Obama Caught Between Two Masters - Goldman Sachs & SEIU - Part 2. SEIU

Sept. 25, 2009 - PRLog -- Radical even among unions, the Service Employees International Union has staked a name for itself building it's two million members not just by organizing the workplace but by stealing members from other long established unions.

The genius behind this radical labor movement is Andy Stern, yet another of the many Obama backers who were youthful members of the most radical organizations of the 1960's.  Andy was in the socialist SDS, Students for a Democratic Society, before setting off on a life of organizing.  To his credit, SDS was rather radical but never endorsed the use of terrorist bombings like other socialist groups.

Stern, perhaps the most loved and most hated member of the labor movement in modern America, began his career as a community organizer and never looked back.  During his years as recruitment coordinator for the President of the AFL-CIO he consistently pushed for revitalization of the labor union movement and refocusing American unions to consolidate and gain bargaining power.

By 2005 he was head of the SEIU and was pushing his boss, John Sweeny, President of the AFL-CIO to make reforms or he would lead a walkout from the union federation.  Sweeny balked and Stern made good on his threat.  Within a year he formed the Change to Win (CTW) Labor Federation, getting the powerful Teamsters and five other unions to join forces with the SEIU.  It was the first new labor federation in America in 50 years.

Meanwhile he targeted other unions in a radical move to build his SEIU and his membership soared to 2 million this year, the largest labor union in America, with nearly 1 million health care workers.  Parlaying the millions of dollars in membership dues and lack of unions in the health care industry Stern claims he spent $60.7 million to get Obama elected.  It would be the largest union and special interest campaign financing ever given to a single candidate.

What was the price of the financing for Obama?  Perhaps it is most obvious in the actions by the new president.  Within ten days of becoming president, on January 30, 2009, Obama signed the first three Executive Orders wanted by the unions.

The first executive order requires employers with federal contracts above $100,000 in value to post a notice in the workplace informing their employees of their rights under the National Labor Relations Act (NLRA), including the right to join a union.

The second order applies to federal contractors who provide services to government buildings. When a federal agency changes contractors, the new contractor will be required to offer jobs to the non-supervisory employees of its predecessor.

Finally, the third order prevents federal contractors from being reimbursed in federal funds for money spent to oppose (or support) union organizing efforts among their employees.

In another boost to organized labor, just six days later President Barack Obama on February 6, 2009, signed a fourth Executive Order, effective immediately, authorizing executive agencies of the federal government to require every contractor or subcontractor on a large-scale construction project to negotiate or become a party to a Project Labor Agreement (PLA) with one or more labor organizations.    This is the fourth pro-labor Executive Order signed by President Obama since January 30th.

This was only the beginning.  

Though stymied on the Employee Free Choice Act, (the Card Check Act), abolishment of the secret ballot in elections which would make it easier for workers to form unions, organized labor claimed a big consolation prize: the massive application of a law guaranteeing “prevailing wages” for hundreds of thousands of construction workers hired under President Obama’s economic stimulus program.  

Such is the power of Stern that Obama once said he consulted with SEIU on every major decision he makes.  Proof of the power is that the White House, when it became obvious that the Obama healthcare initiative was in danger of losing support and faced with a series of contentious town hall meeting in August, brought Stern and SEIU in to manage the campaign for approval.

Stern dispatched the SEIU mobile centers to coordinate town halls for nervous members of the House and Senate all over the nation.  They were to control and counteract the opponents to the Obama healthcare proposals including filming events with their own video teams and feeding footage to the media to make the opponents look bad.  Some say the tactics of the purple clad SEIU operatives was like thugs and one SEIU staffer was arrested for beating up an older man.

In September another victory for the unions when Obama imposed heavy import tax duties on imported Chinese tires at the request of labor unions, an action against that threatens to spark a trade war between the US and China.  China has already threatened to add a tariff to imports of US poultry and vehicles.  The action by Obama increased the 4% tariff on Chinese tires by 35%.

Now Congress is back and it is time to see if the big payoff is made to the SEIU, passage of health care reform that allows, even gives favorable treatment, to allow Stern to organize the health care industry in America.  Over 17 million people work in health care and related social services in America.  SEIU now represents about 1 million of these workers while the Communications Workers of America represents about 140,000 meaning the pool of non-unionized health care workers is huge.

SEIU expects to be the primary beneficiary of the health care reform using it to open doors to unionizing this massive prize.  The union dues and lobbying wealth it would generate would dwarf current spending by the unions.  A public option would make it even more desirable as public workers would be much easier to organize.

Unfortunately, the more SEIU has tried to function like a well oiled corporation the more difficulties it has encountered so it remains to be seen if Stern can wrap up the gigantic payback.  If anyone can he can.

Corruption in SEIU is extensive, especially in California where battles between unions and between union leaders, most instigated by SEIU, threaten to tear apart the move to grow the unions.  One union official in California calls Stern a "threat to the soul" of the union movement.

Stern led the condemnation of the greed and mismanagement on Wall Street.  Now he stands to fall into the same trap as his Wall Street enemies.  According to the New York Daily News, Stern undertook a bitter campaign against the Bank of America last spring while he was borrowing an astonishing $87.7 million from the bank at the same time.  In another industry it would probably be called protection money.  He borrowed another $15 million from the union owned Amalgamated Bank.  SEIU recently reported $33 million in assets and $102 million in liabilities.

The SEIU cannot afford delays in the payback by Congress and Obama, they need money and they need it fast.  It will be interesting to see if Obama, Pelosi and the Democrats can maintain the sense of urgency they need to approve the bill and help SEIU or if the public discovers the truth first.

In the tale of the two Masters, the SEIU has no chance against Goldman Sachs when it comes to deciding which master will win out with the Obama administration.  Goldman has billions to manipulate while SEIU must borrow money to play the money game.  So far the return to Goldman has already been in the billions of dollars while the token victories given to SEIU have not even made a dent in paying their debts.

Nor can SEIU match the vast army of former Goldman executives strategically placed throughout the Obama administration and throughout the world of finance and politics.  No one has ever questioned the loyalty of this massive force.  Andy Stern may have attended the Wharton School of Finance but Goldman wrote the course and probably financed the school's endowment fund.