Big Labor cash induces Barack flip-flop

Hunger for forced-labor political money damages the reform-Democrat brand

Memo to: Barack Obama, Re: Campaign financing. This is one of those times when a candidate needs to be on the receiving end, instead of the dispensing end, of some straight talk. You have just jeopardized the excellent political brand - as the "candidate of change" - that you and your team spent long months crafting. It is the brand that won you widespread appeal across the political spectrum, as voters told pollsters that, now more than ever, they want a leader who can change the way Washington works -by making the government respond to the will of the people.

You had things lined up just right. But you blew a great opportunity when you announced you will become the first major party presidential candidate since Watergate to reject public financing of your general election campaign.

Your problem isn't your final decision but your explanation of it. You compromised candor when you should have told the whole truth about what you are doing and why you are doing it. You especially went wrong when you said in your video statement: "...the public financing of presidential elections as it exists today is broken, and we face opponents who've become masters at gaming this broken system."

The problem with this excuse is that you knew the system was every bit as broken last November, when you declared, in a written answer to a questionnaire from the Midwest Democracy Network: "If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election."

You're lucky that most journalists never bothered to cite the whole list of times you made that promise. Indeed, the Web site politico.com was the only one I saw that did do the basic journalism and listed your previous promises.

- You made the promise in a February op-ed in USA Today.

- Then, later, in the Feb. 26, debate in Cleveland, you repeated: "I will sit down with John McCain and make sure that we have a system that works for everybody."
n And on April 27, you told Fox News: "I have promised that I will sit down with John McCain and talk about, can we preserve a public system, as long as we are taking into account third-party, independent expenditures?"

People know all about those independent efforts (of the so-called 527 organizations) that will spend lavishly in excess of their $85-million campaign spending limit under public campaign financing. Everyone saw how the Vietnam veterans' Swift Boaters' television ads savaged John Kerry in 2004.

So why did you think it was okay to simply explain your recent decision by saying that the presidential public financing system was broken - as if this is a development that happened after all of your past promises?

By the way, so far, John McCain hasn't benefited big-time from these independent attack ads you warn about - but you have. Such as that TV ad paid for by the very liberal MoveOn.org and the AFSCME labor union featuring a mother holding her baby as she denounces McCain and his Iraq policy. In your spirit of all candor, all the time, no doubt you'll be condemning that ad any day now.

- Martin Schram is a Scripps Howard News Service columnist.


Barack, labor leaders swap ideas at confab

Labor and business cartels laud Organizer-in-Chief

Barack Obama traded ideas on energy, healthcare and schools with business, labor and academic leaders on Thursday at a campaign forum in Pittsburgh. The group included the chief executive officers of General Motors and United States Steel Corp., along with the presidents of the Massachusetts Institute of Technology and the Service Employees International Union.

Related video: "Barack rips management"

Also on the panel was retired Gen. James Jones, a former NATO Supreme Allied Commander who is close to Obama's Republican rival John McCain but has been mentioned as a possible running mate for the likely Democratic presidential nominee.

Obama opened the forum at Carnegie Mellon University by laying out his energy, healthcare and education agenda, then asked each of 13 panelists to share their thoughts on those topics.

"If you were setting federal policy, what do you think would be the most effective approach to ensure these exciting innovations are moving rapidly?" Obama asked Vinod Khosla after the venture capitalist talked about a "radical revolution" in renewable energy technology.

Investment in university research, Khosla responded, along with stable policy and making people believe it can happen.

Steve Case, the former chairman and chief executive officer of America Online, reminded Obama that government-funded research spurred development of the Internet and then the private marketplace took over.

"I believe there's some lessons that you learn from that approach," Case said. (Introducing himself, Case said: "My real claim to fame is that I went to high school with Barack Obama in Hawaii.")

Andy Stern, President of the Service Employees International Union, told Obama: "What we really need is just to change the old Washington ways where we can't get anything done."

"The old idea that business and labor can't work together for the common good is outdated," said Stern, whose union supports Obama.

G. Richard Wagoner, Jr., the chairman and CEO of General Motors, told Obama that the country should diversify its energy sources as quickly as possible, saying biofuels would be the quickest to develop.

After the event, Wagoner told reporters that Obama had recently "reflected a much more detailed understanding of what's going on in the industry" than he did in a Detroit speech last year. Obama had faulted car makers in the speech for fighting tougher fuel efficiency standards, among other things.

But Wagoner was careful not to take sides between Obama and McCain.

"My sense is both candidates have a pretty good understanding that business and innovation is an important part of the success of the American economy," Wagoner said.

Also on the panel were Lael Brainard, vice president of the Brookings Institution; Los Angeles real estate mogul and philanthropist Eli Broad; Geoffrey Canada, President and CEO of Harlem Children's Zone; Susan Castillo, Superintendent of Public Instruction at the Oregon Department of Education; Susan Hockfield, the president of MIT; former Transportation Secretary Federico Peña; John P. Surma, the chairman and CEO of United States Steel Corp; and Harold Varmus, President of the Memorial Sloan-Kettering Cancer Center.


GOP Teamster-UPS lobbyist rats out FedEx

Related UPS stories: here
Related FedEx stories: here

Who really runs UPS?

A secret report from a lobbyist who represents United Parcel Service Inc. prompted an Ohio state investigation into employment practices of FedEx Corp., leading to a finding that FedEx owed back taxes and interest.

Kenneth Kies, a Washington tax lawyer and lobbyist whose firm has been paid $540,000 by UPS since 2002, sent Ohio officials a 562-page report in December 2006 alleging that FedEx misclassified truck drivers as contractors. A copy of the report, including a cover letter in which Kies asked for confidentiality, was released to Bloomberg News by Ohio officials.

"We took it and opened our own investigation," said Judi Cicatiello, Ohio's unemployment compensation deputy director. She said it was "very" unusual to get such detailed allegations. Her agency determined in May 2007 that the drivers were employees and FedEx owed $654,000 in taxes and interest. The company is appealing.

The report is the first disclosure indicating that UPS may have played a role in prompting an investigation of FedEx's employment of 15,000 drivers as independent contractors. The strategy gives FedEx a cost advantage over UPS, whose 91,800 drivers are covered by a contract with the Teamsters Union.

The benefit for companies such as Memphis, Tennessee-based FedEx may be as much as 30 percent compared with treating the workers as employees and providing retirement and health benefits, said Marick Masters, a professor at the University of Pittsburgh's Katz School of Business who studies labor issues.

Since 2002, FedEx has gained 9 percentage points in market share on Atlanta-based UPS. Neither company discloses wage and benefit expenses by employee type.

10.3 Million Workers

The dispute may affect other industries. Companies that use some of the 10.3 million people working as independent contractors in the U.S. include Home Depot Inc., Allstate Corp. and Avon Products Inc., FedEx Chief Executive Officer Fred Smith said Jan. 10 on a call with analysts. Newspaper publishing companies also have faced scrutiny over whether their carriers are employees or independent contractors.

"As a matter of policy, UPS does not discuss the activities of its consultants or advisers," UPS spokesman Norman Black said yesterday in an e-mail.

"We certainly have provided government regulators with publicly available information on this thing, this whole controversy, without question," Black said earlier in an interview. "`This is an issue that has grown to the point that it is important to us because, as I said, we believe this situation is unfair to taxpayers as well as the workers and competitors."

Kies's Clients

Kies didn't return telephone calls to his Washington office. At the time of the report, Kies's Federal Policy Group, where he still works, was a part of Clark Consulting. UPS was one of about 50 clients including General Motors Corp. and General Electric Co. Some paid more than $1 million a year, compared with UPS's $80,000 fee for 2006, based on federal filings. UPS is the only package-delivery business among the firm's clients.

"We have seen an increase in the number of state investigations and have been trying to better understand what prompted these inquiries," FedEx spokesman Maury Lane said in a statement. "We are surprised by today's report of UPS's apparently concealed involvement in this activity."

FedEx's labor practices have been under investigation in 25 states and prompted a lawsuit as a class action covering drivers in 20 states. FedEx said in December that it may have to pay $319 million in back taxes and penalties to the Internal Revenue Service for worker misclassification in 2002.

The IRS also was auditing FedEx's trucking unit for 2004 to 2006, the company said. The potential liability may rise to $1 billion if the U.S. review results in an adverse ruling, said Jon Langenfeld, an analyst at Robert W. Baird & Co. in Milwaukee, in an interview last week.

Kies Report

In his Dec. 15, 2006, letter to Ohio officials, Kies said the report showed "potentially significant noncompliance" with state tax laws. "These drivers should be classified as employees," he wrote.

Kies, the former chief of staff for the Congressional Joint Committee on Taxation, included in the Ohio report IRS letters to drivers advising them they were considered FedEx employees for U.S. tax purposes; FedEx-related court decisions; documents on regulatory rulings in two other states; and a FedEx Ground contractor operating agreement.

"We request that you treat this submission as confidential and protected from disclosure as information provided by informants," Kies said in his letter to Ohio authorities. Cicatiello, the Ohio official, said her agency considers the letter and the report public documents.

FedEx paid Ohio the back taxes and interest for the years 2003 through 2006, Cicatiello said. Cicatiello said she didn't know on whose behalf Kies filed the documents.

Washington State Letter

Companies reporting to authorities about rivals' practices "probably happens more often than you think," said Charles Elson, director of the John Weinberg Center for Corporate Governance at the University of Delaware in Newark. "Companies typically compete providing products. Sometimes their competition extends to other regimes."

Clark Consulting also sent a report to Washington state in late 2006 or early 2007, FedEx alleged in a June 9 lawsuit aiming to force disclosure of the sender's identity. The state refused because it considers the report confidential, said Elaine Fischer, spokeswoman for the Washington Department of Labor and Industries. In its lawsuit, FedEx doesn't name Kies or UPS.

The agency is investigating whether FedEx drivers are independent contractors and the company should be paying worker compensation premiums, Fischer said.

Massachusetts Attorney General Martha Coakley in December fined FedEx $190,000 for what she called intentionally misclassifying 13 drivers as contractors.

California Ruling

The California Supreme Court in November upheld a trial court decision that single-route contractors in the state were full-time workers.

As long as they are legally considered independent contractors, FedEx drivers can't be unionized under U.S. law, said Joshua Javits, a Washington labor arbitrator and a former National Mediation Board chairman. If they could be, a union would seek benefits "comparable to their main competition, which is UPS," he said.

The Teamsters have been working to overturn FedEx's use of drivers as contractors and to organize the workforce.

FedEx's ground unit accounted for almost a fifth of the parent company's $38 billion in revenue for the fiscal year ended May 31. Its ground market share grew to 23 percent in this year's first quarter from 14 percent in 2002, according to SJ Consulting Group Inc., based in Sewickley, Pennsylvania, which tracks industry market share. During the same period, UPS's share fell to 70 percent from 79 percent.

'Good for Contractors'

The "increased scrutiny" of the contractor model may limit growth of FedEx's ground unit and expand UPS's market share, Justin Yagerman, a Wachovia Capital Markets LLC analyst, who follows the companies, wrote in a June 19 report.

FedEx defends its contractor system as an opportunity for drivers to work for themselves and has said it has strong defenses to the challenges the model faces.

"The business model we use is good for our contractors," CEO Smith told analysts in a conference call. "That's what freedom's all about. We've given that entrepreneurial opportunity to thousands of contractors to own, grow and expand their own business."


Hoffa sets goal to roll over FedEx

Related FedEx stories: here
Related UPS stories: here

Union seeks card-check sweetheart deal just like at UPS

Teamsters General President Jimmy Hoffa joined hundreds of Teamster members, organizers and FedEx Express mechanics to throw his support behind their efforts to form a union. During his remarks at Teamsters Local 667 in Memphis, Tennessee, Hoffa called on FedEx to allow these workers to seek representation free from intimidation by management.

"We've already heard reports that FedEx held captive audience meetings today at locations around Memphis," said Teamsters General President Hoffa. "These workers deserve the right to make a choice free from any anti-union efforts from their employer."

Dave Saucier, a ten-year mechanic at FedEx Express, felt that it was time to bring the power and support of a union to his workplace after the company unilaterally replaced his retirement plan on June 1.

"In my ten years I've seen FedEx Express continue to squeeze us at every turn," Saucier said. "Now that they've taken our pension plan away, we stand to lose tens of thousands of dollars and will work at a minimum of ten more years to make up the difference."

The rally took place two days prior to the launch of the largest organizing blitz in the union's history as hundreds of Teamster members will hit the streets to visit thousands of FedEx Express mechanics in the Memphis area.

The Teamsters look to build on a successful six months during which the union organized more than 28,000 new members.

"With our mighty army of organizers in the field, the Teamsters are ready to go to battle with FedEx to bring these workers the respect and power they deserve," Hoffa said.

Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women in the United States, Canada and Puerto Rico.


Big Business opposes worker-choice scheme

Related story: "Big Business in cahoots with Big Labor"

Favoring labor cartels over competition

The Greater Golden Chamber of Commerce's board voted Wednesday to oppose the right-to-work ballot initiative being pushed by an executive from one of its own member organizations.

Greater Golden Chamber President Gary Wink said the 13-member board based its decision on Amendment 47 solely on concerns about too many voter initiatives aiming to change the constitution. But he acknowledged the group declined to vote on any other efforts to alter the constitution via the ballot box.

The key supporter of a right-to-work proposal that would ban all-union workplaces: Jonathan Coors, an executive at CoorsTek and a descendant of the Golden-based brewery giant's founders.

Wink said CoorsTek and Coors Brewing both hold memberships in the chamber but do not currently have executives serving on its board.


'Any privatization, we are in opposition.'

Union pressure secures threatened dues-flow

City council members rejected Mayor Pam Iorio's proposal to turn janitorial jobs over to the private sector, a move that preserves the jobs of 27 employees but forces the council to figure out other ways to save money. The council voted 6-1 Thursday to deny the award of a contract to United Services Group, the Clearwater company the administration had selected to do the work. Councilman Charlie Miranda voted against the motion to deny.

Last year, as taxpayers demanded property tax reform, Iorio created an Efficiency and Effectiveness Task Force to come up with ways to save the city money. The task force recommended, and the mayor supported, a proposal to turn janitorial and security work over to the private sector.

This month, the city nixed the security idea after realizing the cost savings were minimal and because officials had other concerns. But Iorio's administration liked United Services Group's $940,000 bid.

Officials estimated the city would save about $430,000 a year by turning the work over to United Services Group. Twenty-seven people would have been laid off.

But Councilman John Dingfelder started criticizing the plan last year, arguing some of the city's lowest-paid workers would be affected.

Thursday, five other council members agreed with him. They were influenced, in part, by the pleadings of a few city janitors Thursday morning.

Service attendant Robert Tracy, 54, said he was worried about losing his job and health care.

"The way they're doing this is not the proper way," Tracy said. "I cannot walk out there and start all over."

Amalgamated Transit Union President Martha Stevens said, "Any time there is privatization, we are in opposition."

Council members said they were concerned that laid-off employees would be unable to afford health insurance. Even if some were hired by the private firm, the pay scale starts at about $9.50 an hour, barely enough for some employees to make ends meet, Dingfelder said.

Jeff Chapman, a United Services Group vice president, said his company could do the city's work for less money because his group can be more efficient.

That drew a sharp response from several council members, including Mary Mulhern.

"Why can't our staff be more efficient?" Mulhern said.

Councilman Tom Scott asked whether the administration has considered outsourcing senior management.

James Buckner, the city official who heads the efficiency task force, said the whole purpose of the group is to come up with ways to be more efficient. Privatizing janitorial work is just one example, he said.

Miranda said the city had to find ways to save money as taxpayers demand lower property taxes and, in effect, smaller government. Unfortunately, he said, losing some government jobs is part of that new reality, especially as government has to pay more for fuel and chemicals.

"I hate to say this, we're on a respirator. We're about to go into a coma."

Dingfelder said: "If we can't find $400,000 out of a half-billion-dollar budget, we don't deserve to be here."

The city's budget generally tops $700 million.

After the vote to reject the contract, Dingfelder suggested turning down the administration's suggestion to spend $250,000 on new illuminated street signs. The issue was postponed for three weeks.

Several council members said they were committed to finding $430,000 to cut in the budget.


Big House for AFSCME dues embezzler

Fed oversight foils unions' criminal element

The U.S. Attorney’s Office in Washington says a Maryland woman has been sentenced to a year in prison for embezzling more than $75,000 from the nation’s largest public service employees union. Forty-eight-year-old Zona Albritton was sentenced Thursday in U.S. District Court in Washington after pleading guilty in April. She also was ordered to repay the money. Albritton was the manager of general services for the American Federation of State, County and Municipal Employees for about eight months beginning in September 2003.

Prosecutors say during that time, Albritton submitted several false bid proposals and invoices to the union. Checks were then made out to a fictitious company and deposited into an account controlled by Albritton.

The scam unraveled in March 2004, when one of the checks was returned to the union because of an insufficient address.


News Union dues roundup

Left-wing, paper-waste mouthpieces in trouble

- Boston Globe Sale?: Speculation about the Boston Globe's future as a New York Times Company asset is about as persistent as YHOO-MSFT rumors. The latest fromThe Phoenix is a report that NYTCo chairman Arthur Sulzberger was asked at a staff town hall meeting if the paper is on the block. His reply, according to the paper's source: ""As you can imagine, we can't get into that whole thing ... We can't go down that road. That's why CEOs go to jail ... We do face a raft of challenging issues. That's the hand we were dealt." The focus should be on fixing the situation, not "muddying the waters." Meanwhile, the paper wants a 10 percent pay cut from the Newspaper Guild and competitorBoston Herald is laying off130-160 employees.More newspaper news after the jump.

- Palm Beach Newspapers: The Cox Enterprises-owned publisher of the Palm Beach Postand several other Florida papers plans to slash 300 jobs out of a total of 1,350 posts across its properties including about 130 newsroom jobs. ThePost's limited coverage is here; More details from E&P.

-- Detroit Media Partnership:The Detroit Free Pressand theDetroit News, governed by a Joint Operating Agreement, announced voluntary buyouts in hopes of reducing staff by up to 7 percent, or 150 positions.Free PressPublisher Dave Hunke said the move was being made in light of bad business conditions. The program, which is open to those 45 and older with at least 10-years experience will offer two weeks of severance pay for every year worked. Buyouts have become a common prelude to layoffs, as publishers often haven't found enough volunteers. More at the Free Press.

- Default Watch: Alan Mutter put together a chart showing the major publishers and their varying degrees of default likelihood, based on ratings from Moody's. In worst shape is Journal Register, which has a 72 percent chance of being in default. As he notes here, default can mean two different things. Either the company can be in violation of some financial convenent (e.g., not maintaining a proper leverage ratio), or it can be in the more severe hard default, which basically means bankruptcy. The highest rated "paper":Washington Post, though mainly that's because the company is really a solid education company (Kaplan) that also owns a struggling newspaper.


Labor-state domination plan exposed

How to stay #1 in the nation

Oregon AFL-CIO union leaders have embarked on a program to transform the role of state federations in organizing—and Oregon Unity Team organizer Graham Trainor sends us the latest on the project.

In September 2007, leaders from more than 20 Oregon unions convened in Portland at what was the largest Organizing Summit ever held in the state. The goal was to build Oregon’s union movement by providing cross-union support for one another’s organizing efforts and by maximizing the union movement’s ability to link politics and organizing in unprecedented ways. We call ourselves the Unity Team.

The Unity Team, in recent days, held a quarterly meeting to discuss the group’s progress and to move the program forward.

This was by far, the most productive meeting of its kind that we have ever had in Oregon. In order to help prepare our affiliates for the passage of the Employee Free Choice Act, the single most important piece of legislation for working people of the past 70 years, and potential dramatic increases in union membership, we must work together with an eye towards building union density in Oregon.

The group voted to undertake six different projects of varying sizes. These projects will include assisting with home visits for several union organizing drives and turning out members for a rally of another affiliate looking to highlight unfair labor practices of a large corporation.

Says Oregon AFL-CIO President Tom Chamberlain:

The aggressive agenda and increased collaboration shown by this group of leaders is inspiring. Despite past hurdles to this group’s unity, we are all interested in one thing: giving workers a voice on the job and allowing them to bargain for a better life. This is our rallying cry.

Union membership is on the rise nationwide, with 2007 private-sector membership increasing for the first time since 1979. Some 60 million U.S. workers say they would join a union if they could, based on research conducted by Peter D. Hart Research Associates in December 2006.

Says Oregon AFL-CIO Secretary-Treasurer Barbara Byrd:

The political will for working together and increasing union density in Oregon is there. It was proven at this week’s meeting, and continued collaboration among our affiliates is critical for the future of Oregon’s labor movement.

The Oregon AFL-CIO is a federation of unions and nonunion working men and women, representing more than 225,000 working families in Oregon.


NYT: Soros-Labor operation goes underground

Collectivists put rope-a-dope on MSM

The Fund for America, which had been expected to a major Democratic soft-money vehicle in the presidential campaign, is disbanding, the latest sign that the landscape may be changing for such groups in this election.

The group was created to be a clearinghouse for large donations that could then be funneled to various organizations on the left and had distributed about $20 million since its founding last year.

But the organization, which was organized as a so-called “527” under the tax code, freeing it from restrictions on donations that govern campaigns and parties, had been struggling to raise money during the extended primary fight between Senators Barack Obama and Hillary Rodham Clinton. The Obama campaign, which has discouraged its top fund-raisers from giving to outside groups, had also been sending disapproving signals recently about such outside efforts.

The news of the group’s shuttering was first reported by the Washington Post’s blog, the Fix, and confirmed today by Amy Dacey, the group’s executive director, who declined to offer further comment.

The group’s board, however, said in a statement to supporters, “given the current political climate F.F.A will cease its operations.”

About a month ago, another Democratic-aligned soft-money group, Progressive Media U.S.A., that had been expected to be the major outside television advertising effort for Democrats, shut down as well, in part because of signals from the Obama campaign.

At the same time, however, other soft-money vehicles on the left appear poised to plunge ahead, with the leaders of such groups saying they believe the Obama campaign is drawing a distinction between media efforts, because it wants to be able to control its message, and outside groups that do other activities like voter registration and turning out voters.

America Votes, a 527 that is actually an umbrella organization for several dozen liberal organizations that are mobilizing for voter turnout efforts, received about $4 million from Fund for America, out of the $11 million it has raised so far. It is hoping to raise another $10 million before the general election. Martin Frost, the group’s president, said in a statement that it was redoubling its efforts, despite the shuttering of one of its primary benefactors.

“While the assistance of the Fund for America was significant, a majority of our funding has come from other sources,” he said. “We thank the Fund for its help and will continue our own aggressive fund-raising to build a strong independent progressive infrastructure in 2008 and beyond,”

Similarly, Steve Phillips, president of PowerPAC.org, a non-profit that is also free to accept soft-money contributions, said in an interview last week that his group was planning to spend about $15 million towards this year’s election, primarily focused on getting out the vote.

“People are over-interpreting whatever comments have been made,” he said, about signals from the Obama campaign. “When campaigns talked about 527s, I think that’s shorthand for, they don’t want Swift Boating happening. I think we all agree with that, but they’ve never said there shouldn’t be community organizing, we don’t think there should be grassroots organizing.”

There are also a host of unions, including Service Employees International Union and A.F.L.-C.I.O., and other special-interest groups planning to spend tens of millions of dollars to support Mr. Obama and oppose Senator John McCain, the presumed Republican nominee.

Mr. McCain has been critical of 527 groups in the past but has appeared to have softened his rhetoric lately, saying he cannot be expected to “referee” such groups. So far, however, no major independent efforts on the right have managed to get off the ground.

The liberal group, MoveOn.org, recently closed its dormant 527 but is hoping to raise some $40 million for the general election through its political action committee, which can accept donations of up to $5,000.

It recently teamed up with the American Federation of State, County and Municipal Employees to spend more than $500,000 on an anti-McCain commercial that aired nationally on cable and in Ohio, Wisconsin and Michigan.

Fund for America’s filings with the Internal Revenue Service, which only covered up to March 31, 2008, showed George Soros, the financier who has been a major donor to such organizations on the left, contributed $2.5 million to the organization, as did Stephen Bing, another major donor for Democratic causes.


AFL-CIO officials turn against county Dems

Unions threaten to withhold support to lawmakers

Citing their bitter feud with the county’s Democratic Party leaders since last October, labor union officials are threatening to withhold endorsements of Prince George’s County lawmakers unless they agree to ditch the current leaders of the county Democratic Central Committee.

In a letter dated June 11, members of the Metropolitan Washington Council of the AFL-CIO notified state and county lawmakers that they should not expect any funding or support from organized labor unless they denounce Central Committee Chairman Terry Speigner and Vice Chairman Arthur Turner and get them not to run for the posts again in September.

The letter also calls for each elected leader to pledge support for several union causes, including making sure labor agreements are a part of county-funded economic development projects.

‘‘Many of you have been endorsed and been given money and support by labor unions,” AFL-CIO President Joslyn Williams wrote in the letter reportedly sent to all elected officials in the county. ‘‘Unfortunately, it appears that we cannot expect that support to be reciprocal.”

Though their financial support is limited compared to real estate developers and businesses, unions have traditionally helped politicians get out thousands of voters through volunteer networks, phone banks and other efforts. Union spokesman Rick Powell said the group will use response to the letter to determine which county Democrats will get similar support in the future.

‘‘Those that respond, fine. Those that don’t, we’re moving forward,” Powell said. ‘‘Things are changing.”

The letter is the latest in the protracted dispute between local unions and the leaders of the central committee, which coordinates Democratic Party actions in the county. Because no Republican holds office in Prince George’s, the Democratic Central Committee is a major source of power.

The dispute began last fall when Turner sent e-mails bashing labor attempts to hold up the Woodmore Town Center development in Glenarden, where a non-union Wegmans grocery store is slated to go.

In e-mails to elected officials and others, Turner accused organized labor of trying to deprive the county of long-sought high-end retail developments. The party leader singled out Tony Perez, the UFCW Local 400 government affairs specialist who filed the zoning appeal.

‘‘Why is Mr. Perez fighting against those who live, work, play and pray in our beloved Prince George’s County? Why is he acting to keep us in a subservient, second-class, substandard, marginal state?” wrote Turner, who declined to comment for this story. ‘‘I am prayerful that his intentions are noble and just are not part of some less than honorable scheme.”

The e-mail led to a backlash from the unions, whose members turned out to protest last fall. Speigner, the chairman, came to Turner’s defense, though other members at the time called for a reprimand.

In the end, the Democratic Central Committee agreed to appoint six women to the committee, with the understanding that they would be backed by labor officials.

But after delaying the vote for months, Speigner and the committee reneged, choosing a slate of candidates supported by county senators this spring.

‘‘That was a conscious decision to screw us,” Powell said.

Speigner said he had not seen the letter, and declined to comment. But state party officials say the rift needs to be resolved.

‘‘I think it’s time to move forward,” said Quincy Gamble, spokesman for the Maryland Democratic Party. ‘‘And I don’t see how this letter gets us closer to that.”

Several elected officials said they had not seen the letter last week, and declined to comment.

Gamble said the unions are still a vital part of the party.

‘‘This is a small bump in the road,’ he said. ‘‘It’s time to work together.”


R.I. relaxes teachers union-dues mandate

Labor-state disregards union objection

The Democratic leaders of the Rhode Island General Assembly joined Republican Governor Carcieri yesterday for the signing of a new $6.9-billion state budget that, one after another, they each hailed as “a victory” for Rhode Island’s beleaguered taxpayers because it does not raise sales or income taxes.

“The good news,” said Carcieri, “is that everyone understood the seriousness” of the state’s financial situation.

“This is the House leadership saying that we are not going to raise taxes,” chimed House Speaker William J. Murphy, D-West Warwick. “Working-class families in Rhode Island, the middle class have paid enough. We are paying over $4 a gallon for gasoline; we can’t afford to increase taxes in Rhode Island.”

Added Senate President Joseph Montalbano, D-North Providence: “Where I’m running for office, I think my platform is going to be: we didn’t raise taxes and my constituents are going to be happy about that. Small businesses are going to be happy about that. Large businesses are going to be happy about that and once again, we hope to live for a better day and the only way we get a better day is by improving the economy.”

Aimed at averting a potential $425-million deficit, the new tax-and-spending plan for the year that begins July 1 would freeze municipal aid at current-year levels, cut programs for the elderly, the poor and the disabled and reduce the state work force at the same time it provides the next in a series of income-tax cuts promised the state’s wealthiest taxpayers in rosier times.

Dropping the state’s flat-tax rate another notch will cost the state treasury an additional $5.3 million in the 2008-09 budget year that starts next week; $26.9 million a year after that.

Not everyone is happy with the budget package, and the decisions made to preserve those tax cuts.

A glum Henry Shelton sat in the audience at the State House news conference, bemoaning the dismantling of a two-year-old program aimed at helping the poorest low-income families pay their utility bills. Eliminating the legislation will save millions over the next few years: $4.2 million in fiscal year 2009; $8.6 million in 2010; $13.1 million in 2011; $17.8 million in 2012; and $18.5 million in 2013, according to an estimate by the House Finance Committee.

But the timing couldn’t be worse for those struggling with heating costs, which are expected to be hundreds of dollars higher next winter. “It’s a disaster,” said Shelton, coordinator of the George Wiley Center, a Pawtucket agency that lobbies on behalf of low-income families, recently.

With no raises in the offing and state employees being asked to pay more for their health insurance, Richard Ferruccio, president of the prison guards’ union, said, “I don’t think it’s a victory for anybody,” pitting the rich versus the poor makes it “a very divisive budget,” and “I know there’s still questions as to whether the budget is actually going to save the money that was necessary.”

Carcieri acknowledged for the first time yesterday that the state may have to cut twice as many state jobs to achieve a projected $97 million in personnel savings as previously anticipated.

The savings were hinged, in part, on the assumption that 3,000 or more state workers would retire this fall before new rules go into effect that hike the cost of health insurance for state retirees, and that 400 of those jobs would be left empty. Responding to a reporter’s question yesterday, Carcieri said it is not yet clear how many more jobs will have to go, “but it’s my judgment right now is that it is probably another 400 people, another 300 to 400 people would be required.”

Budgets are, in their own way, a political manifesto and legislative Republicans have been on talk radio claiming a disputed victory in the war over taxes-and-spending.

The entire General Assembly is up for reelection in five months. Lawmakers rushed to end the previous legislative session last week, in part so they could focus on the looming elections and file related paperwork due this week with the secretary of state’s office. One political observer believes Carcieri emerged from the budget debate looking the best.

“I think the budget is a big victory for Governor Carcieri,” said Brown University political science Prof. Darrell West. “He defined the terms of the debate and got the Democrats to approve much of what he requested.”

But University of Rhode Island political science Prof. Maureen Moakley says the General Assembly also scored political points with the electorate by resisting the temptation to plug the $425-million budget shortfall with tax hikes. “I think it was a win all around,” said Moakley. She acknowledged some of budget projections may be exaggerated, but suggested there will be little political fallout for leaving some of the tough decisions for next year.

“They still have options down the road when they come back in January and the election will be over,” she said.

But Carcieri’s wins extended beyond taxes.

He successfully pushed for the inclusion of budget language that creates a new class of public schools - known as mayoral academies - that are largely free of labor union bargaining and prevailing-wage standards. The budget also prohibits municipal health-care contracts from specifying a health-insurance provider.

Organized labor strongly opposed both proposals.

Moakley credits the governor’s newly hired director of the state Department of Revenue, Gary Sasse, with pushing the governor’s agenda through what had until recently been a hostile General Assembly.

Sasse, who is generally respected by leaders of both parties as the former head of the Rhode Island Public Expenditure Council, “provided the kind of cohesive force that kept all these people on the same page. Having him in the mix made a big difference,” Moakley said.

Instead of claiming a Republican victory yesterday, Carcieri opted to be magnanimous. Given the magnitude of the deficit, he said; “I think we all understood that we’ve got a huge problem and when you’ve got a huge problem the reality is you can’t nip around the edges, you’ve got to dig in and you’ve got to go to work and there are going to be difficult decisions…. and when you look at where we spend the money, of the $3.2 billion in general revenue, [$800 million] is people — personnel and benefits, $1 billion is human-service programs and … the largest piece [$1.1 billion] is just money that we all collect and pass back to the cities and towns, most of that for school aid.”

“So I think everybody up here understood that our options are few…. that we needed to dig in, really dig in deeper than we’ve ever dug in and make some major, major changes.”

“It’s a victory of cooperation,” said House Finance Chairman Steven Costantino. Asked if the lawmakers were setting the governor up for blame if the promised savings do not materialize, Costantino, D-Providence, said: “Certainly there’s a few issues within this budget that [are] going to take a lot of work by the administration to meet what they [told] us they would meet and we will be watching that.”


Vindictive ballot measures advance

UFCW punishes state for considering worker-choice

The Colorado Supreme Court rejected a legal challenge to a labor-backed ballot initiative that would require employers to provide health insurance for workers. The United Food and Commercial Workers Local 7 has hundreds of signature gatherers helping to circulate petitions to get the measure on the fall ballot. If voters back the initiative, employers with 20 or more workers would be required to offer a health plan and could require an employee to foot only 20 percent of the cost.

The union is also behind a ballot initiative that allows employees to sue for workplace injuries. The court also rejected opponents’ challenges to that measure, affirming the state title board’s initial decision.

“Despite efforts to disenfranchise voters, Coloradans will get to vote for the basic health care and safety protections they rightfully deserve and need,” UFCW spokesman Manny Gonzales said.


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