Friday, June 24, 2016

BREAKING: Judge Confirms Arbitrator’s Decision Requiring SEIU-UHW to Withdraw California Ballot Initiative


Sacramento County Superior Court
This afternoon, a Sacramento County Superior Court judge confirmed an arbitrator’s June 6th decision that orders SEIU-UHW’s Dave Regan to withdraw a statewide ballot initiative by June 30 or face tens of millions of dollars in fines, according to court records and sources who attended the hearing.

Judge David Brown announced his decision at the end of a hearing during which attorneys from SEIU-UHW and the California Hospital Association (CHA) argued their positions.

Yesterday, the judge issued a tentative ruling on the matter, according to the Los Angeles Times (John Myers, “Sacramento Judge Moves to Cancel a November Ballot Initiative Limiting Salaries of Hospital CEOs,” June 23, 2016).

SEIU-UHW’s spokesperson Steve Trossman told the Times that SEIU-UHW “will decide next week whether to appeal the judge's ruling or allow the initiative to be scrapped.”

The Superior Court judge’s ruling represents a massive defeat for Regan.

In 2014, Regan leapt into bed with hospital CEOs to forge a secret deal that sold out workers, patients, and the public. Regan triumphantly called the sell-out deal a “visionary” agreement that would transform U.S. labor relations and the healthcare industry.  Yeah right.

By late 2015, Regan found himself with nothing to show for his sordid act of lovemaking with the fatcat CEOs.

So, in November of 2015, Regan decided to file a statewide ballot initiative targetING his CEO pals and their multi-million-dollar salaries. Unfortunately, Regan forgot about the far-reaching gag clause that he’d written and signed… and which specifically blocks him from filing such a ballot initiative. 
Doh!


Regan must now carefully contemplate his next chess move after flawlessly steering SEIU-UHW into a tight-ass corner with no way out. 

Thanks to Regan, SEIU-UHW’s members are trapped in a no-win situation where they will watch as somewhere between $5 million and $50 million of their dues money is unceremoniously flushed down the toilet.

Way to go, Dave!


Stay tuned for Dave’s next Einstein move.

Wednesday, June 22, 2016

Arbitrator: SEIU-UHW Could Face Tens of Millions of Dollars in Fines


How big are the fines that SEIU-UHW could face if Dave Regan refuses to withdraw his statewide ballot initiative by June 30?

“Tens of millions of dollars,” according to an arbitrator’s decision issued June 6.

How did the arbitrator come up with this figure?

If the Hospital Executive Compensation Act of 2016 appears on the November 2016 ballot, says the arbitrator, the California Hospital Association (CHA) will be forced to mount a statewide campaign to oppose it. In addition, a public debate about CEO compensation will damage the hospital industry’s reputation, according to the arbitrator.

Here’s an excerpt from the arbitrator’s decision:
Further, calculation of the precise harm to CHA is difficult at best. Clearly, any campaign at the statewide level is extremely costly, with estimates in the tens of millions of dollars. (p. 40)

The arbitrator cites one of the CHA’s witnesses who testified at the seven-day arbitration hearing:
In addition, according to [Gail] Blanchard-Saiger's testimony, beyond the millions of dollars that would be incurred in opposing an initiative, there would also be incalculable damage to the reputation of the hospital industry as a result of any campaign. (p. 37)

Regan is fully aware of the possible fines.

On Monday (June 20), SEIU-UHW’s attorneys delivered a legal brief to a Sacramento County Superior Court judge stating that the arbitrator’s decision “threatens UHW with substantial damage if the initiative remains on the November 2016 ballot.”

In his June 6 decision, the arbitrator ruled that Regan’s filing of the ballot initiative was a direct violation of a gag clause that Regan himself negotiated and signed as part of his secret partnership deal with the CHA. Regan’s gag clause prohibits SEIU-UHW from filing ballot initiatives (or, for that matter, any legislation, litigation, or regulatory actions) that are “adverse to the California hospital industry.”

In fact, Regan’s gag clause even blocks SEIU-UHW from making comments “raising concerns about… executive compensation in health care.”

So... in a major f*ck-up of colossal proportions, Regan appears to have backed SEIU-UHW into a no-win situation that’ll inevitably cost the union’s members millions of dollars.
 
SEIU-UHW's Dave Regan
If Regan withdraws the initiative before June 30, he’ll flush an estimated $5 million down the toilet. That’s the money Regan spent earlier this year to collect voters’ signatures to qualify the measure for the ballot. Furthermore, Regan will be unable to place a similar measure on the California ballot until November 2018, the next statewide election.

If Regan refuses to withdraw his initiative, SEIU-UHW’s members could face tens of millions of dollars in fines and penalties. The risk is huge. For example, how much would SEIU-UHW be forced to pay for the “incalculable” (p. 37) and “irreparable harm” (p. 39) to the hospital industry’s reputation?

This Friday, Regan’s attorneys will make a last-ditch attempt to overturn the arbitrator’s decision at a hearing in Sacramento County Superior Court scheduled for June 24 at 2:00pm.

Stay tuned.

Monday, June 20, 2016

Arbitrator Imposes Injunction and Possible Fines against SEIU-UHW for Violating Its Secret Partnership Deal with California Hospital Association


Tasty obtained a complete copy of the 42-page decision recently issued by an arbitrator investigating SEIU-UHW’s violations of its secret “partnership” deal with the California Hospital Association (CHA). 

The arbitrator's decision, dated June 6, 2016, imposes an “injunction” and “a cease-and-desist order” on SEIU-UHW in order to force it to withdraw a statewide ballot initiative that violates the partnership agreement’s gag clause

The decision also empowers the arbitrator to impose possibly millions of dollars of future fines and penalties on SEIU-UHW if Dave Regan, the union's president, fails to withdraw the ballot initiative. 

SEIU-UHW threatened to put the Hospital Executive Compensation Act of 2016 on the November 2016 ballot unless hospital executives allowed SEIU-UHW to unionize up to 60,000 hospital workers without employer opposition. SEIU-UHW, in turn, agreed to force the workers into pre-negotiated labor contracts with cheap wages, substandard benefits, and a ban on strikes.

Here’s an excerpt from the arbitrator’s decision:  
“In light of all these circumstances, and for the reasons expressed above, I am compelled to conclude that a cease and desist order and an injunction is appropriate and that it should extend to UHW, its agents, employees and surrogates, including [Nathan] Selzer and [Ben] Tracey, and those acting in concert with them. I further agree that it is appropriate to issue an injunction in a partial final award and to retain jurisdiction for purposes of considering damages or other relief if the Initiative remains on the 2016 ballot.” (p. 41)

Nathan Selzer, who serves as SEIU-UHW’s Communications Director (2015 salary: $131,317) and Ben Tracey, the union’s Healthcare Outreach Director (2015 salary: $145,495), filed the statewide ballot initiative on behalf of SEIU-UHW.


In March of 2016, a California Superior Court judge ordered the arbitration process. 
SEIU-UHW's Dave Regan and CHA's Duane Dauner

In April and May of 2016, the arbitrator held seven days of hearings where more than a half dozen CHA officials testified, including CHA CEO Duane Dauner and Kaiser Permanente’s Greg Adams, who serves on the CHA's Board of Directors.

Only one SEIU-UHW official, Dave Kieffer, took the stand. Regan failed to testify.

What's the basis for the arbitrator's decision?

As part of SEIU-UHW's "partnership" agreement with the CHA, the union's president Dave Regan signed a gag clause that prohibits SEIU-UHW -- purportedly a union of healthcare workers -- from "pursuing, sponsoring or supporting” any legislation, ballot initiative, regulatory, or other efforts that are “adverse to the interests" of hospital corporations.

Here’s the arbitrator's order: 
Based on careful consideration of the evidence and the arguments of the Parties in their entirety, I issue the following Partial Final Award:
1. The Complaint is sustained.
2. UHW, including but not limited to its agents, employees and surrogates Selzer and Tracey, and those acting in concert with them, are prohibited from pursuing, sponsoring or supporting the 2016 Executive Compensation Initiative.
3. UHW, including but not limited to its agents, employees and surrogates Seltzer and Tracey, and those acting in concert with them, are directed to immediately withdraw the 2016 Executive Compensation Initiative pursuant to California Election Code Section 9604(B) and take any other action necessary to terminate their pursuit, sponsorship and support of that Initiative.
4. I will retain jurisdiction for the purpose of considering damages or other relief if the 2016 Executive Compensation Initiative appears on the November 2016 ballot. (p. 42)

SEIU-UHW must now withdraw the ballot initiatives before June 30, the final date on which state officials permit such measures to be withdrawn. 

Later this week (June 24), SEIU-UHW will go before a judge in Sacramento County Superior Court in a last-ditch attempt to overturn the arbitrator’s decision.

Stay tuned for more news and analysis.

Here’s a full copy of the arbitrator’s decision, entitled “Opinion and Award in Arbitration Proceedings before Arbitrator Richard L. Ahearn Pursuant to the Code of Conduct Agreement between California Hospital Association and SEIU-United Healthcare Workers West.


Friday, June 17, 2016

BREAKING: SEIU-UHW Ordered to Withdraw Statewide Ballot Initiative due to Dave Regan’s Violations of Secret Pact with California Hospital Association


An arbitrator has ruled that SEIU-UHW President Dave Regan violated the terms of his secret “partnership” deal with the California Hospital Association (CHA) by filing a California ballot initiative that seeks to cap hospital executives’ salaries, according to recently filed court records.

The arbitrator has ordered SEIU-UHW to withdraw its 2016 Executive Compensation Initiative, which SEIU-UHW filed this spring after spending at least $5 million to gather signatures to qualify the measure for the November 2016 ballot.

CHA’s attorneys describe the arbitrator’s decision the following way in a document filed with the court on June 16, 2016 (see full copy below):
On June 6, 2016 the Arbitrator issued an opinion and partial final award prohibiting UHW and its agents from pursuing, sponsoring or supporting the 2016 Executive Compensation Initiative, which required UHW and its agents to immediately withdraw the 2016 Executive Compensation Initiative from the ballot qualification process and take any other acts necessary to terminate their pursuit, sponsorship, or support of that initiative.

On June 24, 2016 at 2:00pm, Sacramento County (Calif.) Superior Court Judge David Brown will conduct a hearing to finalize the arbitrator’s decision.

SEIU-UHW’s attorneys have filed a last-ditch attempt to “vacate” the arbitrator’s decision. Yesterday (June 16), both the CHA and SEIU-UHW delivered lengthy legal briefs to the judge in advance of next week’s hearing. Additional legal briefs are due next week.

What’s the basis for the arbitrator’s decision against SEIU-UHW?
 
SEIU-UHW's Dave Regan
In May of 2014, Regan and CHA CEO Duane Dauner signed a secret partnership deal containing a far-reaching gag clause that, for example, prohibits SEIU-UHW from making comments “raising concerns about… executive compensation in health care.” 

The gag clause also blocks SEIU-UHW from “sponsoring or supporting… initiatives adverse to the California hospital industry,” among other prohibitions.

Regan, who co-authored and signed the secret partnership deal, nonetheless decided to violate its terms when, in November of 2015, he filed a statewide ballot initiative that seeks to cap hospital executives’ salaries at $450,000 per year. 

At that time, the CHA had essentially abandoned Regan and the partnership after Regan failed to deliver on a promise to deposit billions more dollars of Medicaid funding into hospital executives’ pockets.

It’s the third time in four years that Regan has filed the same initiative, which Regan hopes will leverage the CHA into an act of industrial love-making that’s a cynical money-for-members quid pro quo that sells out patients, workers, and taxpayers.
 
CHA's Duane Dauner
Following SEIU-UHW’s filing of the executive-compensation ballot measure in November 2015, the CHA went to court to compel SEIU-UHW to submit its violations of the terms of the secret partnership agreement to binding arbitration

In March of 2016, a judge ordered SEIU-UHW into arbitration, which then led to the arbitrator’s decision, issued just days ago.

For more than a year, Regan’s partnership deal with Dauner was a closely guarded secret. Regan famously refused to show it to SEIU-UHW’s members, staff, and even to the union’s Executive Board.

In June of 2015, NUHW obtained a copy of the secret deal and filed a complaint with California Attorney General Kamala Harris alleging that the deal’s gag clause -- which blocks SEIU-UHW from "pursuing, sponsoring or supporting any legislation, initiative, regulatory, or other efforts that are adverse to the interests" of hospital corporations -- violates California law by blocking healthcare workers from reporting patient-care violations to government oversight agencies.

The secret deal also prohibits SEIU-UHW members from conducting strikes against California’s healthcare corporations.

In January of 2016, the CHA was forced to disclose a copy of the partnership agreement -- called the “Code of Conduct” -- when the CHA sued SEIU-UHW in California Superior Court to compel arbitration. These records confirmed the authenticity of the documents disclosed earlier by NUHW.


Stay tuned for more developments.

Thursday, June 16, 2016

500 California Workers Vote to Leave SEIU, Join Independent Union


A group of 479 school employees in San Diego, California has voted to decertify SEIU Local 221 and join an independent union called the Poway School Employees Association (PSEA).

On June 10, the California Public Employment Relations Board tallied workers’ ballots and announced the following results:
PSEA:  295 votes
SEIU Local 221: 10 votes
No Union: 1 vote

The 479 workers include cafeteria workers, bus drivers, custodians, groundskeepers, warehouse workers, skilled trades workers, and others at the Poway Unified School District, which is the third-largest school district in the county. Poway USD, located in northern San Diego County, operates 38 schools serving 35,500 students, according to its website.

What was behind the landslide vote, in which 96% voted to dump SEIU?  

In a press release, the PSEA offers a hint about why the president of SEIU’s former chapter at the district joined other rank-and-file leaders to remove SEIU.

The PSEA describes the election results as…
a resounding rebuke of SEIU, which has represented these 479 employees since 1988. In March of this year, the former leadership of the SEIU chapter at PUSD led the effort to unite their blue-collar members with PSEA, an independent union which has represented the 1,500 white-collar classified employees at PUSD since 2010. The former SEIU chapter leaders complained of unresponsive SEIU representatives, high SEIU dues, and a lack of resources, training and assistance.

Last week’s decertification election is just the latest in a string of losses for SEIU Local 221. In recent years, at least eight bargaining units have bolted Local 221 including…
1) San Diego Community College District
2) City of San Marcos
3) City of La Mesa
4) San Diego County’s Probation Officers Unit
5) San Diego County’s Crafts Unit
6) San Diego Regional Center
7) San Diego County’s Construction, Maintenance, Operations and Repair Unit8) Poway Unified School District’s Operations Support Service Unit


Here’s the PSEAS’s press release about last week’s election at Poway USD:

Tuesday, June 14, 2016

SEIU's Dennis Rivera Hires P.R. Firm in Wake of Allegations of Business-Funded Influence-Buying Scheme


SEIU's Dennis Hickey Rivera
Just one day after news surfaced about Dennis Hickey Rivera’s involvement in an alleged influence-buying scheme linking multiple deep-pocketed business executives to Puerto Rico’s scandal-plagued governor, Rivera hired a pricey New York public relations firm to do damage control, according to press reports.

Nell Callahan, Vice President of SKDKnickerbocker (also known as SKDK), said Rivera had retained the firm “to set the record straight.” Within 24 hours, SKDK reportedly circulated a memo to legislators’ offices in Washington DC defending of Rivera.

SKDK is a full service public affairs practice that offers crisis communications, branding, marketing, media training, digital/social media advice, speech writing, and message development. Its clients have included Barack Obama, New York Gov. Andrew Cuomo, New York Mayor Michael Bloomberg, AT&T, Facebook, and the Rockefeller Foundation.

Jennifer Cunningham, SEIU 1199NY’s former political director, is a Partner and Managing Director at SKDK, where she advises politicians and provides “C-suite message and communication strategy for many Fortune 50 corporations,” according to SKDK’s website. Cunningham was formerly married to New York Attorney General Eric Schneiderman.
 
Jennifer Cunningham
Rivera was the president of SEIU 1199NY from 1989-2007. Since then, he's since served as a “Senior Advisor” to SEIU President Mary Kay Henry.

In an earlier post, Tasty described Rivera’s role in founding and operating the organization that took hundreds of thousands of dollars from banks, hedge funds, real estate developers, private equity funds, and other big business… and then hired the governor’s brother to fill an alleged no-show job as the organization’s only staff member. 

In 2014, SEIU-UHW, headed by President Dave Regan, was the fourth-largest contributor to the organization, “Sociedad Económica de Amigos del País” (SEAP), according to federal tax returns.


along with SEIU’s Dennis Rivera, SEAP’s Board of Directors is composed of corporate executives including the CEOs of GM Capital, Banco Popular, UBS Financial Services, Bacardi Rum, Putnam Bridge Funding, and Putney Capital Management.

Thursday, June 9, 2016

SEIU-UHW Gave $25,000 to Group Linked to Alleged Influence-Buying Scheme and Scandal-Plagued Puerto Rican Governor


Banco Popular in San Juan
California-based SEIU-UHW contributed $25,000 to a group at the center of an alleged influence-buying scheme linked to Puerto Rican governor Alejandro García Padilla, according to records obtained from two federal agencies.

Why did SEIU-UHW President Dave Regan give $25,000 of his members’ money to a Puerto Rican organization that’s co-financed by a massive hedge fund and the island’s largest bank… and which allegedly funneled money to the Governor’s brother for a no-show job?

The answer apparently lies with Dennis Hickey Rivera.

Rivera -- who was the president of SEIU 1199NY and is now a “Senior Advisor” to SEIU President Mary Kay Henry -- is closely associated with the Puerto Rican governor and his political party, the Popular Democratic Party.

Rivera reportedly set up the organization that’s at the center of the alleged influence-buying scandal -- the “Sociedad Económica de Amigos del País” (SEAP) -- by using the shell of a nonprofit corporation he previously established in New York.
 
SEIU's Dennis Rivera
What does SEAP do? And who funds it?

Here’s where the story gets interesting.

According to its website, SEAP seeks “to support economic development in the Commonwealth” by “bringing investment and creating jobs in Puerto Rico.”

However, critics allege that the organization is a tool for corporations to buy influence with the governor. They point to the organization’s funding sources and its payouts to the governor’s brother to back their claims.

In 2014, a majority of SEAP’s funding -- $200,000 of its total $275,000 -- came from just three corporations: Banco Popular (Puerto Rico’s largest bank), St. James Security, Inc. (a security firm that holds contracts with the Puerto Rican government), and Putnam Bridge Funding (a hedge fund operated by its billionaire CEO, Nicholas Prouty, which has made huge bets on Puerto Rican real estate).

Excerpt from SEAP's federal tax return for 2014 indicating some of its sources of funds.
Banco Popular’s CEO Richard Carrion serves as the Chairman of the SEAP’s Board of Directors while SEIU’s Dennis Hickey Rivera is the Vice Chairman, according to the organization’s website and federal tax returns.

Another member of the organization’s board is Miguel Ferrer, former Chairman of UBS Financial Services Inc., which in 2012 paid a $26.6 million penalty to the U.S. Securities and Exchange Commission (SEC) to settle allegations that it misled customers and engaged in fraud, according to Reuters.

What about the governor’s brother?
 
The Puerto Rican governor and his brother, right.
Curiously, SEAP has only one staff member -- the governor’s brother, Antonio García Padilla. 

He’s a full-time professor at the University of Puerto Rico… but he nonetheless was paid $70,000 over 11 months by Rivera’s nonprofit organization to serve as the organization's full-time Executive Director, according to SEAP’s 2014 tax returns. 

What role has SEIU-UHW President Dave Regan played in the scandal?

In 2014, SEIU-UHW was SEAP’s fourth-largest contributor, according to SEAP’s federal tax returns. 

SEIU-UHW’s annual filing with the US Department of Labor confirms the union’s $25,000 contribution to the group (see excerpt immediately below).

Excerpt from SEIU-UHW's US DOL Form LM-2 for 2014
Now… it doesn’t take a rocket scientist to understand why corporations would want to buy influence with the governor. But why did SEIU-UHW contribute to SEAP, which is located some 4,000 miles away?

Tasty’s sources say it was part of an effort by SEIU-UHW’s Regan to buy influence inside SEIU’s DC headquarters during his battle against SEIU President Mary Kay Henry.

Regan delivered the $25,000 to Rivera in July of 2014 as Regan was sharpening his attack against Henry. Only five months later, Henry and SEIU’s International Executive Board approved a resolution ordering the transfer of 65,000 members of SEIU-UHW’s members to a separate SEIU local union controlled by one of Henry’s allies, Laphonza Butler.

According to Tasty’s sources, Regan’s donation of $25K to Rivera’s organization was intended to curry favor with Rivera, who works inside SEIU's headquarters and also has great influence with leaders of 1199NY, the largest and most powerful local union inside SEIU.

Interestingly, the scandal surrounding SEAP comes just months after another influence-buying scandal involving another brother of the Governor. 

In December, the FBI arrested 10 businessmen and Puerto Rico officials in the first scandal.
Press coverage of scandal with Gov's first brother

Anaudi Hernández Pérez -- a businessman, political fund-raiser, and the head of campaign finances for the governor’s party -- allegedly used his relationship with the governor’s second brother (Luis Gerardo García Padilla) to steer government contracts to corporations that, in turn, lined Hernández Pérez’s pockets. 

The government then paid the corporations for contract work they never actually performed, thereby lining the businessmen’s pockets with cash, according to a 25-count indictment handed down by the US Attorney’s Office.

On June 24, Hernández Pérez faces sentencing of up to six years after pleading guilty to 14 corruption charges. He also agreed to forfeit his $4 million home in Puerto Rico. Meanwhile, the governor has announced he will not run for another term of office.

Smart move.

SEIU and Dennis Hickey Rivera have a long and dirty relationship with the governor’s party, the Partido Popular Democratico or "Popular Democratic Party."

In 2008, SEIU used its cozy relationship with the party and then-Governor Anibal Acevedo Vila to try to eliminate one of Puerto Rico’s largest and most militant unions, the Federacion de Maestros de Puerto Rico (FMPR), and replace it with SEIU as a “company union” that would do the governor’s bidding, according to reporting by Juan Gonzalez at the New York Daily News.
 
Puerto Rican teachers confronting SEIU's 2008 convention
The current SEAP scandal underscores SEIU will officials' cozy relationships with the captains of big business, including the hedge funds, banks, and real estate corporations that have played an outsize role in the economic crisis affecting Puerto Rico and the United States.


More news to follow in the days ahead. 

Here's a full copy of SEAP's federal tax return for 2014, which includes disclosure of Regan's $25,000 contribution to SEAP on page 22.