The Politico is reporting that unions are intimidating Wall Street by leveraging the billions in dollars in pension funds that financial firms manage for workers and retirees. In a questionnaire making the rounds on Wall Street, unions are asking pointed and specific questions about fund managers’ history and associations. Although it’s not explicit in the letters, unions are implying that that they will pull their pension funds with firms that support EFCA.
The questionnaire has three parts: 1) what are the fund managers’ public positions, lobbying history, and political contributions? 2) Do the managers have any “relationships” between the company and any organization(s) that oppose EFCA? 3) Do the managers belong to any other trade associations that oppose EFCA?
Union leaders claim that pension fund managers are actively undermining the interests of the unions. Officials in the financial services industry were understandably none too pleased with the unions’ overt attempts at shaking down firms. An official for one trade organization said that the unions’ threats to Wall Street were “beyond outrageous” and that it was “troubling that Big Labor would use their pension plans as the bargaining chip.”
Of course, using pension plans for political leverage is illegal:
The Department has also consistently rejected a construction of ERISA that would render ERISA’s tight limits on the use of plan assets illusory and that would permit plan fiduciaries to expend trust assets to promote myriad public policy preferences. Rather, the Department has reiterated its view that plan fiduciaries may not increase expenses, sacrifice investment returns, or reduce the security of plan benefits in order to promote collateral goals.
It shouldn’t surprise anyone that unions have attempted to intimidate through financial means. Unions already tried to limit a newspaper’s right to free speech. And now we see them attempting to scare companies into giving up their right to petition the government. What’s next?