Labor Pains: Because Being in a Union can be Painful

Labor Boss Claims No Pay To Play

sharriganThe Sacramento Bee and ProPublica both reported that Sean Harrigan, a “veteran leader of the United Food and Commerical Workers union,” actively solicited contributions for his union from money managers and pension fund consultants while serving on the board of California’s largest pension fund, CalPERS.

Harrigan claimed that he “invited not more than two dozen firms to participate” and that it was not a pay to play scheme. Harrigan also claimed that he never let the donations to the UFCW’s Issues Education Fund influence his decisions on CalPERS’ investments.

State campaign finance records found that money managers, pension fund consultants, and advisers pumped in more than $1 million to the UFCW’s fund between 2000 and 2004.

Furthermore, an examination of campaign contribution records “show the UFCW campaign fund received contributions from money managers as their deals were being considered by the CalPERS board.”

The Bee provides several examples of contributions followed by dubious pension fund investment decisions that appear to have benefited the contributors.

One of the largest contributors to the union fund was Yucaipa American Funds LLC, a financial firm owned by millionaire businessman Ron Burkle. … In October and November 2001, Harrigan had several telephone conversations directly with Burkle and other members of his company about his plans to create a merchant bank – The Yucaipa Companies. On Feb. 4, 2002, CalPERS announced deals and investments with Yucaipa for up to $560 million. Between Sept. 20, 2002, and April 23, 2004, Yucaipa American Funds put $36,000 in three $12,000 donations into Harrigan’s union fund, documents show.

The pattern of contributions and subsequent pension fund investment decisions certainly give the appearance of potential pay to play. Harrigan and the UFCW don’t help their own case, judging by how they spent a bulk of the contributed funds:

Harrigan said his union used some of the money companies contributed for member education and voter registration efforts. Some of the cash also financed the UFCW Western State Council’s annual Person of the Year Award gala dinner, he said. Harrigan confirmed that he was named person of the year by the UFCW and feted at an event that featured a day of golf and a gala dinner attended by 300 to 400 people in Monterey. The dinners have cost between $100,000 and $200,000 to organize and stage, documents show.

To summarize: labor boss solicits donations for union from potential investment targets while sitting on the board of the largest state’s largest pension fund. These donations are funneled to host expensive galas, including one to honor aforementioned labor boss as Person of the Year. Labor boss says there’s no wrong-doing or evidence of pay to play.

If that doesn’t sound at all suspicious to you, we’ve got an union organizing card for you to fill out.

Categories: Center for Union FactsEFACNewsUFCW