Andy Stern Tried to Silence Huffington Post's Article Detailing SEIU's Deal with Billionaire Ron Perelman

Ron Perelman and Andy Stern

In its recent article, the Huffington Post unearthed a previously unknown chapter in Andy Stern’s corporate career at SIGA Technologies, a bio-warfare pharmaceutical company.

It turns out that soon after journalist Ryan Grim published a 2010 article outing Stern for an allegedly corrupt backroom deal with billionaire Ron Perelman (“Andy Stern's Bizarre Alliance With Private Equity and Biowarfare,” October 7, 2010), Stern and SIGA hired a fancy corporate law firm to try to bully the Huffington Post into silence.

In their recent article, Grim and fellow journalist Jeffrey Young describe how SIGA’s lawyers threatened to sue the Huffington Post unless the news outlet deleted Grim’s article discussing Stern's allegedly corrupt deal with Perelman… in which Stern and SEIU abandoned 10,000 security guards who work for AlliedBarton. Just weeks after Stern resigned as SEIU's president, Perelman appointed him to SIGA Technologies board of directors where Stern pocketed tens of thousands of stock options and buckets of cash. 

Below, Tasty has posted a copy of the lawyers' bullyboy letter sent to the Huffington Post… which appears to have been taken from Chapter 1 of a scare-tactic handbook.

Here's how the scare tactic works. 

After a fatcat is stung by the truth, he hires lawyers with super scary-looking letterhead and tells them to send an “I'm going to sue the f*ck out of you” letter to the journalist. The fatcat hopes the journalist will tremble in his boots… and quickly agree to delete the article rather than risk an expensive battle with testosterone-filled attorneys.

In this case, the Huffington Post called Stern on his bluff and forced SEIU’s President Emeritus to slink back to his padded chair in SIGA’s corporate boardroom. Stern’s about-face, of course, had the effect of proving the truthfulness all of the things that Stern and SIGA claimed were untrue. 

 

Arianna Huffington

Check out these excerpts from Stern/SIGA’s “I'm going to sue the f*ck out of you” letter, which was delivered to Arianna Huffington, the Editor-in-Chief of Huffington Post in 2010. "BARDA" is a federal agency that gave a half-billion dollar sole-source contract to Stern's company, SIGA.

For the reasons set forth below, the Companies insist that you withdraw this article from your website and from your archive and that you post in its place a one-line statement that the article was withdrawn because of errors. The Companies further demand that you take all additional steps to have the article removed from computer search engines and deleted by any licensees of The Huffington Post…

First, a major thrust of the article is the implication that SIGA improperly has been using Andy Stern's influence to obtain a BARDA contract and to prevent the funds for that contract from being lost to budget-cutting. That implication is false… [SIGA’s half-billion-dollar federal contract] procurement is not some kind of government boondoggle…

Second, the article falsely implies that Mr. Stern did not have the best interests of SEIU members in mind when negotiating labor agreements with AlliedBarton. And it suggests that Mr. Stern's allegedly improper activities were at the behest of MacAndrews & Forbes, which owned a majority of AlliedBarton at the time, and its senior management, including Ronald Perelman. Those implications are false…

The article should not remain posted on your website, and the Companies hereby demand that you promptly remove it from the site and from archives, and that you take all additional steps to have the article removed from computer search engines and deleted by any licensees. In its place, the Companies hereby demand that you place a single-line note explaining that the article was removed because it contained errors. Thus, people who may try to return to the article will know that it was removed for a reason. If you take these actions promptly, my clients will consider the matter closed, but, if not, they reserve all of their options and remedies. If you do not plan to comply, my clients hereby also demand that you preserve all of Mr. Grim’s and The Huffington Post's documents relating to this story, including all electronic documents, e-mails, voicemails, and similar materials.

Sincerely,

Ronald L. Marmer

  Letter on behalf of SEIU's Andy Stern to the Huffington Post demanding the deletion of an article alle...

 

SEIU’s Andy Stern and Pharma Company Faulted in Ebola Drug Shortage

Why hasn't the U.S. developed a more effective drug to combat Ebola?

According to an article by the Huffington Post’s Ryan Grim and Jeffrey Young, a "politically connected drug company" waged "a high-stakes battle for federal funding" several years ago and snatched up government money that otherwise would have gone to developing an “experimental drug now being used by the U.S. government to treat Ebola patients.”

What's the name of this "politically connected drug company"?

You guessed it. SIGA Technologies.

Here's what happened:

In 2010, the federal government awarded a nearly half-billion-dollar contract to SIGA (which was developing a drug “in case terrorists weaponized smallpox, a disease that was considered fully eradicated by the 1970s”) rather than awarding the money to Chimerix, which was developing "a broad-spectrum antiviral” medicine that the U.S. government is now using on an emergency basis during the Ebola outbreak.

The Chimerix drug “was given in the late stages to Thomas Eric Duncan, the Dallas patient who succumbed to Ebola in early October,” according to the Huffington Post.

The HuffPo article discusses the role of Andy Stern, SEIU’s President Emeritus, and his billionaire benefactor, Ron Perelman, in this tale of money, political deals and a lethal viral epidemic.

The bid for the potentially multi-billion dollar government contract was ultimately won by Siga Technologies Inc. in fall 2010. Just before the contract award, The Huffington Post reported that Siga had brought on board Andy Stern, who had recently departed as head of the Service Employees International Union. Having been the lead labor negotiator on the Affordable Care Act, Stern knew his way around the Department of Health and Human Services, which was to award the contract. Stern and Ron Perelman, whose holding company had a potentially controlling ownership stake in Siga, had long been on friendly terms, having become close after negotiating union contracts when Stern was a labor leader.

After the story, Siga threatened to sue HuffPost for reporting Perelman's ownership, which the company said did not amount to a controlling stake. It was a critical distinction, because Siga had bid for the contract as a small business. Chimerix Inc., the rival bidder, challenged the awarding of a $2.8 billion contract, arguing that Siga was not a small business, as the contract required, because it was controlled by MacAndrews & Forbes Holdings, the massive company solely owned by major Democratic donor Perelman.

In November 2010, the Small Business Administration ruled that Siga was in fact controlled by Perelman's company and voided the contract. (Siga did not sue HuffPost and declined to comment for this story; the law firm that wrote the letter threatening the suit is now listed as an unsecured Siga creditor.)…

Instead of reopening the bidding, the Biomedical Advanced Research and Development Authority, or BARDA, asked Siga simply to submit a sole-source bid -- one that no other company could apply for, arguing that Siga was the only company capable of meeting the criteria.

SEIU's Andy Stern

Of course, SEIU’s Stern has a long and storied connection to Perelman.

When Stern was the President of SEIU, he abandoned thousands of low-waged security guards at AlliedBarton after he allegedly cut a backroom deal with their boss, Ron Perelman, according to an earlier article by Ryan Grim in the Huffington Post. (“Andy Stern’s Bizarre Alliance with Private Equity and Biowarfare,” October 7, 2010)

Then, just weeks after resigning as president of SEIU, Stern was placed on SIGA’s Board of Directors where he apparently was enlisted to use his SEIU rolodex and Washington, DC political connections to "dial for dollars" on behalf of SIGA. 

SIGA’s CEO said the following about Stern in a press release:

Andy is a strong leader and a great addition to our Board of Directors. His insight, experience, and leadership, particularly his understanding of how our federal government works, will complement the skill sets of our existing board members.

SIGA then rewarded Stern with tens of thousands of shares of stock and hundreds of thousands of dollars of cash. SIGA reportedly mounted a full-court press for the half-billion-dollar federal contract, which later prompted investigations into illegal bid rigging by U.S. Senator Claire McCaskill (D-Mo.).

And those aren't the only questionable connections between Stern and his sugar daddy, Perelman. 

SIGA’s majority owner also created and funded a custom-made job for Stern – the Ronald O. Perelman Senior Fellow at Colombia University's Business School in NYC where Stern pulls down a handsome paycheck.

Last month, SIGA filed for bankruptcy after a Delaware court ordered it to pay damages of $232 million for ripping off another company.

Check out the HuffPo story here. 

SEIU-UHW’s “Gag Clause” Turns Heads at Football Stadium

Dave Regan’s cozy relationship with the hospital industry is turning heads -- this time inside a football stadium.

In a recent article ("Dignity Health Spends Big at Levi's Stadium," September 14, 2014), the San Francisco Chronicle describes the public outrage after Dignity Health shelled out $2.5 million for a luxury skybox at the San Francisco 49ers’ new football stadium. 

Inside the air-conditioned suite, Dignity’s overpaid execs are gorging themselves on trays of food and bottles of liquor as athletes battle it out on the gridiron below.

Consumer Watchdog, a leading consumer rights organization, told the Chronicle it’s “scandalous” that Dignity Health -- a nonprofit hospital corporation -- is "wasting millions of dollars on luxury skyboxes rather than putting those charitable dollars towards patient care..."

Damn right!

Dignity’s skybox scandal appeared to offer a perfect opportunity for SEIU-UHW to attack Dignity's pinstriped priorities. To use a baseball metaphor, Dignity had served up a proverbial "softball" that SEIU-UHW could hit out of the park. After all, Dignity recently demanded -- and Dave Regan accepted -- a wage freeze for all of SEIU-UHW’s 14,000 members at Dignity.

Why, then, has SEIU-UHW been quiet as a church mouse about Dignity's skybox scandal?

Sources say it’s typical of Regan, who has implanted himself firmly in the Boss's pocket instead of at the side of workers. During recent contract negotiations, Regan helped Dignity eliminate workers’ defined-benefit pension and impose a wage freeze on 14,000 SEIU-UHW members.

Sources also point to a second interesting explanation for SEIU-UHW’s deafening silence:  the gag clause in Regan's new “partnership” deal with the California Hospital Association, signed in May of 2014.

In an internal SEIU conference call leaked to Tasty, Regan said the gag clause bans SEIU-UHW from expressing any criticism or doing any "negative campaigning" against hospital corporations. Here's what Regan said:

The Code of Conduct requires that in all of our interactions -- whether they're in the public realm, in the realm of advocacy, in the realm of media relations or press relations or political work as well as in the realm of non-union workers deciding whether or not to join our union -- we will eliminate and prohibit all negative campaigning.

To reinforce the deal, Regan brought a top Dignity exec -- Wade Rose -- to speak about the terms of the "partnership" agreement at one of SEIU-UHW’s recent Executive Board meetings.

Hmmm… So how, exactly, are Dignity's workers supposed to get any kind of justice from their

Skybox at the 49ers new stadium

multibillion-dollar employer if they can't utter a single criticism about sky-high executive salaries, wasteful spending, off-the-hook profits, and short-staffing?

Good question! It's like fighting a 300-lb. bully with both hands tied behind your back.

And that's the bottom line. Regan has fixed the fight in the Boss's favor. Which helps explain why Dignity workers' wages and benefits are suffering while their company's profits are booming. 

Several weeks ago, Dignity reported $913 million in profits for the year ended June of 2014… with one economist criticizing nonprofit Dignity's sky-high profit margin of 8.3%. (Sacramento Business Journal, "Dignity Health Sees Healthy Growth in Profit Margin," September 25, 2014).

So... for all you 49er fans out there -- keep your eyes out for SEIU’s Dave Regan. Tasty bets dollars to doughnuts he’ll soon be partying with Dignity's execs inside their $2.5 million skybox!

Dave Regan's Secret Deal Brings More Cuts to SEIU Workers in Ohio

What's in store for workers under Dave Regan's secret partnership deal with the California Hospital Association?

Well, workers in California might wanna chat with their Ohio counterparts who’ve been reaping the bitter fruits of Regan's earlier sellout "partnership" with Catholic Health Partners (CHP), a $6 billion hospital chain in Ohio.

In 2008, Regan inked an infamous back-room deal with CHP’s execs. At the time, Regan was president of SEIU 1199 Ohio. 

Under the deal, the company’s execs -- not the workers -- asked the NLRB to hold unionization elections for 8,000 workers. And get this: the Boss asked for only one union to be on the ballot: SEIU!

The backroom deal -- negotiated by SEIU’s Dave Regan, Scott Courtney and Mary Kay Henry -- ultimately led to SEIU's violent attack on a Labor Notes conference in 2008 that sent some conference-goers to the emergency room and left David Smith, an SEIU homecare worker, dead of a heart attack.

So why was CHP willing to ink a secret unionization deal with SEIU? Here's a clue.

In the first contract, SEIU negotiated ZERO improvements to workers’ wages, benefits and working conditions. A company official described it this way:

There are no separate standards giving Union employees more money or rights and privileges than non-union employees have in the workplace.

Then, in 2012, SEIU let the company eliminate workers’ seniority rights and their defined-benefit pension plan.

Fast-forward to 2014. 

Last week, The Morning Journal (Lorain, Ohio) reported that CHP is now demanding even more cuts from SEIU’s members at Mercy Regional Medical Center in Lorain, OH, including:

• the elimination of step increases in the wage scale.
• the elimination of paid sick time.
• the elimination of overtime pay.
• cuts to workers' health insurance that would force them to pay $5,000 more in out-of-pocket expenses per year.

Damn.

So… is CHP going bankrupt? Hardly! Profits are up over last year -- $113 million in profits during the first six months of 2014, according to the financial statements on CHP’s website.

The moral of the story? 

You can trust Regan and his Purple Palace pals as far as you can throw them. They're happy to toss workers under the bus to keep their business buddies happy and the union dues flowing.

SEIU's Six-Figure Purple Parachute for Anna Burger

As SEIU’s Andy Stern anxiously awaits a response from his billionaire benefactor, Stern’s partner Anna Burger has enjoyed a soft landing courtesy of a six-figure purple parachute.

According to federal records, SEIU paid Burger a total of $551,145 in consulting fees during the two years following her resignation from SEIU after she lost an election to succeed Andy Stern.

More than $100,000 of this total was funneled to Burger through a for-profit corporation that she set up at her home -- a company that appears to have been designed specifically for that purpose (see below).

Here's what happened:

In April of 2010, Stern announced his resignation from SEIU, thereby sparking a power struggle between Burger and Mary Kay Henry to succeed him. The following month, Henry won a vote of SEIU’s International Executive Board and took over Stern's corner office at the Purple Palace.

In August of 2010, Burger -- who had continued to serve as SEIU’s Secretary-Treasurer --announced her resignation from SEIU.

 

Stern and Burger

Days later, the purple gravy train began to flow -- not directly to Burger, but instead to a company called “AB Action Now LLC,” which Burger registered at her home soon after her resignation, according to incorporation documents from the District of Columbia. 

Federal records show that SEIU delivered monthly checks of $24,162 to Burger for nearly two years, which basically allowed her to duplicate the quarter-million-dollar annual salary that she received before resigning her job as SEIU’s second-highest officer.

The first $116,569 of SEIU's payouts came through "AB Action Now LLC."  Later, SEIU made “consulting” payments directly in Burger’s name and also sent them to Burger's home.

The payments raise interesting questions.

After the hotly contested 2010 election, Mary Kay Henry marginalized and fired a number of Burger's supporters in a post-election purge, including one of SEIU’s Executive Vice Presidents, Mitch Ackerman.

So why did Henry pay more than a half million dollars to her main rival for SEIU's top spot?

One possibility: the payouts were a kind of “hush money” to keep Burger from challenging Mary Kay Henry in SEIU’s 2012 officer elections. In fact, Burger’s monthly $24,162 checks arrived like clockwork in her mailbox until 2012. However, in June of 2012 -- when SEIU’s internal elections had been completed and Henry had been elected to a full four-year term of office -- Burger’s checks suddenly stopped, according to federal records.

And, like so many episodes inside the Purple Palace, the payments raise obvious questions about SEIU’s top officials... who appear to be far more comfortable hanging out with billionaires and funneling wads of cash to dummy for-profit companies than actually fighting corporations. 

Incorporation Record for AB Action Now LLC

Excerpt from SEIU's DOL Form LM-2 for 2010

Excerpt from SEIU's DOL Form LM-2 for 2011

Does Bankruptcy Signal End of Billionaire's “Bromance” with SEIU's Andy Stern?

Ron Perelman

There's an interesting wrinkle to the Andy Stern/SIGA Technologies bankruptcy.

According to the Wall Street Journal, SIGA filed for bankruptcy because it "doesn't have the money to post the necessary bond for the full amount of the damages, plus interest” …which total $232 million or more.

However, Stern’s billionaire patron -- Ron Perelman -- owns 24% of SIGA and could bail out the company with a single swipe of his ATM card. After all, Perelman is one of the world's richest people and is worth $14.4 billion!

So what's going on?

Tasty realizes that Andy is merely an errand boy for Perelman. But hey, $232 million is just pocket change for cigar-chomping Perelman.

Here's what Bloomberg reports about this made-for-TV drama about the latest chapter of their "bromance:"

The bankruptcy filing also signals that billionaire Ronald Perelman, whose MacAndrews Forbes owns about 24 percent of Siga, won’t bail the company out, Selvaraju said today. “He could have written a check for the bond himself,” the analyst said. Christine Taylor, Perelman’s spokeswoman, declined to comment on whether he considered covering Siga’s bond liability.

Hmmm. Doesn't look good for Andy...

So... has SEIU’s Andy Stern begun delivering dramatic, personal pleas to

SEIU's Andy Stern

Perelman for financial assistance? "Pretty PuhLEASE!!!"

Or is Andy hunkered down in his apartment nervously preparing a series of text messages to Ron design to carefully kiss his ass in preparation for the big ask: “Yo Ron, did I tell u that u r like totally the bomb!”

Has Andy begun performing unsolicited favors like, uh, mowing Ron's lawn, washing his car, “liking” all of Ron’s Facebook posts even if they're totally stupid?

Or more likely... has Andy begun lobbying SEIU’s Mary Kay Henry to sign more back-room with Perelman and his vast array of companies?