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SEIU's California Scheming

This week, The Los Angeles Times featured a three-part series on suspicious dealings at a local of the 2 million-member Service Employees International Union (SEIU), one of the most powerful unions in the United States.

California's largest union local and a related charity have paid hundreds of thousands of dollars to firms owned by the wife and mother-in-law of the labor organization's president, documents and interviews show.

The Los Angeles-based union, which represents low-wage caregivers, also spent nearly $300,000 last year on a Four Seasons Resorts golf tournament, a Beverly Hills cigar club, restaurants such as Morton's steakhouse and a consulting contract with the William Morris Agency, the Hollywood talent shop, records show.

In addition, the union paid six figures to a video firm whose principals include a former union employee. And a now-defunct minor league basketball team coached by the president's brother-in-law received $16,000 for what the union described as public relations, according to the union's U.S. Labor Department filings and interviews.

Most of the 160,000 people represented by the union, a local chapter of the nation's fastest-growing labor organization, the Service International Employees Union, earn $9 an hour or slightly more tending to the infirm and disabled in private homes under taxpayer-funded programs. The workers, whose dues fill the local's coffers, often are described as "the poor caring for the poor." In its Labor Department filings, the local, headed by Tyrone Freeman, has reported more liabilities than assets for each of the last three years.

Freeman, who leads the United Long-Term Care Workers, said he and his union have done nothing wrong. "Every expenditure has been in the context of fighting poverty," he said.

A rising star in labor circles, Freeman, 38, said the union's members have benefited from the money spent on the video production and day-care companies that his wife and mother-in-law operate at their homes, because of what he termed the high quality of the services.

The union and the charity have paid those firms at least $405,700 since January 2006, not counting any outlays this year.

Nelson Lichtenstein, director of UC Santa Barbara's Center for the Study of Work, Labor and Democracy, said the local's spending recalls the excesses of organized labor's past.

"It's very important for unions not to do this kind of thing," he said. "Union leadership is a public trust -- all the more so when the people being represented are among the lowest-paid in America."

SEIU is the same union that is suing to prevent layoffs of state employees in California, which is facing a $15.2 billion budget deficit. An organization where this kind of thing may have gone on is hardly in a position to tell state governments -- or anybody -- how to better spend -- or not spend -- their money. This is especially so in light of the Times' account of the SEIU headquarters' reaction to the allegations at the Los Angeles local.

A source close to the union said [SEIU spokesman Steve] Trossman was informed six years ago of allegations involving Freeman's finances and personal relationships. It is unclear whether a review was undertaken at that time; Trossman said that the SEIU might have performed an audit of the local because of the allegations, but that he couldn't be sure.

The source, who asked not to be identified because he feared retribution, said Trossman helped develop a strategy in 2002 to keep the allegations from embarrassing the SEIU at a time of epic membership growth.

Trossman's efforts succeeded, the source said. Freeman's local continued to expand as part of SEIU President Andy Stern's much-celebrated campaign to organize entire industries state by state. The local and an affiliate ended up representing about 190,000 workers, most of them in the field of home healthcare.

A union rising star Freeman may have been, but he had considerable help from a powerful friend: SEIU President Andy Stern.

Lichtenstein said the union clearly had an "investment" in Freeman, a Stern protege who has been a high-profile loyalist in the SEIU push to consolidate regional locals into statewide chapters. That effort is being resisted by a handful of dissidents, notably the president of a 150,000-worker Oakland affiliate.

Stern wants to move 65,000 workers from that local to Freeman's, a proposal that has triggered a nasty internecine fight.

It will be interesting to see how Stern's centralizing efforts play out -- and how his opponents within the union fight back. There should be more drama within SEIU to come in the next few years.

For the full story, see here, here, and here.