Wednesday, June 15, 2011

Stern in Hot Seat as Congress Probes SIGA's $2.8 billion Contract

SEIU President Emeritus Andy Stern is in the hot seat again – this time for his role in a controversial $2.8 billion government contract awarded to SIGA Technologies, a bio-warfare firm that gave Stern more than 35,000 stock options to sit on the for-profit company's Board of Directors.

CNBC is reporting that two Congressional committees have launched probes into how SIGA got the no-bid federal contract to produce small pox antiviral medicine.

CNBC's coverage discusses both Stern and his cigar-chomping billionaire buddy, Ron Perelman, who owns 30% of SIGA's shares. Last year, SIGA brought Stern onto its board reportedly because of the extensive relationships he developed with government officials while on SEIU's payroll.

After SIGA got the $2.8 billion contract, the company's stock price jumped. According to a journalist at Forbes, Perelman stands to make $140 million in profit if SIGA's stock price increases by $10 per share. As for Andy's profits, good question.

The Huffington Post has written about Stern's cozy relationship with Perelman, who's the 64th richest person in the world (estimated net worth: $12 billion). As president of SEIU, Stern reportedly cut a sweetheart labor deal with Perelman, who owned a giant security firm called AlliedBarton. The HuffPo writes:

In September 2006, the SEIU surprised the labor movement by agreeing not to organize 10,000 security guards working for AlliedBarton, largely in the Philadelphia area, in exchange for organizing opportunities elsewhere. In 2008, the SEIU again surprised observers by not standing in the way of the sale of AlliedBarton to the private-equity firm Blackstone Group...
Observers speculate that Stern's cushy gig at SIGA may be Perelman's way of paying off for Stern for his earlier sweetheart deal on AlliedBarton. It also raises other ethical questions… like whether SEIU's President Emeritus is using his SEIU rolodex to make millions – the kind of revolving-door ethical violation that SEIU likes to criticize when other people do it.

So…as SEIU claims to be "fighting for a fair economy," SEIU's President Emeritus is "making bank with his billionaire buddy."

What's next? Well... we'll see what Congressional investigators can uncover. In the meantime, it stinks like all of the other corrupt dealings that seem to emerge from SEIU like a steady stream of effluent.