact credit on Heid's ledger, albeit on the same day, to reduce
CER, Inc.'s indebtedness to Heid cannot alter the fact that the
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withdrawal of $616.60 from CER, Inc.'s checking account was a
withdrawal of corporate funds to pay the printing bill. To hold
otherwise would permit circumvention of the prohibition against
such employer payments. A contrary holding would, moreover,
facilitate abuse where an officer, through whom the corporation
must act, in this case the Treasurer, has commingled his funds with
that of the corporate employer.[2] Respondent may not benefit
from such ambiguity.
The Director further contends that Mr. Heid, because of his
involvement with CER, Inc., as a primary investor, Treasurer and
Trustee must also be considered as an employer for purposes of the
Act. It is not necessary to reach that question in view of the
finding that CER, Inc.'s payment is prohibited by the statute.
The printing bill on which a balance of $613.60 was due was
for a newsletter, the Union Newsline, December 1992. That
newsletter was essentially a campaign document for the Wallace
slate. (DX 6-7). This document was clearly designed to affect the
outcome of the election. The Director has demonstrated a violation
of Section 401(g) of the Act which may have affected the outcome of
the election. Respondent has presented no evidence that the
outcome of the election was not affected by the violation of
Section 401(g) of the Act.[3] Accordingly,
IT IS HEREBY ORDERED that,
1. The December 3, 1992 election and the December 17, 1992
runoff election is null and void.
2. Local 916, American Federation of Government Employees, is
to hold a new election under the supervision of the Director,
Office of Elections, Trusteeships, and International Union Audits,
in accordance with this decision as soon as practicable.
THEODOR P. VON BRAND
Administrative Law Judge
TPVB/jbm[PAGE 4]
[ENDNOTES]
[1] Director's exhibits are referred to as DX and Respondent's
exhibits as RX.
[2] The operating funds of the corporation consisted of moneys
contributed by Heid and Wallace and receipts from the Bingo
operation.
[3] No findings are made concerning the allegations with
respect to use of CER, Inc.'s telephone facilities and space.
The fair market value question with respect to those facilities
cannot be resolved on the basis of the present record. In short,
with respect to these allegations, genuine issues of material
fact remain, which require resolution. A decision on these
allegations would, accordingly, be inappropriate on the basis of
the motions for summary judgment.
