Whistleblower docs reveal ACORN's practices

More ACORN stories: here

Union-backed voter-fraud group exposed

Jun 18, the Consumers Rights League (CRL) published a collection of whistleblower documents that suggest the Association of Community Organizations for Reform Now (ACORN) has reaped substantial financial gains by misusing taxpayer dollars for political ends and by attacking lending corporations for the same “predatory” lending practices it regularly engages in.

The ACORN Housing Association (AHC), an ACORN affiliate that receives over 40% of its funding from government sources, claims to be a consumer advocate. In a newly-released report from CRL, however, a series of documents obtained from a whistleblower source reveals hypocritical and potentially illegal use of taxpayer dollars by ACORN and its related organizations.

These documents – which include staff emails and internal organization policies – suggest that ACORN has failed to maintain a proper distinction between its tax-exempt housing work and its aggressive political activities.


Barack: I'll end secret-ballot union elections

More collectivism stories: here

Dems feature union-collectivist agenda in 2008

Sen. Barack Obama took part in a nationwide conference call with union members this afternoon, and he’s ready to work with the union movement to win this fall and turn around America.

More than 2,500 union leaders, activists and members across the country got a chance to hear Obama talk about the challenges facing the country, and the values and principles that inspire his campaign.
Everywhere I go I hear the same story. Wages are falling, good jobs are disappearing, families are losing their homes and prices on everything from fuel to food are going up and up.
Obama reflected on his experience as a church-based community organizer, working in neighborhoods crippled by closing steel mills. Working with unions, churches, and local government, he fought for job training programs to help turn those neighborhoods around. That’s the fight he wants to continue in the White House.
The fundamental truth at the heart of this country, and the heart of the labor movement, is that we have mutual obligations in this country. We rise and fall together
Obama contrasted this message with the ideology at the heart of the Bush agenda, which benefits very few and leaves working families behind.
They call it the ownership society, but what it really means is, “you’re on your own.”
Those left on their own include workers who’ve seen their jobs shipped away, parents who can’t afford health care coverage for their children and millions of us struggling in face of stagnant wages and rising prices. Obama pledged to put an end to the Bush agenda and work with unions to fight for policies that improve workers’ lives.
If I have the honor of serving as your president, I will be a champion for working families.
Passing the Employee Free Choice Act is an essential part of building a strong, worker-friendly economy, Obama said, and promised to sign it if elected. He also pledged to fight for fair trade policies, and to stop rewarding companies that send jobs overseas. By investing in infrastructure and building a new energy economy, Obama said, we can create good jobs—including up to 5 million new green jobs.
We’ll create ripple effects through the economy, and put people back to work.
Obama also pointed to fixing our public education system, making college affordable and protecting Social Security as top priorities. He pledged to create a Department of Labor and a National Labor Relations Board that act on behalf of workers.

As a community organizer, state senator and U.S. senator, Obama has seen that union political mobilization is important and effective. He said that union outreach, through phone banks, mail, worksite visits and local union mail, is going to be essential to get union members engaged and energized. Obama spoke directly to the local union leaders on the call in noting the importance of union political mobilization.
Change doesn’t happen from the top down, it happens from the bottom up…People trust their union and local union leaders, because they work alongside you. They elect you. It means more than any other phone call, more than any other piece of political mail.
Obama knows he needs the support and enthusiasm of union members to win this fall, and he’s pledged to fight for working families and for the needs and priorities of working people.
We need to make sure we aren’t afraid to say we need a stronger labor movement in this country.
Obama said that the values that inspire the labor movement are those that drive his campaign. AFL-CIO President John Sweeney says Obama is a candidate who is on the side of workers and will fight for them as president. Speaking on the call today, Sweeney said:
We all know he’s a great speaker, but what impresses me just as much is what a great listener he is. He has a deep understanding of the problems facing working families in our country.

Confused Bush pleases none

More worker-choice stories: here

Worker-choice advocates sense GOP double-cross coming

Lawyers for a group of non-union public employees challenging the spending of their security fees on litigation outside their bargaining unit have asked the Court to deny the Solicitor General’s request for divided argument in Locke v. Karass (07-610).

Last week, the Solicitor General, which filed an amicus brief in support of neither party, requested that the Court allot 10 minutes of argument time to the federal government, and divide the remaining time between the two parties. It noted that both the employees and the union opposed the motion.

The opposition, filed Monday by attorneys at the National Right to Work Legal Defense Foundation, contends that 17 of the 22 pages in the government’s brief oppose the employees’ position, and the the respondent union’s brief cites it 14 times in support of its argument. Jeremiah Collins, a lawyer for the respondent, said the union did not plan to file an opposition.


Unions picket v. Verizon during negotiations

Related story: "The 28 labor-states"
Related Verizon stories
: here • More strike stories: here

Typical labor-state bargaining practice

Hundreds of Verizon Communications Inc. employees picketed at its offices around New York on Thursday, threatening to strike if the phone company and union fail to agree on a new contract by a weekend deadline.

The Communications Workers of America, which has 65,000 members, said talks were progressing slowly despite the current contract's expiration on August 2, after which union workers could go on strike.

"We're unhappy with the pace of negotiations," CWA representative Bob Master said outside Verizon's downtown headquarters as his union colleagues chanted union slogans.

A strike by employees, including engineers and customer service workers, could delay Verizon's plans to expand its FiOS high-speed Internet and video service. The company said its home phone and wireless services will not be affected.

FiOS is a key part of Verizon's strategy to bolster its landline business and compete with cable companies' all-in-one packages of phone, video and Internet services.

This week it launched FiOS TV in New York City, where it will compete with cable service providers such as Time Warner Cable Inc. and Cablevision Systems Corp. A strike could delay how soon the city's residents receive the FiOS service.

"We want FiOS to succeed. But we're going to do what we have to do to protect our jobs and our healthcare," Master said.

Disagreements include a potential increase in worker payments for healthcare coverage, a proposal that workers retiring from 2009 onward pay for their own healthcare, and the elimination of retiree health care coverage for new hires, according to the CWA.

"We can't let corporate greed interfere with getting a fair contract," said Denise Hawley, a customer representative who has been with Verizon for 37 years.

Verizon has so far said it was optimistic about resolving the dispute, although spokesman Alberto Canal said it also had contingency plans in place to prevent any disruptions to service.

Bank of America analyst David Barden said the Saturday deadline could come and go without a new contract, but that any fall in the shares as a result could pose a buying opportunity for investors.

"The potential for very short term volatility around specific announcements in the process is predictable, but we would be looking to buy Verizon on dips rather than attempting to call each up and down tick over the month or so it may take to finally resolve the labor relationship for another period of years," he said.

Verizon shares fell 30 cents to $34.04 on Thursday.


Tree-killers run secret-ballot ads

Center for Union Facts Exposes Union Leaders' Scheme to Effectively Eliminate Secret Ballot Elections on the Job

Today, the Center for Union Facts ran full page ads in The New York Times and USA Today, taking labor union leaders to task for aiding in bankrupting American industries and hobbling our economic competitiveness. The ad comes on the heels of the labor movement's new campaign to push the deceptively named Employee Free Choice Act, which would effectively eliminate employees' right to a private ballot vote when it comes to voting to join - or not to join - a union.

The national print ad, which features a gate with a closed sign hanging from it, reads:

"Like what union leaders did to steel, airline and auto industry jobs? Then you'll love what they do to yours."

"With the economy sputtering, businesses posting record losses, and tens of thousands of American workers being laid off, this is a terrible time for America to receive a shock to its economic competitiveness," said Center for Union Facts Managing Director J. Justin Wilson. "But that's exactly what union leaders have in store for American workers. From inflexible work rules and job assignments to uncompetitive wage demands, they are trying to do to many American businesses what they already did to the steel, airline, and automotive industries."

Wilson continued: "Working Americans need to recognize the realities of the modern labor movement. Labor leaders have alienated workers through gross mismanagement of dues and disrespect for their right to vote in secret ballot elections. The precipitous decline of organized labor is a direct result of employees across the country realizing that corrupt, power-hungry union leaders are not looking out for anyone but themselves."

The Center for Union Facts is also airing television ads across the country exposing labor bosses' scheme to effectively do away with private ballot elections.


WGA corrects FiCore blackball list

Related story: "Shameful union blackballs Fi-Core members"

Writers' union general counsel removes one name

Dear The Union News: I am writing in response to a blog posted on your site ("Shameful union blackballs Fi-Core members") that included the WGA posting of list and letter from the Presidents on April 18, 2008. I was erroneously placed on this list and the WGA has already removed my name. I am now asking for you to also remove my name from your web posting.

I understand you may need a retraction from The WGA so below is a letter from Anthony Segall at the WGA, West that was sent Tuesday, July 15th. You are welcome to contact him to confirm as well. See below.

Jannen Vogelaar

Dear Janeen,

I apologize for not responding sooner. I was on vacation until yesterday.

I am writing to confirm that the WGAW in fact removed your name from the list of resigned members attached to the April 18, 2008 presidents’ letter from Patric Verrone and Michael Winship. Although you resigned your WGAW membership during the period of the recent MBA strike, we removed your name from the list to dispel any implication that (1) the bargaining unit in which you are employed was on strike at the time of your resignation; or (2) you crossed a WGAW picket line in order continue working during the strike.

If any third party requires further confirmation of the above facts, he or she may contact me and I will provide it.

Anthony R. Segall
General Counsel
Writers Guild of America, West, Inc.
7000 W. Third St.
Los Angeles, CA 90048-4329
Phone 323.782.4526

Collectivist barons lavish cash on Dems

A contrast with workers hurting from California budget crisis

It's kiss-and-make up time in Silicon Valley today for Barack Obama's and Hillary Clinton's major fundraisers. Some of the valley's biggest Obama backers are co-hosting a Los Altos Hills fundraiser with Clinton as star attraction late this afternoon to help Clinton retire her more than $20 million campaign debt.

"Time is healing the wounds," said Lorraine Hariton, a major Clinton backer at whose home the cocktail-hour event will occur. "I'm very pleased with how well the Obama people are getting their people out," she added.

It's also good politics, as Obama seeks to win over the Clinton faithful. And since many Clinton supporters have already donated the federal maximum, Obama backers are needed to help erase the debt. Hariton said she expected about 150 people to attend the fundraiser. Guests are being asked to contribute between $500 and the federal limit of $2,300.

Clinton will arrive in the valley after delivering a speech to a convention of labor union members and holding a small, high-priced fundraiser in San Francisco.

In her remarks to American Federation of State, County and Municipal Employees, Clinton enthusiastically endorsed Obama, a man she says she knows well. "I have stood on stage with him in 22 debates, but who's counting? I have seen his passion and determination, his grace and his grit. His own life exemplifies the American dream."

Her only tiny hint at disappointment came when she said she was proud to have garnered 18 million-plus votes during the hard-fought primary campaign. "But now it is time for us to unite and together to stand up and say no more of the Republican ideology."

And she said when asked recently if she would have run for president if she knew what the results would be, she answered "In a bird-dog minute."

Following Clinton, Obama addressed the convention by video from Iowa, where he was campaigning today. He did not specifically mention a new ad by GOP rival John McCain comparing Obama's "celebrity" to Paris Hilton and Britney Spears, and overtly suggesting he is not ready to lead the nation.

"I respect his many accomplishments. My differences with him are not personal," Obama said. "They are with the policies he has proposed. Because while he legitimately can tout moments of independence from his party in the past, such independence isn't characteristic of his presidential campaign."

With the hard feelings now dissipating from the primary fight, Clinton backer and Santa Clara County Assessor Larry Stone said he expected the Los Altos Hills fundraiser to "be like a reunion," bringing together major Democratic fundraisers from around Silicon Valley who typically work together once the Democratic nominee is chosen.

"Everyone has come to grips" with the election results, said Stone, a key valley Democratic fundraiser. Stone has already met with Obama campaign leaders and is helping plan the presumptive Democratic nominee's next big Bay Area money event, scheduled for Aug. 17 in San Francisco.

Just how good are the feelings? Obama backer Wade Randlett invited his child's godmother, a Clinton backer, to today's event "so she can partially forgive me for not supporting her losing candidate."

And Obama's California campaign finance co-chair, Palo Alto attorney John Roos, said he's just happy "all of us are on the same team again. Everyone has worked hard on the Clinton event," he said, adding "and the flip-side for Obama's August 17 event, the Clinton people are pulling through."

All of which is to say, the transfer of wealth, from Silicon Valley to presidential battleground states, continues this fall.


SEIU: 'Everbody's pissed.'

Jumbo union stirs discontent at California hospital

The age-old story of worker versus boss is playing out at Saint Louise Regional Hospital, and a strike seems likely even though administrators say they have compromised in good faith with the upset union.

"Everybody's pissed," Ernest Gonzales, a local steward for the SEIU United Healthcare Workers union, said Wednesday afternoon outside the hospital cafeteria. "They're threatening us and trying to intimidate us," Gonzales said.

"Most of them have been pro-strike," Gonzales said of the union members who, among other things, have demanded a stronger voice in quality care, increased job security and insurance benefits and the ability to have a third party arbitrator break stalled negotiations.

During the latest round of talks last week, the hospital agreed to some of these demands, but union members called it a ruse: The administration weakened current contract language on job security and arbitration going into the first round of negotiations last March - before the union members' contracts expired April 30 - and has since restored that language and called it progress, Gonzales and others said.


Celebs wow AFSCME confab in S.F.

Star quality on display

Sen. Hillary Rodham Clinton appeared before a crowd of several thousand adoring members of the American Federation of State, County and Municipal Employees Thursday at the Moscone West Convention Center.

The New York Democrat did not disappoint the packed union crowd that gave the senator a standing ovation on her way in and out as Sister Sledge's "We are Family" blared from the stage loudspeakers.

Not to be outdone by his former campaign foe and now ally, Sen. Barack Obama, the presumptive Democratic Party presidential nominee, was beamed in live via satellite to the convention members about an hour after Clinton's speech ended.

But make no mistake, Clinton had the boisterous crowd at hello. She struck several chords during her 22-minute speech that resonated deeply with the audience.

Mostly though she touted the benefits of what a future Democratic president would do for American working people.

"You've been fighting for the last eight years. You've seen first hand what this Administration and their allies in the Congress have done to our country and our government. You've seen how they have outsourced critical government functions to private companies which our often more expensive and certainly less accountable and less competent," Clinton said. "The Administration's motto seems to have been, ‘If isn't broke, we haven't tried hard enough.'"

Clinton urged the crowd to help her continue the fight against privatization of essential government services.

"That's why we have fought to defend Social Security against privatization. That's why we have fought against the President and his Republican allies who have tried to undermine Medicare by taking money away from doctors so they can give it to insurance companies..." she said. "That's why we have been fighting day by day against policies that seem to shift the burdens of Medicaid, home heating oil assistance and child healthcare and economic development and so much else onto the backs of state and local governments."

Clinton did not spare her well known distain for the current occupants of the White House.

"(The Bush Administration) represents a narrow, radical ideology and it's up to all of us to speak out against it and to vote against those that would support it. That's why I am going to work as hard as I can with all of you to ensure that we have a Democratic victory in November," Clinton said. "For this reason (we) have to elect more Democrats to the Senate, more Democrats to the House and Barack Obama as the next president of the United States of America."

For his part, Obama delivered a slightly less energetic talk the union throngs - virtually all of whom were sporting bright green T-shirts with the AFSCME logo.

Obama started his talk by praising Clinton and thanking her for her service and commitment to Democratic ideals.

"For 16 months she and I shared a stage as rivals but I couldn't be happier that we now share it as allies in the effort to bring America's working families and new and better day. I am so honored to have her support. I am a better candidate because of her outstanding work and the great campaign she ran," Obama said.

Obama also reminded the crowd that Bush Administration has been consistently anti-labor since taking office.

"It's not that they haven't been fighting for you, they've actually have been trying to stop you for fighting for yourself. They don't believe in unions and they don't believe in organizing. They have packed the Labor Relations Board with their cronies and (other) corporate types. Well, we have news for them. It's not the ‘Department of Management' it is the Department of Labor," he said.

Like Hillary, Obama also hit the high notes that a labor union crowd in particular would want to hear.

"(We have a) president who denigrates public service by privatizing public jobs every chance he gets," Obama said. "(If elected president) I will make the Employee Free Choice Act the law of the land."

(The currently stalled Employee Free Choice Act (House Resolution 800, Senate Bill 1041) would establish stronger penalties against employers who violate employee rights, provide mediation and arbitration at first contract disputes and allow employees to form unions by signing cards authorizing union representation, among other things.),

Mostly, though, Obama used Thursday's speech to rally the union faithful and to remind them that the Nov. 4 election is less than 100 days away and that their help on the ground will prove pivotal to his chances of winning against presumptive GOP presidential nominee John McCain.

"I am running for president because I believe that if we can just put an end to the politics of division and distraction. If we can just reclaim the idea (that) we all have to stick with each other and that we all have mutual obligations to one another," Obama said. "If we can just unite this country around a common purpose then there is no obstacle that we cannot overcome. This is the opportunity we have in this election."


SEIU misrepresents nurses

Jumbo union quick to take credit where none is due

I am writing to respond to a recent full-page advertisement purchased by the Service Employees International Union, which compared two local (CA) hospitals, St. Elizabeth Community Hospital of Red Bluff and Enloe Medical Center.

Many people may believe that St. Elizabeth had some involvement in this advertisement, because it painted Enloe in a very dim light compared to St. Elizabeth. The staff at St. Elizabeth, where I am a nurse, wants to assure the community this was not the case. In fact, many employees, especially among the nursing staff, were also very offended.

We want to point out is that the SEIU only includes the service and technician class employees and not the registered nurses. In fact, St. Elizabeth is unique as its nurses are the only ones within the Catholic Healthcare West (CHW) system that are not part of any union. All of our honors and awards were bestowed before the SEIU's arrival, which wasn't until October 2007. That is why this advertisement especially offended all the registered nurses because it did not give any credit where credit is due — to the nursing staff, who are not part of any union in any way.

For more than a century, St. Elizabeth Community Hospital has worked tirelessly and with great dedication to build a hospital that we can all be proud of. St. Elizabeth regards Enloe as a key partner in our ability to provide quality health care for our community.

- Samuel B. Crow, Red Bluff (CA)


Organizer-in-Chief wants you

Barack's paid volunteers would likely owe union dues

Sen. Barack Obama's call to public service is quite different from JFK's. JFK knew America was already a nation of givers and volunteers, perhaps the most charitable and altruistic nation on Earth. Entities such as the Peace Corps would give Americans an outlet for their kindness and generosity, an opportunity to share what the freest nation on Earth had given them. Obama will force you to share.

Obama's Orwellian use of the words "universal" and "voluntary" together is an indicator of an antithesis to capitalist society deeply rooted in his socialist associations, education and training. Indeed, in 1996, when he ran for an Illinois state Senate seat, one of his first endorsements was from the Chicago branch of the Democratic Socialists of America.

On the surface, his plan looks just like typical bureaucratic program growth. He wants to expand Americorps to 250,000 slots and double the size of the Peace Corps. He'll create a Clean Energy Corps to plant trees and otherwise save the Earth. It's how Obama plans to fill those slots that's worrisome.

Announcing his plan July 2 at the University of Colorado, he said: "We will ask Americans to serve. We will create new opportunities to serve. And we will direct that service to our most pressing national challenges." He will make us an offer we can't refuse.

Obama says that as president he will "set a goal for all American middle and high school students to perform 50 hours of service a year, and for all college students to perform 100 hours of service a year." What he doesn't say is that he'll make such voluntarism compulsory by attaching strings to federal education dollars. The schools will make the kids volunteer. It's called plausible deniability.

In a commencement speech at Wesleyan University, Obama advised graduates not to pursue the American dream of success, but to serve others.

"You can take your diploma, walk off this stage and chase only after the big house and the nice suits and all the other things that our money culture says you should," he told the graduates. "But I hope you don't."

Don't be another Bill Gates and amass a fortune making people more productive and successful in their daily lives and giving your countrymen a standard of living the world will envy. Exchange your cap and gown for sackcloth and ashes. Leave your possessions behind and come and follow Obama.

"Fulfilling your immediate wants and needs betrays a poverty of ambition," he opined. Shame on us for being selfish and buying that SUV built by an autoworker trying to fulfill his family's immediate wants and needs.

"Our collective service can shape the destiny of this generation," Obama said. "Individual salvation depends on collective salvation."

We already have a Salvation Army that is truly a volunteer organization. Collective service and salvation is not a classic definition of voluntarism. What Obama has in mind is to turn America into a socialist version of the old Soviet collectives.

And if your idea of service is to join the military and keep others alive and free, forget about it. And never mind about ROTC on campus.

Obama has no place for those who are willing to abandon fame and fortune to lay down their lives for their friends and ours. "At a time of war," Obama says, "we need you to work for peace."

"We left corporate America, which is a lot of what we're asking young people to do," Obama's wife, Michelle, told a group of women in Zanesville, Ohio, during the primaries. "Don't go into corporate America. . . . Become teachers. Work for the community. Be social workers. Be a nurse. Those are the careers we need, and we're encouraging people to do just that."

Don't be the engineers who will figure out better ways to extract shale oil from the porous rock that holds it. Figure out how to extract more money from taxpayers' wallets.

But the Obamas are doing more than "encouraging" or "asking." In a speech in California, Michelle, who has made a small fortune in the "helping industry," said: "Barack Obama will require you to work. He is going to demand that you shed your cynicism. That you come out of your isolation, that you move out of your comfort zone. . . . Barack Obama will never allow you to go back to your lives as usual — uninvolved, uninformed."

But America is not a nation of selfish, self-serving people. Social demographer Arthur Brooks once calculated that Americans volunteered 32% more than Obama's beloved Germans. We also donate seven times more money to charities and causes than the Germans who gathered in Berlin.

In talking about his national service, Obama, the man who seems to be running for "community organizer in chief," also made this startling statement:

"We cannot continue to rely on our military in order to achieve the national security objectives we've set. We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded."

This is an idea worthy of Hugo Chavez.

Northwestern University law professor James Lindgren has estimated that this civilian national security force alone would cost somewhere between $100 billion and $500 billion, or between 10% and 50% of all federal tax receipts. And that doesn't include the cost of the brown shirts.

Adults are not exempt from all this, even adults who've already served in the U.S. military. "People of all ages, stations and skills will be asked to serve," Obama says. Will they be asked, or drafted?

"The future of our nation depends on the soldier at Fort Carson," he concedes. "But it (also) depends on the teacher in East L.A., the nurse in Appalachia, the after-school worker in New Orleans . . ." So drop down and give Sgt. Obama 50 hours.

Require. Demand. Never allow. Obama's version of "voluntary" service is more appropriate for Havana than middle America. He wants to turn America's students, and even adults, into clones of Elian Gonzalez, compelled to serve the state in ways Obama "will direct."

Correction: In the first installment of this series on Tuesday, the Luo ethnic group in Kenya was identified as "communist." The father of the Luo leader cited, Oginga Odinga, did espouse the post-colonial African version of communism in the 1970s and '80s, and his son, Raila Odinga, calls himself a social democrat. But communism as an ideology did not characterize the entire tribe.


Governator pulls budget trigger pay-cut

Will unions offer workers a dues-cut?

Gov. Arnold Schwarzenegger on Thursday, trying to avoid a ''full-blown'' financial crisis in California, eliminated thousands of part-time and temporary positions and ordered that up to 200,000 state workers receive the federal minimum wage. His signing of the executive order had been expected since last week but is a stark illustration of the cash problem facing the nation's most populous state.

Lawmakers have yet to agree on a spending plan a month after the state's fiscal year began, leaving California without the ability to pay contractors, the higher education system and legislative employees.

Democratic and Republican lawmakers remain divided over how to close a $15.2 billion deficit, with Democrats favoring $8.2 billion in new taxes on corporations and the state's wealthiest residents. Republicans want a spending cap and oppose tax increases.

Adding to the fiscal mess has been an unprecedented number of wildfires this year, costing the state far more for emergency response than it had budgeted.

''Today I am exercising my executive authority to avoid a full-blown crisis and keep our state moving forward,'' Schwarzenegger said. ''This is not an action I take lightly.''

Yet the governor said he is responsible for making sure California has enough money to pay its bills and that the executive order will lead to immediate savings.

The order exempts public safety agencies but will have an immediate effect everywhere else: Hiring, overtime and contracting will be halted, and tens of thousands of employees will feel the squeeze.

It covers 22,000 retired state employees who work under contract, temporary and part-time workers such as those who fill in at the Department of Motor Vehicles, seasonal employees and student assistants. But Schwarzenegger's finance team said of that total, just 10,300 would receive pink slips immediately. The others are workers who might be exempted from the order because they are deemed crucial to public safety.

Schwarzenegger also cited a 2003 California Supreme Court ruling allowing him to slash the pay of regular full-time employees when the state lacks a budget. By law, those workers must be paid at least the federal minimum wage of $6.55 an hour and would be reimbursed once a budget is approved.

Whether that provision of the order will ever be implemented is in doubt because the state controller, who cuts the checks, has said he will not comply with it.

The administration estimates that immediately terminating the contracts and suspending overtime would save the state as much as $80 million a month. The deferred wages for full-time employees would take several weeks to implement, saving the state anywhere from $300 million to $1 billion a month starting in late August, depending on how many employees are determined to be essential to public safety and would be exempt from the executive order.

Department heads were ordered to develop a list by Friday of exempt employees.

Before he signed the order, Schwarzenegger said he understood the effect it will have on thousands of people and apologized to state employees.

''It is a terrible situation to be in,'' he said. ''I don't think any governor wants to be in this situation.''

But the governor also said he was left with no other option, saying the state was running out of cash.

As Schwarzenegger left the news conference to return to his office, a man in the hallway of the Capitol began shouting at him ''no, no'' and saying the cuts were unfair. He was quickly surrounded by California Highway Patrol officers and taken away.

Officer Keith Troy said the man, who appeared to be college-age, was detained for protesting without a permit and escorted out of the Capitol when officers determined he posed no threat. Troy said he did not have the man's name.

Tiffany Woodruff is among those who will feel the sting immediately.

The 28-year-old is one of four part-time employees at the state Employment Training Panel, which provides training to those who are out of work.

Now, she said Thursday, ''I could be unemployed. We're going to receive our pink slips this afternoon.''

She said she works as many hours as she can - usually 35 to 40 hours a week - and takes home about $2,500 a month. It's already hard paying for food, a car and rent, she said, adding that her unemployment benefits would max out at about $1,800.

Woodruff said she and other employees feel like pawns in the budget fight.

''We're just completely upset with having your salary completely abolished because of the inaction of the Legislature and the political inaction here,'' she said.

Assembly Speaker Karen Bass said she was disappointed with Schwarzenegger's order but said it would not deter legislative leaders from working toward a budget compromise. The Los Angeles Democrat said she hoped they would submit a spending plan to Schwarzenegger ''in the next few days.''

Assembly Minority Leader Mike Villines, R-Clovis, said Schwarzenegger's move puts more pressure on legislators to pass a budget by mid-August, before the first minimum wage paychecks would go out. He said negotiations remain locked over Democrats' push to raise taxes and Republicans' insistence on long-term budget reforms.

The governor's executive order came under immediate challenge.

State Controller John Chiang, a Democrat, sent a letter to Schwarzenegger on Thursday saying he will defy the order and issue employees their regular paychecks.

He said the governor's executive order was based on ''faulty legal and factual premises.''

Chiang said the 2003 Supreme Court ruling did not specify the actual amount of the salary his office could pay state employees during a budget impasse.

''Constitutional authority says I get to decide,'' he said while flanked by union members during a news conference in Los Angeles.

He also said his computers are not set up to pay only the federal minimum wage, which is $1.45 less than California's minimum wage.

The controller and the Republican administration also differ over the state's financial condition. Chiang maintains that California has enough money to meet all its expenses through September.

If it's later determined that California has insufficient money, Chiang said he is authorized to borrow until a budget is approved.

Chiang's refusal to comply sets up a potential legal skirmish between his office and Schwarzenegger's. If the administration decides to sue, Chiang said it would be a waste of taxpayer dollars.

The governor was asked during a news conference whether that was a possibility if the controller refuses to comply with the executive order.

''If that's what it takes,'' he said. ''I'm here to make sure that our state functions, and whatever it takes, I will do it.''

Schwarzenegger signed the order Thursday because it's the first day of the August pay period. Most paychecks that would be affected by the minimum wage order would be the one state employees receive in early September.

The largest union representing state employees is planning legal action to block the executive order, said Yvonne Walker, president of Service Employees International Union Local 1000.

She criticized Schwarzenegger for ''doing gimmicks and games'' instead of concentrating on budget talks.


SEIU protests Governator

Verizon strikers to pay bigger price

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