Michigan SEIU Scam the Product of Government Collective Bargaining

Proponents of government collective bargaining view it as a fundamental human right. The shameful actions of SEIU in Michigan, however, undermine this claim.

In 2005, Michigan lawmakers signed off to create the Michigan Quality Community Care Council (MQC3). MQC3 maintains a registry of homecare providers to assist Medicaid recipients looking for a caregiver. In reality, the primary function of MQC3 was to make 45,000 private homecare providers government employees and dues-paying union members.

In 2006, SEIU took advantage of Michigan law deeming homecare providers government employees. To gain exclusive representation SEIU organized a covert union campaign. The stealth-organizing tactic led to 20 percent voter turnout and SEIU won a landslide victory.

Soon thereafter, SEIU obtained a collective bargaining agreement (CBA) with the state. The events following the CBA expose the dangers of government union political influence and permanence of CBAs.

MQC3, acting as a “dummy” employer for homecare workers, created a mechanism for union dues to be siphoned off Medicaid checks. Not only is it illegal to unionize homecare workers who are private contractors, homecare workers already have employers: their Medicaid beneficiaries. Worse, the scheme wholly rejects the purpose of Medicaid by diverting funds from individuals who cannot afford medical care to Big Labor.

Since 2006, SEIU collected nearly $6 million a year and $28 million total (and counting) in union dues from Medicaid payments to homecare providers. The Mackinac Center broke the news and filed suit to stop the forced unionization and dues payments of homecare workers.

Once Michigan lawmakers became aware of SEIU’s exploitation, they took action to stop it. Gov. Rick Snyder eliminated MQC3 funding in the FY 2012 budget and planned to close the program on September 30, 2011. State Rep. Paul Opsommer (R) introduced H.B. 4003, banning stealth unionization of private contractors and forced union dues payments of homecare workers, which passed House.

Apparently, laws that protect low-income individuals with health problems are unpopular in Michigan. Union-friendly state lawmakers worked behind the scenes to stall H.B. 4003 in the Senate and to maintain union funding from MQC3. Their efforts included State Senator Roger Kahn (R) conducting a meeting with SEIU officials to preserve their forced dues collection. Sen. Kahn’s first notes of the meeting read. “SEIU is concerned re: moving forward w/ funding QC3. Gent. Agreement to find $.”

Sadly, SEIU’s collective bargaining power made their political influence superfluous. The binding powers of CBAs allow SEIU to continue collecting union dues until the contract expires on November 15, 2012.

Mackinac Center Legal Foundation Director Patrick Wright explains the devastating effects of union political influence combined with government collective bargaining power, “The amazing resilience of MQC3 indicates that legislation is going to be required to ultimately end the government employee unions’ practice of diverting money from the state’s most needy citizens to fill their own coffers.”

All attempts to protect those in need and taxpayers (by way of lawsuits, reform, and defunding) from corruption have failed. Big Labor’s ability to convince legislators to set up dummy agencies enabling unions to steal from taxpayers is so strong that repealing government union collective bargaining power is the only way to end all such heinous behavior.

However, one legal maneuver may be left to stop illegal forced-dues payments and to recover taxpayer funds in Michigan. Medicaid receives funding from federal and state governments, opening the door for filing “false claims” charges in both state and federal courts to recover taxpayer funds. False claims are taxpayers’ most powerful tool to recover stolen government funds.

On the federal level, the False Claims Act, 31 U.S.C. §§ 3729-3733, allows taxpayers to recoup losses from any person or entity that “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.”

In Michigan, the Medicaid False Claims Act, Act 72 of 1977, directs the state “to prohibit fraud in the obtaining of benefits or payments in connection with the medical assistance program; to prohibit kickbacks or bribes in connection with the program.” Violations of the Medicaid False Claims Act involve “making a claim or causing a claim to be made under the social welfare act that contains a statement of fact or that fails to reveal a fact, which statement or failure leads the department to believe the represented or suggested state of affair to be other than it actually is.”

The creation of MQC3 was fraudulent, exposed as political payback from e-mails obtained by the Mackinac Center. Additionally, proposals creating MQC3 failed to reveal the fact that union dues would be taken out of Medicaid payments.

Government union collective bargaining power allows Big Labor to steal from the needy and increase the costs of providing public services. Removing collective bargaining power from government unions would diminish their political influence and reduce false claims and fraud.