SEIU’s Dave Regan Loses Another Court Battle to California Hospital Association

SEIU-UHW’s Dave Regan lost yet another legal battle to the California Hospital Association (CHA) over his secretive, sweetheart deal with hospital CEOs.

On January 13, 2017, a Sacramento County (Calif.) Superior Court judge effectively tossed out Regan’s personal lawsuit against CHA’s CEO, Duane Dauner, and three other CHA officials. Instead, the judge ordered Regan’s allegations to be sent to binding arbitration, as required by Regan’s secret 2014 “partnership” deal with the CHA.

A copy of the judge’s decision is below.

Regan’s suit, initially filed on November 24, 2015, alleges that four top leaders of the CHA violated their “fiduciary duties,” committed “dishonest acts and gross abuses of authority and discretion,” and carried out “unlawful conduct” by “undermining” Regan’s scheme to secure billions more dollars of Medicaid funding for California’s hospital corporations.

Why was Regan trying to put more taxpayer money in hospital corporations’ pockets?

It was one of the requirements of his secret deal with the CHA. Specifically, hospital CEOs required Regan to deliver $6 billion a year in additional revenues to California hospital corporations as the price for “buying” special treatment from CEOs during SEIU unionization campaigns.

And that’s not the only concession Regan gave to hospital CEOs.

 

Dave Regan and Duane Dauner

He also agreed to force any newly organized workers into cheap, pre-negotiated SEIU-UHW labor contracts that included a ban on strikes and a far-reaching gag clause barring SEIU-UHW from criticizing hospital companies and their gold-plated executives.

Regan’s lawsuit is yet another piece of the paper trail documenting “Wall Street” Dave’s backroom deals with hospital CEOs.

The suit also offers a window into the internal battles raging between SEIU’s officials. For example, Regan’s lawsuit says Dauner met “secretly” with officials from SEIU to “undermine” Regan’s Medicaid funding scheme.

Which SEIU officials?

LaPhonza Butler (President of SEIU Local 2015) and Jon Youngdahl (former Executive Director of SEIU California State Council), says Regan.

According to Regan’s suit, SEIU officials undercut him by telling Dauner that “UHW and its president, Plaintiff Regan, would soon lose half its membership and that Defendant Dauner needed to deal with Butler and the SEIU State Council – not Regan and UHW – if he wanted to accomplish any legislative and policy goals that were important to CHA’s members.”

Jon Youngdahl

Last spring, Tasty published a leaked 30-page document containing the questions that SEIU-UHW attorneys posed to Dauner during a closed-door legal proceeding, including grilling him about Dauner’s meetings with SEIU’s LaPhonza Butler and Jon Youngdahl.

Elsewhere in the suit, Regan alleges that Dauner “sabotaged” him and “hid” his activities from Regan and others.

Regan’s suit seeks Dauner’s removal from the board of directors of “Caring for Californians,” a partnership organization jointly established by CHA and SEIU-UHW following their 2014 deal. The organization was funded with $50 million that Regan and Dauner diverted from their organizations’ coffers.

Regan and Dauner are the Co-Chairs of “Caring for Californians.” The remaining seats on its Board of Directors are split evenly between CHA and SEIU-UHW. That’s why Regan also sued Greg Adams (Group President at Kaiser Permanente), Mark Laret (CEO of UCSF Medical Center), and James Holmes (CEO of Redlands Community Hospital). They’re CHA’s appointees to the “Caring for Californians” board, and Regan alleges they, too, committed “unlawful conduct” and violations of their fiduciary duties.

So who did Regan appoint to fill SEIU-UHW’s seats on the board?

Three SEIU-UHW staffers: Dave Kieffer, Cass Gualvez, and Arianna Jimenez.

With last month’s ruling in Sacramento Superior Court, Regan has maintained a perfect winless record in the multiple lawsuits that followed the collapse of his secret deal with the CHA.

In June of 2016, for example, a Superior Court judge ordered SEIU-UHW to withdraw a statewide initiative from the California ballot or face millions of dollars in penalties. In November 2016, the court ordered SEIU-UHW to submit to binding arbitration over Regan’s refusal to return $34 million to CHA and SEIU-UHW.

 

LaPhonza Butler

What’s next for Dave?

Regan, who is rumored to be stepping down from his position as SEIU-UHW’s president, apparently will be wrapped up in lawsuits for the foreseeable future.  

At least one question remains unclear. 

Who will fund Regan’s lawsuits after he steps down? In the suit discussed in this post, Regan sued as an individual, not as SEIU-UHW. Should SEIU-UHW’s members continue to pay tens of thousands of dollars to litigate Regan’s personal lawsuit? 

  Judge Orders Arbitration in Lawsuit by Dave Regan (SEIU-UHW) vs. California Hospital Association: 01-13-201... by tastysternburger on Scribd

Back in Court: California Hospital Association Sues SEIU-UHW for Millions Locked up in Covert Partnership Organization

The California Hospital Association (CHA) has taken SEIU-UHW to court… again.

This time, CHA is trying to recover tens of millions of dollars that SEIU-UHW has locked away inside a secret “partnership” organization, according to records obtained from Sacramento County Superior Court. (Below is a full copy.)

On October 14, CHA’s and SEIU-UHW’s attorneys will face off in a Sacramento courthouse.

Here’s what’s happening.

When SEIU-UHW’s Dave Regan and CHA’s Duane Dauner signed their secret partnership deal in 2014, they also agreed to set up and finance a secret new organization to carry out their joint projects.

The new organization’s first priority was to help SEIU-UHW convince politicians to steer $6 billion a year in new Medicaid funds to California’s giant hospital corporations.

 

Dave Regan and Duane Dauner

If SEIU-UHW had succeeded in this task (they didn’t), then the hospital CEOs would have allowed SEIU-UHW to unionize 30,000 of their employees… but only as long as the workers were banned from striking, forced into cheap labor contracts, and silenced by a massive gag clause.

The covert partnership organization -- ironically named “Caring for Californians” by its founders -- was funded with $50 million that Regan and Dauner diverted from their treasuries in 2014.

With millions in its bank count, “Caring for Californians” leased office space in Sacramento, hired Peter Ragone as its Executive Director, hired attorneys and staff, etc. The organization was soon spending $40,000 a month in operating expenses, according to court filings by the CHA.

For a time, things were going swimmingly for Wall Street Dave. Fantasies of his class-collaborationist partnership danced through his head as he performed late-night lap dances for some of California’s wealthiest corporate CEOs.

Peter Ragone, CFC's Executive Director

By November of 2015, however, Dave’s partnership had exploded in a fiery display that lit up California’s skies. The partnership was dead!  

At the time of the partnership’s demise, “Caring for Californians” still had $34 million in unspent cash sitting in its bank account.

And that’s what the latest lawsuit is all about. The $34 million.

Under the terms of Regan and Dauner’s secret partnership deal, the $34 was supposed to be returned to CHA and SEIU-UHW on January 1, 2016. However, Regan -- in an apparent fit of vindictiveness against his former pin-striped pals -- is refusing to return the money to either organization.

According to CHA’s lawsuit, Regan has vetoed any return of the money to both CHA and SEIU-UHW.

How?

“Caring for Californians” is run by an eight-person Board of Directors, with equal numbers of seats filled by CHA and SEIU-UHW. Regan and Dauner are co-chairs of the board. Since January of 2016, says CHA, Regan has used his four votes (one of them is SEIU-UHW staffer Arianna Jimenez) to block every proposal to return the $34 million.

So what’s happening to the money?

It’s simply swirling down the drain, says CHA. 

Here’s an excerpt from a recent CHA legal filing, which refers to “Caring for Californians” by its initials “CFC.” The term "Code of Conduct" refers to the secret partnership deal signed in 2014.

“On December 31, 2015, the Code of Conduct terminated pursuant to its terms. Since that time, CFC has had no ongoing work, and neither CHA, UHW, nor any CFC Director has made any efforts to initiate new endeavors. Nonetheless, CFC has continued to spend approximately $40,000 each month on operating expenses for resources and services it has not been using. These are not only unnecessary expenditures, but they also decrease the amount available for redistribution to both CHA and UHW as provided by the Code of Conduct.” (p. 3)

Interesting, right?

 

SEIU-UHW's Arianna Jimenez

Regan is so vindictive he’s willing to piss millions of dollars of SEIU-UHW members’ money down the drain to get back at CHA.

How much money do SEIU-UHW members stand to lose? According to the CHA:

“As of September 1, 2016, the CFC has approximately $34 million in its accounts that is not currently encumbered. Pursuant to the terms of the Code of Conduct, approximately $27.2 million would be returned to CHA and approximately $6.8 million would be returned to UHW.” (p. 4)

What’s CHA asking the judge to do?

CHA’s lawsuit asks the judge to force SEIU-UHW into binding arbitration so it can recover its $27.2 million. Plus, it wants SEIU-UHW to pay all of CHA’s attorneys fees.

If history is a judge, it looks like SEIU-UHW’s members will be footing the bill for yet another idiotic blunder by Regan.

Here’s a copy of CHA’s suit filed on September 6, 2016:

  California Hospital Association's lawsuit versus SEIU-UHW over $34 Million Locked in Secret Partnershi...

Leaked Document Offers Glimpse into California Hospital Association’s Arbitration Hearing against SEIU-UHW’s Dave Regan

A source has offered an interesting glimpse into last week’s three-day, closed-door arbitration hearing against SEIU-UHW. The hearing was triggered by a California Hospital Association lawsuit alleging SEIU-UHW violated a secret partnership deal.

For six months, Dave Regan has refused to appear before an arbitrator.

Recently, however, a Sacramento Superior Court judge and an appeals court both ordered Regan to stand before an arbitrator to face charges he violated the terms of his secret partnership deal with the California Hospital Association (CHA), including the deal’s far-reaching gag clause.

So… what happened at last week’s arbitration hearing?

A source has provided a 30-page document with the questions that SEIU-UHW’s attorneys posed during their cross-examination of CHA CEO Duane Dauner, who also testified at the hearing.  

The document, entitled “Dauner Cross-Examination Outline,” offers insights into the clandestine maneuvers by Regan’s rivals at SEIU, along with the shifting loyalties of his former best buddy, CEO Duane Dauner.

Under the partnership deal -- memorialized in a written contract called the “Code of Conduct” -- SEIU-UHW and the CHA set up a labor-management committee (LMC) that they named “Caring for Californians” (CFC). The LMC, which was jointly controlled by the two partnering organizations, planned to introduce a statewide ballot initiative to raise billions of Medicaid revenues to deposit into the coffers of California hospitals.

Then, in the summer of 2015, Dauner reportedly began clandestine discussions with Regan’s rivals and decided to dump Regan and instead form a partnership with SEIU California State Council, the California Teachers Association, and the California Medical Association.

CHA's Duane Dauner

The CHA joined these organizations -- known as the “ABC Coalition” -- to file an alternative ballot initiative that submarined Regan’s scheme to corral $6 billion in taxpayer funding for hospitals. 

(For discussion of the organizations’ motives in undermining Regan’s initiative, see this post.)

Regan’s simmering anger at Dauner and Regan's Purple Palace rivals is abundantly evident in the questions that SEIU-UHW attorneys fired at Dauner as he sat on the witness stand last week.

SEIU-UHW’s attorneys repeatedly sought to uncover details about Dauner’s contacts and conversations with Laphonza Butler (President of the SEIU California State Council and a close ally of SEIU President Mary Kay Henry), John Youngdahl (Executive Director of the SEIU California State Council), the California Teachers Association, and others. Here are excerpts from the document below:

Who are the members of the ABC Coalition?

Who is your contact person for each organization?

Who is your primary contact at the ABC Coalition?

Who is John Youngdahl? (SEIU State Council Executive Director)?

When did you first meet with John Youngdahl regarding the ABC Coalition?

How many times did you meet in person regarding the ABC Coalition?

Where did you meet?

Who else was present?

What was discussed?

Isn’t it true that the subject of the discussions was how to construct an alternative

SEIU's Mary Kay Henry and Laphonza Butler

initiative?

Isn’t it true that as part of the agreement outlined above the California Hospital Association made a $25 million commitment to the ABC Coalition?

And when David Regan asked you for a copy of the Agreement – you refused to give it to him, didn’t you?

And on December 3, you told David Regan that you would be supporting the ABC Coalition initiative – didn’t you?

How many e-mails did you exchange regarding the ABC Coalition?

Who else was on the e-mail chain?

What was discussed?

How many times did you speak on the phone regarding the ABC Coalition?

Contacts with Laphonza Butler, President of SEIU United Long-Term Workers

Contacts with Dustin Corcoran, CEO of California Medical Association

Contacts with California Teachers Association

When did your contacts with ABC Coalition or members begin?

Who initiated the contact?

For what purpose?

Frequency – regular, scheduled discussions versus occasional, as needed

What form where the communications: written or oral?

Duration of contacts – ended or ongoing

…SEIU-UHW’s questioning of Dauner continued:

When did you know ABC Coalition would put a competing initiative on the ballot?

SEIU's John Youngdahl

ABC Coalition asked you to stall or prevent CFC’s initiative, didn’t they?

What promises did you give to ABC Coalition?

What was your deal with ABC?

Did deal involve other CHA members of CFC’s Board?

Who?

What are the specifics of discussion with John Youngdahl?

What with the specifics of discussions with Laphonza Butler?

The 30-page document also confirms the money-for-members transaction that Regan inked with hospital CEOs, including the exchange of 30,000 non-union members for billions in new Medicaid revenues.

And it confirms that Regan and other SEIU-UHW officials (including Arianna Jimenez) attended secret meetings with hospital execs at luxury hotels in California, including the Fairmont Grand Del Mar in San Diego... where the cheapest room costs $545 a night. (pp. 6-7)

Here’s the document:

  SEIU-UHW's Cross-Examination of Duane Dauner, California Hospital Association 05-06-16 by tastysternburger

SEIU-UHW's Dave Regan Takes His Ballot Initiative Bamboozle to Arizona

Dave Regan has begun circulating a copycat ballot initiative in Arizona as part of his latest attempt to pressure the California Hospital Association (CHA) into signing another secret sweetheart deal with SEIU-UHW.

According to internal SEIU-UHW documents, Regan hopes the threat of an Arizona ballot initiative will leverage several large multi-state hospital corporations to convince CHA’s Duane Dauner into inking another deal with Regan in California.

Regan's Arizona initiative -- called the "Hospital Executive Compensation Act" -- would cap hospital executives' pay at $450,000 per year. It’s identical to the initiatives that Regan filed -- and has twice withdrawn -- in California.

According to records from the Arizona Secretary of State (see below), SEIU-UHW staffers Arianna Jimenez and Cass Gualvez filed the initiative on February 12. By July 7, SEIU-UHW must collect more than 150,000 valid signatures in order to qualify the measure for the state's November 2016 ballot.

An internal SEIU-UHW document discusses Regan’s filing of a California measure (the "Hospital Executive Compensation Act of 2016"), for which SEIU-UHW is now circulating petitions among voters.

The document goes on to state that SEIU-UHW filed "a similar Executive Compensation initiative…in Arizona where several of our employers such as Dignity [Healthcare], Tenet [Healthcare] and CHS [Community Health Systems] are big players in the market." (See full document below.)

Apparently, Regan hopes that CEOs from the three companies will be willing to do some horse-trading in order to get SEIU-UHW to drop its ballot initiative.

In California, legislators enacted a law that criminalizes using ballot initiatives to extort "any thing of value… for the purpose of withdrawing an initiative petition." (Senate Bill 1253, authored by former Sen. Darrell Steinberg). The law was enacted after two rounds of Regan's ballot initiative bamboozle.

For four years, now, Regan’s ballot initiative strategy has been an utter (and massively expensive) failure in California. Regan has poured more than $25 million of SEIU-UHW members' dues into the initiatives. Nonetheless, Regan's "partnership" dreams have exploded in flames as California hospital executives abandoned and then sued SEIU-UHW in response to Regan's violation of an embarrassing "gag clause" penned by Regan.

Today, Regan is even the subject of a criminal investigation after allegedly breaking the arm of a CHA process server. The criminal probe is reportedly in the hands of the Contra Costa County District Attorney.

What's next?

SEIU-UHW's members should get ready to see millions more of their dues dollars disappear down the purple toilet.

 

Regan selling snake oil to the California public

And Arizonans should be prepared to see Regan deliver his best impersonation of a traveling snake oil salesman. As he did in California, Regan will shower the public with lies about how SEIU-UHW will use the ballot initiative to fight the Good Fight for the Little Man against fatcat CEOs.

But make no mistake, Arizonans. Wall Street Dave has twice "played" Californians like so many pawns on a board game. After promising populist-sounding reforms, Regan will sell you out at the drop of a hat so he can seal his own deal with hospital CEOs. 

In fact, in California, Regan not only dumped SEIU-UHW's ballot initiative in exchange for a secret deal with CEOs, he also signed a gag clause that blocked SEIU-UHW, its members, and allies from even uttering a peep about CEOs’ multi-million-dollar paychecks for a multi-year period. So much for the public interest!

This, my friends, apparently is Regan's "innovative" strategy for "rebuilding" the labor movement… by, umm, destroying the public's trust in unions that should be fighting against the billionaire class rather than secretly colluding with them.

  SEIU-UHW's Arizona Ballot Initiative: "Hospital Executive Compensation Act of 2016"

  SEIU-UHW Internal Document on Ballot Initiatives: 2016

SEIU-UHW's Dave Regan and California Hospital CEOs Borrow a Page from Ronald Reagan's Playbook

Reagan's "Peacekeeper"

Here's more news about SEIU-UHW's secret deal with the California Hospital Association (CHA).

According to a complaint that NUHW recently filed with California Attorney General Kamala Harris, SEIU-UHW and hospital CEOs recently set up a corporate entity to implement the terms of their secret partnership deal. The new corporation is responsible for enforcing the gag clauses that reportedly block workers from reporting patient-care violations to local, state, and federal agencies.

The corporation is governed by a board of directors that includes Regan and hospital CEOs.

What to call the newly formed company responsible for gagging tens of thousands of hospital workers?

Well, Regan and his pin-striped industry pals decided to borrow a page from Ronald Reagan’s playbook by naming their new corporation "Caring for Californians." 

In the 1980s, Reagan famously named a newly developed U.S. intercontinental ballistic missile, which carries up to ten 300-kiloton nuclear warheads, "The Peacekeeper."

Here's a letter printed on "Caring for Californians" letterhead. The company's office is located in the same building as the California Hospital Association. Both Reagan and the CHA's CEO Duane Dauner signed the letter as the "Co-Chairs" of "Caring for Californians." 

The letter also notes that Greg Adams (the President of Kaiser Permanente’s Northern California Region) is the "Treasurer" of "Caring for Californians." More records are below.

  Caring for Californians, "Letter of Authorization," May 1, 2015

Arianna Jimenez

Here are two filings that "Caring for Californians" made with the California Secretary of State, including its "Articles of Incorporation." 

The documents again name Duane Dauner and Kaiser's Greg Adams as key officers of the new company. 

One of the records also names SEIU-UHW's Arianna Jimenez as the "Secretary" of the company. Jimenez is UHW’s "Statewide Political Director" and a member of the union's "Executive Committee."

  Caring for Californians: "Articles of Incorporation" and "Statement of Information" fro...