The Ultimate Payoff: Andy Stern’s Plans for the Future of Big Labor By Ivan Osorio Summary: The December issue of Labor took a campaign to ‘rebrand’ the union. He Watch looked at the growing influence of used financial incentives to get all the local the 2.1-million member Service Employees branches of the union to begin using the SEIU International Union (SEIU) and its savvy name, its new logo and, of course, its new president, Andrew Stern. This article ex- color”— purple. amines Stern’s controversial attempts to restructure organized labor in the image of California Scheming SEIU, the conflicts this has provoked with Stern has encountered persistent resistance to other union leaders, and Stern’s newest or- his centralizing efforts. The most notorious ganizing initiatives. episode concerns one SEIU local in Califor- nia. A bitter and protracted struggle over the n 1973 Andrew Stern, a 23 year-old local’s fate has seriously embarrassed SEIU’s graduate of the University of Pennsyl- to the AFL-CIO leadership following Sen. national leadership, especially because it vania, became a social worker at the John Kerry’s presidential election defeat I in November 2004. Naturally, this would involved a forced merger with a local deeply Pennsylvania state welfare department. The enmeshed in corruption. department’s social-service workers had just require many union chiefs to relinquish their been unionized, and the bright and energetic fiefdoms, so Stern’s proposal encountered In August 2008, the Los Angeles Times Stern rose quickly in the ranks of SEIU Local considerable resistance within the AFL-CIO. reported on suspicious dealings at a Los 668. Eventually, he joined SEIU’s national In June 2005, Stern and Teamsters president Angeles area-based SEIU local, which at executive board, became SEIU director of James P. Hoffa (who had presented similar the time was California’s largest local union. organizing, and, in 1995, ran then-SEIU proposals) responded by announcing that The union represents 160,000 low-wage president John Sweeney’s successful insur- their unions were leaving the AFL-CIO and home health care workers, most of whom gent campaign to replace incumbent AFL- forming a new federation, the Change to Win earn around $9 an hour taking care of ill CIO president Lane Kirkland. Sweeney then coalition, along with five other unions. and disabled people in private homes under left a lieutenant in charge of SEIU who fired government-funded programs. According Stern. Stern then led a successful insurgent Within SEIU, Stern was already working to to U.S. Department of Labor documents campaign on his own behalf and in 1996 he centralize his own authority. In 2000, SEIU acquired by the Times, SEIU’s Los Angeles became SEIU’s youngest-ever president, at had adopted a reorganization scheme, dubbed local, called United Long Term Care Work- age 45. the “New Strength Unity Plan,” to give its national headquarters greater authority over ers, and a related nonprofit paid more than $400,000 to businesses owned by the wife Since taking over SEIU, Stern has been local SEIU unions. Many SEIU rank-and-file and mother-in-law of the local’s president, a lightning rod for controversy as he has members and local union leaders protested Tyrone Freeman. worked tirelessly to advance two closely the plan, and some locals disaffiliated, but related priorities: to grow the overall labor Stern pressed on. As the New York Times’s Freeman denied wrongdoing, and claimed movement under SEIU leadership while Matt Bai wrote in 2005, “When Stern came consolidating his own power within SEIU. into power, the SEIU represented a dispa- January 2010 Stern initially proposed that the more than rate coalition of local unions that identi- 50 national and international unions in the fied themselves by different names and SEIU’s Stern AFL-CIO federation consolidate into a small maintained separate identities.” To create a Page 1 number of mega-unions organized around strong national identity for the union, “Stern entire industries or large geographical ar- hired a corporate consulting firm versed in Labor Notes eas. Stern proposed this restructuring idea the jargon of the new economy and under- Page 6 that union members benefited from the mon- At first, this might seem like a case of typi- Freeman stepped down as the L.A. local ey spent on video production and day-care cal union graft. However, the scandal grew president on August 20, 2008 and on Janu- companies that his wife and mother-in-law in importance when Stern tried to force an- ary 9, 2009 SEIU announced that its national ran out of their homes, “because of what he other SEIU healthcare workers local, United executive board voted to approve the merger. termed the high quality of the services,” re- Healthcare Workers-West (UHW), based in Then on January 27, SEIU placed UHW in ported Times writer Paul Pringle. According Oakland, California, to merge with Freeman’s trusteeship for alleged “financial wrongdo- to the paper, the union and the charity paid corrupt L.A. union. Worse, Stern authorized ing.” The next day, Rosselli and other dissi- those companies at least $405,700 between Freeman, the corrupt L.A. union boss, to act dent local leaders announced the creation of January 2006 and December 2007. The union on his behalf in carrying out the merger. In a a new union, National Union of Healthcare also spent nearly $300,000 on a Four Seasons June 11, 2006 memo to the affected Califor- Workers (NUHW), which, according to its Resorts golf tournament, a Beverly Hills cigar nia locals, Stern called Tyrone Freeman one website (nuhw.org), “was formed after a club, expensive restaurants (including Mor- of his “Personal Representatives…charged two-year struggle to expose and reverse SEIU ton’s steak house), and a consulting contract with overseeing the process of creating the President Andy Stern’s drive to centralize with a Hollywood talent agency. new entities” outlined in the memo. power among a small clique of Washington- based officers and staff at the expense of rank- Some union members alleged that the SEIU Some union staffers said Freeman’s lieuten- and-file workers’ voices with their employers national leadership knew about the corruption ants pressured them to sign a petition support- and in their own union.” problem and failed to address it. The Times ing him. “Let it be clear that we...proudly and reported that a “source close to the union” firmly stand with President Freeman and the Rosselli opposed Stern’s efforts to central- said SEIU spokesman Steve Trossman was work of our local,” the petitions said. Those ize not only SEIU’s institutional structure, informed six years earlier about the allega- who resisted said they faced reprisals. Some but also its contract negotiations. Consis- tions against Freeman. The Times’s Pringle were “transferred to positions far from their tent with Stern’s goal of organizing entire reported: homes,” reported the Times’s Pringle, and industry sectors in large geographic areas, about ten workers had their union-provided the SEIU national headquarters has aimed The source, who asked not to be identified cell phone service cut off. “It’s essentially a to control large-scale contract negotiations because he feared retribution, said Tross- loyalty oath,” one worker told Pringle. The with major employers. Rosselli charges that man helped develop a strategy in 2002 to worker described conditions at the union Stern intends to shut local union leaders out keep the allegations from embarrassing as “very tense,” and said, “There’s a lot of of the process. For instance, Rosselli says the SEIU at a time of epic membership intimidation.” SEIU barged in as UHW was entering nego- growth. tiations with the hospital chain Tenet. “We SEIU responded by announcing that former were about to go into bargaining and then the Trossman’s efforts succeeded, the source California Attorney General John Van de International started bargaining with Tenet said. Freeman’s local continued to expand Kamp would investigate events at the Los by themselves,” Rosselli told the pro-union as part of SEIU President Andy Stern’s Angeles local and that former California newsletter Labor Notes in a February 2008 much-celebrated campaign to organize Supreme Court Justice Joseph Grodin would interview. “The International excluded our entire industries state by state. The local preside over an internal hearing on the members from bargaining with their employ- and an affiliate ended up representing inquiry. However, in its statement Stern’s ers. They reached tentative agreements with- about 190,000 workers, most of them in office also went on to accuse the Oakland out the input of our elected bargaining team.” the field of home healthcare. leaders of United Healthcare Workers-West of “engag[ing] in a pattern of financial mal- Stern’s plan to create mega-locals makes this practice and fraud.” The allegations against scenario not only more likely, but also more Editor: Jeremy Lott the 150,000-member Oakland local (whose difficult to resist, as union leaders become Publisher: Terrence Scanlon 65,000 healthcare members Stern wanted to more removed from the workers they are Address: 1513 16th Street, NW transfer to the statewide SEIU mega-local) supposed to represent. Washington, DC 20036-1480 included diverting $3 mllion in members’ Phone: (202) 483-6900 dues for the UHW leadership’s personal and UNITE-HERE Disunites Email: [email protected] political use, misappropriating an internal Not long after Rosselli and his allies parted Website: www.capitalresearch.org database, and retaliating against UHW with SEIU, another union found itself in seri- members who criticized the leadership. ous conflict within its own ranks—and Stern Thus, SEIU was placing UHW in trustee- and SEIU played a major role in that conflict.