Purple Palace Suffers Self-Inflicted Wound through Trusteeship of SEIU Local 73

SEIU officials have carefully used their trusteeship of Chicago-based SEIU Local 73 to deliver a strategic blow… to themselves!

Here’s what happened.

For many months, Local 73’s leaders have been in discussions aimed at affiliating the 2,000-member Graduate Students United (GSU) at Columbia College Chicago, a private liberal arts college with 9,500 students.

The affiliation was intended to advance SEIU’s national campaign to unionize faculty and graduate student workers.

Then, on August 3, SEIU’s Mary Kay Henry imposed an “emergency trusteeship” on Local 73 and removed the union’s president and secretary-treasurer.

During SEIU’s trusteeship hearing on September 24, Local 73’s former president, Christine Boardman, warned that the trusteeship would submarine Local 73’s affiliation discussion with graduate students.

Here’s what Boardman said in her prepared testimony:

On the downside of adjunct organizing, I can tell you that we will not get Columbia College which after they disaffiliated from the IEA, their bargaining unit was 2,000 strong. They began meeting with SEIU Local 73 regarding possible affiliation.

Diana Valera, the leader of that group, was continually asking questions about how much independence would they have and can they make their own decisions.  Putting an emergency trusteeship in place at Local 73 has definitely cooled their idea of joining our local.  Talk to Grant Williams and Sean McGough.

It looks like Boardman was right.

Last week, the 2,000-member Graduate Students United announced that its members had voted to stay with the American Federation of Teachers (AFT), according to an article in The Chicago Maroon (“GSU Votes to Stay with Union Affiliation”).

AFT's Randi Weingarten

In fact, the AFT received nearly twice as many votes as SEIU Local 73. 

AFT President Randi Weingarten gushed about the AFT’s victory. Here’s how she’s quoted in a press release and news article:

“Tens of thousands of graduate students are already affiliated with the AFT, as momentum builds in our nationwide fight for them to be recognized as the higher education professionals they are,” AFT president Randi Weingarten said in a press release Thursday. “The AFT will be with them every step of the way.”

From the looks of things, SEIU officials implemented their trusteeship at precisely the wrong time. Mary Kay Henry seized control of Local 73 just eight weeks before graduate students began voting on whether to affiliate with the Chicago-based union. By the time that graduate students cast their ballots, Local 73 was functioning under a sort of "martial law" without any functioning constitution or system of local control.

A perfect formula for victory, right?

President of SEIU Local 73: SEIU Officials Imposed an “Illegal” Trusteeship after I Supported Bernie Sanders

Christine Boardman, SEIU Local 73

Christine Boardman, the President of SEIU Local 73, has provided an insider’s view of SEIU’s recent trusteeship of her union, which represents 25,000 public-sector workers in Illinois and Northwestern Indiana. 

In a communication sent to Tasty in recent days, she writes: “I read your two posts concerning the Local 73 trusteeship and feel obliged to write to you.” 

On August 3, 2016, SEIU officials seized control of Local 73 in an "emergency trusteeship" and removed Boardman and Secretary-Treasurer Matthew Brandon from office. Boardman had served as the union’s president for 16 years.  

In Boardman's place, SEIU President Mary Kay Henry appointed Eliseo Medina to serve as trustee. On September 24, SEIU officials conducted a trusteeship hearing where Boardman and others reportedly testified.

In her communication to Tasty (see documents below), Boardman writes:

I was removed from office in a classic SEIU trusteeship. As we all know the International likes to use the wording “emergency trusteeship” even when it is not. The basic reason I was removed from office was because I disagreed with the International leadership on a number of issues. The most recent was when they called me from Washington to assure themselves that I supported Hillary in the Primary which I did not. I supported Bernie Sanders. Both times they called I told them that I supported Bernie Sanders. They told me he would lose. This was probably the straw that broke the camel’s back for them. For years I have disagreed with them on major issues of democracy within the union, organizing new members and servicing members which the International sees as in opposition to organizing new members.

She goes on to describe how SEIU officials in Washington DC “regularly criticized me for ‘taking too many cases to arbitration.’”

SEIU's Eliseo Medina addressing Local 73 members

The International’s main focus is to extract as much dues money from the members which it promptly turns over to the DNC. This deprives locals of operating expenses, as well as funds to support local candidates who actually support unions. The National Democratic office holders who get the members money have consistently avoided enforcing existing labor laws and instead have promoted bad trade deals that have sent most manufacturing jobs overseas.

As anyone familiar with the SEIU International is aware they are very thin skinned and accept NO dissent of any kind, they promote and expect complete obedience. The fact that I had an executive board of 100 rank and file members and that I always brought numerous members to all bargaining sessions simply horrified the SEIU International.

This illegal take over was plain and simple an undemocratic take over in the long and sordid history of the SEIU.

With her permission, Tasty has posted below Boardman’s message as well as her testimony during SEIU’s recent trusteeship hearing. 

During SEIU’s trusteeship hearing, Boardman described how she blew the whistle on “corrupt and unethical behavior” by Local 73’s Secretary-Treasurer Matt Brandon after he cut a “backroom deal” with Chicago Mayor Rahm Emanuel that “sold out” Local 73’s members.

 

Chicago Mayor Rahm Emanuel

Instead of penalizing Brandon, SEIU used his illegal behavior as the pretext for removing both her and Brandon, even though she was the “whistleblower” who outed his misconduct, says Boardman.

Boardman’s testimony includes poignant passages like this one:

You have put me into a situation that I will have to sue the International Union. You have ruined my reputation of more than 45 years in the trade union movement with a bs attempt to get me out of office. I was doing my job and you will be hard put to show that I was not.

Her testimony describes the role of other SEIU officials in Local 73’s problems, including Debbie Schneider, Mary Ann Collins, Denise Poloyac and Pia Davis. Schneider served as a "Deputy Trustee" with Medina during SEIU's trusteeship of SEIU-UHW in 2009.

Boardman concludes her testimony:

I feel that the entire emergency trusteeship has been a sham, and the International views the local as something they will award to their friends, and not positions that require significant experience and skill at accomplishing the task at hand. You are attempting to make me collateral damage and I will not accept that.

SEIU's Debbie Schneider

I ask that the hearing officer reinstate me as President so that I may continue to do what I believe and that is the strong belief that working people can overcome all obstacles in their way. I did nothing wrong and everything right. If the International does not allow me to complete my work and transition a new President at the end of my term which is April 2017. It will be a great disservice to the local and our members.

See two separate documents below from Boardman.

  Christine Boardman's message to Tasty on SEIU's trusteeship of SEIU Local 73 (October 8, 2016) by tastysternburger on Scribd

  Christine Boardman's testimony to SEIU trusteeship hearing on SEIU Local 73 (September 24, 2016) by tastysternburger on Scribd

Dave Regan’s Pal at Dignity Health Is a Pioneer in the Gig Economy

Lloyd Dean -- the CEO of Dignity Health and a close ally of SEIU-UHW’s Dave Regan -- is courageously forging new ground in the gold-plated gig economy.

Earlier this week, Tasty described how Dean works full-time as the CEO of the US’s third-largest health system, Dignity Health… but finds enuf time to pocket $350,000 a year for sitting on Wells Fargo’s board of directors.

Well… it turns out Dean holds down a number of other side-gigs, too.

He happens to sit on the board of directors of McDonald’s Corporation, which is one of the targets of SEIU’s Fight for $15 campaign.

Wonder if Regan’s infamous gag clause, which "Wall Street" Dave signed with Dean and other CEOs, prohibits SEIU from discussing Dean’s sky-high salary?

How much does McDonald's pay Dean?

Approximately quarter million dollars a year in cash and stocks for attending board meetings. Thus far, he’s assembled thousands of shares of McDonald’s stock for himself and the “Dean Family Trust,” according to SEC records.

Dean also sits on the board of Navigant Consulting, Inc., a Chicago-based management consulting firm, which pays Dean $200,000 a year in cash and stock.

Recently, Dean gave up his seat on two other corporations’ board of directors. Those companies happen to pay far less than Wells Fargo, McDonald’s, and Navigant.

 

Fight for $15

Last year, he resigned his board seat at Premier, Inc., which paid him only $50,000 a year in cash. 

Chump change, right? 

Premier, based in Charlotte, NC, provides performance-improvement consulting and group purchasing to hospitals and nursing homes across the US.

He also ditched his seat at Cytori Therapeutics, Inc., a San Diego-based biotechnology company where Dean was the Chairman of the Board. During Dean’s last year at the company, he pocketed 16,030 stock options, 10,550 shares of restricted stock, and $33,625 in cash, according to the company’s SEC filings.  

Tough gigging for the 1%.

Wells Fargo Scandal Nabs One of Dave Regan’s Pinstriped Pals at Dignity Health

Wells Fargo CEO John Stumpf testifying in Congress last week.

One of SEIU-UHW President Dave Regan’s closest CEO buddies -- Lloyd Dean, CEO of Dignity Health -- is neck-deep in the scandal that’s rocking Wells Fargo. In fact, Dean -- who serves on Wells Fargo’s Board of Directors -- may have used insider information at the bank to improperly line his pockets, according to SEC records not been previously reported.

The episode offers another glimpse at the harmful effects of Regan’s collaborationist approach with corporations.

Headquartered in San Francisco, Dignity Health is the fifth largest health system in the nation and is the largest hospital company in California. In 2014, Dignity paid Lloyd Dean $8.1 million, according to the company’s federal tax returns.

Lloyd Dean's 2014 Compensation at Dignity Health: IRS Form 990

Dean, in addition to his full-time job at Dignity, has plenty of time to work well-paid gigs on the side … like serving on Wells Fargo’s Board of Directors.

At the bank, Dean headed the “Corporate Responsibility Committee,” charged with monitoring “customer service and complaint matters,” at the same time that Wells Fargo was quietly setting up 2 million phony accounts for customers, according to proxy statements cited by Fortune Magazine.  The fake accounts -- which forced bank customers to pay service fees on debit cards, credit cards, and other accounts they never authorized -- boosted Wells Fargo’s profits.

Here’s an excerpt from the Fortune Magazine article published last week (“The Wells Fargo Board Committee in Charge of Stopping Phony Accounts Rarely Met”):

A review of board records in Wells Fargo’s annual proxy filings of the past few years suggests that, even as scrutiny of Wells Fargo’s consumer practices was ramping up outside the bank… officials at the highest levels of the company, who were most responsible, did little—that is, the absolute minimum—to address the bank’s growing problem.

None of that, though, or the aftermath, appears to have curtailed the payday of the board members involved…

The bank’s board formed the corporate responsibility committee in 2011. It was first headed by Lloyd Dean, another Wells Fargo board member, who now heads the committee that oversees compensation. Dean was paid $346,027 in cash and stock last year.

Dean’s role as chair of Wells Fargo’s compensation committee is important to note given that the bank’s aggressive sales quotas and financial incentive programs are at the heart of the fraud it perpetrated on millions of customers. 

In recent weeks, Wells Fargo agreed to pay more than $200 million in fines. Some executives may face criminal charges. Meanwhile, Wells Fargo’s CEO John Stumpf was forced to give back $41 million in compensation due to public pressure.

But don’t cry for Stumpf.

He’s still sitting on $247 million in Wells Fargo stock, according to SEC records.

Earlier this week, Congresswoman Carolyn Maloney (D-NY) ripped Stumpf a new one during a hearing on Capitol Hill. She presented evidence that in October 2013, Stumpf appeared to have used insider information to sell $13 million of his own shares of Wells Fargo stock just before the bank’s fraud became publicly known.

Why is the timing of Stumpf’s stock sell-off significant?

During Stumpf’s testimony before a Senate panel on September 20, 2016, he said he first learned of his bank’s fraud in “late 2013.”

Here’s a video of Rep. Maloney interrogating Stumpf.

Did other fatcat insiders dump their stock at the same time?

What about, umm, Dignity Health CEO Lloyd Dean?

According to SEC disclosure forms, Dean carried out the same stock-dumping transactions just a handful of days after Stumpf did. 

In early November of 2013, Dean sold Wells Fargo stock worth more than $520,000. Dean had acquired the 12,330 shares through a special stock purchase option program available to the company’s Board of Directors.

One of Dean's SEC Forms 4

In March 2016, Dean and his family trust sold another $327,051 worth of Wells Fargo stock, according to SEC records.

See below for copies of Dean’s and Stumpf's SEC Forms 4.

What’s SEIU-UHW President Dave Regan’s relationship to Lloyd Dean?

Dave “Wall Street” Regan, who favors “partnerships” and secret backroom deals with CEOs, has worked hand-in-glove with Dean for years.

In 2008-09, Regan secretly conspired with Dean to carry out SEIU’s trusteeship against California’s militant healthcare workers union, then headed by Sal Rosselli.

In an apparent payback, Regan then delivered hundreds of millions of dollars to Dean by negotiating massive wage and benefit cuts affecting SEIU-UHW’s 14,000 members at Dignity hospitals in California.

In 2010, for example, Regan eliminated SEIU-UHW members’ defined-benefit pension plan, delivering Dignity a $217 million windfall, according to the company’s financial statements.  

In 2012, Regan allowed Dignity to freeze SEIU-UHW members’ wages and to implement more benefit cuts... even though the company was making massive profits.

In 2015 and 2016, Regan negotiated more cuts for workers.

SEIU-UHW's Dave Regan

And in 2014, Regan famously signed a secret partnership deal with the California Hospital Association, Dignity Health, Kaiser Permanente, and other corporations. The deal, which was designed to institute “a new model of labor relations,” included bans on worker strikes and implemented a gag clause that blocked SEIU-UHW and its members from supporting any regulatory action, legislation, or ballot initiative adverse to the interests of Dignity Health and the California hospital industry.

The secret pact’s provisions, which were eventually made public through litigation, also prohibited SEIU-UHW -- California’s largest healthcare workers union -- from “raising concern about... executive compensation in health care."

With the stroke of his pen, Regan silenced SEIU-UHW and its members from voicing any criticism of Dean’s outrageously high salary at Dignity Health... not to mention his apparently gold-plated insider trading at Wells Fargo. 

  Lloyd Dean's and John Stumpf's SEC Forms 4: 2013 and 2016

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...

UNITE HERE Leaders: SEIU Is Undermining the U.S. Labor Movement

Andy Stern: Pimping for the plutocrats

Two leaders at UNITE HERE have penned a sharp critique of SEIU.

The piece, entitled “Labor’s Neoliberal Caucus” in Jacobin Magazine, criticizes SEIU for pushing a boss-friendly, “neoliberal” style of unionism that’s undermining the US labor movement.

The authors -- Warren Heyman (an international vice president of UNITE HERE) and Andrew Tillett-Saks (the organizing director for UNITE HERE Local 217) -- define “neoliberal unionism” as “a unionism that espouses collaboration with corporations instead of conflict and upholds free-market capitalism as reconcilable with labor’s interests.”

According to the article, the “modern wave” of this boss-friendly unionism “is rooted in SEIU and its former president Andy Stern’s push for neoliberal unionism in the 2000s.”

Stern, who made backroom deals with CEOs as SEIU’s president and also tried to stamp out internal critics through trusteeships, has continued walking down the same ideological path since his retirement.

Only days after retiring, Stern accepted tens of thousands of shares of stock and a fully paid job from Ron Perelman, a billionaire corporate raider who’s one of the world’s richest men. Perelman has showered Stern with gifts in apparent exchange for sweetheart labor deals that Stern negotiated from SEIU's Purple Palace in Washington DC, including a deal with one of Perelman's many companies, AlliedBarton.

Here’s an excerpt from Heyman’s and Tillett-Saks’ article regarding Stern’s role in pushing neoliberal unionism:

Stern explicitly and aggressively pushed the labor movement to adopt a “collaborationist” approach towards capital; according to the Stern ideology, workers and unions don’t have to fight corporations, just build “relationships” with them and cajole them into a mutually beneficial partnership.

In this spirit, Stern and SEIU amassed a lengthy record of striking deals with corporations that sold out workers’ ability to fight in exchange for promises of union recognition… SEIU expanded, but what expanded was a neutered shell of a labor movement, full of members with preposterous contracts and little ability to fight for better.

Stern is gone but his ideological legacy remains… From embracing free-market capitalism to embracing employers to embracing their political representatives, the political and intellectual lineage is clear.

SEIU-UHW’s Dave Regan is clearly one of Stern’s disciples.

Regan famously inked a secret deal with the California Hospital Association that banned strikes, forced workers into pre-negotiated contracts with stripped-down wages and benefits, and imposed a gag clause that blocked SEIU members from criticizing their employers or mentioning their CEOs’ sky-high salaries.

On Labor Day of 2014, Regan famously told NBC-LA TV News that the idea of strikes and “adversarial relationships” between workers and corporations is “outdated.” Instead, says Regan, unions must “collaborate” with corporate CEOs to create a new “teamwork” economy.

Below, see a two-minute excerpt from Regan’s NBC TV interview in which he describes his vision of SEIU's idea of "21st century" unionism.

Heyman and Tillett-Saks conclude their article by issuing a call to arms to US workers and unions, who they say must confront and battle SEIU inside the US labor movement.

The proliferation of this model of unionism would spell disaster for the American labor movement. Our movement’s success depends on how widely and how militantly we can organize workers to fight corporate power and the 1 percent, not embrace them.

Union members and leaders must do everything in their power to halt the march of neoliberal unionism, before they march the labor movement straight into its grave. 

What does "neoliberal unionism" look like? Check out this 2-minute excerpt from Regan’s interview with NBC TV News on Labor Day, 2014:

Dignity Healthcare Workers Bolt SEIU-UHW, Leaving Stan Lyles to Swallow His Words

Stan "Mr. Integrity" Lyles

Some workers at Dignity Healthcare report that not all employees were affected by SEIU-UHW’s recent bargaining during which management demanded more cuts to workers' wages and benefits.

In 2015, a unit of workers at Dignity's Northridge Hospital Medical Center in Los Angeles left SEIU-UHW after requesting an NLRB election to dump the union. The workers include clinical lab scientists, social workers (MSWs and LCSWs), radiation therapists, and nuclear medicine technologists.

According to NLRB records, the workers filed a formal “decertification” petition with NLRB Region 31 in Los Angeles. After SEIU-UHW officials realized they’d get trounced in an election, they decided to threw in the towel and let the workers go without an election -- what’s called “disclaiming interest in the unit,” in NLRB parlance.

Why did the Dignity workers bolt from SEIU-UHW?

They say SEIU-UHW never did anything for them... and wouldn’t even return workers' phone calls.

The workers’ action is especially embarrassing for SEIU-UHW Vice President Stan Lyles, who formerly worked at Northridge Hospital Medical Center. Lyes tells everyone he’s got “rockstar” status with his former co-workers at Northridge.

Not quite, Stan.

But... if you really want to see a rockstar performance by Stan, check out the following  video of Stan attacking SEIU for its undemocratic practices in 2008.

Lyles, speaking at a meeting of Teamsters for a Democratic Union (TDU), attacks SEIU officials for making back-room deals with CEOs -- including a secret deal with Tenet Healthcare to allow the company to subcontract the jobs of more than 10% of SEIU-UHW's members.

That's one of the dirty moves that prompted SEIU-UHW members to publicly criticize Andy Stern and SEIU in 2007 and 2008, which then caused Stern to remove SEIU-UHW's elected leaders through a trusteeship in 2009.

After imposing the trusteeship, SEIU officials gave Lyles a big purple paycheck to abandon his principles and pledge his allegiance to Andy Stern, Dave Regan, and the other Purple Palace officials whom he had so sharply criticized.

Lyles, who had aggressively opposed the trusteeship, quickly changed his tune. Ain’t it interesting what a boatload of cash will due to the moral compass of some people?

Perhaps that’s why Lyles has earned the nickname of “Mr. Integrity.”

Here’s the video of Lyles attacking SEIU in 2008, before he received his big payoff from Andy Stern: