Dem spat uncovers huge union political-front groups

The Democratic presidential race heated up Saturday, with Barack Obama charging that rival John Edwards committed campaign hypocrisy by deriding political organizations called 527s at the same time he allegedly will benefit from their spending.

Stumping in central Iowa three days before Christmas, Obama described the former North Carolina senator as "a good man," and said both agreed that special interests and lobbyists "have too much influence in Washington." Yet, the Illinois senator said, it was learned Saturday that even as Edwards was calling for a ban on spending by such outside groups, one was planning to spend $750,000 on television ads in Iowa in support of his campaign.

On Friday, at a campaign stop in Johnston, Edwards slammed these groups. He has often said they ought to be banned from influencing elections.

"You can't say yesterday you don't believe in them, and today you have three-quarters of a million dollars being spent for you," Obama said. According to the Obama campaign, one of the officers of the independent group supporting Edwards is Nicholas R. Baldick, Edwards' national campaign manager in the 2004 presidential race. Efforts Saturday to reach Baldick were unsuccessful.

David Axelrod, Obama's chief strategist, said the 527 group known as Alliance for a New America just bought $756,000 worth of air time to run ads in Iowa from Wednesday to Jan. 3, the date of the caucuses.

"These things are supposed to be independent," Axelrod said. "How independent are they when you have your longtime operative running it? Pure and simple, it's a way of circumventing the campaign-finance laws."

The ads are scheduled to run in several Iowa markets, with the heaviest concentrations in Sioux City and Des Moines. After being questioned by reporters later in the day, Edwards called on Baldick "not to run the ads."

"I would prefer if all the 527s, not just this one, that all 527s stay out of Iowa," he said.

The Alliance for a New America's purpose, according to its lean website, is to "make Washington work for middle-class families."

"We are encouraging voters to ask the candidates how they will make the middle class and working Americans their top priority in Washington, while ensuring that special interests and corporate America lose their stranglehold on our government," the website says.

In filings with the Federal Election Commission, Alliance for a New America reported receiving hundreds of thousands of dollars from organized labor -- largely state and local branches of the Service Employees International Union, including the California chapter. And the documents say that the group is spending the money on broadcast ads on behalf of Edwards.

In Iowa, SEIU officials and members are routinely seen cheering for Edwards at campaign events. On Saturday, the president of the largest SEIU local chapter in Iowa (which is not among those funding the ads) introduced Edwards to hundreds of supporters in a steamy Coralville ballroom.

Edwards on Saturday initially denounced secretive support organizations, but said he was forbidden by federal elections law from communicating or interfering with such groups. He used the opportunity to poke at his rivals for accepting lobbyists' donations.

"If Sen. Obama is serious about real change, I hope he and Sen. [Hillary Rodham] Clinton will finally end their silence and join with me in calling on the Democratic Party to end the influence of Washington lobbyists by once and for all rejecting their money," he said in a written statement Saturday morning.

But after a reporter reminded Edwards in the afternoon that he had urged President Bush to call off the "Swift Boat" attack ads against Democratic presidential candidate John F. Kerry in 2004, Edwards urged the Alliance for a New America to abandon its plans to run the ads.

In New Hampshire, after autographing baseballs, books and business cards at Milford's River House Cafe, Clinton told reporters she wasn't going to jump into the sparring match between Obama and Edwards.

Both men have been trying to claim the mantle of political purity, each arguing that he is the best man to change the political culture in Washington. Obama's events are often festooned with signs boasting "Not paid for by PAC or federal lobbyist money." The rear of Edwards' "Main Street Express" bus reads "Not Fueled by PACs or Washington Lobbyists EVER."

Saturday's exchange was the sharpest direct engagement of the campaign between Obama and Edwards.

After a packed stump speech at a Lisbon school, Edwards said Obama's sudden attention was prompted by Edwards' growing momentum in Iowa.

"You can see it in the energy and enthusiasm of the events, you can see it in the size of the crowds, and I see it when people come to me after the event, as they did 15 minutes ago, and said, 'I came here for Obama; [now] I'm for you, I'm committing right now,' " Edwards said. "I know that we're moving, and Sen. Obama's comments this morning and over the last few days would indicate he knows the same thing."

At a tea-and-pumpkin-pie stop in Pleasantville, Obama was asked by reporters whether he was suddenly concerned about Edwards because he went after the former North Carolina senator at the first event of the day.

"We feel great," he responded. "And you're seeing it in the crowds, you can see confirmation ... I think everyone knows this is going to be a close race."


IRS does Hoffa's bidding v. FedEx

FedEx Corp. disclosed Friday that it has received an IRS challenge to its business model for contracting with independent drivers for the company's FedEx Ground division.

FedEx said in a Securities and Exchange Commission filing that the IRS "has tentatively concluded" through a 2002 audit that contract drivers with FedEx Ground should have been classified as company employees.

The IRS decision is the latest in a series of attacks on FedEx Ground's system for contracting with independent pickup and delivery drivers who own and maintain their own trucks while lacking access to work benefits provided for company employees.

In its second-quarter earnings report Thursday, FedEx noted that "increased regulatory and legal uncertainty" with the independent contractor model could eventually cut into earnings at FedEx Ground, the company's fastest growing division.

"The IRS has indicated that it anticipates tax and penalties of $319 million plus interest for 2002," FedEx said. "Similar issues are under audit by the IRS for calendar years 2004 through 2006."

FedEx believes the decision is wrong, particularly since the IRS, after a similar review in 1994, approved the contractor-driver model for tax purposes, said company spokesman Maury Lane.

FedEx will appeal the audit findings with the IRS and go to federal court to oppose them if necessary, Lane said. "These cases can take up to a decade at times to decide. Right now FedEx is not required to set aside any money for this finding," he said.

Lane said FedEx found out about the IRS decision after the earnings report was released Thursday.

FedEx faces lawsuits from unhappy Ground drivers from around the country and is in the process of making major changes with its independent driver system in California because of legal challenges.

More than 50 lawsuits brought by drivers in 36 states have been consolidated in federal court in South Bend, Ind.

Among their complaints, drivers argue they should be company employees with full employee benefits and should be reimbursed for on-the-job expenses and lost wages.

FedEx Ground, headquartered in Pittsburgh, was formed in the late 1980s and has grown steadily since. The division had revenues of $1.7 billion, up 12 percent from last year, for the financial period ending Nov. 30.

In California, FedEx Ground is offering financial incentives to single-route contract drivers to take on multiple routes. A research note filed in October by analysts with Credit Suisse said those incentives could total up to $20 million.

FedEx Corp. is based in Memphis.


L.A. pol shakes down unions for 'non-profit'

As he vies for a seat on the Los Angeles County Board of Supervisors, state Sen. Mark Ridley-Thomas has tapped labor unions and companies with business before the Legislature to donate thousands of dollars to a nonprofit he founded that works to register voters and empower residents in his South Los Angeles district.

Over the last year, Ridley-Thomas raised $200,000 from such companies as Verizon, Zenith Insurance Co. and Chevron Corp., who donated as much as $25,000 each without violating the county's strict $1,000-per-donor limit on campaign contributions for supervisorial races.

The nonprofit - the California Community Empowerment Foundation - was started by Ridley-Thomas several years ago as a nonpartisan organization that seeks to engage residents in local politics and educate them about the work of government.

But political watchdog groups called the timing of the recent fundraising "troubling," noting that the charity and its work were strongly associated with Ridley-Thomas and could help raise his profile as he campaigns for votes in the area it serves.

Among the donors were several Los Angeles labor unions that announced their endorsement this week of Ridley-Thomas' campaign for supervisor.

"This is his first competitive race in a long time, and he wants to get a lot of visibility, and everyone wants to maximize their visibility when running in a competitive race," said Robert M. Stern, president of the Los Angeles-based Center for Governmental Studies.

Ridley-Thomas defended the fundraising, saying it had no connection to the supervisorial campaign and that he began seeking the donations after participants in the charity's events decided it was time to expand the organization to "raise the civic IQ" in South L.A.

He said the charity does not promote his interests but conceded that it could help raise his profile.

"Any good works that an elected official does appropriately raises his or her profile," he said. "The reasons why I'm in public office is to help people participate in the democratic process, to learn about their communities, to engage in debate, to know what's going on."

Ridley-Thomas said much of the fundraising preceded his decision to run for a seat on the board. But state financial records show he reported raising more than half of the donations after his Oct. 24 announcement that he was entering the race. Indeed, during his five years in the Legislature, the senator did not report raising any money for the charity until this year.

Ridley-Thomas is locked in what is expected to be a close race with Los Angeles City Councilman Bernard C. Parks for the 2nd Supervisorial District seat Supervisor Yvonne B. Burke is vacating after 16 years. The two men are the only major candidates so far, and each enjoys significant popularity in the district, parts of which each represents.

Aside from the money he has been raising for his supervisorial campaign, Parks has not reported fundraising for any charity or other organization since joining the City Council in 2003, city finance records show.

The funds raised by Ridley-Thomas for the Empowerment Foundation go to a charity called Community Partners, which helps start and sponsors civic programs and serves as an umbrella organization for the foundation and 140 similar charitable programs.

The money helps fund forums attended by tens of thousands of residents in South L.A. who come to discuss important civic issues, including race relations, the workings of state government and police-community relations.

The money also funds the Empowerment Congress, a network of residents, business leaders and neighborhood activists that was created by Ridley-Thomas in the wake of the 1992 riots and is widely cited as a precursor to today's neighborhood councils.

Paul Vandeventer, Community Partners' president and chief executive, said he has sole discretion over how the foundation's funds are used and said its activities are strictly nonpartisan. "It's involved a wide cross-section of community leadership well beyond" Ridley-Thomas, Vandeventer said, "and has brought ordinary citizens into the mainstream, into a dialogue . . . that has profoundly changed the nature of the way people think about the problems that they face in their community."

But others said the activities cannot help but benefit Ridley-Thomas in the months before the June 3 election. For example, photographs of Ridley-Thomas adorn the websites of both the Empowerment Congress and the Empowerment Foundation.

Dermot Givens, a lawyer and campaign consultant who has worked for both Parks and Ridley-Thomas, said an increase in civic forums and other programs that draw local residents would undoubtedly help the senator raise his profile.

"They can start pulling people into their events," Givens said. "And who are they going to start hearing favorably about? Mark Ridley-Thomas."

The practice of politicians raising money for charities they are associated with has recently raised concerns among political ethics experts. Mayor Antonio Villaraigosa and Assembly Speaker Fabian Nuñez (D-Los Angeles) both have come under fire for seeking charitable donations from companies and organizations with business before them.

Several political ethics experts said they believe Ridley-Thomas has a reputation for integrity, but they questioned his decision to ask for donations.

"Corporations don't give the money out of the goodness of their hearts or because it's the season," said Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights, a nonpartisan group based in Santa Monica.

The Agua Caliente Band of Cahuilla Indians contributed $5,000 months before the Legislature approved a new compact that allowed the tribe to more than double the number of slot machines at its casinos. Ridley-Thomas voted for the compact.

Ridley-Thomas said his approval had nothing to do with the contribution. Donors, he said, could expect no political favors in return for their giving, noting that any promise or even talk of a quid pro quo would be illegal. "I'm pleased that my record in public office has not been tainted by any such activity or behavior, nor shall it be," he said.

Indeed, other large contributors won little sympathy from the senator when it came time to vote. Verizon contributed $25,000, but legislative records show Ridley-Thomas repeatedly voted against the company's interests on bills this year.

Last year, however, the senator was among lawmakers who approved a bill that allowed phone companies such as Verizon to compete more easily with the cable industry to provide customers with paid television service. Verizon lobbied heavily for the bill.

Zenith Insurance Co., the state's largest private sector workers' compensation carrier, gave $25,000. Stanley Zax, chairman of Zenith's board, bristled when asked if the company donated with the expectation of political help from the senator.

"He's a pretty high-class guy, and I like him very much, and he's helped me with some charitable endeavors that I'm involved with," Zax said, "so I was happy to help him with something he believes in."


Union bigwigs in backlash against transparency

The federal government’s union watchdog agency will have to get by on less next year. The mammoth omnibus spending bill passed last week hacks nearly $3 million from the Office of Labor Management Standards -- a small gift for Big Labor just in time for Christmas.

The budget cut was a setback for the office, which has recouped more than $100 million for American workers since 2001 as a result of increased enforcement. The Bush Administration had sought to increase the agency’s budget to $56.88 million. Now, however, it will fall to $44.93 million for this fiscal year.

Though the cut is unwelcome, the office managed to dodge an even more dramatic change. Democrats dropped their plan to restrict funding for the collection of conflict-of-interest reports. The newly revised LM-30 form had angered union bosses because it requires union officers or employees to “disclose possible conflicts between personal interests and the officer’s or employee’s duty to the union and its members.”

Although the conflict-of-interest requirement dates back to the Labor Management Reporting and Disclosure Act, enacted in 1959, the agency’s revised version makes it harder for union officials to avoid disclosing perks such as mortgage deals or car service agreements they receive as a result of their union employment. Only about 40 reports were filed annually in the past; the new rule takes effect on Jan. 1, 2008.

The agency views this greater transparency as a victory for hard-working union members who pay dues but currently have little information about where or how their money is spent. The increased transparency, however, has prompted a backlash among union bigwigs.

AFL-CIO President John Sweeney complained last week about the “rank new directive from the Bush Labor Department that adds yet another debilitating burden to unions by requiring more than 100,000 workplace volunteers to report their run-of-the-mill consumer transactions to the federal government.”

Sweeney’s misleading statement gives the impression that unpaid volunteers would have to comply with the conflict-of-interest requirement. In fact, the Office of Labor Management Standards requires only union officials on payroll to file the LM-30 form, and in the case of workers who double as union officers, they don’t need to file a report unless they work more than 250 hours (approximately six weeks) on union business.

The attacks on the office are nothing new for Big Labor. They’ve been badmouthing the office ever since the Bush Administration revived the enforcement operations that had been allowed to languish during the Clinton era. With Democrats now in control of Congress, unions have made a push to peel back some of the gains in transparency for dues-paying union members.

Lately, though, the attacks have extended beyond the office itself. The liberal Center for American Progress released a 28-page report this month that singles out the agency’s director, Don Todd, in a highly personal attack on his character. The report mentions Todd by name on 29 occasions and accuses him of being a political hack determined to sabotage unions.

“The underlying purpose,” the report concluded, “is to undermine the reputation of the labor union movement through a classic political misinformation campaign -- all under the supervision of a lifelong partisan political operative whose career has been dedicated to the destruction of his political opponents.”

Todd has not commented publicly about the report, but a Department of Labor spokesman dismissed it, noting that the office has brought greater transparency to rank-and-file workers within the confines of the law. As a result of the increased enforcement, the office has helped bring corrupt union officers to justice.

In the past month alone, for example, a former financial secretary for the United Mine Workers in Wheeling, W.Va., was sentenced to a year in prison for embezzling more than $70,000 in union funds, an office secretary for the Plasterers in Denver pleaded guilty to embezzling $28,480 in union money, and the former president of National Treasury Employees Union in Detroit pleaded guilty to one count of bank robbery.

News stories about union corruption are not what Big Labor wants the public -- or its rank-and-file -- to see. It’s no wonder John Sweeney and his union cohorts are doing what they can to shut down the one agency in the federal government that looks out for union workers.


NLRB: Employer's property doesn't belong to union

The National Labor Relations Board has ruled that employers have the right to prohibit workers from using the company’s e-mail system to send out union-related messages, a decision that could hamper communications between labor unions and their membership.

In a 3-to-2 ruling released on Friday, the board held that it was legal for employers to prohibit union-related e-mail so long as employers had a policy barring employees from sending e-mail for “non-job-related solicitations” for outside organizations.

The ruling is a significant setback to the nation’s labor unions, which argued that e-mail systems have become a modern-day gathering place where employees should be able to communicate freely with co-workers to discuss work-related matters of mutual concern.

The ruling involved The Register-Guard, a newspaper in Eugene, Ore., and e-mail messages sent in 2000 by Suzi Prozanski, a newspaper employee who was president of the Newspaper Guild’s unit there. She sent three e-mail messages about marching in a town parade and urging employees to wear green to show support for the union in contract negotiations.

During the years that this case was pending, many companies were uncertain whether they could bar union-related e-mail. But the labor board’s decision gives companies nationwide the green light to prohibit union-related e-mail as part of an overall nonsolicitation policy.

“An employer has a ‘basic property right’ to regulate and restrict employee use of company property,” the board’s majority wrote. “The respondent’s communications system, including its e-mail system, is the respondent’s property.”

Labor leaders attacked the decision, calling it part of board rulings that have favored employers and undercut workers.

“Anyone with e-mail knows that this is how employees communicate with each other in today’s workplace,” said Jonathan Hiatt, general counsel for the A.F.L.-C.I.O. “Outrageously in allowing employers to ban such communications for union purposes, the Bush labor board has again struck at the heart of what the nation’s labor laws were intended to protect — the right of employees to discuss working conditions and other matters of mutual concern.”

The ruling comes as the nation’s labor unions continue to struggle to reverse their membership declines. They represent just 12 percent of the nation’s work force, down from 35 percent in the 1950s.

The two board members who dissented asserted that the employees’ interest in communicating with other employees about union activity and other collective concerns should, with regard to the e-mail system, outweigh the employer’s property interest.

They wrote, “The majority erroneously treats the employer’s asserted ‘property interest’ in e-mail — a questionable interest here, in any event — as paramount, and fails to give due consideration to employee rights and the appropriate balancing of the parties’ legitimate interests.”

The majority’s decision was dated last Sunday, the day the board’s chairman, Robert J. Battista, stepped down because his term expired. President Bush has not renominated Mr. Battista, with many Democrats threatening not to reconfirm him because he has been part of so many anti-union rulings.

The board overturned several decisions it had made in ruling that an employer does not illegally discriminate against pro-union speech if it lets employees use e-mail for personal communications but bars them from using e-mail for solicitations for outside organizations.

Adopting the reasoning of the United States Court of Appeals for the Seventh Circuit, involving two cases concerning the use of employer bulletin boards, the labor board distinguished between personal non-work-related postings like for-sale notices and wedding announcements, on the one hand, and group or organizational postings like union materials on the other.

In many past cases, the labor board ruled that employers engaged in illegal anti-union discrimination if they barred workers from engaging in union-related speech on bulletin boards or telephones when they allowed workers to communicate on bulletin boards or telephones about other matters.

In its new ruling, the board’s majority wrote that employers can allow workers to use e-mail for personal communications while barring them from organizational-related communications. The majority redefined the meaning of discrimination and wrote that the Seventh Circuit’s approach “better reflects the principle that discrimination means the unequal treatment of equals.”

Adopting another new policy, the board appeared to allow employers to bar e-mail for certain organizational activities, like promoting a union or Avon products, but not organizational activities related to charities.

The dissenters said the majority’s decision, in allowing employers to bar solicitation with regard to some activities and not others, “would allow employees to solicit on behalf of virtually anything except a union.”


Do you know where your state & local gov't workers are right now?

They are the basic chores that can make or break a political candidate: identifying likely supporters, getting them excited and making sure they turn out when it's time to vote.

And as the Democratic presidential campaigns focus on the Jan. 3 Iowa caucuses, Hillary Rodham Clinton has a major advantage: Three organizations outside her campaign are lending a big helping hand with those difficult and expensive tasks, pouring more than $2 million and an army of fresh troops into the last-minute push. The outside effort, much larger than any being mounted on behalf of a rival campaign, is led in large part by EMILY's List, the nation's largest political action committee and a significant force in Democratic politics. Allied with it are the American Federation of State, County and Municipal Employees and the American Federation of Teachers.

The unions are supporting pro-Clinton radio and television advertising and direct mail contacts with targeted voting groups. Separately, AFSCME has dispatched more than 200 paid workers to Iowa. The fly-in gives Clinton about twice as many such workers in the state as rival Barack Obama, officials of his campaign say.

EMILY's List also is trying a new technique developed with the help of Google to reach female voters there, especially those who are unsure how to navigate the state's complex caucus system. Whenever someone in Iowa searches online for "recipe," "stocking stuffer" or "yoga," for instance, a banner will pop up inviting the searcher to visit a website supporting Clinton.

How much effect the last-minute infusion of money and other resources will have is unclear, but the effort has stirred concern in the Obama campaign. "When you are in a tight race like this, any- and everything matters," said Obama's field director, Steve Hildebrand.

The effort by EMILY's List and the two unions reflects the increasing importance of so-called independent expenditures, in which groups officially independent of a particular campaign pay for advertising, consulting fees and other expenses that might otherwise be covered by the candidate. Such spending is on the rise in both Republican and Democratic campaigns.

And such groups can accept more in donations than a candidate can. Individuals may give no more than $2,300 to a candidate per election, but they can give $5,000 to independent political action committees like EMILY's List. So long as the outside groups avoid "coordinating" their efforts with the favored campaign, federal rules permit the groups to advocate for the candidate by name.

Just how close the ties can be between an independent group and a campaign is illustrated by EMILY's List. The group previously steered clear of presidential politics and concentrated on electing women at the state and congressional levels who support abortion rights. But it backed Clinton as soon as she announced her candidacy.

Ellen Malcolm, president of the feminist PAC, is a national co-chair of Clinton's campaign; she says shehas stayed away from the independent spending by EMILY's List for Clinton. Federal rules prohibit coordination of independent spending with a candidate's campaign.

Former President Clinton signed a fundraising pitch for the PAC in October, in advance of the group's independent campaign.

Other Democratic presidential candidates also are benefiting from independent expenditures, on a smaller scale. Branches of the Carpenters Union and the Service Employees International Union will spend $1.4 million on behalf of former North Carolina Sen. John Edwards. A firefighters' union has spent $158,000 backing Connecticut Sen. Christopher J. Dodd.

A California-based group has spent $38,000 for Illinois Sen. Obama.

But no candidate has attracted as much independent money as New York Sen. Clinton, who is also the target of $360,000 in such spending opposing her candidacy.

The high-tech, and high-price, campaign innovations employed in Iowa by EMILY's List reflect the unique place the group occupies in American politics.

Its name is an acronym for the slogan "Early Money Is Like Yeast" ("it helps the dough rise"). It raised $46 million for candidates in the 2006 election. It trained campaign personnel. And it has been a source of early cash for female Democratic candidates across the country who support abortion rights.

In addition to its own spending on Clinton's behalf in Iowa, the group has bundled hundreds of contributions directly to her campaign. It also has begun a separate effort encouraging New Hampshire women to support Clinton when their state votes Jan. 8.

Female voters are crucial to Clinton's success, but her relationship with them is complicated. She draws her strongest support from younger, blue-collar women who view her as a champion. Wealthier, college-educated women, surveys show, are drawn more to Obama.

The Web-based effort by EMILY's List got its start earlier this year, after research showed that more than half of those who caucused in Iowa in 2004 were women and that their numbers could soar in 2008.

All the campaigns have been targeting women -- it's one reason Obama campaigned with Oprah Winfrey. But Clinton strategists found that their candidate did particularly well among women who were unsure whether they would participate in a caucus.

The most common reason women said they were hesitant to attend caucuses was that they didn't know what would happen. EMILY's List launched a website called You Go Girl -- the one linked in banner ads on the Iowa Google searches -- to educate voters.

Another reason some women said they might not attend caucus sessions was family obligations such as providing dinner. So the website offers "caucus-night recipes," including chicken-noodle and taco casseroles.

Other campaigns are buying Google ads, but typically they are linked to political search terms, not consumer preferences.

"We wanted to find women where they live online," said the technology guru at EMILY's List, Maren Hesla. "If we can increase caucus attendance by just 5,000 statewide, that could make the difference in a race like this."

One ad displays a picture of a Cedar Rapids mother, Sarah Jankwietz, and a quote: "I want to caucus for Hillary but don't know how."

Jankwietz, 45, is a stay-at-home mother of two. Photos of her 10-year-old son in his soccer uniform adorn her refrigerator. Anna, a month shy of 18, is heading to college next year.

Clinton's positions on the issues are in sync with what matters to Jankwietz and her daughter -- the war, and "families and children, women's issues." So she agreed to help with ads.

A mailer featuring Jankwietz and her daughter arrived in her mailbox last week. She answered the phone the other day and heard her own voice explaining why she is supporting Clinton. Friends call and e-mail her telling her when they hear her on the radio or receive mailings.

Jankwietz has always voted. But as she says on the mailers, "I've never been to the caucus." That will change Jan. 3. "This is the first year my daughter, Anna, can vote, and I want to be a good role model," she says on the mailer. Both will be supporting Clinton on caucus night.


Hoffa a First-Class Schmoozer

There's an art to schmoozing and successfully working a room during any event, and Teamsters President James Hoffa has it mastered.

"You have to be sincere," says Hoffa, 66, who leads one of the largest and most powerful labor unions in the world. "You have to really like people. I love people. I just walk up to people and talk."

Basics: Good social skills are necessary for anyone who speaks and networks as part of his or her job, adds international etiquette, manners and protocol training coach Cynthia Lett.

Lett advises executives to enter rooms like they belong there, keep their heads up, smile and use deliberate strides. Shake hands correctly. Keep your right hand empty. "Keep your drink in your left hand so your right hand is free and dry to shake," she says.

Next, put yourself in a position that will force you to socialize, Lett suggests. Like most business skills, mingling with meaning requires practice, so you must attend events regularly if you want to be as comfortable as Hoffa or perhaps as charming as Detroit City Council President Ken Cockrel Jr.

Make eye contact: "Remember to look straight in the eye" of the other person "when you are talking," Hoffa says. "When I go to an event, I have a conscious policy. I have to keep moving because I want to visit with everybody."

Cockrel agrees with Hoffa that it would be hard to network effectively without being genuine. But he also has his own secret: "Listen more; talk less."


Flat Tax proposed by Gov. in Right To Work state

Taxes are always an important part of the political debate in South Carolina, and Gov. Mark Sanford is offering a Christmas package for thought.

Since taking office in 2003, Sanford has pushed for a reduction of the 7 percent income tax rate to make the state more competitive, seeking to attract the large migration of people and businesses from one state to another.

"Rates matter in terms of bringing jobs and investment to our state," Sanford said Wednesday. "This plan has a host of benefits when it comes to improving the quality of life for thousands of South Carolinians by impacting the cost of smoking and therefore the rate of smoking."

A Dec. 10 Wall Street Journal article pointed out that South Carolina has one advantage as a right-to-work state and that states that are attracting people and businesses are generally the ones "with the lowest tax, spending and regulatory burdens."

Sanford has opposed tax increases, and his plan for 2008-09 budget would be to offset about $107 million in tax cuts with a 30-cent-per-package cigarette tax increase, which would take the state's lowest-in-the-nation cigarette tax to 37 cents.

The carrot in his tax package is the optional 3.4 percent flat tax that leaves a lot of room for discussion -- if not argument, which is bound to flow from the General Assembly, which hasn't been favorable to his tax plans.

Many clamor for a flat tax, thinking that it would simplify their life and allow them to keep more of their money. The Tax Reduction Institute said that flat and consumption tax proposals at the federal level would result in a greater amount of taxes for middle-income workers. The institute points to 9-year-old reports from the Cato Institute and Money magazine that show that at the federal level, the flat tax would help those who earn $500,000 a year and hurt those who earn less.

Offsetting deductions on state and federal taxes has a lot to do with how much it saves a person. Tinkering with one affects the other.

Not all Palmetto State residents are enamored with the governor's plan.John Ruoff, director of South Carolina Fair Share, told The Associated Press that cutting income tax for higher wage earners during an economic downturn doesn't make sense.

Others will contend that it doesn't make sense, either, to penalize lower-income and working people by saddling them with a higher tax on cigarettes to support cuts for the wealthier residents.

Sanford also proposed a 30-cent cigarette tax last budget year, but it didn't get much traction in the General Assembly. Many don't want a tax increase of any kind; other say that if the cigarette tax is hiked, it should be used to offset the cost of health care or others state government expenses, not a tax cut.

The General Assembly had $1.2 billion extra to spend in this budget year that will not be around next year. The debate will be interesting, if not bloody.


Iraqi teachers union to join sit-down protest

Iraq's teachers and healthcare workers are uniting with other public-sector employees to demand the government take action on improving working conditions, and pledge to begin a campaign of public sit-ins in Baghdad Dec. 26.

The teachers union representing education workers in 15 provinces marched in Baghdad Dec. 16 in a one-day strike, pledging to escalate actions if the government doesn't deal next month. The teachers are demanding the same pay as colleagues in the safer Kurdistan region, and for greater investment in deteriorating schools. Security is also a key demand, following the slaying of a Baghdad school director last month.

Speaking to the Baghdad newspaper al-Mada, the deputy head of the Teachers' Syndicate, Burhan Nema, said "Iraqi teachers will stage a sit-in as part of a protest campaign that calls for improving the living standards of 500,000 families living in poverty."

The Ministry of Education "supports the demands of the teachers but it has not acted in a serious way with the Council of Ministers and the Committee on Education in the Parliament," said Amir al-Qaisi of the Iraqi Teachers' Syndicate. "The ministry's position is one of a spectator to the educational reality in Iraq."

The General Federation of Iraqi Workers, which includes the Iraqi Federation of Oil Unions (IFOU), is supporting the teachers of Basra. IFOU leaders protest that the national oil ministry has relied on a decades-old anti-union law in refusing to deal with the union. "The law enacted under the Saddam regime is still acted upon and implemented by the government in Iraq," Iraqi Federation of Oil Unions President Hassan Jumaa Awad told UPI in London last month. "Up until now the Iraqi government has not repealed these acts and are in the same position, basically."


UAW plans to squander VEBA $$ billions, part 1

A historic new trust intended to pay the health costs of UAW retirees from Detroit's automakers could run out of money much sooner than the 80 years union President Ron Gettelfinger said it would last.

Industry experts say the scant public information about the trust -- known as a voluntary employees' beneficiary association, or VEBA -- provides little comfort that current benefits will remain as promised for hundreds of thousands of UAW retirees.

The UAW's plan has two key problems:

• Automakers are paying an estimated $52 billion to shift $88 billion in retiree health care liabilities to the union-run trust -- leaving about $36 billion unfunded.

• The plan assumes health care inflation falls to 5% by 2013 and stays at that level, even though it has averaged almost double that rate in recent decades.

"They've got ridiculous assumptions on health care costs," said Lance Wallach, a VEBA consultant in the New York City area. "It's not even close to being realistic, it's preposterous. ... Unless they make drastic changes to the way they treat health care, I'd be surprised if the money lasts 20 years."

If the money runs out, many of the 750,000 retired workers, surviving spouses and dependents who are to receive benefits under the trust would have to rely on Medicare and need supplemental health insurance, even though they were told those costs would be covered.

Union members and outside experts said the UAW will have difficulty keeping its commitments unless the federal government has a national health care system within 5-15 years.

People familiar with the VEBA planning dispute those assessments, saying their analysis of life expectancies, investment returns and health care cost inflation shows otherwise.

The UAW would not comment for this report and hasn't publicly shared a detailed analysis that supports the promise.

The promise

Gettelfinger first committed the VEBA to an eight-decade run at 4 a.m. Sept. 26, when he announced that the UAW had called off its nationwide strike of General Motors Corp. because the parties had agreed on a new 4-year labor contract.

He said the VEBA would "secure the benefits of our retirees and every seniority employee who is on the rolls as of Sept. 14, and that stretches out in our projections for the next 80 years."

In the following weeks, the union made the same promise to members at Chrysler LLC and Ford Motor Co.

The UAW, like the automakers, won't divulge details about ages of members and other factors that are crucial to determining the plan's soundness. Gettelfinger says to trust him.

"It's a very simple thing, based on cash flow and solvency," he said in September. "I can assure you that based on the trend and the discount rates and other projections, that VEBA will be solvent for 80 years."

When asked for clarification, he said: "Eighty years, eight-zero, as in E-I-G-H-T-Y."

Defenders of the promise say the VEBA will save costs by implementing healthy living programs and taking advantage of the size of its population to negotiate lower costs. They say that help from a national health care system seems more likely than ever before, and if put into effect would essentially transform the VEBA to a supplemental Medicare plan.

The problems

But critics say the same cost-saving measures were available to the automakers, whose leaders said they could no longer afford the rising costs. The critics point out that the prospect of national health care has been a possibility for decades and remains theoretical. And they say the health care inflation assumptions for the VEBA are low and could lead to an even faster evaporation of the trust's funds.

The largest problem, several VEBA consultants say, is the UAW's 5% inflation figure.

"It's an aggressive assumption," said Mark Wilkerson, a consultant with VEBA Service Group in Spokane, Wash.

Medicare costs have risen an average of 9.1% for the past 24 years, and private-sector health inflation has averaged 10.1%, said Gerard Anderson, director of the Center for Hospital Finance and Management at the Johns Hopkins Bloomberg School of Public Health.

"I think it is overly optimistic to think in the next 75 years it will only average 5%," said Anderson, who sits on a Medicare committee that studies such trends. "We have not figured out how to do that for the past millennium, so I'm not sure we're going to be able to do that over the next 75 years."

The UAW expects the VEBA to average a 9% annual return on its investments. Regardless of the assumptions, many workers say they don't believe that the independent board of trustees that will manage the VEBA can make $52 billion cover $88 billion in costs.

"I can't say I have any hopes that this VEBA will last," said Gary Walkowicz, 57, of Ford's Dearborn Truck plant.

Jim Robinson, a skilled trades worker at GM's assembly plant in Arlington, Texas, said he didn't see how it could last. "But I haven't seen much," he said. "The union is treating it like everything's got to be a secret, and whenever I've seen that happen, that's not a good thing. ... I'm not very pleased."

Defensive maneuver

Although the UAW describes the VEBA as a solid plan to provide benefits, in part it was a defensive maneuver.

Such trusts protect workers from corporate bankruptcies that typically wipe out retiree benefits. For automakers posting record losses, that is not an unthinkable prospect.

And it wouldn't even have to come to that. In letters to retirees, the union argued that if the money wasn't transferred to the VEBAs, the automakers could have sought court approval to simply terminate retiree medical benefits.

"The win on the union side is that they've got additional security because they actually have the money in their hands," said Dale Yamamoto, chief health actuary at Hewitt Associates LLC near Chicago.

The VEBA is expected to begin negotiating benefits for about 750,000 people in 2010. It doesn't include active workers, and grows only to add retirees who were employees Sept. 14. It will not cover new hires.

And the VEBA first must go through a court-approval process, which is expected to begin early in 2008.

Big pile of money

Additionally, the union could benefit if it can hold its health care inflation to 5%.

Mike Raleigh, a finance director at GM, defends the 5% long-term estimate, saying the automaker's health plans often outperformed Medicare.

He also noted that the UAW plan includes rate increases for retirees. And the UAW could cut costs where the automakers could not, Yamamoto and others acknowledge.

"We're now looking at, with the VEBA, is the second-largest health care purchasing pool next to the federal government," said Kristin Dziczek, senior project manager at the Center for Automotive Research in Ann Arbor. "If they don't have some power over pricing, then shame on them."

Ultimately, though, Raleigh and others argue that politics or other factors must begin to slow the rate of inflation, or the country will go bankrupt.

Sean McAlinden, chief economist at the Center for Automotive Research, said the VEBA money would last.

"It will last 80 years because it is a Big Pile of money," he said in an e-mail. "GM retirees and the active UAW labor force are quite elderly. Eighty years from now, only a handful will be left -- maybe no one.

"If it runs out before 2087, you can yell at Mr. Gettelfinger -- but I guess he's 63 now."


Secret ballot proposal draws union venom

A war of words erupted at the Saskatchewan legislature Thursday, with Premier Brad Wall accusing union leaders of "swearing and sputtering" about planned changes to labor legislation.

During Thursday's question period, Wall said the newly introduced essential services legislation will force NDP members to choose between public safety and "their political allegiances to union leaderships, union leaders who were outside (in) the rotunda yesterday swearing and sputtering rather than entering into a meaningful debate.

"(The NDP) will have to make that choice. We will choose, Mr. Speaker, public safety and health care every single time," said Wall.

When pressed by reporters outside the assembly about his comments, Wall said his "understanding was that (Saskatchewan Federation of Labour president Larry) Hubich was swearing in the rotunda," on Wednesday in earshot of others, and had also interjected comments during interviews about the legislation.

NDP Leader Lorne Calvert said he had no idea what Wall was referring to, but told reporters he has no problem standing with "working people."

"If Mr. Wall's question to me is do I stand with Mr. Hubich, do I stand with working people, the answer is, 'You bet I do,'" said Calvert, who this week said the Saskatchewan Party lied about essential services by saying prior to the election that legislation might not be necessary.

"Working people have some very legitimate ... questions and concerns both about the underpinning philosophy of this government and its current actions."

Meanwhile, Hubich dismissed Wall's comments about "swearing and sputtering" as "juvenile" and suggested they were an attempt to distract from the real issues at hand.

"It's clear to me where the problem is here. (The premier) treats the labour movement with utter contempt by his posture, by his response and by his raising this red herring about something that occurred or allegedly occurred in the rotunda," said Hubich, who maintained he is willing to have a "mature, respectful" dialogue with government.

The turmoil has stemmed from the introduction of the essential services legislation - which would see the work of some public-sector employees deemed as essential - as well as another bill that would amend the Trade Union Act, including a move to secret ballot votes for union certification or decertification.

The SFL has questioned the scope of the essential services legislation as well as many of the changes to the Trade Union Act, suggesting it will be among the worst legislation for workers in Canada.

That prompted the Saskatchewan Chamber of Commerce to respond Thursday with a news release calling the SFL's comments about the legislation "disappointing but not unexpected."

Chamber chief executive officer Steven McLellan said the organization couldn't let comments from labour pass that suggested the legislation will put Saskatchewan at the "bottom of the barrel."

"That's obscene, quite frankly, that that reference has been made," McLellan said. "We have lobbied for this sort of change for some time and are glad to see it in place ... We think it's fair."

Amendments such as allowing an employer more opportunity to communicate with employees when a certification effort is underway are overdue, he said.


Labor-state law lets workers sue employers

In the first lawsuit of its kind, three construction workers are suing an electrical contractor for back wages and more under Minnesota's prevailing wage law, which dictates the hourly rate of pay for workers on state-funded projects. The workers claim they were not paid what they were owed.

The lawsuit against Cole's Electric in Owatonna names three plaintiffs, electricians Kyle Krienke, Cory Martinson and Jeremiah Johnson. The three did electrical work for Cole's and are seeking double the wages they claim were withheld and to compel the employer to comply fully with the law. Martinson is still employed by Cole's; the other two no longer work there.

The suit was filed Thursday in state court in Blue Earth County.

Cole's attorney Doug Seaton insists the claims have no merit and that the workers were paid what they were rightfully owed under the law.

Following a legislative auditor's report that found the 34-year-old wage law largely unenforced for non-highway construction projects, the state Legislature amended it earlier this year so individual workers can come forward and sue their employers for not paying the prevailing wages on state-financed projects. This is believed to be the first lawsuit by workers since the law was passed.

The prevailing wage is set by the state Department of Labor and Industry. It is calculated county by county for many different classifications of work. The wage is set at the rate paid to the largest number of workers in the county where the work is being conducted and in each job classification, such as electrician.

"The company has been in business for quite some time and has worked on some prevailing wage projects," Seaton said. "They believe they have done their work appropriately under the law and have complied with prevailing wage and other legal requirements. They have sought information and advice from the Department of Labor and have followed it."

The workers claim they were misclassified as "skilled laborers" and were not paid at the higher rate for electricians even though that was the work they did. Seaton said the workers carried out all sorts of work and were paid accordingly.

Their work included wiring, mounting control panels, mounting meter sockets, installing light switches and pulling wire, according to the lawsuit. "They're doing electrical work," said Brendan Cummins, the workers' attorney. "There's no debate about it."

The state-funded projects they worked on included a remodeling project on the student union at Minnesota State University, Mankato; a wastewater treatment project for Lake Shetek in Murray County; and a wastewater treatment project in Hammond. Most of the claims they are making were for projects constructed in 2007.

The wages they were paid varied. According to Cummins: Martinson was paid $12 per hour while electricians on prevailing wage rates in the different counties he worked in were paid $34.28 per hour to $52.10 per hour. Krienke's wages varied. He was paid $12 per hour on one project and $14 per hour on another with fringe benefits of less than $1 per hour; the prevailing wage ranged from $34.38 in one county to $41.24 in another.

Seaton countered that the workers are confused about which wages apply to which work and that the law covers a whole range of positions and trades and that different rates apply to the work they have done. None of the workers are union members. Seaton contends that the International Brotherhood of Electrical Workers Local 343 is behind the lawsuit and called it a "sour grapes lawsuit" driven by a union that has been unable to organize that workplace.

"This is partly a disgruntled employee issue and partly a disgruntled union issue," Seaton said. "We are confident that the employer will prevail in this lawsuit and that they have done nothing wrong."

Cummins represents IBEW Local 343. Though the plaintiffs were not members, they did come to the union local to ask about the prevailing wage law. "These workers were concerned about their rights being violated. They complained to the union about it and were referred to us."


Right To Work law earns Arizona #2 outlook

Two labor economists ranked Arizona second in the U.S. for its low taxes, pro-business regulatory environment and limited government.

Arizona ranked second-best overall in terms of economic competitiveness in the study produced for the American Legislative Exchange Council by economists Arthur Laffer and Stephen Moore.

The report cites Arizona's recent property and income tax cuts, openness to charter schools and private school tax credits, right-to-work laws and lack of inheritance tax. The Laffer-Moore analysis also points to Arizona's economic and population growth.

Utah ranked first on the survey thanks to its economic growth, flat income taxes and low corporate income taxes.


Union-only PLA obviates any other quotas

Contractors are still not hiring enough local skilled laborers to build the new Washington Nationals ballpark, a task force reported at a meeting Thursday evening.

Under an agreement former D.C. Mayor Anthony Williams put together in 2005 with unions and contractors, D.C. residents are required to perform at least 50 percent of the work to build the $611 million stadium.

But as of the end of October, only 27 percent of electrician's hours were by D.C. residents. That number is even lower for carpenters (25 percent), operators (21 percent) and iron workers (15 percent). Skilled laborers, with 48 percent, are nearly meeting the goal.

As a result of the findings, the joint venture of contractors building the stadium called Clark Hunt Smoot has sent out letters to about 25 firms to explore why they did not meet the threshold, according to Courtland Cox, the director of local small business development for the D.C. Sports & Entertainment Commission.

"My sense is we'll know very soon who's done what," Cox said. "We will then begin to look at it seriously and make whatever kinds of comments are needed."

The report not only holds contractors accountable, but it also gives the D.C. government a sense of where resources need to be allocated to improved D.C.'s workforce. The PLA task force includes Josh Williams, the president of the Metropolitan Washington Council AFL/CID, and Jerry Lozupone, the executive secretary treasurer of the D.C. Building and Construction Trades Council. The numbers are taken from certified payrolls and reported to the Department of Employment Services.

An area of improvement was in the number of trades meeting quotas for hiring apprentices. Seventy-six percent of the iron worker apprentices' hours were by D.C. residents, while local electrician apprecentices recorded 63 percent of the total hours, local carpenter apprentices took on 90 percent and local cement mason apprentices performed 83 percent of the hours.

"I always take the Tiger Woods approach," Cox said. "Even though you're killing people, you're never going to get there, because you're always striving to be better."

The Project Labor Agreement (PLA) was implemented to ensure the city was giving employment and apprenticeship opportunities to local residents.

"We want to make sure we are building an infrastructure of what we have and what are the deficiencies and how do we deal with the deficiencies," Cox said.

After the stadium is complete, the unions and government are going to flow the workers into Mayor Fenty's $3.5 billion 10-year school modernization project.

The first game at the new stadium is scheduled for March 29.


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