Voter-fraud group ACORN favored in D.C.

Do left-wing organizers profit from public slush funds?

Should the United States drop into a historically memorable economic downturn in the near future--a clearly possible if far from certain event--economic historians will likely cite July 11, 2008, as a critical date. It will be not unlike October 28, 1929, which we know today as Black Monday. I propose that future historians call it "Fickle Friday" for the confusing signals out of Washington whipsawed the market and led to a diminution of confidence in the government's ability to right the financial system.

Dawn broke on the East Coast that Friday with our two biggest Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac, trading down 50 percent from their close the day before. These two are the main conduit through which home mortgages pass in the marketplace. The proximate cause of their problems was a New York Times story saying that the Bush administration had plans to nationalize them and wipe out their equity value in the process. After the story broke, a mildly positive day in the European markets turned to one of major losses, and New York markets were set to open sharply lower. Nearly everyone associated with the money markets was talking about how the government would have to do something and soon.

The Bush administration began the day of confusing signals by announcing a presidential event at 11 o'clock--which turned out to be about gas prices--and a National Economic Council "Administration announcement" at 4 P.M., which turned out to be about an EPA issue. There was also to be a 10 A.M. statement by Treasury secretary Henry Paulson, which was widely hyped. It ended up being delayed by 25 minutes and turned the hopes of a rally based on great expectations into a midday fizzle. The secretary did not appear, and a written statement was released saying, "Today our primary focus is supporting Fannie Mae and Freddie Mac in their current form as they carry out their important mission." The markets viewed the phrase "in their current form" as showing some real detachment between policymakers and the facts on the ground. Equities were rapidly sold off, hitting lows not seen for two years.

But Senate Democrats improved on the administration's record for confusion. The Senate had been working on a Federal Housing Administration reform bill, sponsored by banking committee chairman Christopher Dodd, all week. One of the key provisions was a tax on all of Fannie's and Freddie's lending, amounting to about $300 to $400 on each mortgage. No sensible person could think that imposing heavier taxes on institutions whose stocks were in a death spiral was a good idea. But the taxes were dedicated to a new housing slush fund that would go to (largely Democratic) governors, mayors, and left-leaning community groups like ACORN. (The last--the Association of Community Organizations for Reform Now--would be a leading recipient of the bill's largesse despite, or perhaps because of, its being one of the few institutions in the country to have seven of its members convicted of voter fraud for generating fictitious voter lists.)

Then at 2 o'clock in the afternoon Senator Dodd went in front of the television cameras to defend Fannie and Freddie. He said that they were sound institutions, had access to capital, and had significantly tightened their lending standards. Then he mentioned that he had been in conversations with the Treasury and the Fed about the possibility of providing a new liquidity facility to Fannie and Freddie. Markets began to turn. Reuters piled on with a story that Federal Reserve chairman Ben Bernanke had told Freddie Mac CEO Dick Syron that they would have access to the discount window to cover any short-term liquidity crises. The Dow, which had been down nearly 200 points skyrocketed to positive territory. It turned out the Reuters story was false, but the Dodd statement had given them sufficient grounds to run it, and the Fed did not deny it until after the markets closed. Still, equities were turning back down at the close as cooler heads realized there was enormous uncertainty about the soundness of the housing giants and about the size or form of any government bailout.

But the day was not over as far as senatorial input was concerned. In the oddest moment, Senate majority leader Harry Reid issued a statement saying that all Senate Democrats had confidence in the GSEs. Then at 5 P.M., the Office of Thrift Supervision (OTS) closed IndyMac, a California mortgage lender. In a written statement, the OTS said that the "immediate cause" of the failure was Senator Chuck Schumer, a New York Democrat. Back in June, Schumer had sent a letter to the OTS questioning the bank's condition, a letter he then released to the press. A bank run followed with depositors withdrawing $1.3 billion in 11 days. It is the second largest bank failure in American history. According to the Wall Street Journal it will ultimately cost the bank insurance fund between $4 and $8 billion. Schumer shot back saying the OTS should concentrate on doing its job rather than pointing fingers.

These Washington follies exposed two big weaknesses in the governmental underpinnings of the American financial system. First, the government's backing of Freddie and Fannie puts them in a box. The chaos around the GSEs indicated to the markets that the authorities would have to offer some kind of bailout. So, on Saturday, when Paulson called around to various investment banks urging them to buy debt that was going to be issued by Freddie Mac on Monday, he was met with a very cool response. Why should private institutions put their money at risk if the government already believed that it would have to be the investor of last resort? If the nation's finance minister was reduced to playing bond salesman for a private company, moreover, it would stand to reason that things must be pretty bad.

Second, the Schumer-inspired collapse of IndyMac will, over the coming few weeks, remind people that not all deposits in banks are insured; in fact, roughly one third are not. The FDIC only insures deposits up to $100,000 in each account. IndyMac had a fairly wealthy clientele, and, when they find that they may not get all their money back, it will become national news. This is how bank runs start. People with large accounts tend to be quite sophisticated and will rapidly move their deposits to Treasury bills or other investments. In the last banking crisis in the late 1980s, FDIC chairman Bill Seidman was able to protect nearly all of these uninsured depositors by merging institutions. But in 1991, Congress in its infinite wisdom, made this far more difficult to do the next time--i.e. this time. (This is a story that will unfold in coming weeks.)

The more immediate crisis for Washington was what to do that would help Freddie Mac raise money Monday morning. Goldman Sachs, Paulson's old firm, had been charged with trying to place the debt issue and was failing. Late Sunday afternoon, before markets opened in Tokyo 13 time zones away, Paulson announced a three-point plan, which amounted to a request for Congress to issue a blank check to the Treasury Department to both extend loans and purchase the equities of Fannie and Freddie. The reaction in each of the world's markets was initially positive, but was quickly followed by a sell-off as investors considered the plan. Having the GSEs fail was unthinkable, but putting their losses on the books of the federal government wasn't a great idea either.

There are three important concerns that continue to weigh on markets. First, Fannie and Freddie--despite the protestations of their champions in the Democratic caucus on Capitol Hill--are not well capitalized. Why else would Paulson be requesting a blank check for the government to inject equity capital? Unlike what Paulson said in his formal statement, there really is no way that Fannie and Freddie can come through this "in their current form."

A look at Freddie Mac's own accounting statements shows that using the "fair value" method that includes some of their off balance sheet positions, the firm's net worth is negative $5 billion. Freddie has set aside a total of $14 billion to guarantee a total of $1.8 trillion in loans, enough for a loss rate of just 0.8 percent. Should their loss rate rise to 5 percent, which is conceivable in this housing market, they would be nearly $80 billion under water.

The problem at Fannie seems less acute on the surface. It would take a 1.5 percent swing in either their assets or their liabilities to make them insolvent under fair value accounting. But, they have $112 billion in exposure to mortgage insurance companies, like PMI and Radian, whose share prices have been rapidly dropping. These potential losses would require a level of capital injection from the Treasury so high as to be politically impossible. But, if the government is unwilling to pony up the huge sums that might be needed in the extreme, then any money put in now would simply be lost.

The second problem plaguing the Paulson plan is that despite open-ended commitments, there was no explicit sacrifice being asked of the existing management or shareholders. The plan appeared to be so generous that the share prices of these supposedly failed enterprises actually rose as markets opened. The smart money on Wall Street, moreover, had already bet on some form of government bailout by buying the preferred stock and subordinated debt of these two companies at a steep discount. Paulson's announcement produced billions of dollars in windfall profits for those who placed a bet that the government would indeed blink. This money did nothing to improve the access to mortgages for America's homebuyers; it was a direct transfer to Wall Street's investment banks and hedge funds.

Third, the Paulson plan undermined confidence in other financial institutions. There are plenty of ordinary commercial banks in the country that need to raise capital to restore their balance sheets. But Paulson signaled that even institutions that had the implicit backing of Uncle Sam like Fannie and Freddie could now effectively raise capital only from the Treasury and not from private markets. The stocks of many troubled banks--Washington Mutual, Wachovia, and National City for just three examples--plunged steeply in Monday's trading. The bank stock index had its worst fall in more than 10 years, dropping 8 percent at one point.

This leaves the question of what to do now. I do not share the view of some conservatives that we should just let the market handle it, though they are right that we should never have gotten ourselves into this mess by creating a for-profit company that comes to the government whenever it needs money. But, we are where we are and need to learn from our mistakes.

The key to repairing the GSEs is to make sure that existing shareholders and management pay a price if they get bailed out. Ideally common shareholders should see the values of their shares reduced to zero, or close to zero. Investors in other parts of the capital structure who knew they were taking risks should have their investments written down--taking a "haircut" in Wall Street parlance. But the bondholders, who supply the capital to homeowners, should be largely protected.

Government investment in the capital structure gives government control. We should avail ourselves of this opportunity to wind down the scale and scope of the government's involvement in the mortgage market. While mortgage securitization might at one time have been a specialized "high tech" financial innovation needing the government, it is not today. Homeowners, investors, and taxpayers would all benefit from having a more competitive mortgage securitization market with many well-capitalized private participants who are responsive to market discipline. The market share of Fannie and Freddie needs to be reduced.

Finally, we need to put financial regulation out of the reach of politicians seeking time before the television cameras. Bank supervision works only when it is done quietly, letting the regulator and the bank solve problems out of the glare of the limelight. Senators should not be spreading panic for political gain. Market discipline, by contrast, is done under the glare of publicity and full disclosure. The lessons of Fickle Friday should remind us that we need discipline in Washington, as well as in the financial markets, if we are to come through this crisis in good stead.

- Lawrence B. Lindsey is the author of What a President Should Know .  .  . but Most Learn Too Late


Constitutional power-grab in Michigan opposed

Related 'Reform Michigan' stories: here

Labor-backed group smacked-down

The Michigan Chamber of Commerce announced this morning it will file suit against the state to prevent a sweeping proposal seeking to overhaul state government from appearing on the fall ballot.

"We're not going to allow the Michigan Constitution to be hijacked like that," said Robert LaBrant, the chamber's senior vice-president and general counsel. "This petition drive is all about guaranteeing (Democratic) control of state government in the coming decade."

At issue is the Reform Michigan Government Now ballot proposal that would, among other things, reduce the size of the state legislature and Michigan's top courts, cut salaries of the governor, state lawmakers and judges by 15 to 25 percent, and provide for no-reason absentee balloting. It would also change the rules on how legislative seats are redrawn every 10 years to reflect population changes. Democrats believe they have been shortchanged in redistricting for decades.

On Thursday allegations were made that a 34-page PowerPoint presentation that appeared earlier on the Web site of a UAW local demonstrated that the effort was being orchestrated by organized labor and the Michigan Democratic Party.

The Midland-based Mackinac Center, a free-market public policy think tank, said the presentation proved that Democratic interests have spent more than a year methodically planning -- with the aid of focus groups and statewide polling -- a $5 million effort to win approval to rewrite the Constitution. To date the ballot group has not identified who its backers are and who is paying for the campaign.

LaBrant said the chamber and four or five other unidentified plaintiffs would file suit with the state Court of Appeals on Wednesday or Thursday.

Although state elections officials have just begun their review of the nearly half-million petitions signatures submitted earlier this month by Reform Michigan Government Now group, LaBrant said there is established case law to justify bringing suit before the state has determined if the petition drive has met the legal requirements to win ballot certification.

"We have plenty of (legal) standing to challenge this," LaBrant said during taping of the PBS television show Off the Record. "This proposal is not ballot eligible."

He said the measure is so overly broad -- the 12-page petition language encompasses 35 changes in law -- that it should properly fall to a Constitution Convention. Michigan voters are scheduled to vote in the fall of 2010 on whether a convention should be convened. The last constitutional convention gave rise to the 1963 Constitution that governs the state today.

Michigan Democratic Party Chair Mark Brewer has steadfastly denied playing a role in the drafting of the petition or formation of the ballot campaign strategy, a claim that LaBrant said is not supported by the evidence.

Brewer said he does embrace the goals of the ballot effort and said that state judges should not be allowed to strike down the effort because they are all in a conflict of interest since judicial salaries would be carved by 15 percent under the plan. He said the ballot provisions are changes that voters would enthusiastically support.

"Provisions such as ethics reform and asset disclosure for elected officials would help create a more open and accountable government that works for the citizens of Michigan rather than the special interests that currently have too much control over the way business is done in Lansing," Brewer said in a prepared statement on Thursday.

Backers of the proposal say they will provide financial documentation next month when they are required to do so by state law.


Corruption charge derails labor-backed Dem

Related story: "Did labor-state Dems misuse tax dollars?"

'Much ado about nothing', every union-backed candidate does it

Sean Ramaley's path to becoming the youngest member of the state Senate once seemed like it had already been paved. Bright and well-spoken, the lawyer and two-term state representative from Beaver County won the Democratic nomination to run for the 47th Senate district after securing key endorsements from party officials and labor unions.

But the 33-year-old Ramaley's political career sustained a potentially fatal blow this month when he became ensnared with former Rep. Michael R. Veon and 10 current and former House Democratic aides in the state's biggest political corruption scandal in years.

The state Attorney General's Office accused the 12 of using taxpayer dollars to fuel political activities and underwrite personal perks; Ramaley allegedly used a taxpayer-funded job and resources to aid his 2004 House campaign.

Stunned party officials now must sort out whether Ramaley should remain in the Senate race with six theft, conspiracy and conflict of interest charges hanging over his head.

Reached by telephone Wednesday, Ramaley would not discuss his candidacy. Ramaley's attorney, Philip Ignelzi, told reporters on July 11 that the charges are unlikely to be resolved before Nov. 4 general election, and that voters should give Ramaley the presumption of innocence until then.

Ramaley has a baby boy and a wife who is an assistant district attorney in neighboring Allegheny County. If he does not win, he will be out of the Legislature completely, having given up his House seat to run for Senate.


SEIU throwing stones from glass house

Jumbo union underfunds its own workers' pensions while protesting others

On July 17, in New York and 50 other cities, one of America's biggest unions, the Service Employees International Union, will try to demonize prominent New York financier Henry Kravis, a founding partner of the private equity firm Kohlberg Kravis Roberts.

The SEIU already has attempted to besmirch Mr. Kravis on its Web site for paying too few taxes, even though it does not accuse him of illegal activity. It asserts that because of tax loopholes, Mr. Kravis's taxes are too low. It wants higher taxes for private equity partners, with the proceeds used for middle-class tax cuts and health care.

The pep rallies are another in a series of SEIU efforts to attack private equity firms. Apart from the silliness of making Mr. Kravis its target when its complaint really lies with Congress, the SEIU would do better to look in the mirror. In its own treatment of workers, especially worker pension plans, it falls short.

Among other activities, KKR buys companies and reorganizes them to make them profitable. It manages investments for pension funds of the SEIU, a union with an estimated 2 million members, many in low-wage jobs, such as office cleaning and nursing assistance.

SEIU local and national pension funds made up more than 30% of KKR's 2006 Fund, one of several investment funds in the firm's portfolio.

SEIU President Andy Stern is not above trying to use that business relationship as leverage to pressure KKR to embrace the SEIU's political goals, either by threatening to harm KKR's name, as with the July 17 rallies, or by controlling proxy votes in shareholder meetings.

The SEIU, which has pledged $85 million to Democratic campaigns this year, wants this pressure to lead to investment decisions by KKR that Mr. Stern asserts would benefit workers: reduced CEO compensation, higher rank-and-file wages, and more emphasis on environmentalism and politics, instead of profits.

Yet in 2006, the SEIU National Industry Pension Plan, a plan for the rank-and-file members, covering 100,787 workers, was 75% funded. That is, it had three-fourths of the money it needed to pay benefit obligations of workers and retirees.

In contrast, a separate fund for the union's own employees, numbering 1,305, participants was 91% funded. Even better, the pension fund for SEIU officers and employees, which had 6,595 members, was 103% funded.

Such disparity was not always the case. In 1996, the SEIU National Industry Pension Fund had close to 110% of the funds it would need to pay all promised pensions to its workers.

When the pensions of the rank-and-file are compared with those for SEIU officers and staff, neither poor market returns nor the weak economy explain the funding discrepancy. The three plans are merged into a single trust, and thus are managed in a similar manner. Poor performance should affect them all equally.

The major difference among the funds is that the decisions regarding contributions to the officers' funds are made by the trustees of the SEIU, instead of by several large employers pursuant to collective bargaining contracts.

The trustees alter contributions to the officers' fund from the SEIU locals so that it is actuarially sound. In contrast, they do not take sufficient care in negotiating adequate employer contributions for the rank-and-file plan, with the result that these plans are underfunded.

The success of the officers' funds shows the heads of the national organization know how to properly fund a pension plan if they so choose. There is no excuse for their inability to negotiate with employers to properly fund pensions.

The problem of poor funding occurs not only in the national SEIU pension plan. Thirteen local pension plans, whose beneficiaries are almost all rank-and-file members, were all less than 80% funded, and, of these, six were less than 65% funded. The Massachusetts Service Employees Pension Fund fell from nearly 110% to 70% funded in 10 years, and the SEIU 1199 Upstate Pension Fund fell from 115% to 75% since its inception in 1999.

Poor stock market performance could explain part of these failings, but Internal Revenue Service filings show that 10 of these funds received two-thirds less of their annual costs in employer contributions.

The SEIU trumpets its efforts to secure health and retirement benefits for service workers. Unfortunately, it is becoming clear that the SEIU is not truly securing these benefits. Workers covered by the union's national pension fund have their retirement incomes dependent on a fund whose adequacy has been falling from year to year.

For the SEIU to hold pep rallies to attack private equity funds, while allowing the pensions of their own rank-and-file members to perform worse than those of union officials, is sheer hypocrisy. On July 17, rather than taking back the economy, workers should insist that their pensions are actuarially sound. Who knows, perhaps KKR could help.

- Ms. Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.


VW flees UAW, forced-labor unionism

Related story: "The 28 labor-states"
Related VW stories: here

Investment repelled by forced-labor unionism

So Volkswagen is returning, but not to Western Pennsylvania. That was a lesson learned. Twenty years after it blew a perfectly sound strategy to make cars in the United States, Germany's biggest automaker will try again with a new U.S. assembly plant. Once a pioneer, however, it's coming back a tail-ender. And this time, its 2,000 jobs and $1 billion of investment will go to Chattanooga, Tenn.

Tennessee is a "right-to-work" state, one of 22 in the United States that give workers the choice to join -- or not to join -- the dominant labor union on the premises. Unions are weak in such places, but job growth is strong.

Nearly all the Asian and German "transplants" making cars in the United States are in right-to-work states. America's gasping "Big Three," in contrast, all unionized -- General Motors, Ford and Chrysler -- are losing market share and rapidly turning blue. None has a common stock worth $14 anymore. GM last week warned of thousands more job cuts coming.

Detroit vented that grim news even as Wolfsburg, Volkswagen's German headquarters, said it will start building 150,000 midsized sedans a year in the United States, beginning 2011.

Trying to compete here with imports alone, VW has only a 2 percent U.S. market share vs. 9.8 percent globally and loses money in America.

The sagging dollar is the ironic hero in CEO Martin Winterdom's strategy to reverse all that. Dropping like a stone against the euro, the dollar makes made-in-America cheap, but painfully inflates the stickers of vehicles from Europe.

Chattanooga will include body-stamping, painting and assembly operations. It will in short chew up the raw materials, employ the many skills, and generate the "multipliers" that make host communities salivate and subsidize. Volkswagen said it looked at 25 locations; whether Pennsylvania was on the list wasn't clear. Bloomberg News said the Tennessee city's infrastructure of transportation and services, supplier base and work force won the day.

In its first foray into U.S. manufacturing, in 1972, far ahead of the Japanese, Volkwagen took over a never-activated factory shell from the old Chrysler Corp. near New Stanton, Westmoreland County. The Germans were used to unionization. They thought to insure positive labor relations by openly inviting the United Auto Workers in.

Friendly gesture, bad result. A series of wildcat strikes marred the startup years, a few "troublemakers" were fired, and while labor peace eventually took hold, other foreign carmakers got the message. No other "transplant" ever came to this state which had led the way.

The Westmoreland-built Rabbit autos in time lost favor and management responded to the market too woodenly. VW called it quits in 1988 and later sold the plant to Japan's Sony for television making. No union ever again got in the door.

Volkswagen still makes Beetle and Jetta autos in Mexico, but Pennsylvania had no more shots at the industry it scared away.


Teachers union fined $10K for misconduct

Jumbo gov't union wastes union-dues opposing dissenter

The Clark County (NV) Education Association was wrong to expel a dissenter from its ranks and was ordered to reimburse Ron Taylor for his expenses in challenging his expulsion, the Local Government Employees-Management Relations Board ruled this week.

The board, a state entity that resolves unfair labor practices, ordered the teachers union to restore Taylor's full rights as a member, which include union representation at school grievance hearings, malpractice insurance and discounted movie tickets. Taylor's expenses in the case could cost the education association about $10,000.

Because the union was guilty of "prohibited labor practices," a public statement or posting will be made of the case. Taylor said he was going to make sure the posting is "on every union bulletin board in every school in Clark County."

The board ruled that Taylor's expulsion could have "a chilling effect" on other members who wanted to criticize the education association, which represents teachers in the Clark County School District. The union also showed "personal animosity" toward Taylor and never tried to work with him on his concerns, the ruling states.

Taylor, a middle school teacher who represented himself before the state board, said the union tried to get rid of him for raising questions about how the union was spending its money and for criticizing the union's health care benefits for members.

Taylor said the union had accused him of breaking its code of conduct for members, but the case fell apart because of insufficient evidence.

A hearing to contest a member's expulsion would normally take 90 days, Taylor said, but the union dragged it out over two years and hired a law firm to file counterclaims, which increased Taylor's expenses.

John Jasonek, executive director of the Clark County Education Association, said the employee-relations board made a "bad ruling" and he planned to appeal. He said many organizations would file briefs in support of the teachers union.

Jasonek argued that the case was not about dissent but about the union's right of self-preservation and the right to kick out hostile members. The union director said Taylor "was in it to kill it," by recruiting members for the Teamsters and trying to decertify the Clark County Education Association.

Taylor, who is a School Board candidate for District B, said, "If they want to waste more money, go ahead."

Taylor doubted that the union could appeal since it had stipulated to the facts before the state board.

When the association's lawyer, Francis Flaherty, admitted that the union expelled Taylor because of his move to decertify and organize for another union, the employee relations board decided that the union did not have a case. It's illegal to "restrain or coerce anyone of their right" to join a union or organize, the board stated.

Because former union president Mary Ella Holloway brought the case against him, Taylor said he informed the Clark County School District that she was guilty of a prohibited labor practice since she has applied for a new job with a district committee that would resolve labor issues.


Teamsters strike v. Ford dealer, month 8

Local government rallies to collectivists' side

Striking Teamsters Local 618 union members will hold a rally on Saturday, July 19, from 9 a.m. - 1 p.m. at Valley Ford. The workers, who have been on strike since November 1, will be joined by their families and supporters from the community and local government. The unions are asking Valley Ford to abide by the area agreement that is the standard for dealerships in St. Louis, however the company has refused.

Striking Teamsters and Machinists
Community and family supporters
Tom Cole, Teamsters Local 618 Business Agent
Rally to support striking workers at Valley Ford
Saturday, July 19, 2008
9:00 a.m. - 1:00 p.m.
Valley Ford
675 Dunn Road
Hazelwood, MO 63042


Gov't unionists picket outside City Hall

AFSCME plays politics with collective bargaining

City employees picketed once again outside St. Louis (MO) City Hall on Friday morning, demanding raises and merit increases. "It's time to stop playing politics with employees' pay raises," said Ted Williams, president of the American Federation of State, County and Municipal Employees Local 410, in a statement. "The unions have bargained in good faith, the citizens voted for a 1.5 percent sales tax increase trusting that the monies would be used for employees' pay raises."

Williams said the unions, representing electrical workers, firefighters, engineers, plumbers, painters, teachers, police and carpenters, would continue to picket until they received their raises.

Mayor Francis Slay has said increased fuel costs and other expenses have left the city strapped for cash.


News Union takes a dues hit in Baltimore

Big Print beset by paper-stream waste, unchecked collectivism

Reacting to low response to its late-June buyout proposal of 100 job cuts by mid-August, the Baltimore Sun Media Group said Friday that 16 Washington-Baltimore Newspaper Guild members at The Sun — 11 in the newsroom and five in advertising — would be laid off.

The 11 editorial positions — four editorial assistants; four interns; and three reporters, two of whom had volunteered to be laid off — constitute the total newsroom layoffs.

Two inside and three classified advertising positions coselect allmprise Guild members laid off in advertising.

“This is a sad day,” reacted Tanika White, the union’s unit co-chairwoman at The Sun. “Even though only nine members are leaving involuntarily,” there are still 55 [newsroom] people who are leaving, and untold others in other departments. That means fewer people to do the kind of work that this community has come to expect from the Baltimore Sun.”

Those laid off have the option of either departing immediately or on August 15. The 44 newsroom staff who accepted the company’s buyout offer of one week of pay for every six months of service — with a minimum of six weeks and a maximum of 52 weeks pay — will leave by August 1.

White did not know how many non-union layoffs were in the mix, but previously estimated total buyout applications at only 10-20 above those from the 400-member union. If true, that would mean that between 30 and 40 non-Guild members also received pink slips Friday.

The downsizing, the third in just over a year at media group for a total of 190 positions, comes on the heels of revenue losses at Tribune Co. — owner of The Sun, the Baltimore Sun Media Group’s 21 weeklies and 10 other dailies — and the parent company’s $8.2 billion, going-private move in January.

“When Sam Zell [Tribune Co. chairman and CEO] took over, he said that you can’t cut your way to prosperity,” said Washington-Baltimore Newspaper Guild President Bill Salganik. “He was right then, and he is wrong now — six months later.”

Phone calls to The Sun’s spokeswomen Judy Berman were not returned.


UFCW organizers test Do Not Call registry

Related RICO stories: here

Nuisance by RICO-challenged union could backfire with public

Thousands of households are getting phone calls from striking workers at a nursing home in northern Ohio seeking support in their labor fight over wages and benefits. Long used by politicians, automated or "robo" calling is gaining momentum in the labor movement, experts said.

The 90-second calls on behalf of workers at Hillside Acres nursing home in Willard - voiced by the union steward - urge people to call the home's owner "and tell her to do the right thing" and negotiate with strikers.

Jeff Stephens of UFCW Local 911 in Toledo said pickets have told him that a few people have gone to the picket line to show their support because of the calls. The local represents 31 employees at the nursing home, including the 21 who have been on strike since May.

A sister union in Cincinnati used the robo technique in a contract dispute last year with grocer Kroger Co.

Robo calling on nonpolitical issues is a new idea for labor that could prove very effective, said Harley Shaiken, a labor specialist at the University of California-Berkeley who had heard of the tactic being used in a West Coast grocery chain dispute.

"It's an attempt to reach out to the community," Shaiken said. "Forty years ago, a strike was won or lost on the picket lines. Today, it can be won or lost in the community, as well."

Robo calls are widely used by telemarketers, bill collectors and nonprofit fundraisers and are disdained by many recipients. They are banned or restricted in some states.

But robo dialing is popular with users because it is cheaper than hiring people to place calls. Some companies that advertise robo service charges 1 cent per call to deliver a 15 second message.

Gene Carroll, a union expert at Cornell University's School of Industrial and Labor Relations, called the tactic a smart use of technology.

"That's what labor has to do in this era, create electronic pickets," Carroll said. "I would say it's a maturing, a cutting edge tactic."

Neither Carroll nor Elaine Bernard, director of the Harvard Trade Union Program, said they knew of robo calling being used outside of political campaigns.

The calls to Ohio households on behalf the Willard nursing home workers include the name and e-mail address of Linda Black-Kurek, president of Liberty Health Care, which owns 15 nursing homes in the state.

"I hope enough people hear it and put pressure on (her) to sit down with us," said Sandy Grossman, who organized the United Food and Commercial Workers unit at Hillside Acres five years ago.

Black-Kurek did not return a call seeking comment. A woman who answered the phone at Black-Kurek's office said some people had called because of the robo calls.

UFCW Local 1099 in Cincinnati arranged for about 200,000 calls to be placed in counties where Liberty Health Care has nursing homes, said spokeswoman Brigid Kelly.

"They've been doing it for political campaigns and some of their organizing," Stephens said. "When they heard there were some (Liberty) homes in their area, they offered it to us."

Liberty's headquarters are in Dayton, about 50 miles north of Cincinnati.

"Unions increasingly take their issues to a broader public," said Dan Swinney, executive director of the Chicago-based Center for Labor and Community Research.


AFSCME in labor-state prison protest

Picketers demand attention

Members of AFSCME Union Local 3549 picketed outside the Jacksonville (IL) Correctional Center Friday to protest what they claim is unsafe and unhealthy working conditions at the facility. About 100 union members picketed to highlight safety concerns at the prison.

Union local spokesman Donald Olendzki said a correctional officer was assaulted at the Vince DeMuzio Work Camp, formerly the Greene County Work Camp, on July 14, and the correctional center administration did not lock down both facilities or conduct an investigation into the assault.

Mr. Olendzki said prison officials have not responded to staffing correctional officers in high-risk areas since a February 2006 assault on a member of the kitchen staff. The union is also concerned with health issues for staff members, because prisoners do not have access to soap to reduce the spread of germs and infections.


UFCW goes out on strike in Ohio

Related RICO stories: here

RICO-challenged union: 'They’re killing a half-million chickens per week.'

Union employees at Case Farms Inc. of Ohio went on strike Thursday. About 150 employees walked off the job about 10 a.m. at the poultry processing facility at 1818 County Rd. 160. “We expect more to join (today),” said Tim Mullins, union organizer with United Food and Commercial Workers Union Local 880. Based at Cleveland, the union also has northeast Ohio offices at Akron and Youngstown.

“We’ve attempted to negotiate a contract for a little more than a year,” Mullins said. “While we have a pile of paper, the company pretty much refused to negotiate money and that was the main reason people voted for the union. Their last offer was an insult – 15 cents – and they’re already the lowest paid place in Ohio among poultry processors.”

He said the vast majority of employees make $8.10 per hour. That’s $3 less per hour than union employees at Park Farms at Canton and $2 less than those at the non-union Gerber Poultry plant at Kidron “for the same work, and some of them have eight to 10 years or more of service,” he said.

“So, as much as we didn’t want to, we went on strike today,” Mullins said. “We understand their prices are going up, with corn and gas. Obviously, we want the company to do well, and they’re doing quite well. We just want them to share. They’re growing leaps and bounds. They’re killing a half-million chickens per week.”

He said the company has grown to more than 400 employees, with at least 85 percent of them Hispanic.

“When we voted on the company’s final offer, it was 294 to 12 against it,” Mullins said. “So, the people really didn’t like the offer. We’ve met a couple more times but to no avail. They didn’t come up even one more cent despite that vote, so we felt there was nothing left to do.”

Ken Wilson, director of public relations and compliance for Case Farms, said that “from memory, less than 25 percent of the people went out today. That means 75 percent stayed in, and I think that says all it needs to say.

“We’re going to do what we need to do to protect the future of employees and the company. What they’ve asked for is a $1.8 million increase in costs for our company, and that’s not realistic. When you look at what the corn prices are and the cost of feed for running a poultry operation – that’s just totally unrealistic.”

Mullins said, “There was a large line of church, community and union people waiting outside for them to come out this morning.”

He said there is one production shift that operates about 10 hours per day. The trend has been to work five days one week and six the next.

“We’re not going away,” he said. “We hope to make gains for the employees. We’re prepared to start a national boycott against those who sell their chicken.

“Hopefully, in a short time we’ll go back to the table, or they’ll make us a decent offer.

But after having dealt with them for a year, I don’t expect that soon. I don’t think they’re in a negotiating mode.”


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