Meg Whitman & SEIU: The Stench of Big Money in Elections

by Paul Rockwell on October 6, 2010

When it comes to big money in elections, at least in California, Meg Whitman gets all the attention. A recent SEIU flyer tells us that the billionaire candidate is trying to buy California’s gubernatorial run-off. It’s true. Big money corrupts; it destroys free elections.

But here’s the rub. Union elections are no exception to the rule. SEIU is now spending more money per capita in one decertification election than Whitman is spending in the entire state. Press estimates vary (SEIU refuses to provide an itemized budget), but Randy Shaw (in Beyond Chron) and Steve Early (author of Embedded with Organized Labor) estimate SEIU is spending 20 to 40 million dollars to crush its former local, now called NUHW, in a Kaiser-wide election. More dues money than any union has ever spent in any campaign against another union.

All right. There is a difference between Meg-the-billionaire and SEIU-the-giant-dues-collector. Whitman buys elections with her own superfluous wealth. It’s ugly. But SEIU buys elections with the hard-earned dues of its members. That’s really ugly. In fact, thousands of SEIU members are forced to pay the huge costs of a campaign against their own beliefs, against their preference for NUHW. It’s as if the American Lung Association were forced to pay millions of dollars for tobacco ads by Philip Morris.

Whatever the outcome of the election, whatever the legalities of using dues against dues-payers, the stench of big money will linger long after the dollars and votes are counted.

SEIU IN DEBT, PENSIONS IN DANGER

Contrary to SEIU’s show of wealth over the last few years, SEIU’s financial situation is bleak. SEIU began its descent into debt in 2008, a direct result of failed union raids against the California Nurses Association, the Puerto Rican Teachers Union, and UNITE HERE.

As internal disputes and labor fratricide drained its resources, SEIU took on a $90 million debt from Bank of America. In 2009 SEIU added $25 million to its debt. SEIU assets fell by almost half in 2009, from 64 million to 34 million. Then-president Andy Stern noted: “We maxed out the credit card.” The debt hit $121 million in 2010. (Wall Street Journal, 5/16/2009)

The future of SEIU retirees is now in danger. SEIU pension plans are underfunded, drained by inter-union fights. An underfunded pension plan lacks the assets to meet obligations to retirees for the future. In Congressional terms, any pension plan with less than 80% of needed assets is considered “endangered.” A fund with less than 65% enters a “crucial status.”

Two national pension plans of SEIU (National Industry Pension Fund and the Pension Plan for Employees of SEIU) reached critical status last year. Local pension plans are in worse shape. In 2007, SEIU Local 32BJ Building Maintenance Contractors Association Pension Plan was funded at 41%. SEIU’s 1199 Greater New York Pension Fund was funded at 58%. 1199 is supposed to be a flagship union of SEIU, but 1199 members are outraged at SEIU profligacy. The New York Daily News (Sept. 1, 2010) reported on Local 1199 protests against misuse of dues. “New York’s lowest paid unionized workers are up in arms over being asked to cough up cash to pay for a labor battle 3,000 miles away.”

Many lavish SEIU expenditures are already a matter of record. In 2008 SEIU spent $2.5 million on hotels in California. Again in 2009, SEIU spent another $2.5 million for lodging for out-of-state staff and anti-NUHW propagandists. In a showdown with NUHW over representation of 10,000 home care employees, SEIU overwhelmed Fresno, California with 900 paid staff. SEIU spent $300,000 just for lodging alone. These figures do not include the costs of airfare, car rentals, meals, and per diems. SEIU spent $10 million in Fresno. (Washington Post, “Union Leader Stern Leaves With Questions Over Spending,” 5/15/2010)

In California, SEIU appointed Tyrone Freeman to run the giant Local 6434. SEIU dues payers paid Freeman $200,000 a year. He ran up a $10,000 tab at the Grand Havana Room in Beverly Hills, a bar known for Hollywood clientele. He spent $123,000 on a golfing tournament at the Four Seasons Resort. The home care workers that he represented got $9 an hour. (L.A. Times, 8/21/2008).

The campaigns of Meg Whitman and SEIU are examples of profligacy in painful economic times. And we know from the Wall Street crash that power brokers spend other people’s money less carefully than they spend their own. SEIU is no exception.

Paul Rockwell is a national columnist. He was a shop steward in SEIU for many years.

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