Tuesday, June 21, 2011

SEIU Hit by Multi-Million-Dollar Spending Scandal

SEIU officials are pulling the plug on a failed scheme that wasted an estimated $20-$25 million of members’ dues dollars over the past three years, according to this internal SEIU memo that's discussed in this recent article. Here's what happened.

Remember the 2008 SEIU Convention in Puerto Rico? That’s where SEIU officials pushed through their “bold” idea of building nationwide 1-800 call centers to handle members’ grievances. They also decided to centralize local unions’ accounting, dues-collection and other "back-office services" into a national business office controlled by SEIU International.

Stern and Mary Kay Henry predicted that, by 2012, one million SEIU members would be participating in this new scheme. They even re-wrote SEIU’s constitution to permanently cement the new centralized system into SEIU.

After the 2008 convention, they set up a for-profit corporation called “Member Action Service Center (MASC).” They then got $2 million in tax breaks from the State of Michigan and pumped millions of dollars of SEIU members’ dues money into their for-profit venture.

One small problem: it was a massive failure. The price? An estimated $15-$20 million of wasted dues. Check out SEIU’s internal memo, which has statements like this:

“SEIU’s finance staff estimates that we will have spent $14 million in setting up and operating the MASC in its first year.” (p. 6)

“In no scenario we reviewed was the MASC self sufficient and no scenario included any possibility that SEIU’s investment would be recovered in the foreseeable future.” (p. 6)

"The President should appoint someone to develop a contingency plan that will prepare us for shutting down the operation... a course of action to mitigate the financial impact of a shutdown and the impact on locals already enrolled." (p. 11)

Tasty's got a few simple questions:

Will SEIU officials be held accountable for flushing $20-$25 million of members' dues money down the toilet?

If Bruce Raynor got axed for $2,300 in dinner receipts, shouldn't Mary Kay Henry, Eliseo Medina and Tom DeBruin pay a price for flushing millions of dues dollars down the drain?

Why have SEIU officials hidden the news of this financial fiasco from the membership?

Mary Kay? Eliseo? Tom? Your turn now…