U.S. District Court Judge George L. Hart Jr. ruled yesterday that the AFL-CIO has violated federal campaign spending laws and fined the huge labor federation $10,000.
But he rejected a Federal Election Commission demand that the AFL-CIO's political contributions fund forfeit $312,000 in money that can now be targeted for this fall's congressional races.
Both the ALF-CIO and the FEC appeared satisfied by the decision, claiming victory and saying no appeals are planned.
"We made our point," said FEC attorney Barbara VanGielder, noting that the judge had also banned the AFL-CIO from co-mingling union dues money and voluntary donations for political campaign.
"We made $302,000," said Lawrence Gold, attorney for the AFL-CIO, noting the arithmetic of the decision.
At issue in yesterday's hearing was a charge by the FEC that the 14-million-member labor federation had illegally "co-mingled" money from a dues-supported education fund and a separate campaign fund that can be financed only from voluntary contributions under federal law.
The AFL-CIO contended that this stemmed from a "loan" of $704,500 from its campaign fund to its education fund, of which only $392,500 had been repaid. It said the practice of transfering money between the two funds was longstanding one, sanctioned until recently by federal authorities, and wanted the remaining $312,000 repaid.
However, the FEC argued that the AFL-CIO in stittling money between the two funds, violated requirements that the funds be kept strictly separate and thus forteited the right to reclaim the $312,000 for campaign purposes.
VanGelder said the FEC was not accusing the AFL-CIO of a "district malfeasance," but said the law attempts to guard against the appearance of wrongdoing as well as wrongdoing itself.
"The evil is the appearance of impropriety," she said, under which AFL-CIO President George Meany and Secretary-Treasurer Lane Kirkland could "take money from their left pocket and put it in their right pocket."
To sanction such practices, she added, would put an "insuperable burden" on the FEC in monitoring 1,475 corporate and labor campaign financing committees.
While ordering the repayment of the $312,000 to the campaign fund, Hart said further transfers were outlawed, noting that the AFL-CIO would be inviting a contempt-of-court citation if it didn't keep the funds separate.
At one point, he described the procedure as an "invitation to finagle," but later noted that "equity" also was involved.
The AFL-CIO argued that the General Accounting Office, which preceded the FEC in monitoring campaign financing, had required that such transactions be reported but did not bar them. It said the loan was made before the FEC rules came into play.
The FEC's action followed a complaint from the National Right to Work Committee about a number of ALF-CIO campaign practices. The commission took the federation to court when the AFL-CIO, while agreeing to stop transferring money in the future, insisted on repayment of the $312,000 to the campaign fund.