Elaine and Gerald Schuster - who raised millions of dollars for Democratic campaigns, earning them the friendship of the Clintons and visits to the White House - are walking away from the Democratic Party in a bitter dispute.
Elaine Schuster made the break in a recent, angry conversation with Philip Johnston, the Massachusetts party chairman. Johnston informed her that the state party is backing a union in its long and bitter battle to organize workers at a Schuster-owned nursing home in Wilbraham.
''She laid him out in lavender,'' said a source familar with the conversation.
The issue erupted last week, when Johnston and two other party officials wrote a letter to members of the Democratic State Committee, calling on them to send Gerald Schuster a letter urging him to settle his dispute with the Service Employees International Union, Local 285. The letter placed the state party squarely on the side of the union.
Johnston yesterday confirmed that the Schusters are breaking with the party. He said the couple is irate with party leaders for siding with SEIU, including Senator Edward M. Kennedy, a major beneficiary of their fund-raising.
Johnston said the Democrats were forced to chose between campaign donors and principle.
''This is a classic case where you have a fund-raising issue clashing with party values,'' Johnston said. ''In the case of the Massachusetts Democratic Party, values will prevail.''
Johnston confirmed that Elaine Schuster ''is very upset, and she has made her dismay clear to me in no uncertain terms.''
''She feels that she has been a major fund-raiser for the party and that she has not received any support on this issue from the party,'' he said.
Johnston said the national party is aware of the rift and supports the state party's decision to back the union.
The Schusters, who live in Brookline and amassed their wealth through a sprawling housing and real estate business, have thrown huge fund-raisers for Kennedy, Senator John F. Kerry, and Representative J. Joseph Moakley, dean of the state's congressional delegation. The couple has also contributed hundreds of thousands to the national party through soft money donations and has raised millions more for Democratic candidates.
At Moakley's Silver Jubilee, Elaine Schuster helped raise $900,000 as cochairwoman. Hillary Clinton appeared at the event, and Moakley called Schuster ''a great American.''
Party sources said Johnston received the green light from Kennedy to take the union's side in the dispute. Kennedy and other state Democrats have been under heavy pressure from state union leaders to back the SEIU.
The Schusters' battle with the union has been festering for more than a year. Union leaders were furious at the party's annual convention last June in Lowell when the session was gaveled to a close just as labor delegates tried to pass a resolution in favor of the SEIU. Since then, Johnston was elected chairman in a campaign in which he expressed strong sympathy for the union in its fight with the Schusters, sources said.
The Schusters were traveling yesterday and were unavailable for comment. Alan Eisner, a spokesman for the Schusters, said they were ''extraordinarily disappointed.'' He said the Schusters felt that the party was interfering unjustly in Gerald Schuster's business operations.
''Certain leaders of the political party are pursuing a union agenda that disrespects Gerry's ability to negotiate in good faith,'' Eisner said. ''Elaine is particularly upset that her name has been dragged into this, although she has no formal role in her husband's company.''
Eisner said the Schusters blame Johnston in particular for bowing to union pressure. ''For those in the Republican Party who think [US Senator] Jim Jeffords is a traitor, they can see the Democratic Party has its own Benedict Johnston,'' Eisner said.
Eisner said the Schusters would continue to provide financial support to individual Democrats, such as Hillary Clinton, but will not raise money for the party.
Gerald Schuster made much of his fortune through his company, Continental Wingate, which builds federally subsidized family housing. The company has come under heavy criticism from unions and tenants, who have attempted to exert pressure on the firm by lobbying Democratic leaders who benefit from the Schusters' fund-raising.
The direct financial impact on the Masschusetts party will be slight, sources said. The Schusters did not raise much money for the state party, but raised millions of dollars, through their own donations and by throwing lavish fund-raisers at their home, for the national Democratic Party and major national figures, such as the Clintons, Moakley, Kerry, Kennedy, and US Representative Martin T. Meehan of Lowell.
During the Clinton years, the Schusters were frequent guests at White House dinners, Christmas parties, two of the infamous White House coffees, and an inauguration brunch in 1997.
This story ran on page B1 of the Boston Globe on 5/25/2001.