SEIU insider payola exposed

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More Andy Stern stories: here

Andy Stern mum on crackdown at dissident local, fed probe could mushroom

California's largest union local and a related charity have paid hundreds of thousands of dollars to firms owned by the wife and mother-in-law of the labor organization's president, documents and interviews show.

The Los Angeles-based union, which represents low-wage caregivers, also spent nearly $300,000 last year on a Four Seasons Resorts golf tournament, a Beverly Hills cigar club, restaurants such as Morton's steakhouse and a consulting contract with the William Morris Agency, the Hollywood talent shop, records show.

In addition, the union paid six figures to a video firm whose principals include a former union employee. And a now-defunct minor league basketball team coached by the president's brother-in-law received $16,000 for what the union described as public relations, according to the union's U.S. Labor Department filings and interviews.

Most of the 160,000 people represented by the union, a local chapter of the nation's fastest-growing labor organization, the Service International Employees Union, earn $9 an hour or slightly more tending to the infirm and disabled in private homes under taxpayer-funded programs. The workers, whose dues fill the local's coffers, often are described as "the poor caring for the poor." In its Labor Department filings, the local, headed by Tyrone Freeman, has reported more liabilities than assets for each of the last three years.

Freeman, who leads the United Long-Term Care Workers, said he and his union have done nothing wrong. "Every expenditure has been in the context of fighting poverty," he said.

A rising star in labor circles, Freeman, 38, said the union's members have benefited from the money spent on the video production and day-care companies that his wife and mother-in-law operate at their homes, because of what he termed the high quality of the services.

The union and the charity have paid those firms at least $405,700 since January 2006, not counting any outlays this year.

Nelson Lichtenstein, director of UC Santa Barbara's Center for the Study of Work, Labor and Democracy, said the local's spending recalls the excesses of organized labor's past.

"It's very important for unions not to do this kind of thing," he said. "Union leadership is a public trust -- all the more so when the people being represented are among the lowest-paid in America."

Based on documents filed with the Labor Department and Internal Revenue Service, the Guidestar nonprofit database, business records submitted to several state and local agencies and numerous interviews, a Times investigation has also found that:

* Payments to the company owned by Freeman's wife were among the local's largest single expenses last year. Payments by the charity, the Homecare Workers Training Center, to his mother-in-law's firm represented more than 10% of the nonprofit's total annual expenditures.

* A housing corporation that Freeman helped found as a nonprofit has not been granted the IRS tax-exempt status it sought and was suspended from doing business in California. It also has claimed on its website to have a "strong relationship" with the prominent California Community Foundation, which says it has no such relationship.

* The union spent at least $123,000 more on the fund-raising tournament at the Four Seasons Resort in Carlsbad than it received in reimbursements, according to Labor Department filings and interviews. Freeman said the event made money for the charity. The union's expenditures included $100,000 in payments to entities associated with former professional football star Eric Dickerson, which have been suspended from doing business in California. The payments were listed as donations to nonprofits, not as fund-raising expenses.

* The local's nearly $10,000 tab at the Grand Havana Room, a cigar lounge known for its celebrity clientele and invitation-only memberships, was for "lodging," according to the union's annual financial report. A Grand Havana spokeswoman said the club does not provide accommodations. Freeman declined to characterize the expenditure, and after The Times inquired about it, he said he had refunded it.

Freeman's local has grown dramatically in recent years, largely because of a consolidation campaign spearheaded by Andy Stern, president of the 2-million-member SEIU. The local is SEIU's biggest California chapter, the second biggest in the nation -- and it is bigger than many international unions. Freeman also represents 30,000 workers as president of an affiliate, California United Homecare Workers.

Stern, among the most influential labor leaders in America, has denounced excessive pay and perks for union officials.

He and his spokesman would not answer questions about Freeman, who ranks among the country's better-paid local labor chiefs, receiving $213,000 in salary and other compensation in 2007.

In an e-mail, Stern spokesman Steve Trossman said: "As far as I can determine, the International Union has not received allegations concerning [Freeman's local]. If the International Union receives allegations about a local that warrant further action, we have internal union procedures for handling them."

Video production

Freeman's wife, Pilar Planells, 28, was a union staff member until 2006, earning more than $50,000 as an executive assistant. She left the local to pursue an entertainment industry career, according to another former employee. That year, Freeman's local paid roughly $36,000 to Planells' firm, Lotus Seven Productions. In 2007, the local paid the company about $178,000, annual financial reports filed with the Labor Department show.

Labor Department officials said they have no record that Freeman filed a 2006 disclosure form that requires union officers to reveal payments to entities in which a spouse has an interest.

The officials said Freeman filed the 2007 form more than four months after the deadline, on July 17, about a week after The Times raised questions about the payments to Lotus Seven.

He also did not identify his wife on the financial reports as the owner of the firm.

Freeman said Lotus Seven has produced 10 videos that promote the local's work and have been shown on lease-access cable channels. He said that the company won the contract through a competitive bidding process and that his wife did not personally profit from the payments to her company.

"She only gets reimbursements," Freeman said. "She does not profit at all."

Freeman said Lotus Seven had other paying clients, but he declined to provide their names or respond to questions about whether the firm received more payments from the union this year.

Pilar Planells, who also uses the stage name Pilar Sharai, declined to be interviewed. In a letter to The Times, she said of the video contract: "Any money that was left over after paying staff and expenses went back into the company."

Los Angeles city officials said Lotus Seven does not have a business license for the couple's Studio City address. No other address for the firm could be found, nor could a phone listing.

Freeman said that a union committee solicited bids before awarding the contract. The local did not respond to questions about the bidding process.

"At one time it was on our website, I do remember that," Freeman said of efforts to advertise for bids. "And then that was it, I mean, and the word goes out. . . . I stayed away from it."

Two losing bidders for the video contract, Freeman said, were Grand Ma's Watching Productions, whose incorporation papers list former union employee Brian Cheatham as chief financial officer, and The Filming Inc.

The two entities still received money from the union, according to the local's Labor Department reports.

Last year, the local paid about $147,000 to Grand Ma's Watching for other video work, Freeman said. It paid the company about $72,000 in 2006 for consulting. Calls to Grand Ma's Watching, which produces music and awards show videos, were not returned.

The Filming was paid nearly $106,000 by the union, but Freeman said he had no information about the entity or the work it performed.

"I would suggest you track them down," he said.

The union's financial report forms describe $82,000 of the payments to The Filming as a contribution to a nonprofit organization; the other $23,650 was reported as advertising and promotional expenses for the golf tournament.

No state incorporation record or IRS nonprofit listing for The Filming could be found, and the Los Angeles address given for it on the union's financial report could not be located. L.A. city officials said no business license has been issued for a company of that name at such an address.

Day-care contract

Carmen Planells, Freeman's mother-in-law, provides day care at her Los Angeles home. Her business had been receiving more than $90,000 annually for the past several years from the training center that Freeman founded as a separate nonprofit and chairs, according to IRS filings and interviews. Freeman's wife and brother-in-law, Hernando Planells Jr., are listed in state documents as officers in the mother-in-law's business.

Freeman said the day-care contract was awarded to Carmen Planells several years before his 2006 marriage to her daughter. The state birth registry shows that Freeman and Pilar Planells are the parents of a daughter born in 2001.

Asked about the day-care payments, Freeman responded, "She wasn't my mother-in-law when she got the contract."

Freeman said the day care was available to anyone who applied for it and that he did not use it. He added that his mother-in-law has been providing the service since 2000. IRS records show that the training center began reporting itemized payments for day care -- initially about $92,000 -- in 2002.

In a telephone interview, Carmen Planells said she still had the day-care contract. "Is there something wrong with that?" she said, before declining to answer more questions.

After The Times inquired about the contract, Freeman said the training center's board would review it.

Hernando Planells Jr., listed in state records as one of three officers of the day-care service, was also coach of the Hollywood Fame, a former American Basketball Assn. franchise, according to the team's general manager, Carl Williams. The team received $16,000 from Freeman's local in 2006, the union's financial report shows.

Freeman did not respond to questions about the payment, and Hernando Planells Jr. could not be reached.

Another sports undertaking was the Four Seasons golf tournament last year, which Freeman said netted $80,000 to $100,000 for the training center and the housing group. The Long-Term Care Housing Corp. is a separate entity from the local, but its "primary goal" is to help union members obtain affordable housing, according to its website.

The local's financial report shows that it spent $418,000 on the event, not counting about $7,000 in unspecified lodging costs at the Four Seasons. That was at least $123,000 more than the local received in return. Some reimbursements may still be outstanding, Freeman said.

Lichtenstein said the tournament spending was troubling under any circumstances.

"I don't care if they're making money or not," he said. "It's disconnected from the world of the people they're representing. No one's playing golf who's a home healthcare worker."

The local's costs for the tournament included a combined $100,000 in payments to two entities associated with Dickerson, the former Los Angeles Rams running back and a co-host of the golfing fund-raiser. Another NFL Hall of Famer and tournament host, Jackie Slater, was paid $30,000 in consulting fees.

Freeman said the gridiron greats helped raise much more money than the sum paid to the Dickerson entities and Slater. Dickerson "only got a portion of what he raised," Freeman said. "If he didn't raise it, he wouldn't have got it."

Dickerson did not respond to interview requests.

In a brief phone interview, Slater said a former teammate had asked him several years ago to "help the workers" by hosting the tournament.

The union money that went to the Eric Dickerson Foundation and "Dickerson Sports" was recorded on the local's financial report as contributions to nonprofits, not as fund-raising expenses for the tournament.

The state Franchise Tax Board has suspended Dickerson Sports from doing business for failing to file a statement of corporate officers in 1999, a spokesman said.

The tax board has also suspended the Dickerson foundation for failing to file numerous tax returns, the spokesman, John Barrett, added. Dickerson Properties has been suspended for not submitting tax returns or a corporate statement of officers, Barrett said. All the suspensions remain in force.

In addition, the tax board suspended Long Term Care Housing Corp.'s right to do business because it had not filed tax returns since Freeman founded it in 2004.

After the Times inquired about the suspensions, a law firm for the housing entity said in a memo that tax-exempt status had been "delayed" because the IRS had made a "routine" request for additional information. The memo did not say when the request was made.

The memo said the housing organization has filed its tax returns. As a result, the Franchise Tax Board lifted the suspension Thursday, a spokeswoman said.

On its website, the corporation says it has "a strong relationship with the California Community Foundation, and they are currently building 13 new homes" in Lancaster. It said the foundation was "helping us purchase land."

"No one here has ever heard of the group," said California Community spokeswoman Namju Cho. She said the foundation asked the corporation to remove the statement from the website, and the corporation did so this week.

The site lists a Bell Gardens address for the corporation. County property records show that the address is that of a home owned by Freeman's former chief of staff, Rickman Jackson, who now heads a local in Michigan. He did not return phone calls.

Freeman said he did not know if the housing organization paid Rickman for use of his residence.

All of the local's expenses were justified, Freeman said, including $41,500 last year at three restaurants. The union had tabs of $12,500 at Morton's in Burbank. The restaurant bills were for meetings of the local's executive board and "large numbers of workers," he said.

William Morris, which represents people in the entertainment industry and provides consulting services to companies, received $106,000 from the union last year.

Freeman and his representatives said the contract was for public relations and advancing the union's political agenda.

In an e-mail, a William Morris spokesman said the agency provided the union with strategic analysis and "advice and counsel" in such areas as media and "membership awareness."

Neither Freeman nor the William Morris spokesman, Christian Muirhead, would offer specific examples of the agency's services to the union. Freeman said the contract had nothing to do with his wife's entertainment industry work.


Barackonomics concerns employers

More EFCA stories: here

Unionism gains would likely bring job cuts, wage stagnation

KAI RYSSDAL: The classic definition of recession is two straight quarters of a shrinking GDP, even though noboby goes by that anymore. Still, we've only had one quarter of negative economic growth, so by that very academic measurement -- nope, not a recession. There are a million more things we could've thrown on that list but, hey, the show only lasts half an hour.

Today's Wall Street Journal, on the other hand, ran about 48 pages. And it had Wal-Mart in its crosshairs right on Page 1. The Journal's reporting that the biggest company in the country has politics on its mind. It says that in the past few weeks Wal-Mart has warned thousands of supervisors about the economic peril of a Democratic win this fall. That that would make it easier for workers to unionize and hurt the bottom line.

At a time when companies are already struggling with high fuel costs and a slow economy, Marketplace's Steve Henn reports Wal-Mart's not the only one worried about labor getting organized.

STEVE HENN: Business groups have chipped in $50 million to fight the Employee Free Choice Act. Barack Obama backs the bill, and opponents fear a new Congress will pass it. Glenn Spencer at the U.S. Chamber of Commerce says if the bill becomes law, there would be some big economic consequences.

Glenn Spencer: Well, there is little doubt that you would see a pretty widespread increase in union organizing efforts -- and particularly, we think, among small businesses. There is certainly a potential to see labor costs rise.

Right now, though, unemployment is rising, wages are stagnating, and most unions are hemorrhaging members. In fact . . .

Jared Bernstien: American workers have been facing steadily declining real wages and squeezed paychecks.

Jared Bernstien at the Economic Policy Institute says American workers don't have the clout right now to bargain for cost-of-living increases. But Jeffery Rubin, chief economist at CIBC World Markets, thinks wage hikes could be just around the corner.

Jeffrey Rubin: Now people might scoff at that notion, saying that in today's world that's untenable, facing the onslaught of cheap labor from China. But I think that's yesterday's world.

Rubin believes sky-high oil and shipping costs are making U.S. goods more competitive at home. That, along with reinvigorated unions, could help workers in a range of businesses, from furniture to steel, win wage concessions. But policymakers and businesses fear a jump in wages would usher in a return to 70s-style inflation.

In Washington, I'm Steve Henn for Marketplace.


ACORN may get federal probe over grant-use

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Concerns mount for union-backed voter-fraud group

Conservative Republicans in the House prodded the chairman of the House Financial Services Committee on Thursday to investigate alleged evidence that ACORN, an advocacy group for low-income families that has strong ties to the Democratic Party, used federal funds for political purposes.

Thirty-nine mostly conservative Republicans, led by Reps. Tom Feeney of Florida and Jeb Hensarling of Texas, sent a letter to Financial Services Chairman Barney Frank asking the Massachusetts Democrat to hold hearings examining recent claims that the group co-mingled federal grant money with political funds set aside for a vote-registration drive.

Frank countered that if these Republicans "think there were incidents of abuse, they should go to the IRS."

The House recently approved a massive housing bill that included $4 billion in federal grants to restore low-income housing in communities where foreclosure rates are the highest and another $5 billion for affordable housing, mortgage restructuring and financial counseling for people struggling to re-pay their home loans.

In the run-up to that vote, Conservatives complained that some of these funds would eventually be funneled to groups like ACORN, which advocate on behalf of low-income families while organizing voter-registration drives for the benefit of national Democrats.

But Frank said those funds are specifically directed to the state governments so local officials can reinvest in these communities.

In the letter, the Republicans cite a report published by the Consumers Rights League — a libertarian group created as a foil to ACORN and similar advocacy organizations — that reproduces ACORN documents "that suggest that there is an ongoing practice of comingling of taxpayer funds with political projects," according to the letter.

The Feeney-Hensarling letter comes on the heels of a Wall Street Journal piece that chronicles ACORN's effort to register Democratic voters as the group also lobbied hard on behalf the housing bill. These conservative claims echo those made by Democrats when Republicans controlled Congress that the GOP directed federal funds to religious groups that also served as the party's political base.


Criminal probe launched v. ACORN in Wisconsin

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Union-backed voter-fraud group in more hot water

A Milwaukee County prosecutor says a criminal investigation is under way into irregularities involving a voter registration drive. Assistant District Attorney Bruce Landgraf says his office and the Milwaukee police are following up on referrals made by the city's election commission.

The Associated Press reported Wednesday the commission had referred the names of 6 special deputy registrars for possible prosecution. Commission director Sue Edman says the canvassers worked for the Association of Community Organizations for Reform Now. She says they fabricated hundreds of voter registration forms.

Landgraf says it's too early to say whether criminal charges will be filed.


ACORN's Hypocritical House of Cards

More ACORN stories: here

Union-backed voter-fraud group gets more bad news

The Consumers Rights League (CRL) today released newly obtained affidavits from former ACORN and Acorn Housing Corporation (AHC) employees that attest to ACORN and AHC's illegal practice of using taxpayer dollars to fund political activity.

The affidavits from two former AHC employees, obtained by CRL following the publication of its original report in June, "ACORN's Hypocritical House of Cards," make further specific and damning allegations, including:

-- AHC and ACORN were at one time being funded from a joint account, which would appear to violate the same laws highlighted by the AmeriCorps Inspector General in 1994.

-- According to a former ACORN board member and AHC employee, AHC -- which received taxpayer money -- directly used funds to support ACORN activities, including paying for rent at an office where AHC was not even a tenant.

-- Perhaps most troubling, the sworn statement of former AHC staffer Andrew Johnson suggests AHC leadership pressured employees to intentionally hide information from HUD investigators.
Statement from James Terry, Chief Public Advocate, Consumers Rights League:

"These AHC affidavits are further evidence in a growing litany of potentially illegal abuses of taxpayer dollars by ACORN and AHC. Members of Congress, who recently doled out millions of dollars to these groups in the housing bailout bill, need to ask some serious questions to ensure that those taxpayer dollars are being spent properly and not illegally supporting political activity, or being squandered by an organization with an already checkered past of voter fraud and embezzlement. In addition to the affidavits, these former employees have offered to assist any investigation with additional information. It is time for Congress, HUD and others to exercise proper oversight and investigate these entities before millions more in public funds are wasted."


In June, the Consumers Rights League released a report exposing the role of ACORN in the nation's housing crisis. The report, "ACORN's Hypocritical House of Cards," included whistleblower documents provided by former ACORN and ACORN Housing Corporation (AHC) employees. The report outlined AHC's repeated pattern of shaking down corporate targets, driving low-income consumers to questionable loan products, and potentially misusing taxpayer funds by maintaining what appears to be an illegally close relationship with ACORN, which engages in overtly political activity.

AHC is a federally recognized tax-exempt organization. As such it is not allowed to share funds or provide funding for ACORN. Over a three-year period surveyed for the AHC report that organization took in 40% -- or more than $7 million -- in taxpayer funds. Over the same period, AHC gave grants and paid fees totaling more than $4.6 million to ACORN-related organizations (including Citizens Consulting, from which the brother of ACORN founder Wade Rathke embezzled nearly $1 million).

The June Consumers Rights League report highlighted the 1994 scandal in which AHC was caught by government investigators for falsely claiming to be a separate entity from ACORN so that it could use taxpayer money for combined operations. The AmeriCorps Inspector General's report concluded:
"Not only did we find references to ACORN having 'created' AHC to serve purposes common to both organizations, we noted numerous transactions and activities involving 'fraternal' ACORN-related corporations."
In that case, it was found that ACORN had abused the $1 million grant from taxpayers. The practice seems to have continued as AHC has taken in millions more from public coffers. An alarming internal AHC memo from September 2004 specifically stated: "Total funding from HUD's fair housing initiatives this year is about $650,000 which will provide a good opportunity for ACORN and AHC to work together on housing issues and campaigns."

About The Consumers Rights League:

The Consumers Rights League is a non-profit, non-partisan educational organization dedicated to protecting consumer choice and access to the marketplace. Through investigative analysis, CRL produces quality research that thoroughly documents the real-world choices and challenges consumers face and reports on the benefits enjoyed by an overwhelming majority of consumers. Learn more about CRL's mission at www.consumersrightsleague.org.

Affidavits and full ACORN report available at the following links:

SOURCE: The Consumers Rights League


Labor-states losing out?

Related story: "The 28 labor-states"

New York sets an example

Shortly after he was confirmed as governor of New York earlier this year, David Paterson told a group of business executives that when he received congratulations from old friends he hadn't heard from in years, he was surprised how many no longer lived in New York. "All of them basically said the same thing," Paterson told the group. "'Good luck in New York state, but we can't pay the taxes. The opportunities aren't there.'"

After that experience, Paterson presumably can understand the complaints of corporate executives recently surveyed by Development Counsellors International, which advises companies on where to locate their facilities. More than four in 10 of them have ranked New York as the worst state to do business in — second only to California in unfavorable mentions.

The most common gripes included high taxes and anti-business regulations. Joining New York and California on the list of most unpopular states are New Jersey, Michigan and Massachusetts.

The DCI study, coming as it did amid growing talk of state fiscal crises around the country, is particularly revealing.

Of the $48 billion in accumulated budget shortfalls that the 29 states with projected deficits are facing, $33 billion, or two-thirds of the gap, is concentrated in those five states considered by corporate executives to be the least friendly to business.

Meanwhile, among the five states ranked as having the best business environment, Texas and North Carolina have no projected budget gaps, and Georgia, Tennessee and Florida are facing shortfalls amounting to $4.1 billion, or less than one-tenth of the states' total.

An idealist would assume that those stark numbers would jump out at legislators in the most anti-business states and prompt a bracing re-evaluation of their spending, tax and regulatory regimes, as Paterson advocates. But no such luck.

Paterson's former colleagues in the state legislature are lobbying for a new tax on millionaires, while across the country California's legislators have called for boosting the state's top tax rate from 9.3% to 11%.

Since many firms, especially small ones, are organized corporately in such a way that they pay taxes on profits at their owners' personal income tax rate, any increase in the top rate of income taxes will hit small firms hard, to say nothing of the impact on the personal taxes of executives at big firms.

I've often heard people around the country say that voters in places like California, New York and New Jersey (which instituted its own "millionaires" tax on those earning $500,000 or more a year several years ago) get what they deserve. But beware. States that have taxed and spent themselves into a bind want everyone else to pay for their excesses.

Even as Gov. Paterson excoriated his former colleagues in the state legislature for failing to recognize the magnitude of New York's budget problems, last week he traveled to Washington, D.C., to urge the federal government to help bail out the state.

Paterson argued creatively that the rest of the country should come to his aid because the Empire State is home to the country's financial markets and thereby contributes disproportionately to the American economy — although I can imagine many states would gladly take those financial institutions off of New York's hands if the governor considers them such a burden.

Paterson also contended that states like New York deserve aid because they send more in taxes to the federal government than they receive in return in spending. This is an old argument that one often hears from pols not in New York, New Jersey, California and Massachusetts.

Based on an annual "balance of payments" study sponsored by former Sen. Daniel Patrick Moynihan from 1977 through 1999, the study found that certain states were always big losers. But even Moynihan realized those states were mostly responsible for their own plight, because their federal legislators had led the way in constructing a tax system that redistributed income from the rich to others, and did so regionally.

For instance, a study of the 1993 Clinton tax increase, which included a sharp rise in top income tax rates, found that the legislation cost the residents of California and New York $60 billion in additional taxes in the first year, mostly because of all those rich Wall Street and Hollywood types who got hit harder.

Residents of one New York congressional district alone, on the East Side of Manhattan, paid more in additional taxes than taxpayers in any other district in the country — an increase of $3.4 billion, or 700%, in one year.

And yet the congresswoman representing that district, Carolyn Maloney, and the majority of California's and New York's congressional delegations, voted in favor of the tax increase, which had been heavily advocated by Robert Rubin, a New Yorker who was an economic adviser to the president.

By contrast, most of the New York congressional delegation voted against the 2003 Bush tax cuts that saved New Yorkers $36 billion in federal taxes in the first year alone, according to a study by the Manhattan Institute's E.J. McMahon.

The difference is that the tax cuts left money in the private economy, not in the coffers of government, where the likes of Maloney could get their hands on it.

As the fiscal problems of some states increase, we are likely to hear more about how the federal government must bail them out. It's the failings of the federal government (that is, the Bush administration) that are responsible for state budget woes, so the argument goes.

But any look at the states with the biggest deficits reminds us that governors and legislatures are largely the authors of their own problems, and that the biggest trouble some of them have is that their taxing and chronic overspending have made them toxic to the business community.

Don't ask the feds to fix that.

- Stephen Malanga is an editor for RealClearMarkets and a senior fellow at the Manhattan Institute.


Editorial: Kill unfair labor bill

More EFCA stories: here

'No-vote' unionism gets a bad review

An egregiously undemocratic piece of legislation continues to float about in Congress. It has the appealing title of Employee Free Choice Act. It is anything but. The act would make a major change in the way in which unions are formed and recognized by doing away with private elections with secret ballots and overseen by a neutral federal board.

Instead, the measure would allow union organizers to simply get signatures from more than 50 percent of the employees in a company or a bargaining unit within the company. It isn't difficult to see how easy it would be for aggressive union organizers to cajole or even threaten workers, one by one, into signing union cards.

There would be nothing private about the process. Nor would there be any secret ballot election and no oversight.

Imagine what our political process would be like if free elections were replaced by partisan groups that personally pressured voters on an individual basis to cast a ballot on the spot in plain view for a particular candidate.

Yet that is exactly what the Employee Free Choice Act would do in the workplace. It not only would give union organizers an unfair advantage, it tramples on the rights of workers and flies in the face of democratic process.

One does not have to be an opponent of organized labor to oppose this piece of legislation.

In a commentary in the Wall Street Journal, former Sen.
George McGovern, a strong union supporter, denounced the act.

He wrote, "As a longtime friend of labor unions, I must raise my voice against pending legislation I see as a disturbing and undemocratic overreach not in the interest of either management or labor."

McGovern added, "Under EFCA, workers could lose the freedom to express their will in private, the right to make a decision without anyone peering over their shoulder, free from fear of reprisal."

The 1972 Democratic presidential nominee should be heeded, especially by members of his party who are considering voting for the act as a favor to union leaders.

They should understand that eliminating secret-ballot union-organizing elections contradicts advice that prominent Democratic members of Congress, including Rep. George Miller, have given to union organizers in developing nations such as Mexico.

Certainly union organizers should have the right to contact workers collectively or on an individual basis in an effort to establish union representation and recognition in any workplace.

However, Congress should not allow unions to run roughshod over basic democratic principles by taking away the right to secret ballot elections.


Organized labor goes on 'swarm offensive'

Related story: "The 28 labor-states"

Colorado is ground zero for collectivism slugfest

Colorado Democrat Michael Beatty probably never expected to publicly bash a sitting governor of his own party, but that's exactly what the successful energy industry attorney did recently at a Denver business conference. Beatty ripped incumbent Gov. Bill Ritter for being excessively partisan and for denigrating the energy industry, Colorado's biggest, according to The Denver Business Journal. He was formerly a senior aide to Democrat Roy Roemer, Colorado's chief executive from 1987 to 1999.

The Beatty blast, however, is only among the latest in a series of strange doings in Colorado this year, as the state experiences a political uproar that likely presages what's in store for the whole country after the November election.

The uproar didn't come about all at once, however, as its origins were with a quartet of Colorado liberals with bulging checkbooks who several years ago began making common cause with local Democrats, their ideological allies in the non-profit world, and hyper-aggressive union political operatives from across the nation.

This coalition created what Fred Barnes of The Weekly Standard calls "the Colorado Model," the game plan one veteran Colorado Republican dubbed a "swarm offense." Liberals and unions are using it in 2008 to move a somewhat red state decisively over to the blue column. They plan to use it to move the whole country their way in 2009.

Nationally, Coloradans have voted for Democratic presidents only twice since 1964, Lyndon Johnson that year and Bill Clinton in 1992. Even so, with steadily growing liberal power centers in Denver and college towns like Boulder and Fort Collins, Colorado has sent more than a few Democrats to Washington, including Gary Hart, Pat Schroeder and most recently Ken Salazar.

It has not been uncommon over the years for a Democrat to be governor, either, but only six percent of the state's employees are union members, and energy, business and farming interests remain among Colorado's biggest employers and leading political influences.

But the moderately red tilt started turning purple in 2004 when Democrats – quietly funded largely by the wealthy liberal quartet known locally as the "Gang of Four" - upset enough incumbent Republicans to take over the state legislature for the first time in four decades.

Then Ritter won the governorship in 2006, defeating Republican Bob Beaubrez, a former U.S. representative, by successfully appealing to both business and labor with promises of centrist governance emphasizing consensus solutions, especially on education and transportation funding.

But the Ritter era has seen little resembling consensus-building. He had hardly finished taking the oath of office when out of the blue he endorsed a union-backed reform measure gutting Colorado's venerable Labor Peace Act.

The state lacks a right-to-work (RTW) law but a complicated representation process makes union organizing difficult, so Colorado is something of a labor-neutral haven. The union-backed reform was approved on party line votes by the state legislature's Democratic majority, which expected a quick Ritter signature.

The stunned business community successfully pressured Ritter to veto the bill in April 2007. The veto in turn prompted cries of betrayal from labor leaders nationwide, including thuggish hints that the 2008 Democratic National Convention might be moved out of Denver as punishment.

To that end, Ritter got a tongue lashing – finger-in-the-chest style- from Teamsters national president James Hoffa. So, Ritter then sprung another surprise in November, signing an executive order granting collective bargaining rights to state employees.

That's when the political uproar began in earnest, with a RTW initiative petition ballot drive led by Jonathan Coors sparking an incredible explosion of counter-initiatives filed by unions and their trial lawyer allies, with massive funding from state and national sources.

What followed has been an outpouring of fund-raising, political organizing, voter registration drives and marketing campaigns of rare intensity, even by Colorado's initiative and referendum-friendly standards.

Counting both Ballot Question 47, the RTW initiative, and the related Question 49, an Independence Institute-backed measure banning payroll deductions for any purpose except taxes and health insurance, Colorado voters will face at least eight major initiatives in November.

Another 13 questions await certification by the Colorado Secretary of State but appear to have enough petition signatures to make the grade, the most since 1912 when voters decided 22 initiatives, according to Ballotpedia.org.

They've pledged $35 million just to defeat RTW, and will spend far more backing a raft of union-backed anti-business measures that would make it immensely more difficult to fire incompetent or dishonest employees, extend criminal liabilities of a business to its directors, managers and employees and establish severe new civil penalties for a variety of alleged corporate sins.

But wait, there's more! Another proposed measure requires all employers with 20 or more employees to provide expensive new health insurance coverage and establishes a new state bureaucracy to oversee the program. Yet another proposed measure imposes costly new workplace safety standards of doubtful value.

Most of the proposals would create new litigation opportunities for class-action plaintiffs lawyers. And the Colorado Trial Lawyers Association had another nine radical ballot proposals that were only withdrawn when they realized a "just vote against everything" attitude among voters could undermine the entire coalition.

No wonder conservative Colorado legislator John Andrews – who coined the "swarm offense" term - told The Examiner "you sort of feel like they are coming at you from all directions, so you are constantly being thrown back on your heels."

- Mark Tapscott is editorial page editor of The Washington Examiner.


Labor-state bigs to take political scalps

Related story: "The 28 labor-states"

New York shows the nation how it's done

Lawmakers who supported a property-tax-cap bill while the Senate was in Albany last week could pay a steep political price. State AFL-CIO President Denis Hughes said it's possible the 2 million-member labor federation will withhold endorsements in key races that involve senators who voted "yes" on the cap when its member unions meet for their annual convention next week. "There's talk about holding back," Hughes said.

If that comes to pass, the unions that belong to the AFL-CIO would be free to back any candidates they choose, Hughes said. But the federation won't spend a dime on anyone who fails to win support from two-thirds of its member unions on the convention floor.

Lawmakers told union leaders they were merely acting out of political expedience by passing the tax-cap bill in the Senate, noting the measure is in no danger of becoming law because the Assembly Democrats won't support it, sources say.

The anti-cap contingent was unmoved, however, in part because of the Senate's refusal to consider a "millionaire's tax" to raise revenue in the face of a fiscal crisis.

The tax cap could have been an excuse for labor to abandon its support of the Senate Republicans and back the Dems, who need just two seats to take the majority - but several major Democrats also backed the measure.

The bill originated with Gov. Paterson and was supported by a number of Senate Democrats, including Senate Minority Leader Malcolm Smith of Queens and Senate Deputy Minority Leader Jeff Klein of the Bronx.

"What was once a certainty for endorsements of Republican incumbents is not a certainty anymore," Hughes said. "But in this case, it's not just the Republicans; it's the Democrats as well."


One member of the labor family has decided to remain loyal to the Senate Republicans: The powerhouse health care workers union - Local 1199 of the Service Employees International Union. A source close to 1199 confirmed the union will endorse four GOP senators who are among the Democrats' top targets this fall: Serphin Maltese and Frank Padavan of Queens; Caesar Trunzo of Suffolk County, and Joseph Robach of Rochester.

Former Senate Majority Leader Joe Bruno (R-Rensselaer) cultivated a close relationship with 1199, which has poured millions into Senate GOP coffers.

Bruno's recent departure sparked speculation that the majority's alliance with labor in general - and 1199 in particular - might be in jeopardy. But so far, 1199 is staying put.

"They [1199] are absolutely solid in their support and there is no concern that with the new leader [Sen. Dean Skelos] there will be any change in the commitment to health care," the source said.


Assemblyman Brian Kavanagh is breaking ranks with the majority of his fellow Democrats to back insurgent Daniel Squadron against veteran Brooklyn Sen. Martin Connor in the September primary. Kavanagh is only the second elected official to support Squadron. The other is U.S. Sen. Chuck Schumer, for whom Squadron once worked.

The districts Kavanagh and Connor represent overlap on the lower East Side, and the assemblyman said the two have "always been cordial." Connor backed Sylvia Friedman, the incumbent assemblywoman whom Kavanagh toppled in a 2006 primary, as did most elected Dems.

Kavanagh said he's backing Squadron in part because he believes Squadron will remain "independent" in Albany. Knickerbocker SKD, the consulting firm that once employed Squadron, worked on Kavanagh's '06 race, but Squadron wasn't there at the time.


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Teamsters in global tactic v. InBev

Related story: "Bud war looms: Hoffa v. InBev's Carlos Brito"
More A-B/Teamsters stories: here

Corporate officials pay lip service to Hoffa

The prospective sale of Anheuser-Busch Cos. to a Belgian company has for now mostly receded from the headlines, but behind the scenes the International Brotherhood of Teamsters, representing most of A-B's brewery workers, is readying for a tough fight ahead.

Contract negotiations between Anheuser-Busch and its 8,000 Teamster-represented workers in St. Louis and at 11 other U.S. plants are slated to begin Aug. 18. Two days before that, Teamsters from Anheuser-Busch plants, political figures as well as union leaders from Brazil, Belgium, Canada and elsewhere plan to converge on St. Louis.

"We will be there, because we deal with InBev and we've got to tell the American workers that we're together and we don't intend to let them suffer from the acquisition," Robert Bouvier, Montreal-based president of the 125,000-member Teamsters Canada, said Tuesday.

The rally, set for 1 p.m. Aug. 16 at Kiener Plaza, has three goals, union officials say:

• To signal a tough stance in negotiations. The Teamsters' contract expires at the end of February.

• To show the eventual owner that the union is unified and plans to forcefully represent its members.

• To meet with representatives of overseas unions to coordinate strategy.

"We don't want labor problems, but we're also going to be a force to be reckoned with," said Mike Burke, president of 1,200-member Teamsters Local 6, which represents brewery workers in St. Louis.

Anheuser-Busch Vice President Gary Rutledge said he expects A-B to begin "a constructive dialogue with Teamster leadership later this month."

Union leaders in other countries who have dealt with InBev report tough labor practices, contentious union-management relations and strict cost-cutting measures.

Nina Devlin, a spokeswoman for InBev, said the company is "very committed to unions, to union jobs. …"

In a July 17 letter obtained by the Post-Dispatch, InBev CEO Carlos Brito told Jack Cipriani, who directs the Teamsters' Brewery and Soft Drinks division, that InBev "couldn't agree with you more that the Teamsters and the Anheuser-Busch employees play an instrumental role (in A-B's success) and it is our fervent hope that they will continue to do so."


Can Barack distance ACORN?

More ACORN stories: here

Labor-backed voter-fraud group reflects collectivist candidate

Regarding Sanford A. Newman's letter "Acorn Didn't Employ Obama in '92" (July 22), I would like Mr. Newman to explain the following:

(1) The union and Clinton/Gore Campaign financial support to Project Vote in the context of Mr. Newman's claim that Mr. Obama led a "nonpartisan" voter drive in 1992.

(2) His semantic effort to separate the Association of Community Organizations for Reform Now (Acorn) from Project Vote when Mr. Obama's official Web site reports the following with respect to Acorn's endorsement of Mr. Obama's run for the presidency in 2007:

"When Obama met with Acorn leaders in November, he reminded them of his history with Acorn and his beginnings in Illinois as a Project Vote organizer, a nonprofit focused on voter rights and education. Senator Obama said, 'I come out of a grassroots organizing background. That's what I did for three and half years before I went to law school. That's the reason I moved to Chicago was to organize. So this is something that I know personally, the work you do, the importance of it. I've been fighting alongside Acorn on issues you care about my entire career. Even before I was an elected official, when I ran Project Vote voter registration drive in Illinois, Acorn was smack dab in the middle of it, and we appreciate your work.' "

Although receiving federal funds and supposedly nonpartisan, there was nothing nonpartisan about Project Vote's '92 voter registration drive. In fact, some have attributed Mr. Obama's Project Vote work as key to getting Democrat Carol Moseley Braun elected senator. And while Acorn might not have signed his pay checks at Project Vote, Mr. Obama's own words prove that Project Vote and Acorn were hand and glove.

Jon Bauman
The Woodlands, Texas


SEIU to probe dues misuse at dissident local

More SEIU stories: here
More SIEU-UHW stories: here

Jumbo union must be careful about throwing stones from glass house

The Service Employees International Union will send a review team to Los Angeles this week to investigate allegations concerning the financial practices at Local 6434, United Long Term Care Workers Union.

The review team will come to Los Angeles after reviewing books and records at United Healthcare Workers -- West in Oakland, a review ordered by SEIU in the wake of an improper transfer of $3 million in dues money to an outside fund that was uncovered earlier this year.

SEIU treats allegations of financial impropriety seriously wherever they occur. We are fully investigating the issues that have been raised, and will take any appropriate action to ensure that SEIU members' rights and dues are protected.


Labor-state digs big union-only hole

Related story: "The 28 labor-states"

Putting union dues first

Boston’s Central Artery/Tunnel Project, a massive, federally funded project to build freeway tunnels underneath the city and Boston Harbor, will cost $22 billion including interest payments, according to a July 17 story in the Boston Globe. The project, known as the “Big Dig,” was originally budgeted to cost $2.8 billion.

Despite receiving federal funding, the Big Dig was subject to a union-only project labor agreement (PLA) that required project contractors and subcontractors agree to recognize unions as the representatives of their employees on the job, use the union hiring hall to obtain workers, pay union wages and benefits, and obey the union's work rules, job classifications and arbitration procedures. The project was plagued by delays and problems throughout its history.

According to the article, in order to cover the cost of the project, Massachusetts will have to pay close to $600 million annually over the next several years, taking money away from the maintenance and repair of roads and bridges across the state.

In addition, that article pointed out that the Big Dig project, which represents only 7.5 miles of an 11,000 mile highway system, has sucked up nearly 40 percent of the state highway funds over the last 17 years. In order to recoup that loss, the state has been forced to borrow money to meet the current needs of the highway system.

Because of the state’s mounting debt, 80 percent of workers for the Highway Department are being paid with borrowed money, compared to only 14 percent before the Big Dig, the Globe noted. State officials are hesitant to raise taxes, but that may be the only way to fight the massive pile of debt caused by the Big Dig project, the article said.

To read the Boston Globe article, click here.

To learn more about the problems faced by the Big Dig, click here.


Capitalism over-rated

Collectivism blamed on immaturity

It's an old story. Loving parents provide a generous environment for their offspring. Kids are given not only ample food, clothing and shelter, but the emotional necessities as well: encouragement, discipline, self-reliance, the ability to work with others and on their own.

And yet, in due course, the kids rebel. Some even say their parents never loved them, that they were unfair, indifferent, cruel. Often, such protests are sparked by parents' refusal to be even more generous. I want a car, demands the child. Work for it, insist the parents. Why do you hate me? asks the ingrate.

Of course, being an old story doesn't make it a universal one. But the dynamic is universally understood.

We've all witnessed the tendency to take a boon for granted. Being accustomed to a provision naturally leads the human heart to consider that provision an entitlement. Hence the not-infrequent lawsuits from prison inmates cruelly denied their rights to cable TV or apple brown betty for desert.

And so it goes with capitalism.

Capitalism is the greatest system ever created for alleviating general human misery, and yet it breeds ingratitude.

People ask, "Why is there poverty in the world?" It's a silly question. Poverty is the default human condition. It is the factory preset of this mortal coil. As individuals and as a species, we are born naked and penniless, bereft of skills or possessions. Likewise, in his civilizational infancy man was poor, in every sense. He lived in ignorance, filth, hunger and pain, and he died very young, either by violence or disease.

The interesting question isn't "Why is there poverty?" It's "Why is there wealth?" Or: "Why is there prosperity here but not there?"

At the end of the day, the first answer is capitalism, rightly understood. That is to say: free markets, private property, the spirit of entrepreneurialism and the conviction that the fruits of your labors are your own.

For generations, many thought prosperity was material stuff: factories and forests, gold mines and gross tons of concrete poured. But we now know that these things are merely the fringe benefits of wealth. Stalin built his factories, Mao paved over the peasants. But all that truly prospered was misery and alienation.

A recent World Bank study found that a nation's wealth resides in its "intangible capital" -- its laws, institutions, skills, smarts and cultural assumptions. "Natural capital" (minerals, croplands, etc.) and "produced capital" (factories, roads, and so on) account for less than a quarter of the planet's wealth. In America, intangible capital -- the stuff in our heads, our hearts and our books -- accounts for 82 percent of our wealth.

Any number of countries in Africa are vastly richer in baubles and soil than Switzerland. But they are poor because they are impoverished in what they value.

In large measure our wealth isn't the product of capitalism, it is capitalism.

And yet we hate it. Leaving religion out of it, no idea has given more to humanity. The average working-class person today is richer, in real terms, than the average prince or potentate of 300 years ago. His food is better, his life longer, his health better, his menu of entertainments vastly more diverse, his toilette infinitely more civilized. And yet we constantly hear how cruel capitalism is while this collectivism or that is more loving because, unlike capitalism, collectivism is about the group, not the individual.

These complaints grow loudest at times like this: when the loom of capitalism momentarily stutters in spinning its gold. Suddenly, the people ask: What have you done for me lately? Politicians croon about how we need to give in to Causes Larger than Ourselves and peck about like hungry chickens for a New Way to replace dying capitalism.

This is the patient leaping to embrace the disease and reject the cure. Recessions are fewer and weaker thanks in part to trade, yet whenever recessions appear on the horizon, politicians dive into their protectionist bunkers. Not surprising that this week we saw the demise of the Doha round of trade negotiations, and this campaign season we've heard the thunder of anti-trade rhetoric move ever closer.

This is the irony of capitalism. It coordinates humanity toward peaceful, productive cooperation, but it feels alienating. Collectivism does the opposite, at least when dreamed up on paper. The communes and collectives imploded in inefficiency, drowned in blood. The kibbutz lives on only as a tourist attraction, a baseball fantasy camp for nostalgic socialists. Meanwhile, billions have ridden capitalism out of poverty.

And yet the children of capitalism still whine.

- Jonah Goldberg is a nationally syndicated columnist and author of "Liberal Fascism: The Secret History of the American Left from Mussolini to the Politics of Meaning."


Barack finds an ACORN

IBD Series: The Audacity Of Socialism

The man who includes being a community organizer on his short resume has a long association with a far-left group that would organize our communities into socialist gulags.

In 1995, Illinois Gov. Jim Edgar balked at implementing the federal motor voter law out of concern that letting people register via postcard and blocking the state from pruning voter rolls might invite vote fraud.

A young lawyer, a community organizer himself, sued on behalf of the Association of Community Organizations for Reform Now (Acorn) and won. The young lawyer was Barack Obama. Acorn later invited Obama to train its staff.

When Obama served on the board of the Woods Fund for Chicago with Weather Underground terrorist William Ayers, the Woods Fund frequently gave Acorn grants to fund its agenda and voter registration activities.

Acorn has been in the lead in opposing voter ID laws and other efforts to ensure ballot integrity. Acorn has been implicated in voter fraud and bogus registration schemes in Ohio and at least 13 other states. Acorn staffers will presumably be out registering voters again this year.

Obama also opposes voter ID laws. He believes they disenfranchise voters. Last year, Obama put a hold on the nomination of Hans von Spakovsky for a seat on the Federal Election Commission. It seems von Spakovsky, as an official in the Justice Department, had supported a Georgia photo ID law. Acorn espouses the leftist view that voter ID laws are racist.

In addition to subverting American democracy to promote a leftist agenda, Acorn's radical agenda amounts to "undisguised authoritarian socialism." wrote Sol Stern in the 2003 City Journal article, "Acorn's Nutty Regime for Cities."

Acorn opposed welfare reform and opposes securing American borders to stem the flow of illegal immigrants. Acorn was heavily involved a few years back in opposing Rudy Giuliani's efforts to privatize failing New York schools.

Acorn also has been in the lead supporting the "living wage" and opposing efforts by big-box retailers such as Wal-Mart to bring the bounty and benefits of free-market capitalism to inner cities.

Wal-Mart has faced resistance to its plans to expand into urban centers — most notably Chicago and Los Angeles — where unions and liberal orthodoxy remain strong. Opponents there charge that such big-box stores exploit workers, depress wages and drive out community businesses.

Acorn, Obama's former client, supported a big-box living-wage ordinance vetoed by Chicago's Mayor Richard Daley to require stores of at least 90,000 square feet operated by firms with $1 billion or more in annual sales nationwide to pay workers a minimum of $10 an hour plus $3 in benefits.

Critics such as Acorn, who complain that Wal-Mart employees live paycheck to paycheck, forget that many of Wal-Mart's customers also live paycheck to paycheck and seek quality merchandise at decent prices, which is why 100 million people shop there every week.

How can they oppose "low" wages for Wal-Mart employees while in effect supporting higher prices for Wal-Mart customers? They can because they believe the socialist orthodoxy that capitalism is bad, government is good and that the solution to poverty is to make everyone equally poor.

Wal-Mart gives people what they want at a price they can afford. It believes a fair wage is one agreed upon between employee and employer. It is the poster child for roll-up-your-sleeves capitalism. It is efficient, innovative, successful and nonunion — everything government is not — and is opposed for all these reasons.

Advocates of the so-called living wage see their efforts as putting money directly into workers' pockets. But it merely transfers money from one person's pocket to another person's pocket. This is classic socialist income redistribution — not economic justice, but economic extortion.

In the real world, companies that pay workers more than the value of the goods and services they produce go out of business. Workers should be paid what their labor is worth, not what their lifestyle requires.

On his Web site, Obama embraces Acorn's socialist goal, pledging to "raise the minimum wage and index it to inflation to make sure that full-time workers can earn a living wage that allows them to raise their families and pay for basic needs such as food, transportation and housing."

That money would come from taxpayers and business owners or, as Marx would say, from each according to his ability, to each according to his need.


ACORN agents make news

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