LaborPains.org

I can’t take any credit for the research leg-work on this. The credit is due to the Mackinac Center for Public Policy for hammering away at the sham that is the SEIU Member Action Center, Inc and their new tax credit at the expense of Michigan’s taxpayers.  I can’t even hyperlink you to the website for the company, because it doesn’t work.

Never heard of SEIU’s MASC? Not surprising. It didn’t exist until October 22 of this year, according to the Center, but yet somehow managed to apply for a grant from MEGA (Michigan Economic Growth Authority) beforehand. On November 17, Michigan’s state government announced that the Michigan Economic Development Corporation would be helping ten businesses through MEGA, one of which it the aptly-named MASC:

“SEIU Member Action Service Center – The corporate subsidiary of Service Employees International Union (SEIU) plans to invest $3 million to create a shared organization in Redford Township to provide administrative services for the SEIU and other local labor organizations. The project will create 322 new jobs, including 224 directly by the company. The MEDC estimates increased economic activity created by the project will create an additional 108 indirect jobs. Based on the MEDC’s recommendation, the MEGA board today approved a state tax credit valued at $2 million over five years to help convince the company to expand in Michigan over competing sites in Missouri and Florida. Redford Township is considering an abatement to support the project.”

What about the “competing sites” in Missouri and Florida? Forgive me if I don’t hold my breath while the SEIU tries to produce these “competing sites”.  According to MCPP, there is no evidence that any paperwork was filed. So thanks to the tax break, Redford Township, MI, a township in the district represented by the speaker of the Michigan House, will get the SEIU’s new “company” jobs.

What’s so scandalous about the $2 million tax write off, an expected additional abatement from the town, and the timing of the whole thing? The very peeved Mackinac Center for Public Policy explains:

“The SEIU already benefits from its legal status as the workplace representative for more than 12,000 state employees, and annually receives more than $6 million in membership dues and agency fees — all effectively guaranteed and collected by Michigan government.”

“There are at least two problems with this deal. First, did the tax write-offs compromise the union? About two weeks after the Michigan Economic Development Corp. announced its decision to award the tax credit, SEIU Local 517M agreed to revise its contract with the state and make concessions, accepting a less-expensive health care plan for new employees and agreeing to a two-year wage freeze. These concessions were controversial; at least one other union representing a different group of state employees announced it would not follow suit. Even if there was no explicit quid pro quo, the tax break for the union subsidiary might have made the pay cut easier for SEIU officers to swallow.”

“Second, the Member Action Service Center will supposedly provide administrative support, such as grievance intake and record keeping, for union locals. But taxpayers know little about what the SEIU will do with the office space and equipment that the taxpayers’ “generosity” will allow them to rent or buy. The computer networks, photocopying machines, conference rooms and telephones will still be available after hours, and the temptation will be strong for SEIU to use these same state-supported resources for organizing campaigns, political activism, fundraising and get-out-the-vote efforts.”

The hysterically sad thing about this whole affair is that the SEIU and local government billed this little coordinated project as “Project Cherrywood.” Don’t ask me why, because who the heck knows. If you google that name, you’ll find the Redford Township Board agenda docket from Nov. 10, 2009:

Funny names aside, it’s the Michigan taxpayers who will pay the price.

YRC has been on the skids for months, trying to finance, retool, sell, and buy its way off the edge bankruptcy.

At the end of 2009, all its cards played, YRC reached out to its bondholders to complete a debt-for-equity swap that would save it from the brink. If approved, bondholders would end up owning the vast majority of the company. But no one was approving, despite multiple extensions of the approval deadline.

The Wall Street Journal covers what happened next:

It’s here where YRC began to suspect that certain funds were holding out their consent, largely because they had CDS positions that were more valuable, says Mr. Green. In all, YRC and its advisers couldn’t convince—or even locate—owners of about $40 million to $50 million in notes to tender their holdings.  Their resistance was especially perplexing, said Mr. Green, because the company reckoned that bondholders would likely receive nothing in a bankruptcy filing.  As YRC saw it, a tiny group of holders held the fate of a company with 55,000 employees and annual revenues of about $9 billion in its hands. One problem was the opacity of the holders’ positions, said William D. Zollars, YRC’s chief executive. “It’s really difficult to tell who has CDS and how much they have. You can never be certain.”

Somewhere in the financial nether, someone was holding ALOT of YRC bonds, and thanks to this little trick of credit-default swaps, they stood to make alot of money if YRC went under. So the Teamsters, despite their own roll in dragging YRC to the brink, sprung into action…sort of. More from The Wall Street Journal:

Conditions grew so desperate for YRC that it enlisted the Teamsters in its effort to complete the bond tender. The Teamsters targeted a handful of bondholders, singling out the likes of New York hedge fund Brigade Capital. It planned a protest for Dec. 30 on Park Avenue. Brigade declined to comment. At the same time, the union secured the help of Pennsylvania state Treasurer Rob McCord, whose pension fund is an investor in Brigade. It’s unclear what effect Mr. McCord’s intervention had on the matter, but Brigade executive Don Morgan told Bloomberg on Dec. 29 he held no YRC bonds.  In a statement, Mr. McCord said “it was a great to have a chance to help.” The pressure paid off. By Dec. 31, YRC had enough bondholder support to complete its restructuring.

I should clarify that the Teamsters actually ended up canceling their protest against the hedge fund because of the bitter cold, but no one told the police officers who arrived at the scene for security, or The Business Insider who showed up to cover the “incident.” But the Teamsters threat was enough and whoever-it-was holding the bonds allowed the switch. The icing on this strange cake is that in the end even Goldman Sachs even pitched in to help the switch after Hoffa went on the offensive.

The YRC and Teamsters will live to drive another day.

Image courtesy of Telstar Logistics.

Here are a few things about Schwarzenegger that you can rely on.

He will always have that accent. He will always “be back.” And he doesn’t like to feel cornered.  Even his alter egos are pretty good at getting themselves out of tough spots. So what exactly is the SEIU thinking they will gain from fiscally/physically throttling the state of California under Schwarzenegger’s watch?

According the some, the SEIU‘s efforts may lead to the very thing the SEIU fears most–fewer union dues…..Sorry…..I mean layoffs of state workers.

From The Sacramento Bee:

Lawyers for state employee unions are popping champagne corks because of a judge’s order that could force Gov. Arnold Schwarzenegger to halt furloughs of tens of thousands of state workers. There’s no reason to celebrate. By aggressively and successfully challenging Schwarzenegger’s authority to issue furloughs, the Service Employees International Union 1000 and other unions are painting the governor into a corner.  That corner could lead him to lay off thousands of state workers, a much more painful alternative than furloughing workers three days a month. [...]

It should be noted that the governor struck a deal with SEIU 1000 earlier this year that, among other things, would have reduced furloughs to once a month. But then SEIU’s parent union led the fight against Proposition 1A, which included an extension of higher taxes. When 1A went down, the state was left with less money to pay for the SEIU 1000 contract – one reason the Legislature never ratified it. Now that the union has won this round in court, its lawyers say they will seek back pay for state employees who took days off because of furloughs. Imagine the public reaction if they are successful. By taking this stance, SEIU 1000 seems intent on creating a public backlash. That hardly will be in the best interests of its 95,000 members and other state employee unions.

With every Californian’s eye focused squarely on this issue, it would be a welcome thing indeed for Californians to take notice of who bankrupted their state in the first place.

Here’s a piece about one of the last times they put the governor in a corner.

Image courtesy of Dustin Diaz.

New, improved White House visitor lists came out during the holidays. See if you can say “burying the lead” five times fast.

SEIU president Andy Stern and Anna Burger takes first place on the visitor’s list, much like Garry Kasparov would take first place in a chess tourney against, well, you and everyone you’ve ever known. From the Heritage blog:

The Service Employees International Union takes the top prize as President Obama’s favorite labor union. President Andy Stern and Secretary-Treasurer Anna Burger have visited the White House nearly 60 times, including 11 meetings with Obama and another with Vice President Biden.

The vast majority of people who work at the White House– and I don’t just mean the peons– I mean everyone including Deputy Assistants to the President and Special Assistants to the President don’t have that kind of access to the President. Really.

Feel like cyber-stalking more White House visitors? Visit the list HERE.