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Andrew Stern departs the SEIU now weakened by infighting and expenses By Alec MacGillis Washington Post Staff Writer Friday, May 14, 2010; 9:37 AM
In celebrating her election last weekend to the head of the Service Employees International Union -- the fastest-growing and most politically active union -- Mary Kay Henry vowed to "build on the success" of Andrew L. Stern, the charismatic and ambitious labor leader who is taking his influence to new arenas, such as President Obama's deficit commission.
But the state of the union Stern is leaving behind is more mixed than Henry let on. Even as Stern turns his attention to the nation's spending problem, his own union's spending -- notably the multimillion- dollar tab from internal battles he has waged -- is drawing sharp criticism from within the labor movement. Stern has expanded his union, but his decisions have left it, and the labor movement as a whole, financially strapped, according to disclosure reports that have received little scrutiny.
Stern has played an active role in Washington, visiting the Obama White House more than three dozen times and overseeing his union's prominent role in the health-care overhaul. And the 1.8 million-member union has grown in a time of labor decline, making Stern the most consequential labor leader of his era.
Spending by his organization, however, increasingly has been driven not by the usual labor priorities -- organizing workers and helping elect political allies -- but by internal strife, financial disclosures show.
In 2008 and 2009, SEIU sent hundreds of its officials to California to wage a turf war with a big breakaway chapter, spending $2.5 million each year on hotels in the state, a fivefold increase from 2007. In Fresno alone, the organization spent more than $300,000 on lodging before narrowly winning an election over dissident leaders.
The battle in California also helped drive up the union's legal costs last year by 64 percent to more than $11 million, a bill that also reflected a separate showdown with the hotel and restaurant workers union and the fallout from corruption allegations involving several Stern loyalists.
Other expenditures in 2008 and 2009 include a $17,000 bulk purchase of Stern's book; $46,000 to a little-known Hollywood actor for "public persona development" of SEIU officials; and $1 million to a filmmaker who made a movie about SEIU.
Stern and other SEIU officials vigorously defend the union's $300 million budget. They note that the organization improved its finances last year, bringing them into the range of other high-spending unions. And they say they needed to expend money on the internal battles to protect the union from people who sought to weaken it from within.
"It's a tragedy in terms of how the money was spent, but a necessity in terms of preserving the organization's integrity," Stern said. "I don't want to analogize this, but there is not enough money you can spend in America to protect us from terrorists. And you know, sometimes you have to spend money to protect the integrity of the institution from its own version of self-righteousness and terrorism."
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But critics note that the millions of dollars in union dues devoted to internal disputes -- both by SEIU and rival unions -- could have been spent on organizing or advocating for labor's top priority, stalled legislation that would make it easier to organize workers. To bring its spending closer into balance last year, SEIU cut dozens of organizers and saw its growth slow to 50,000 new members, from 115,000 in 2008.
"These sort of fights have been absolutely destructive," said Bob Bruno, a labor relations professor at the University of Illinois at Chicago. "They take the eye off the ball, and are not focused on what the real objective should be. Too much money is being spent vilifying each other, chasing their own tail."
Since Stern, 59, rose from being a Pennsylvania social worker and took the union's helm in 1996, it has doubled in size, signing up thousands of janitors, home health aides and food service workers, among others. It has also become a political force, pumping millions of dollars into election campaigns and making purple-shirted SEIU workers a regular sight at protest rallies.
But Stern's leadership has had a polarizing impact on the movement he sought to revive. His 2005 creation of a federation to challenge the AFL-CIO left a rift, even as his alliance, Change to Win, has fallen short of its organizing goals. Several unions may return to the AFL-CIO.
His strategy also sparked discord within SEIU. Instead of traditional organizing to win union elections, SEIU spent heavily to elect pro- union governors who have opened up sectors of public employment to unionization. And it has cut deals with employers who would allow certain workplaces to unionize in exchange for SEIU settling for employer-friendly terms.
Stern argued for growing membership, whatever it took; others saw such deals as undermining workers. The disagreement intensified as Stern consolidated chapters and centralized power in Washington.
That conflict played out most bitterly in California, where leaders of a 150,000-person SEIU chapter based in the Bay Area criticized new contracts as too weak and resisted the union's plans to move 65,000 long-term-care workers into a new statewide chapter. In early 2009, SEIU ousted the dissident leaders after they refused to accede to the shift, and the ousted leaders then formed a new union that is trying to reclaim its former members.
SEIU has spared no resources to quash the dissidents. It paid Ray Marshall, a former U.S. labor secretary, $176,000 to conduct a 2008 hearing on the dispute, which included SEIU's accusation that the dissidents had shifted funds into a secret account to prepare for their later breakaway, which the dissident leaders deny. Marshall played down the importance of the funds but gave SEIU the go-ahead to oust the dissident leaders.
In addition to its hotel costs for the California fight, the union spent $200,000 on security firms to guard its officials and its Bay Area offices. Some officials stayed so long that the union rented houses for them. The union said it made a clerical error when it listed in its disclosure forms a $15,400 "consulting" expenditure to Sharon Pelle in Berkeley, which Pelle, owner of the I Touch You massage therapy business, said was payment to rent her house.
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Last month, a San Francisco jury ruled in SEIU's favor in a financial dispute with the dissidents. But the breakaway union has won several elections, netting it 3,600 workers, and its officials are confident it will win thousands more in coming months.
"We disagreed with [Stern's] direction of top-down deals with employers, his controlling the direction of the union from Washington, instead of workers controlling it," said Sal Rosselli, the dissidents' leader.
The latest drain on SEIU's coffers has been its intervention in the divorce of the textile workers' union, UNITE, from the hotel and restaurant union, HERE. Stern is an ally of the head of the UNITE side, Bruce Raynor, and SEIU rushed to form an affiliate, Workers United, to absorb workers from the split.
SEIU says it has gotten 100,000 workers into Workers United, which the hotel union disputes. But SEIU has had to heavily subsidize Raynor's faction while it fights in court for its assets. Workers United brought in $10 million in dues, but spent $19 million, and lists $3.9 million owed to SEIU. Stern says his intervention may pay off once Workers Unite is on its feet and its members are paying dues. But he admitted some doubt.
"Now everybody gets 20-20 hindsight," he said. "It's like saying we're going into Iraq and we'll be out in a month and after six years you say, if I knew it would have been six years is this what I would have done? I made a decision based on what I thought was going to happen."
Stern says he uses a simple standard for spending: thinking of an SEIU janitor cleaning the building across from the union's Dupont Circle headquarters. "Every two weeks he takes a little bit of his dues and gives it to the union," he said. "When we think the union is about our life and not his, we've sort of lost our moral compass."
That outlook has not kept SEIU from spending on its image. In 2008, the union paid Simon & Schuster $17,000 to buy hundreds of copies of Stern's book, "A Country That Works," for its convention. Union officials say Stern did not benefit from this.
It spent $700,000 since 2007 on a New York public relations firm, Change Communications, that has promoted the union with bloggers and academics, in addition to other tasks.
And it spent $1 million in 2008 and 2009 on Catalyst Media Productions as it made a movie about the union, "Labor Day." Stern called this a well-intended mistake. "Like all people [we] would love to have our union be seen in a very positive light by large numbers of people," he said. The filmmaker "sold us on 'you can make this movie that everyone would want to watch.' We believed him and it didn't work."
In the race to replace Stern, Henry beat his anointed successor, Anna Burger. But Stern is confident the union will stay its course. Henry has hinted at ending the UNITE-HERE brawl, but staunchly supports the move against the California dissidents.
"The discussion as I'm hearing it in the union," Stern said, "is about who . . . can build on what's happened here -- and not tear it down and change it."