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UNITED STATES v. INTERNATIONAL BHD. OF TEAMSTERS

September 14, 1998

UNITED STATES OF AMERICA, Plaintiffs,
v.
INTERNATIONAL BROTHERHOOD OF TEAMSTERS, et al., Defendants. IN RE: APPLICATION XX OF THE ELECTION OFFICER



The opinion of the court was delivered by: EDELSTEIN

OPINION & ORDER

 EDELSTEIN, District Judge :

 BACKGROUND

 This opinion emanates from the voluntary settlement of an action commenced by the United States of America against, inter alia, the International Brotherhood of Teamsters ("IBT" or "the union") and the IBT's General Executive Board ("GEB"). The settlement is embodied in the voluntary consent order entered March 14, 1989 ("Consent Decree"). The goals of the Consent Decree are to rid the IBT of the hideous influence of organized crime and establish a culture of democracy within the union. The long history of this case has been set forth in this Court's numerous prior opinions. Accordingly, only those facts necessary for resolving the instant application shall be set forth.

 On September 29, 1997 this Court issued a decision approving most aspects of the Election Officer's Application X, For Approval of Proposed Rerun Election Plan and Establishing Rules For the 1996 International Brotherhood of Teamsters' Rerun Election. See United States v. International Bhd. of Teamsters ("Rerun Plan Decision"), 981 F. Supp. 222 (S.D.N.Y. 1997). At that time, this Court set forth the rules that would govern and established a timetable for the rerun election. Id. On that same day, the former Election Officer, Barbara Zack Quindel (the "former election officer"), resigned her position as Election Officer, and this Court appointed Benetta M. Mansfield (the "Interim Election Officer") to the position of Interim Election Officer. See United States v. International Bhd. of Teamsters, 981 F. Supp. 222 (S.D.N.Y. 1997).

 The Interim Election Officer, in Applications XI and XII, petitioned this Court for modification and suspension of the timetable for the IBT Rerun Election. See Election Officer's Application XI, for an Extension of the Timetable for the Rerun Election Plan; Election Officer's Application XII, for Temporary Suspension of the Timetable for the Rerun Election. On October 20, 1997 and November 21, 1997, this Court issued Orders granting the Interim Election Officer's Applications XI and XII, respectively. See United States v. International Bhd. of Teamsters, 1997 U.S. Dist. LEXIS 16817, No. 88 Civ. 4486 (S.D.N.Y. Oct. 20, 1997); United States v. International Bhd. of Teamsters, No. 88 Civ. 4486 (S.D.N.Y. Nov. 21, 1997).

 This Court then appointed Michael G. Cherkasky (the "Election Officer") as the Election Officer for the International Brotherhood of Teamsters by Order dated December 2, 1997. See United States v. International Bhd. of Teamsters, No. 88 Civ. 4486 (S.D.N.Y. Dec. 2, 1997). The Election Officer, in Applications XV and XVI, requested the continued suspension of the timetable for the Rerun Election in order that he may have additional time to complete his investigation of a protest the Carey Slate filed on May 16, 1997. See Election Officer's Application XV to Continue Suspension of the Timetable for the Rerun Election; Election Officer's Application XVI to Continue Suspension of the Timetable for the Rerun Election. This Court, by Orders issued on January 10, 1998 and February 10, 1998, granted Applications XV and XVI, respectively. See United States v. International Bhd. of Teamsters, No. 88 Civ. 4486 (S.D.N.Y. Jan. 10, 1998); United States v. International Bhd. of Teamsters, No. 88 Civ. 4486 (S.D.N.Y. Feb. 10, 1998).

 On February 24, 1998, the Election Officer submitted to this Court Election Officer's Application XVII For Approval of the Timetable for the Rerun Election and Limited Changes to the Rerun Election Plan ("Application XVII"). Application XVII set forth a new proposed timetable for the conduct of the rerun election and proposed four amendments to the previously approved Rerun Plan. This Court granted in part Application XVI. See United States v. IBT ("Rerun Rules II"), 1998 U.S. Dist. LEXIS 3896, 1998 WL 136431 (S.D.N.Y. Mar. 24, 1998) at *6. This Court, however, refused to approve the timetable the Election Officer set forth in Application XVII until a final determination had been made in the Carey Slate Protest. Id. at 2.

 On April 27, 1998, Election Officer Cherkasky concluded his investigation of the Carey Slate protest and issued a decision. See In re Carey Slate, PRc-035-EOH (Post-47-EOH) (MGC) (Apr. 27, 1998). The Election Appeals Master affirmed that decision in all respects, see In re Carey Slate, 98 Elec. App. 348 (KC) (May 15, 1998), and this Court affirmed it in part. United States v. IBT ("Carey Slate Protest"), 1998 U.S. Dist. LEXIS 9181, 1998 WL 338251 (June 22, 1998 S.D.N.Y.) at *9. Therefore, on May 5, 1998, Election Officer Cherkasky submitted to this Court Election Officer Application XVIII For Approval of the Timetable for the Rerun Election ("Application XVIII").

 The timetable in Application XVIII proposed to commence the rerun election process on June 15, 1998 when supplemental nomination ballots were to be sent to delegates. See Application XVIII. According to the proposal, the ballots would be mailed to IBT members on September 14, 1998 and the deadline for the return of ballots would be October 14, 1998. Id. This Court found that "the proposed timetable [was] a realistic plan for the expeditious conduct of the rerun election and allowed for efforts to maximize IBT rank-and-file participation in the rerun election . . . ." United States v. IBT ("E.O. Application XVIII"), 179 F.R.D. 444 (S.D.N.Y. 1998), at 4. Thus, this Court granted Application XVIII and established a new timetable for the conduct of the rerun election. Id.

 The rerun election process officially commenced on June 15, 1998 with the mailing of supplemental nomination ballots. Furthermore, candidates filed slate declarations on July 13, 1998. Unfortunately, because of circumstances beyond the control of this Court, funding for the rerun election was in doubt. A divided panel of the Court of Appeals for the Second Circuit reversed this Court's decision ordering the IBT to pay for the cost of the rerun election. See United States v. IBT ("Rerun Funding"), 1998 WL 145621 (2d Cir. Mar. 30, 1998). Moreover, the United States Congress as well as the IBT's General Executive Board continued to refuse to provide any funding for Election Officer supervision despite the unanimous consensus of the parties that Election Officer supervision of the rerun election was preferred over an unsupervised election.

 In light of these circumstances, on June 25, 1998, the Election Officer submitted to this Court Application XIX For an Order Securing Funding For a Supervised Rerun Election or Requiring the IBT to Conduct an Unsupervised Rerun Election ("Application XIX"). Application XIX requested an order from this Court directing the parties to agree to a plan that secured funding for the Election Officer's rerun election budget and to present it to this Court. Application XIX at 14. The Election Officer noted that approximately $ 8.6 million was needed in order to fully fund the supervision of the rerun election. The Election Officer notified this Court that "absent a prompt resolution to the funding crisis . . . the Election Officer will submit a plan to the Court for the orderly and systematic wind-up of Election Officer operations." Id. at 15.

 After months of negotiations the Government informed this Court that it secured the use of approximately $ 4.017 million to reimburse the IBT for past expenditures for the Independent Review Board on the conditions that (a) the IBT commit to spending "an amount equal [to that sum] . . . to fund Election Officer supervision of the rerun;" and (b) the IBT commits "not only to pay $ 4.017 million to fund Election Officer Supervision but also supplement that with such additional funds as are needed to pay for conducting the supervised election." See Letters from Stephen R. Colgate to Hon. Ted Stevens and Hon. Harold Rogers (July 30, 1998) attached to letter from Karen B. Konigsberg to Hon. David N. Edelstein (August 4, 1998). Furthermore, after long, tedious and protracted hearings, the General Executive Board ("GEB") of the IBT begrudgingly agreed to pay $ 2 million to the Election Officer, as well as the $ 4.017 million, immediately upon receipt of $ 4.017 million from the Government. See Letter from Karen B. Konigsberg to Hon. David N. Edelstein (September 11, 1998). However, it should be noted that the General Executive Board of the IBT finally approved the $ 2 million contribution only after this Court demonstrated to the GEB that $ 2 million is an amount far less than the IBT would have had to expend on an unsupervised election.

 Unfortunately, the approximately $ 6 million now available to the Election Officer remains short of the $ 8.6 million the Election Officer previously stated was needed to conduct a supervised rerun election. Nevertheless, with the imminent prospect of some funding available for a supervised election, the Election Officer submitted to this Court Election Officer's Application XX For ...


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