Unholy Union
Why is the SEIU boss the White House’s most frequent visitor?
STEPHEN SPRUIELL
The Friday before Halloween, in response to requests from the public, the White House released records of the visitors it had received between January and July. George Clooney, Oprah Winfrey, and Serena Williams were among the famous names on the list. But the man who appeared most frequently is less well-known. His name is Andrew Stern, and during the first six months of Obama’s tenure, he visited the White House 21 times — about three times per month. Most of these visits included an intimate meeting with the president or other senior officials. Among outsiders, Stern enjoys unrivaled access to the White House. And the more you know about him, the spookier that sounds.
Stern is president of the Service Employees International Union (SEIU), a federation of health-care, public-sector, and custodial workers that claims approximately 2 million members. Stern replaced former president John Sweeney in 1996, the year after Sweeney won a bitterly fought battle for control of the AFL-CIO. At the time, Sweeney’s win was viewed as a victory for the left wing of the labor movement. Ramesh Ponnuru wrote in these pages: “Many of the people in [Sweeney’s] camp have backgrounds in the New Left.” Andrew Stern certainly fits that description.
Stern lacks the traditional blue-collar pedigree of a union boss. In a profile of him for The New Republic, Bradford Plumer wrote, “Stern was part of a generation of idealistic union leaders who came to organized labor from college, not the factory floor.” He started at the University of Pennsylvania’s Wharton business school in the late ’60s, dabbled in student radicalism, changed his major, bummed around Europe, came back to the States, and went to work as a welfare case officer in Pennsylvania. SEIU had just organized his shop, and he got active in the union. He ended up as one of Sweeney’s protégés, his successor, and, eventually, his bête noire.
In the 1950s, the percentage of American workers who belonged to a union peaked at around 34 percent. Today, that number is closer to 12 percent — 7.6 if you’re counting only private-sector jobs. Against this backdrop of declining union membership, Stern managed to double the size of SEIU in his first ten years as president. Other labor leaders stood in awe. In 2005, Stern engineered a break with the AFL-CIO over frustrations with Sweeney’s leadership. Six other unions, including the Teamsters, followed Stern. The breakaways formed their own federation called Change to Win and adopted SEIU’s one-two punch: intimidate businesses and, if that doesn’t work, exploit their soft spot for corporate welfare.
On the intimidation front, SEIU has worked with the radical Association of Community Organizations for Reform Now (ACORN). The group once served as a valuable ally, but its reputation now lies in tatters thanks to a pair of amateur journalists who, costumed as pimp and hooker, filmed themselves obtaining advice from ACORN staffers on how best to shelter the proceeds of a child-prostitution ring from taxation.
SEIU did not sustain much damage from the scandal, even though, as a colleague of mine quipped, ACORN often acts as its paramilitary wing. SEIU’s former political director, Patrick Gaspard, remains comfortably ensconced at the White House as political director — Obama’s Karl Rove — and the connection does not appear to have hurt him.
The SEIU-ACORN link is deep and longstanding. At least one SEIU local, Chicago’s Local 880, was organized by ACORN and run by it for 20 years. An SEIU official recently testified that the local had severed its ACORN ties, but Chris Berg, a former special assistant at the Office of Labor Management Standards, says, “I’m very skeptical.” Keith Kelleher, who spent many years running ACORN in Chicago, is still the local’s head organizer. “They’ve been wed together for so long, I don’t think they can divorce,” says Berg.
The local, which represents home health-care and child-care workers, attracted scrutiny when former governor Rod Blagojevich helped it secure a lucrative collective-bargaining agreement with the State of Illinois. Many cried foul, pointing to the $1.8 million that SEIU and ACORN had donated to Blagojevich’s campaigns. This story surfaced again when Blagojevich concocted a scheme whereby he would appoint someone of Obama’s choosing to Obama’s old Senate seat in exchange for a six-figure sinecure at Change to Win. Obama and Stern are so close that Blagojevich thought a favor to one would be repaid by the other.
SEIU has given ACORN nearly $6 million since 2006 — including $250,000 this year — according to U.S. Department of Labor disclosures and the union’s own statements. Some of this money took the form of grants, but ACORN also received significant sums for doing the SEIU’s dirty work. In 2007, the SEIU paid ACORN $140,000 to harass a shopping-mall operator called General Growth Properties that would not let the union use the card-check process to organize the company’s janitors (more on card check later). According to the company, ACORN’s tactics included “making allegations and filing unsubstantiated claims with government agencies, then implying in handbills and press releases that the claims — before they are even investigated, let alone proved — are fact.”
SEIU isn’t above these tactics, but it reserves its full attention for bigger targets, such as Bank of America. It has repeatedly tried to unionize Bank of America’s workforce, to no avail. The government bailouts, however, offered the perfect opportunity for SEIU to launch what’s known as a “corporate campaign” against the bank. Paul Levy, the CEO of a Boston hospital that has been on the receiving end of an SEIU corporate campaign, has written that the tactic “consists of publicly denigrating the reputation of the targeted [company], its senior management, and its board of trustees in an attempt to put pressure on the [company] to agree to certain concessions in the union certification process.”
Over the past year, SEIU has helped organize dozens of protests over the size of executive bonuses at Bank of America. Stern’s was one of the loudest voices calling for the ouster of CEO Ken Lewis for the bank’s role in the financial crisis, even though its acquisition of troubled firms Countrywide and Merrill Lynch probably prevented the crisis from deepening. After Lewis was ousted following an SEIU campaign to deluge shareholders with inflammatory talking points, the union sent a letter to executive-pay czar Kenneth Feinberg asking him to seize Lewis’s pension. “I’m not a cheerleader for B of A,” University of North Carolina–Charlotte finance professor Tony Plath told the Charlotte Business Journal at the time. “But let’s be objective about this: These attacks are all about card check.”
SEIU’s corporate campaigns, however effective, are nothing new. Stern’s real breakthrough came when he realized that labor could offer a carrot as well as a stick Around 50 percent of SEIU’s members work in the health-care industry as nurses, hospital attendants, and lab techs. The facilities that employ such workers benefit from a number of government programs. SEIU’s pitch was simple: Let us organize your workforce, and we’ll use our lobbying power to push for increased government spending on health care.
It worked. Fred Siegel and Dan DiSalvo recently observed in The Weekly Standard that, “under the brilliant leadership of Dennis Rivera, [SEIU Local] 1199 built a top-notch political operation, and with the hospitals, which were barred from political activity, formed a partnership to maximize the flow of government revenue.” The alliance has been so successful, they wrote, that New York now spends as much on Medicaid as California and Texas combined. Rivera now serves as the SEIU’s point man on national health-care-reform legislation, with over 400 union staff members working full time at his disposal. Sen. Chuck Schumer called him “one of the few key players” shaping the final bill.
In pursuit of his vision, Stern has turned the SEIU into a massive grassroots army that can mobilize in behalf of candidates and legislation. The scope of its activities in 2008 was epic. Stern bragged that “we spent a fortune to elect Barack Obama — $60.7 million, to be exact — and we’re proud of it.” Ironically, SEIU spent so much in 2008 that it had to take out massive loans to keep operating, including $10 million from — you guessed it — Bank of America. The cash crunch also forced SEIU to implement a round of layoffs, leading to a surreal hall-of-mirrors moment when the Union of Union Representatives filed a complaint against SEIU with the National Labor Relations Board (NLRB).
Undaunted, SEIU has set aside $85 million to spend over the next two years on political advocacy. The union started the year with three major objectives: a union-friendly stimulus, a union-friendly health-care bill, and a bill that would make it easier to organize workers into unions. It has brought its influence to bear on all three of these debates, with varying degrees of success.
Union-friendly stimulus: The stimulus bill was a top priority for SEIU because it contained massive bailouts for state governments and Medicaid. As mentioned above, states such as California, New York, and New Jersey have expanded their social-welfare systems beyond what they can afford, in response to pressures from SEIU and other public-sector unions. At the same time, their progressive income-tax structures have made them especially vulnerable to boom-and-bust cycles. When the credit bubble burst, these states were looking at massive deficits, layoffs, furloughs, and budget cuts. The stimulus bill included a $50 billion slush fund for state governments and $90 billion in Medicaid expansions, helping the states avoid a necessary round of belt-tightening and tax reform.
SEIU president Andrew Stern
Nam Y. Huh/AP
The most illustrative example of SEIU’s clout during this process came when the Obama administration threatened to withhold stimulus funds from the state of California if it went ahead with a planned reduction in payments to home health-care workers. The administration set up a conference call with state officials to discuss whether the cuts violated the terms of the stimulus, and state officials were surprised to learn that the administration had invited SEIU representatives to join the call. “This was really atypical and outside any norm I am familiar with,” California secretary of health and human services Kim Belshe told the Los Angeles Times. The administration backed down from the threat, but only after the story had leaked and caused significant blowback.
Union-friendly health-care reform: During the month of August, when tea-party protesters showed up at town-hall meetings in droves to express their opposition to the Democrats’ health-care plan, liberal commentators and members of Congress tried to portray the movement as “astroturf” (which, in political parlance, means fake grassroots). Democratic senator Barbara Boxer famously said that the protesters were too well-dressed to be anything other than corporate stooges. But, contra Boxer, the most visible trend by far in protest-wear at the town halls this summer was the purple SEIU T-shirt.
SEIU has poured millions into a group called Health Care for America Now, which has dispatched envoys to deliver portable pavilions, professionally printed placards, and uniform attire at almost every major health-care protest this year. Dennis Rivera sent hundreds of union activists to meetings this summer in an attempt to counteract opposition to the Democrats’ bill. “We’re running this campaign like this was a presidential campaign, and our candidate is health-care reform,” Rivera told the New York Times. Why does SEIU care so much about health-care reform? The subsidies and mandates in Democrats’ legislation would drive up demand for health-care services, meaning more revenue for hospitals, more health-care workers, and more members for SEIU.
The creation of a government-run insurance plan is an especially important priority for the SEIU. “The nexus between government and private industry would give SEIU a toehold to organize more workers,” explains J. Justin Wilson, managing director of the Center for Union Facts. Once the public option is in place, SEIU can pressure the bureaucracy to implement union-friendly policies. For example, the public option “might only reimburse hospitals that are unionized or have a neutrality position toward unions,” Wilson says.
So far, SEIU has been successful at getting most of its priorities included in the health-care bill. Democrats have renewed their commitment to the public option, which once looked dead on arrival. The only problem for organized labor concerns the excise tax on “Cadillac” health plans — plans that cost more than $8,000 per year for single coverage or $21,000 for family coverage — contained in the Senate Finance Committee’s version of the legislation. The proposed tax evolved from Finance Committee chairman Max Baucus’s earlier plan to raise revenue by taxing all employer-provided health benefits. Unions objected to that idea because many of them have negotiated generous benefit plans for their workers. Employers could be expected to scale back these plans to avoid the tax.
As a compromise, Sen. John Kerry proposed taxing only the most expensive plans, and the White House embraced this tax on “gold-plated Cadillac” plans because it sounded like the kind of tax-the-rich scheme that plays well with the Democrats’ base. But a number of unions still objected, leading Democrats to propose an exemption from the tax for all benefits granted through collective bargaining. This obvious sop to organized labor was immediately ridiculed and never actually made it into the legislation. Soon after the Senate Finance Committee approved the tax on “Cadillac” plans, a group of 27 unions ran an ad criticizing it. Notably, SEIU was not among them. “We don’t have a substantial disagreement with their point of view but we chose to communicate our views privately,” Rivera told The Hill newspaper.
“I found it interesting that they weren’t willing to sign on,” says Berg, the former Department of Labor official. “The United Auto Workers union is the one that you think of being impacted by this, because they had negotiated these kinds of plans with the automakers. SEIU has become a bigger player because they’ve been rapidly expanding, but they’ve been organizing a lot of lower-income workers.” Because the tax doesn’t affect that many of its members, SEIU is thought to have quietly signaled that it would not oppose the tax too loudly if it proved necessary to the bill’s passage.
Card-check legislation: As important as the Democrats’ health-care plan is to SEIU, the union’s top priority remains the Employee Free Choice Act, otherwise known as the card-check bill. Under SEIU’s preferred version of the bill, employers would have to recognize a union once a majority of its employees had signed petition cards. This process would allow union organizers to identify holdouts and pressure them into signing up. The bill would also require business owners to allow union organizers to hold meetings with employees on the business’s property, while forbidding the owners to hold mandatory meetings to discuss unionization.
Finally, the bill includes a binding-arbitration provision that would allow the NLRB to impose a union contract on a business if negotiations with its union broke down. SEIU loves this provision, because Obama just named one of its lawyers, Craig Becker, to the NLRB. Businesses negotiating with the SEIU would have two choices: accept SEIU’s demands voluntarily or have the SEIU-friendly NLRB accept them for you.
These three goals have one thing in common: All are meant to raise the percentage of workers who belong to a union. State by state, unions are ensuring that the only employers eligible for stimulus money are those with union workforces. On health care, the Democrats’ bill is designed to shift a mind-boggling amount of money into the health-care sector while increasing the government’s administrative control over it — and anyone who believes the Democrats’ rhetoric about cutting costs is encouraged to look at what Dennis Rivera accomplished in New York. Meanwhile, card-check legislation would throw open the doors of private businesses to union organizers and tie their hands when they try to resist.
This is good for unions, but it’s even better for liberals. The past three decades have seen unions embrace left-wing positions on everything from affirmative action to gay marriage to the war in Iraq. (Times have changed: Former AFL-CIO president George Meany refused to support George McGovern because McGovern opposed the war in Vietnam.) The bigger unions grow, the more power they have, as Andrew Stern will tell anyone who will listen. Stern’s obsession with size has embroiled the labor movement in some of the nastiest fights it has ever seen. Old-school union guys like Sal Roselli, a former Stern lieutenant whose National Union of Healthcare Workers split from SEIU earlier this year in a bitter divorce, told Bradford Plumer that “Stern’s drive for growth at all costs” had caused him to ignore what was in the best interest of his members. But Andrew Stern was a liberal before he was a union organizer, just as Obama was a liberal before he was a community organizer. Unions may have existed to serve workers’ interests at one time. These days, they exist to serve liberalism.
“The most important thing to note about what SEIU is doing is that it’s really become a lobbying arm for the president,” Berg says. “Much like Organizing for America [the community-organizing group run by the Democratic National Committee], they are trying to drive bodies nationwide to lobby their congressmen and senators to try to implement the president’s agenda.” Seen in that light, it is entirely unsurprising that Stern’s name should be the one that appears most frequently in White House visitor logs. Obama and Stern are working together to make America a more liberal place, and they want you to join them.
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