SEIU-UHW's Dave Regan channels Donald Trump after slashing workers' benefits and pay

In his latest "groundbreaking" move, SEIU-UHW’s Dave Regan has borrowed a page from Republican Donald Trump’s playbook -- namely, lying through his frickin’ teeth.

Last month, Regan forced giant benefit cuts and a multi-year wage freeze down the throats of 2,000 SEIU-UHW members at four California hospitals run by the Daughters of Charity Healthcare System.

Altogether, Regan accepted more than a dozen benefit cuts -- including stripping hundreds of workers of their health insurance, vacation, holidays, sick pay, retirement, etc. -- which workers exposed by leaking copies of Regan’s agreement to Tasty.

After SEIU-UHW conducted ramrod ratification votes to implement the cuts, workers filed complaints with federal authorities alleging that SEIU-UHW officials withheld vital information from its members, blocked workers from attending negotiations, and committed irregularities during the vote count.

Which is why workers were a bit, umm, shocked to read SEIU-UHW's Dec. 14 press release describing its sell-out contract as "innovative" and "groundbreaking." Here's an excerpt from the press release, which is posted on SEIU-UHW's website (full copy is below):

As BlueMountain accepts the groundbreaking deal, it also assumes an innovative new contract that was recently ratified between 1,900 SEIU-UHW healthcare workers and the Daughters of Charity Health System. The three-year agreement protects benefits and… (emphasis added)

Of course, this is just the latest example of SEIU-UHW lying to its members.

Workers were also a tad surprised to see SEIU-UHW "welcoming" BlueMountain Capital as their hospitals' new owner. 

Headquartered on New York’s Park Avenue, BlueMountain is a $22 billion venture capital firm that makes enormous profits by buying and flipping companies after loading them with debt and exorbitant management fees.

 

Andrew Feldstein, CEO of BlueMountain Capital

Over the weekend, the New York Times described BlueMountain’s role in a scandal brewing in Puerto Rico. It turns out that BlueMountain and other hedge funds are working to keep Puerto Rico mired in debt so they can reap billions of dollars in profits for their wealthy investors. (See "Inside the Billion-Dollar Battle for Puerto Rico’s Future," New York Times, December 19, 2015)

Given SEIU's love of billionaires and venture capital titans, perhaps we’ll soon see "Wall Street Dave" and "The Donald" on the campaign trail together.

SEIU-UHW’s Dave Regan and Blue Wolf Capital Are Hit with Extortion Lawsuit

Dave Regan -- fresh off his failure to get the Daughters of Charity Health System to sell its six California hospitals to Blue Wolf Capital Partners -- now faces a multi-million-dollar lawsuit alleging a lengthy list of violations including extortion, civil conspiracy, and aiding and abetting.

And in case they were feeling left out of the party, both SEIU International in D.C. and Blue Wolf Capital (a private equity firm in New York) also are named as defendants in the civil suit filed by Daughters of Charity Health System (DCHS) in Santa Clara (CA) Superior Court on February 23rd.

Here's a quick summary of the 21-page suit, which seeks tens of millions of dollars in damages and attorneys fees. A full copy of the suit is below.

The lawsuit begins this way:

This is a case about a labor union and a private equity firm conspiring to hold hostage the proposed sale of Daughters of Charity Health System ("DCHS”) for illegal and extortive purposes. By using extortionist threats and bid chilling tactics to frustrate the sale as leverage for other commercial gains they seek, the Defendants have cost DCHS at a minimum tens of millions of dollars in continuing operational losses and professional fees. DCHS continues to face the possibility that the sale will not close, with potentially catastrophic consequences for DCHS's six California hospitals, thousands of employees and retirees of those hospitals, and the patients and communities whom the hospitals serve.

So what prize was Regan trying to extract through his "extortionist threats?"

Regan's goal was to extract a neutrality agreement from Prime Healthcare that would allow SEIU-UHW to unionize thousands of Prime's workers across California, according to the lawsuit.

SEIU-UHW's Dave Regan

In order to pressure Prime to sign on the dotted line, Regan threatened to block Prime’s purchase of the six Daughters of Charity hospitals.

How?

On July 24, 2014, Regan met with Prime's CEO and told him that "Prime would never get approval from the California Attorney General unless Prime agreed to a ‘neutrality agreement’ for Prime's other hospitals in California,” according to the suit. Apparently, Regan told Prime that he has enormous influence over the Attorney General and could block the sale... that is, unless Prime gave him what he wanted.

This, my friends, is extortion -- a criminal act.

When Prime refused to cave in to Regan's threats, Regan asked Blue Wolf to compete head-to-head against Prime in the bidding war for the hospitals… even though "Blue Wolf has no experience managing, owning, or operating healthcare facilities,” says the suit. Regan told Blue Wolf that he would block all of the competing bids, thereby assuring Blue Wolf’s success in the bidding process.

According to the lawsuit, Regan approached other bidders -- such as Alecto Healthcare Services and Strategic Global Management -- and told them "to withdraw from the sale process, stating that the SEIU Defendants had selected Blue Wolf and therefore Blue Wolf was the only viable bidder." Both companies dropped out of the bidding process, according to the suit.

 

Blue Wolf's Adam Blumenthal

Based on Regan's promise to block all competing bids, Blue Wolf deliberately submitted a “low-ball bid” and made "unusual demands" on DCHS, says the suit. For example, the private equity fatcats demanded that DCHS negotiate only with Blue Wolf and stop negotiating with all of the other bidders. Blue Wolf also insisted that the nuns -- that is, the Daughters of Charity religious order -- use its funds to help finance Blue Wolf's purchase of the hospital chain.

According to the lawsuit, "Both conditions were unacceptable to DCHS and had not been requested by the other, qualified bidders that had already showed interest."

According to the suit, Blue Wolf submitted a cheap bid that would have loaded mountains of debt onto DCHS and allowed Blue Wolf to suck profits from the hospitals through "a lucrative management agreement with a 10-year purchase option."

Blue Wolf's bid amounted to "a classic ‘heads I win, tails you lose’ scenario” where Blue Wolf would enjoy all of the upside profits but none of the downside risk, which would instead be borne entirely by workers, patients and creditors, says the suit.

The suit says Regan also sold out SEIU-UHW’s own union members who work at the six DCHS hospitals. The lawsuit refers to Regan's secret labor contract negotiated in a back room with Blue Wolf, which Tasty highlighted in an earlier post, that would

…reduce fringe benefit costs and eliminate restrictive work rules to ensure maximum operational flexibility." Blue Wolf has estimated that this change alone would create $90 million in savings on the back of workers at the DCHS Health Facilities.

The illegal actions by SEIU-UHW, Blue Wolf, and SEIU International imposed tens of millions of dollars of additional costs on DCHS, says the suit. By scaring off bidders, Regan "chilled" the bidding process and forced DCHS to accept a lower price for the hospitals than it otherwise would have gotten. 

 

Ron Bloom aided Blue Wolf

Regan also delayed the entire bidding process, forcing DCHS "to burn through cash at a rate of millions of dollars each month." The lawsuit also alleges that Blue Wolf and SEIU-UHW violated confidentiality agreements signed as part of the bidding process.

The interference and bid chilling by the SEIU Defendants and Blue Wolf has cost DCHS unknown dollars of sale consideration and has created a substantial threat of irreparable injury to DCHS, including DCHS's bankruptcy and the closure of the DCHS Health Facilities.

The lawsuit ends with these paragraphs:

57. This is not a case about labor versus big companies. The CNA, SEIU Local 121 RN, and a majority of the SEIU-represented employees at DCHS who have spoken publicly, strongly support the proposed sale between DCHS and Prime and voiced their disagreement with Defendants' self-serving opposition to the sale.

58. The SEIU Defendants chose to imperil the existence of DCHS—as well as the wellbeing of its patients and employees—to gain the upper hand. in completely unrelated efforts to assert influence over unrelated hospitals owned by Prime and to enrich themselves.

59. In so doing, the SEIU Defendants turned a blind eye to the best interests of union members who work for DCHS. Most members of unions affiliated with the SEIU Defendants who work far DCHS support the sale of the Health System to Prime. They understand that this sale represents the best and only hope to keep DCHS out of bankruptcy, to ensure that the DCHS Health Facilities stay open, and to fulfill existing pension obligations.

60. The SEIU Defendants and Blue Wolf have interfered with the sale to Prime and chilled bids with callous disregard for the best interests of DCHS's or the Hospital Corporations' current or former employees, patients, creditors, or communities served. Blue Wolf's only goal is to control DCHS's assets without adequately capitalizing the hospitals or incurring any downside risk, and the SEIU Defendants' only goal is to expand membership and inflate their own influence.

61. Defendants' threats have caused DCHS and Prime millions of dollars in professional fees and legal fees; delayed the transaction process, forcing DCHS to incur millions of dollars in continued operating losses; and resulted in a lower overall purchase price. Meanwhile, DCHS faces the danger of running out of money. The DCHS Health Facilities may be forced to close, with drastic consequences to public health in the served communities. If that happens, it would be as a direct result of the Defendants' actions.

  Lawsuit filed by the Daughters of Charity Health System against SEIU-UHW, Blue Wolf Capital Partners, and S...

SEIU-UHW’s Dave Regan Suffers Defeat as Union Members, Attorney General, and SEIU Locals Run the Other Way

Today, SEIU-UHW’s Dave Regan suffered a thumping defeat when the California Attorney General approved the sale of six hospitals owned by the Daughters of Charity Health System to Prime Healthcare. The AG rejected SEIU-UHW’s bid to transfer the hospitals to Blue Wolf Capital Partners, a private equity firm in New York City.

For many months, Regan has waged an all-out effort to block the sale to Prime after that company refused to sign Regan's sweetheart unionization deal with the California Hospital Association. During a tape-recorded SEIU conference call last May, Regan famously announced he would wage a campaign to bring Prime "to heel,” according to the Los Angeles Times.

Last fall, Regan launched an expensive political, PR, and "Astroturf” campaign to block Prime from buying the hospitals. The campaign included buying TV ads and busing hundreds of purple-shirted homecare workers from three counties away to fill the chairs in the Attorney General's public hearings that were intended to gather input from the local community.

Regan was forced to bus in the homecare workers because his position was wildly unpopular among SEIU-UHW’s 1,600 members at the six hospitals. Without the sale, the hospitals would likely go bankrupt and put the 1,600 workers’ jobs and pensions in jeopardy. 

Midway through the process, workers also learned that Regan had secretly signed a backroom deal with Blue Wolf Capital to cut workers' pay and benefits by 15% if Blue Wolf got ahold of the hospitals.

When the Attorney General finally conducted hearings on the proposed sale, SEIU-UHW’s own members stood at the microphone and voiced their opposition to Regan. They also delivered petitions signed by more than half of SEIU-UHW’s members opposing Regan's position. 

At O'Connor Hospital in San Jose, Calif. nearly half of SEIU-UHW’s shop stewards resigned their positions to protest Regan's decision to ignore the membership and their livelihoods.

Below, check out a 30-second video of a former SEIU-UHW Chief Shop Steward who describes how SEIU used its members as "pawns" in its own political game. He says: “I'm ashamed to say that I'm an SEIU member because they're not looking out for their own members.”

That's not all. 

After losing the support of his own members, Regan also lost the support of other SEIU unions in California. For example, both SEIU Local 121 and SEIU Local 87 publicly supported the sale of the hospitals to Prime, and formally opposed Regan's position.

Here's the video:

A Union in Wolf's Clothing

This week, SEIU-UHW officials have catapulted to new heights of pathetic behavior at public hearings held by the California Attorney General to evaluate the proposed sale of Daughters of Charity Health System, a chain of six hospitals in Los Angeles and the San Francisco Bay Area.

At the hearings, SEIU-UHW is shamelessly pimping for Blue Wolf Capital Partners, a New York private-equity firm that just happened to ink a secret backroom deal with Dave Regan. 

If Blue Wolf wins the bidding process, Regan's deal would allow it to boost its profits by slashing the pay and benefits of SEIU-UHW’s 2,700 members by more than $100 million a year, according to a deal signed by Regan and posted on this blog site earlier in the week.

From every indication, Regan is highly motivated to convince the A.G. to support his newfound private-equity "partner.” How else can you explain the fact that SEIU-UHW’s staffers and members have turned up at the hearings wearing "Blue Wolf" T-shirts? No joke. Check out these pictures. Pathetic.

As they say, a picture is worth 1,000 words.

And there's more.

SEIU-UHW’s rank-and-file members at the Daughters hospitals are apparently in open rebellion against Regan's sellout deal. In fact, Regan has so little support from Daughters workers that he's been forced to bus public-sector homecare workers from 150 miles away wearing "Blue Wolf" shirts in a pathetically lame effort to convince the AG that somehow "workers" support Blue Wolf.

Unfortunately for Regan, SEIU-UHW’s own members have dropped a host of proverbial turds into Regan's purple punch bowl.

Yesterday, an SEIU-UHW member from Daughters O'Connor Hospital in San Jose testified that a majority of SEIU-UHW’s members at his hospital oppose SEIU-UHW’s support for Blue Wolf. To back up his point, he then presented the Attorney General with petitions signed by half of SEIU-UHW’s members at the hospital… which he says were gathered in 48 hours!

SEIU-UHW's Dave Regan

Today, the AG held a hearing for St. Louise Regional Hospital in Gilroy. One of SEIU-UHW’s stewards at the hospital testified in opposition to SEIU-UHW and presented handfuls of petitions signed by her co-workers. 

During her testimony, the worker reportedly broke down and cried, saying she had once supported SEIU-UHW “but they’re wrong about this and we employees are very disappointed in them. Because of this, I believe the union no longer has the support of employees.”

After the steward left the hearing to go back to work, one of Regan's hack staffers went to the mic and tried to convince the Attorney General that the steward had been bullied by hospital officials into testifying as she did. This reportedly prompted an AG official to say, "You gotta be kidding me.” I guess the same hospital officials bullied hundreds of workers to sign petitions, too. 

They apparently don't understand, but SEIU-UHW’s members should be overflowing with joy and gratitude that their union's president, Dave Regan, cut a backroom deal with New York fatcats to slash and burn their pay and benefits.

Later, when news of the SEIU-UHW staffer's deceitful testimony to the AG reached the hospital, the steward and her co-workers reacted with righteous outrage. Needless to say, Wall Street Dave doesn't have many supporters left at the hospital.

A picture from Northern Pulp, one of Blue Wolf's acquisitions. It
performs "whole tree harvesting," which local residents describe as "ecocide."
Blue Wolf: Bringing a bright future to a community near you!

All in all, then, it's been quite a week so far. 

SEIU staffers in Blue Wolf T-shirts.  Fake hospital workers bused in from 150 miles away. SEIU-UHW’s members in open rebellion against Regan's backroom deal.  And Regan forced to publicly deploy his weapons of treachery and deceit against the union's own members… even as the Attorney General looks on.

SEIU-UHW's Dave Regan Is Caught Making Backroom Deal with New York Company to Slash Hospital Workers' Pay

SEIU-UHW's Dave Regan

SEIU-UHW's Dave Regan has been caught red-handed after secretly signing a deal to slash the pay and benefits of 2,700 of the union's members in California.

That's not all.

Proof of the backroom deal is printed in black-and-white in documents submitted to the California Attorney General, which Tasty has posted below!  

Here's what happened:

In California, a chain of six hospitals called the “Daughters of Charity Health System” is up for sale.

One of the companies trying to buy the chain is Blue Wolf Capital Partners, a private-equity firm based in New York City that has personal connections to SEIU-UHW officials.

Not surprisingly, SEIU-UHW is aggressively backing Blue Wolf's bid to buy the hospital chain.

In September, Blue Wolf’s executives presented their final bid to the Daughters of Charity’s Board of Directors… and announced they'd gotten a signed commitment from SEIU-UHW’s Dave Regan to slash workers’ pay and benefits by 15%.

 

Workers, of course, know nothing about the deal.

A second union -- the United Nurses Association of California (UNAC) -- also signed the backroom deal. UNAC is a "partnership union" that represents RNs at Daughters of Charity and Kaiser Permanente in Southern California.

So how bad are the cuts specified in the secret deal?

According to Blue Wolf, Regan's cuts would reduce workers' current annual $700 million in pay and benefits by 15%.

Here’s an excerpt from a presentation that Blue Wolf made to SEIU-UHW’s Dave Regan and UNAC officials back in June of 2014. Check out the title on the first page: “SEIU/UNAC Briefing Materials – Collective Bargaining.” The following page details hundreds of millions of dollars of cuts to workers' health benefits, retirement, staffing levels, paid time-off, and premium pay. It starts this way:

A critical part of the operational turn-around includes reducing the current $700 million cost of labor and benefits by 15%.

  Blue Wolf Capital Partner's Presentation to SEIU-UHW and UNAC Officials on a Secret Plan to Make Massi...

Ron Bloom, Lazard Freres

In September, when Blue Wolf presented this jaw-dropping news to the Daughters of Charity, the hospital chain's Board of Directors were so taken aback they questioned Blue Wolf's ability to actually carry out the massive cuts.

Nine days later, Ron Bloom -- a former Obama Administration official and a Vice Chairman at Lazard Freres, the investment banking firm that's representing Blue Wolf -- wrote a letter to the Daughters of Charity saying the following: (The full letter is available on the Attorney General's website at this link):

You expressed a concern regarding the likelihood of ratification of collective bargaining agreements along the lines we have discussed. We believe that the materials submitted with our bid reflects the strong support of the leadership of UNAC and the SEIU for our proposal and we are completely confident that upon your acceptance of our offer we will be able to obtain ratification of new collective bargaining agreements. These agreements would be effective at closing and would allow us to realize the labor cost savings for employees represented by these two unions of the magnitude we have prior discussed. We have provided you with letters from the Presidents of those two organizations confirming our belief.

How confident is Blue Wolf it’ll slash and burn workers' pay and benefits if it wins the bidding process?

Adam Blumenthal, Blue Wolf Man

"Completely Confident."

And what about Regan's letter?

Fortunately, Tasty found a copy of it on the Attorney General's website. 

In his letter to Adam Blumenthal (Managing Partner of Blue Wolf), Regan writes the following (see the full letter below):

On behalf of the SEIU and all bargaining unit members we represent at the DOCHS facility, we are pleased to have successfully completed labor contract negotiations with Blue Wolf Capital Partners LLC and its related entities, to create a new collective bargaining agreement… The Union hereby agrees, to the extent that the New CBA is regarded as a modification of the existing CBA, to all such modifications. Further the Union pledges that it will promptly take all necessary, reasonable, and legal steps to secure approval, ratification, acceptance of the New CBA. We commit that all such approvals will take place in advance of "Final Approval."

How dirty can you possibly get? Remember, Regan did all of this behind the backs of SEIU-UHW’s rank-and-file members. (Who actually pay his f*ckin' salary.)

Regan says he'll take "all necessary steps… to secure approval, ratification, acceptance of the New CBA.”  

Hmm... what does that mean?

Unfortunately, Daughters of Charity workers are all too familiar with Regan's top-down, undemocratic, and authoritarian tactics. In 2012, Regan used an unconstitutional ramrod "ratification vote" to force massive cuts down the throats of Daughters workers… including the elimination of their defined-benefit pension plan. 

In one particularly memorable episode, Regan reached a settlement with company officials at 9:35 PM on a Saturday night and then held a membership ratification vote just nine hours later at 7:00 AM the following morning (a Sunday).

Later, when workers formally challenged the unconstitutional vote, SEIU President Mary Kay Henry simply turned her back on the workers.

So, Dave, whatta you got to say?

  Letters Signed by SEIU-UHW President Dave Regan and UNAC President Ken Deitz with Blue Wolf Capital Accepti...