Tuesday, November 22, 2016

Judge: SEIU-UHW's Dave Regan Must Submit to Binding Arbitration over Missing $34 Million

SEIU-UHW’s Dave Regan has lost another court battle against the California Hospital Association (CHA).  

Last Friday, a judge ordered SEIU-UHW to submit to binding arbitration over $34 million that Regan squirreled away inside a secret “partnership” organization. A copy of the judge’s order, issued November 18, 2016, is pasted below. In September, Tasty described the CHA’s lawsuit to recover the millions that Regan is sitting on.

Where does the money come from?

In 2014, Regan and CHA’s Duane Dauner signed their secret partnership deal and also agreed to create a secret new organization to carry out joint projects. 

How was the organization funded? 

Regan and Dauner diverted a combined $50 million from their respective organizations’ treasuries and steered the massive haul of cash into the secret group, named “Caring for Californians.”

In late 2015, Regan’s partnership with the CHA collapsed. Under the terms of the secret deal (detailed in the so-called “Code of Conduct”), the remaining unspent portion of the $50 million was supposed to be returned to SEIU-UHW and CHA. That was supposed to happen on January 1, 2016.

However, Regan -- in an apparent fit of vindictiveness -- refused to return the money to either organization. Instead, he has allowed the money (including SEIU-UHW’s portion, totaling $6.9 million) to be frittered away on no-show jobs, unused offices in Sacramento, an expensive Executive Director, etc. 

So, CHA sued to get its money back.

On Friday, November 18, a judge issued a five-page ruling (see below) siding with CHA and ordering SEIU-UHW and Regan to submit to binding arbitration over the $34 million. Here’s an excerpt from the judge’s decision. The term “CFC” refers to “Caring for Californians,” the secret partnership organization holding the $34 million.
In December 2015, the [Code of Conduct] Agreement terminated pursuant to its terms, and CFC has had no ongoing work. The CFC continues to spend approximately $40,000 per month on operating expenses. CHA has requested that UHW agree to redistribute the unencumbered CFC funds, but UHW has refused. As of September 2016, CFC has approximately $34 million in its accounts that is not currently encumbered, thus $27.2 million would be returned to CHA and $6.87 million would be returned to UHW.
CHA's arbitration complaint alleges that UHW breached the Agreement by refusing to agree to the return of the unencumbered funds. CHA's complaint apparently seeks an "order compelling UHW to agree to the redistribution of funds, or, in lieu of UHW's agreement, an order directing the redistribution of the funds."
…the petition to compel arbitration is GRANTED.

If Regan loses the arbitration, SEIU-UHW will be forced to return the money and pay expensive legal fees to CHA.

This latest lawsuit offers yet another window onto Regan's collusive, backroom deals with employers that represent Dollar Dave's primary mode of operation. The lawsuit once again raises questions like these: 
  • Why is SEIU-UHW, one of California's largest healthcare workers' unions, pooling $50 million with the hospital industry's Chamber of Commerce? 
  • Why is one of SEIU's main leaders signing secret deals that are hidden from SEIU's own members?
  • What other deals has SEIU-UHW signed with employers that have not yet been revealed?

Stay tuned