SEIU-UHW’s Private Equity Partnership Produces Rebellion from Workers

Dave Regan’s partnership with Blue Wolf Capital Partners isn’t quite producing "dividends," according to observers.

SEIU-UHW officials famously backed the New York private equity fund in its attempt to take over a chain of six California hospitals called the Daughters of Charity Health System. But even as SEIU-UHW staffers parade around in blue shirts bearing the private equity firm’s name, workers are running the other way.   

Here's what's happening.

SEIU-UHW’s 1,600 members at the six hospitals have reportedly responded with outrage that Regan signed a secret deal with Blue Wolf to cut their pay by 15% and is putting their jobs at risk by pushing the hospital chain towards a possible bankruptcy.

At O'Connor Hospital, a majority of SEIU-UHW members signed petitions opposing SEIU-UHW’s stance on the hospital sale.

And nearly half of SEIU-UHW’s shop stewards at O'Connor Hospital have resigned their positions to protest Regan's actions. Other workers have decided to stop paying dues to SEIU-UHW.

SEIU-UHW responded by dispatching Val Tagawa and other purple staffers to the hospital. One worker writes:

Since the [Attorney General's] hearing at OCH, we have had a concerted effort from SEIU (Val Tagawa and others) to harass folks about the issue. They have been generally met with "Don't bother me" type responses from workers, and on one occasion security was called and ended up escorting the SEIU stooges from the Cafeteria after employees complained to security.

Tagawa has reportedly been busy scouting for the best local bar and is well known around the hospital for the not-so-fragrant bouquet of her breath.

Meanwhile, the Los Angeles Times and San Francisco Chronicle have editorialized against SEIU-UHW’s position. The California Attorney General, who's responsible for approving or rejecting the proposed sale of the six hospitals, is supposed to make a decision by February 20.

One more note: Tasty earlier mentioned that SEIU-UHW officials have connections to Blue Wolf Capital. It turns out that the connections are multiple.

 

Mike Musuraca, Blue Wolf Man

First, Mike Musuraca (the Managing Director of Blue Wolf Capital) reportedly has connections to Gerry Hudson and Tom Woodruff (Vice Presidents of SEIU International) as well as other top SEIU officials. Musuraca has worked as an advisor for SEIU’s Change to Win. He formerly served as an Assistant Director in the Department of Research and Negotiations at AFSCME District Council 37 in New York City and was a trustee of the New York City Employees Retirement System.

In addition, it appears that David Miller, a staffer at SEIU-UHW, played a role in SEIU-UHW’s nefarious backdoor deal with Blue Wolf. Miller also comes from New York, where he formerly served as the Research Director at SEIU’s 1199 New York. After parachuting into California, he has assumed the over-inflated job title of “Assistant to the President for Strategic Campaigns” at SEIU-UHW ...presumably with an over-inflated salary. 

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...