Buzz for Bernie on the Left Coast

lowwagerally520San Francisco   I’m not totally shocked, but I didn’t see all of this coming.  Meeting with random associates, comrades, and friends from diverse fields and directions, everyone on the Left Coast is buzzing about Bernie Sanders and his race for President.

Running a union, there’s no way to miss the fact that several thousand union activists have signed a letter of support for Sanders’ campaign. That kind of news is flooding my email “in-box.”  The Vermont and South Carolina AFL-CIO councils have issued resolutions of support, worrying AFL-CIO chief Richard Trumka enough that he has already had to issue an alert to state and local bodies to stand down and leave it to the Executive Council and the national unions to make these decisions.  Larry Cohen after ten years at the helm of the Communications Workers resigned one day and the next day announced that he was going to work as a volunteer for Sanders campaign in part because of Sanders’ longtime voting record with labor in Congress and in his home state, but also in protest of Hillary Clinton’s support for the Trans-Pacific Partnership trade negotiations.

In California though his beachhead among progressives is extensive and much wider than labor activists.  For example, in meeting with community, political, and labor activists in Contra Costa County in the East Bay, it was startling to hear how often the conversation migrated to Sanders and his prospects.  Importantly, this interest was deeper than simply speculation about how far Sanders might make it in the Democratic Presidential sweepstakes.  The substantive discussion – and hope – was whether or not a strong run could ignite more movement and support for independent politics at every level, including the prospects for an effective and national alternative party. There was a feeling that support building for Sanders was not an “anybody but Hillary” drive, but a reward and real excitement over a candidate deeply committed and bravely progressive on positions one  after another.

Unspoken, but undoubtedly felt, was the feeling that a card carrying Socialist and avowed independent, building a significant vote total and campaign effort, could create a real Left willing to embrace the opportunity to lead and contend for power, rather than still facing the PTSD of the Cold War.

Many desperately wanted a California campaign.  They want the chance to pile up the votes and use the campaign to build their own infrastructure for now and the future.  Others speculated that the Working Families Party or other nascent national efforts might be able to grow in the slipstream of a Sanders campaign.

Having lunch in Oakland with a longtime supporter of ACORN, I did a double take when she also turned the conversation to Sanders.  Her argument was both personal and political.  Family members including a young nephew were planning at this point to sit the election out in 2016, feeling no enthusiasm and a pox on both their houses kind of attitude.  She felt she had moved the twenty-something towards Sanders as someone different.  Perhaps the buzz for Bernie can go deeper than white, elderly, and rural where he is finding more than enough of his Vermont-type base in his early forays in New Hampshire and Iowa.  Another comrade argued that Sanders might be able to double-down with younger voters from an equally solid place based on his longstanding work with veterans and his advocacy and effectiveness on the Veterans Committee of the Senate.

Grasping straws?  Building dream castles in the sky?  Hard to tell, but if this kind of excitement about Sanders starts to catch fire more broadly around the country, maybe what Sarah Palin famously called this “hope-y thing” might find a cozy home in the Sanders’ campaign with long term results.

Oh, No, Déjà vu All Over Again for SEIU in California

seiu_uhw_colorHouston  If labor doesn’t have enough problems, all we need is another breakout of internecine warfare.

One of the most difficult and divisive disputes in recent decades, since maybe the P9 meatpacking struggle in Minnesota, occurred a half-dozen years ago in Northern California between former SEIU Local 250 renamed SEIU United Healthcare Workers’ West (SEIU-UHW) and the Service Employees International Union.  Northern California being northern California, way too many people out there and elsewhere picked sides, whether they knew the issues or not.  Some claimed it was all about union democracy.  Others said it was a plain and simple internal jurisdictional argument.  All agreed there was ego, ambition, and pride involved and that what should have and could have been resolved, spun dangerously, and expensively, out of control with neither Andy Stern from SEIU nor Sal Rosselli from the local surviving the battle quite intact with both gone once the dust finally settled.  Most people stayed as clear of the mess as they could, and others declared a pox on both their houses.  It wasn’t pretty.

Whether union democracy or union jurisdiction, the trigger to the dispute was an SEIU reorganization plan ordered by the International Executive Board to create one longterm care local union in California just as there was one hospital union, now SEIU-UHW.  Even lopping off this piece left the remaining SEIU-UHW with 80,000 members and still in the top ranks of the US-labor movement as one of the largest locals in the country.  Dave Regan, a leader of SEIU 1199 OH/WV/KY, either drew the straw, or asked for it, to go out there and be the trustee and fight in the trenches to take over the local and implement the order.

My history with Rosselli was strained because my comrade and friend, Mark Splain, from the ACORN family of organizations, had been the trustee of 250 back in an earlier mess, but Rosselli won a bitter, rainy day election, and I developed a working relationship with him and over time a separate peace of sorts.  I liked Dave Regan and had a great working relationship with him both within SEIU and with ACORN.  He was one of the lonely few that joined me on the IEB in the straw poll for John Edwards for example.  We spent time together, and it was good times.  You could count on a small number of fingers who might end up as the international president in his generation and he was right at the point.  Hal Ruddick, who had spent nearly a decade in Local 100 ended up as chief negotiator for SEIU-UHW.   Everything being equal, once there was peace in the valley, I thought they would do a great job for workers there.   After Rosselli had made his bed and split his pieces off, I thought he would do well, sleeping in it.  He’s a talented, creative leader and negotiator, and I was confident that he was one of the few out there that could grow a local from little more than grit and spit, and once it was all over but the shouting, he’s done that, and workers are the better for it to my way of thinking.

Now, there are reports that the healthcare union world of California is on the way to going crazy again, which is a total head scratcher.  The International union under new president, Mary Kay Henry, who incidentally had been the unsuccessful secretary-treasurer candidate with Splain in the last century, not surprisingly re-issued the six-year old order to create one long-term healthcare unit of nursing home and homecare workers in California.  The same order Regan was dispatched as a trustee to enforce when everyone went to the mattresses in Cali.   SEIU wants Local 521 and UHW to make it happen.

Truth is stranger than fiction, and who can sort this out at this point, but the SEIU-UHW board with my brother Dave Regan at its head seems to be trying to organize against the original order that was his mandate.   A thinly veiled resolution was passed by the local.  A not too objective poll was plopped on the members to build their support for standing pat.  I even heard that SEIU-UHW had picketed the International’s headquarters on Massachusetts Avenue in Washington.

Once again SEIU-UHW would be a strong, strapping 80,000 members.News reports are trumpeting a great contract just concluded at Kaiser led by Hal Ruddick as executive director running the team.  Agree or disagree, Regan still has a vision for the labor movement nationally and is coming off a jawboning, heavy bluff-and-feint concession from the California hospital association which darned near gives the union organizing neutrality.

Say it’s not so.  This can’t be déjà vu all over again.  Same song, second verse.

We can’t seem to win for losing these days.

Blue Cross Loses Its State Tax Exemption in California

indexLittle Rock     The state of California in an unusual and precedent setting move withdrew the state tax exempt status of Blue Cross Blue Shield of California.  The Los Angeles Times said they did so “quietly,” but trust  me on this one, their action will reverberate with a loud roar  throughout the soft chairs and well-appointed executive suites of highly  paid, supposedly nonprofit hospital and insurance executives all around the country.  In the short term, barring appeals, this will cost the Blues  tens of millions of years in state tax payments in California.  In the long term this may toughen the backbones of many state tax authorities  and the IRS, now charged with regularly assessing the charitable contributions of nonprofit hospitals, to finally separate the herd,  making the wolves in sheep’s clothing who have for profit style hearts and pay stubs, either really be mission driven or really be all about  the money.

God knows, the California Blues were asking for it!  They had $4 billion in reserves.  They had to be forced by the legislature to reveal the fact that their chief executive was being paid over $4 million per year in 2011 and 2012, and then still with impunity didn’t disclose his pay after that but simply said the top three executives all were paid over
$1 million per year.  This was not a new problem for the Blues.  Their reserves didn’t suddenly surge to $4 billion plus, but have been working  their way up from $3 billion over the last couple of years.  Incidentally,  the level of their reserves was almost four times the industry recommendation for what any outfit might have possibly needed for any conceivable circumstance or calamity.  In some ways in California this is a footnote in a long series of chapters where for profit practices operating with nonprofit protections have been scrutinized and questioned.  One part of California’s Blue Cross operation had already been lopped off as for profit earlier, and with this movement by the California taxman, the company will have to put up or shut up on its charity obligations.  The company’s earlier strategy had been to calf off $30 or $40 million to a separate foundation to handle their charitable obligations, but they must have missed the memo that to be tax exempt the whole operation has to be operating for charitable purposes not just a branch off the main trunk.

Are they alone? Hardly! Looking at the similar problem in nonprofit hospitals, our researchers would only nod at the Cali-Blues pay stubs.  Certainly big nonpro hospital execs at outfits in Houston for example are making in the $4 and $5 million range.  The Partners’ nonprofit hospital behemoth based in Boston lists a small army of  executives making more than a million on their IRS 990.  Children’s in Houston is over a billion dollar operation and even with its creative accounting only claims to spend $6 million in charity care, making the California Blue Cross look like a big spender. It goes on and on and on like this from city to city, state to state.  Looking through our researchers’ spreadsheet you can’t tell what hits you first, the headache at reading all the big numbers, or the heartache at seeing how miserly the charity care continues to be.

As California just made clear, a day of reckoning is coming on the state level as desperate legislators have to balance their budgets and are less willing to pretend these slicksters can get away with being something they aren’t.  These insurers and hospitals have to hear the footsteps of state and federal tax folks heading towards their doors now.  The party is coming to an end.  It’s time for them to pay the piper.  Luckily, that means a better day for all of the rest of us!

Important Suit to Stop Diversion of Foreclosure Relief Funds for Other Purposes

A foreclosure sale sign sits in front of a house in Miami BeachPeterborough    Three California-based nonprofits, the National Asian American Coalition, COR Community Development Corporation, and the National Hispanic Christian Leadership Coalition sued Governor Jerry Brown and his team in California demanding replacement of $369 million obtained for the state for mortgage foreclosure relief and diverted to pay for state debts.  The suit alleges that according to the New York Times that, “Under California law… money placed in a so-called special deposit fund …can be transferred to the state’s general fund only “if the transfer does not interfere with the object for which the special fund was created and the transferred amount is repaid when feasible.” 

            California is certainly not all by its lonesome in diverting the funds from this multi-billion dollar foreclosure relief.  Gretchen Morgenson also cites a report “by Enterprise Community Partners, a nonprofit organization that promotes affordable housing …that half of the 49 states in the settlement had used about $1 billion of the homeowner counseling money for other purposes, like putting it into their general funds or toward non-housing needs.”  Some are claiming that California used the monies to pay down debt from building low income housing, but, frankly, that’s also not the same as foreclosure relief is it?   This whole gubernatorial diversion scheme is troubling and largely smells like a state slush fund at the whim of governors and legislators unwilling to be accountable.  We’ve previously beat the drums about how little of the tobacco settlement money paid by the state actually goes to health programs of any kind or to any sort of smoking abatement programs, and this mortgage relief money wink-and-nod reeks of the same thing.

At the same time this suit is intriguing because there seem to be multiple back stories.  The three nonprofits are smaller, largely unknown players in the long running foreclosure relief battles over recent years and seem to have longer names than their footprints in home buyer counseling and similar endeavors, which made me head scratch a bit, but seeing a picture of Robert Gnaizda, acting as their general counsel, made me start to put two and two together.  Gnaizda’s quote in the paper was peculiar since it was less “advocate” than “insider” in talking about the groups having told the governor they opposed the move but held the suit during the state’s financial crisis until Governor Brown started touting a $10 billion surplus by the end of his second term.  For most organizations fighting for relief in the foreclosure wars, it was either wrong or it wasn’t, and California’s decision to divert funds intended for homeowner relief would have had nothing to do with how much money might have been in their wallets when families were being thrown out on the street, and this money was intended to help them.

But Gnaizda has long been an interesting voice on the California scene, both as a scourge of many of institutions with countless lawsuits dating back to his time directing California Rural Legal Services on to his more recent decades driving the Bay Area-based Greenlining Institute.  At the same time he has been a well-connected California political and establishment figure whether as part of first Brown Administration in several positions or through his constant shoulder rubbing with other big time lawyers and their clients on either side of the table.  He knows his way around the state, both inside and out.  He could be difficult to deal with though and never bridled at attacking other organizations, including ACORN, on our various national banking settlements, based on what he perceived to be California’s special interests and pleadings.  I don’t know the story of his retirement from the Greenlining Institute, but he now claims a role as general counsel for many of the same kinds of CDCs and other groups, similar to the Greenlining Institute’s own coalition of sorts.  I wonder if he was looking for a different platform for his own particular brand of legal advocacy.  Certainly, the Greenlining Institute and the National Asian American Coalition have been publicly linked together on other issues, including the call to eliminate the mortgage income tax deduction, which I heartily agree desperately needs reform. 

With Gnaizda pulling the strings behind this suit it’s certainly serious and not going away, which is promising for whatever reason.  Another interesting tidbit involving this litigation is the fact that they were able to recruit Neil Barofsky, a partner at Jenner & Block and a former special inspector general for the federal Troubled Asset Relief Program.   Barofsky is a hero in the fight for just foreclosure modifications for his argument that a problem in the TARP program was the lack of action on foreclosures and the way the Treasury Department toadied to the big banks and allowed them to make a mockery of any pretense of mortgage modifications.

This suit will never see a trial, I would bet, because it spells deal and settlement in big letters all over the front of it.  Gnaizda and his allies have certainly positioned this matter in every way possible from timing to avoiding all of us rowdies to picking the lawyer to front the case for a big time political deal and a quick settlement, and I’m rooting for them to set a precedent in trying to stop this kind of hijacking of money won for just cause being diverted to separate and unrelated pockets.

Higher Living Wages Somewhere, Maybe? $15 Per Hour, Unlikely!

A group of workers and labor activists march down West Grand Boulevard as they demand a raise in the minimum wage for fast food workers in DetroitLabor DayLittle Rock       A couple of days ago there was an article in the Times that examined the call by some fast food workers through their publicity strike for $15 per hour as their minimum wage.   The reporters wrote of experts and economists being “flown to Las Vegas” for urgent strategy sessions on how any of this might be achieved now that the fast food workers are becoming a mini-Occupy blip on the media screen.  They mentioned a return to the city-by-city living wage campaigns, mainly engineered and piloted by ACORN around the country.  The article noted that none of this was getting much traction from McDonalds or the other mega-employers of lower wage service workers.  

            So, what can really be done?

            Ironically, the lowest hanging fruit is also where labor still matters and the Service Employees International Union (SEIU), which has been funding the fast food organizing, has significant membership and resources, and that’s California.  Cities and counties can legally raise minimum wages on an area basis, and have done so in the past with coalitions of ACORN, labor, and others particularly in San Francisco.   For years these campaigns have been sitting there waiting for the energy, resources, and political will to make them happen, especially in Los Angeles and Los Angeles County, where it would be huge, but the same thing is also possible in San Diego, San Jose, Sacramento, and elsewhere, and it would affect huge numbers of workers, maybe millions given the way “all boats rise.”

            So why hasn’t it been done already?

            Well, it would also take millions of dollars, and huge amounts of organizational ability.   There’s no ACORN anymore of course, but ACCE, the successor to ACORN California, has skills and experience in this area, but… the real truth is all of this is hard and takes time to get the petitions, get on the ballot, and then try to win an election, long after the papers have yellowed and the tweets and Facebook photos have disappeared and most of the original fast food workers have changed jobs another couple of times.  There’s no ACORN now, and since 2008 there haven’t been any statewide initiatives that I can recall to raise the minimum wage or local ones in California or elsewhere where it is legal with the sole exception of Albuquerque by an ACORN successor, OLE!

            And, the hard lessons we learned repeatedly in Denver and Houston initially on local elections and statewide in Missouri, all of which we lost, is that you can’t win elections city or statewide with what you want the minimum wage to be or something close to a living wage, but only with a figure that represents a raise.   When we started winning, we also started polling, especially in statewide campaigns with different wage numbers, and taking the highest number to the ballot that had greater than 60% support.  $15 per hour, forget about it, if you are going to the voters!

            We have to raise the minimum wage, and it matters to all lower wage workers and their communities desperately, but if there’s no movement from the employers and no real organizational or real worker pressure to force them to move, we have to find levels that are not rallying cries, but real benchmarks of progress where we have political support. 

            God knows what the economists had to say on their junket to Vegas, but this is some solid advice based on painful experience and hard won victories that moved billions of dollars to millions of workers.  It’s time to get to it!  It’s all about LA, baby!  Happy Labor Day!

 

Richmond’s Fight to Use Eminent Domain to Stop Home Foreclosures

New Orleans   Talking to community activists this week who are among the sparkplugs behind the Richmond Progressive Alliance (RPA) in Richmond, California, one of the hot topics was the investigation by the city of whether or not eminent domain might force refinancing of houses facing foreclosure that are “underwater,” where owners owe more than market value.    After widespread attention in San Bernardino County last year and their retreat from that notion, I had thought this proposal had been shelved everywhere, but it turns out there is still a heartbeat, and Richmond, used to fighting giants like Chevron with its huge Bay Area refinery that often treats the city like a company town, might be just the place to give this tactic a try.

They have been working with a group of investors called Mortgage Resolution Partners (MRP) who have advanced the scheme.  According to the Mercury News, it would work like this:

“The plan, according to MRP and Richmond officials, goes something like this: After a government agency seizes the underwater mortgage, investors brought together by MRP pay off bond holders at close to the current appraised value, then line up a new mortgage for the homeowner at far less than the previous amount. MRP takes a $4,500 cut from the new lenders.”

My friends had a good friend-of-a-friend-friend-of-a-friend perspective on what happened in San Bernardino County as well.   It seems that before the vote on using eminent domain there, private jets clogged the runways in southern California from Wall Street banks and mortgage funds delivering the message that if San Bernardino tried this tactic they could forget about ever borrowing a dime again or selling a bond on a public works project anywhere ever.  San Bernardino officials were forced to fold like a cheap suit.

The whole fight is the old fight since 2008 of getting banks to agree to principal reductions in refinancing mortgages underwater, particularly those mortgages held in huge Wall Street tranches with hundred of investors making it virtually impossible to get agreements to restate the mortgages to current market values even this long after the bubble burst.  The eminent domain tactic would make loans performing again but banks and other investors would finally have to restate all this paper value to what is really on the streets where people live.

Cities like Richmond on the West Coast and Newark on the East Coast, where this is also under discussion, are desperate.  Studies that say 49% of the mortgages in Richmond are underwater made it easier to get a 6-1 vote to see if a deal can be forged with MRP to use this tool.   Newark with Mayor Cory Booker now raising money coast-to-coast for a snap election for the U.S. Senate will never go toe to toe with big finance and big bankers.   

Richmond though is a whole different matter.   After our visit we toured the site of the old Kaiser shipyards and walked through the National Park Services’ Rosie-the-Riveter museum in this hulking facility with a million dollar view of San Francisco and Marin County from its docks.  They have taken the measure of Chevron and are in a constant struggle with the 8th largest corporation in the world.  They tried to pass the first tax on sugar sodas in the country by referendum going toe-to-toe with the food giants.  They have a Green mayor and a great, volunteer-led progressive organization in RPA, local community organizations like ACCE, formerly California ACORN, and others.  There’s steel in Richmond, so this still might be place that takes the measure of Wall Street and recreates a housing market for working families out of the rubble of the recession.