The Cost of Labor Civil War

Service Employees International Union (SEIU) President Andy Stern was always a fan of the blogosphere. So it was quite fitting that news of his imminent departure from SEIU first appeared, earlier this week, on several blogs. Andy bid SEIU members adieu, officially, a few days later (using a YouTube video, of course). By then, the unconfirmed reports of his resignation had become major news in The New York Times, Wall Street Journal, Washington Post, and other national papers.

The ensuing flow of encomia and criticism summed up, in one place or another, much that was good or bad about Stern’s  career in labor, including his recent role in passage of Obama’s health care legislation. But the effusive farewells penned by his longtime admirers on the liberal-left contained one omission. Not a single one addressed the little matter of membership dues money. As in how many millions of dollars of it was spent, in the final years of Stern’s reign, on the costly internecine conflicts, in and around SEIU, that were instigated or aggravated by him.

Before we get to that total, let’s note the political “bottom line” played up instead by his journalistic fans.  While Alec MacGillis at The Post and Kris Maher at The Journal were both probing Andy’s troubled financial legacy in their news stories, Post columnist Harold Meyerson was hailing Stern, for the umpteenth time, as “the leader of liberalism’s most effective political organization.” Finding Andy to be a “figure of Dostoevskian complexity” as well,  Meyerson argued that he  “has done more than any other to build a nationwide progressive infrastructure.” Meanwhile, over at The Nation, its editor expressed–and not for the first time either–her fervent admiration for Stern’s singular charisma, “pragmatism,” and “vision.”  According to Katrina van den Heuvel,  Andy’s “push for dramatic structural change, his openness to remaking labor’s traditional ties to the Democratic Party and creating new institutions and alliances for working people, and his urgency, even desperation, about the future of labor” made him a ”bold and heretical reformer.”

Van den Heuvel did note that, under Stern’s leadership, “SEIU waged bitter battles” inside organized labor. “One of the nastiest, she wrote, “turned in SEIU’s favor with a ruling last week”—a vague reference to the confused jury verdict, described on this site by Cal Winslow a few days ago,  in a disgraceful SEIU civil suit against the rival National Union of Healthcare Workers that will hardly be determinative of NUHW’s on-going fight to replace SEIU in California. At The American Prospect, Tim Fernholz also alluded, in passing, to internal conflicts instigated by Stern’s union. In Fernholz’s view, Andy’s disastrous trusteeship over United Healthcare Workers-West (UHW)—which led to the formation of NUHW—was just  “something of a distraction from his broader mission.”

Nation contributing editor Marc Cooper put Stern’s “broader mission” in the proper liberal perspective when he dismissed those marginal characters always sniping at Andy on the Left Coast. Stern may have been “abrasive,” “divisive,” and uncaring about “whether he made a lot of friends—or enemies,” Cooper admitted. Nevertheless, he  “embodied the best hope for labor’s renewal” and was never “a ruthless and power-hungry ego-tripper who ran roughshod over a noble rank-and-file.” Only “the Berkeley-style left,” loaded down with a “reading diet” composed of “too much Lenin and Trotsky” would ever propagate such a political “fantasy.” Just remember, Cooper warned, Andy’s “rivals were hardly saints themselves.”
Saintly or not, two of those formidable rivals weighed in on Stern’s departure with  commentary far more rooted in reality than  any of the liberal cheerleading above.

As UNITE HERE President John Wilhelm told The Washington Post: “A combination of events destroyed what ought to have been a great legacy for Andy [who] could have been a really great labor leader. He’s a smart guy with a lot of abilities and a strong strategic sense. But something happened to the guy. It says in Scripture that pride goeth before the fall, and that’s what happened here.”  NUHW leader Sal Rosselli echoed the blistering (and more secular) critique of Stern that Wilhelm delivered before the AFL-CIO executive council in Florida a month ago:

“Stern’s multi-million dollar fights against healthcare workers in California and against UNITE HERE have diverted resources away from healthcare reform and employee free choice, weakening the former and scuttling the latter. These wars of choice have taken a toll on the union’s finances as well as on Stern’s credibility.”

“Wherever Stern parachutes himself next,” Rosselli said, “he will leave behind a workers’ organization in disarray, undemocratic, unable to pay its bills, and unwilling to defend its members, with a crisis of leadership from top to bottom.”

At least one count in their joint indictment is simply incontestable—namely, the ruinous cost of warfare that SEIU itself unleashed upon the progressive wing of labor, in Puerto Rico and on the mainland, via its “organizing union” implosion of the last three years. For a forthcoming book, I’ve done a preliminary tally of that tab (which Brother Andy is now leaving behind for others to pay).  The figures below, particularly staff time/salary costs, are just estimates–because only those paying the bills, on all sides, then and now, know the exact numbers for sure.

*In 2007-8, SEIU spent many millions on its direct-mail  pounding of the much smaller California Nurses Association, and a related “ground campaign.” A year ago, the pro-single payer CNA (now operating with additional allies as National Nurses United) agreed to work cooperatively with SEIU, but not before  their staff-intensive, multi-state conflict had consumed huge amounts of dues-payer money.

*In 2008, SEIU’s next target was 40,000 public school teachers in Puerto Rico, who already had a union, the left-led FMPR.  The largest union on the island, FMPR was stripped of its bargaining rights for striking against the government. SEIU then swooped in to spend what FMPR estimates was $20 million (the actual amount was probably less) on a failed effort to win an island-wide representation vote to replace FMPR. There was only once choice on the ballot—SEIU—and the teachers rejected it in the fall of 2008.

*Also in 2008, SEIU spent an estimated $10 million laying the groundwork for Stern’s January, 2009 seizure of UHW—the largest trusteeship of this type in U.S. labor history. The pre-invasion costs included repeated mailings to 150,000 workers, moving scores of national staffers into the state, and the expense of protracted hearings and pre-trusteeship litigation (Ray Marshall, the hearing examiner alone charged $200,000). To resist a headquarters take-over, UHW was forced to spend  $6 million (in SEIU’s version, much more) that would otherwise have been available for new union organizing and political action.

*In June 2009, SEIU spent $10 million to bring 900 full-time and temporary staffers from around the country to Fresno County, California. They were put up in hotels for a month, given rental cars, and per diems–only to get several hundred more votes than NUHW’s largely volunteer organizers in a contested unit of 10,000 home care workers.

*Throughout 2009, the cost of the actual UHW trusteeship and related courtroom activity (such as the $25 million damage suit filed against former UHW leaders and SEIU’s massive legal intervention to block or delay representation votes sought by NUHW) appears to be in the $10 million to $20 million range.

Law firms involved in suing NUHW (there were four in all) billed SEIU $9.8 million in 2009 alone. That was before their case against NUHW went to trial and got really expensive because SEIU had as many as 18 SEIU lawyers in court at one time. (The jury awarded only $750,000 in damages, a judgment soon to be appealed.)

Among the big trusteeship-related expenses claimed by SEIU, in that case, were the millions of dollars it paid to several corporate security firms, allegedly needed to protect out-of-state staff and SEIU officers who seized UHW. Prior to trusteeship, the once flourishing UHW, a model local, sent $20 million a year in per capita dues to SEIU in Washington. Now, under trusteeship, UHW is $6 million in arrears, a debt that will probably be forgiven but, in the meantime, represents an additional loss of national union revenue.

*Stern’s disastrous meddling in the UNITE HERE divorce has, so far, involved $20 to $25 million in disputed disbursements, related legal and “security” expenses, plus loans and grants to fund the on-going fight between the former Change to Win union merger partners. At great cost, and with much borrowing from local affiliates, UNITE HERE, now headed by John Wilhelm, is clearly prevailing over “Workers United/SEIU,” the faction led by former president Bruce Raynor. Before Raynor defected to Stern’s union a year ago, he doled out $16 million to his supporters, to finance his side of the fight, while claiming to have 150,000 members on his side. That number now appears to be in the 75,000 to 90,000 range. WU/SEIU thus took in only $10 million last year, while spending $19 million. Stern had to make up the difference via millions in per capita dues rebates, salary reimbursements, and a big loan. Meanwhile, the costly, complex, and still unresolved litigation over who gets the Amalgamated Bank and other joint UNITE HERE assets makes SEIU’s lawsuit against NUHW look like a simple slip-and-fall case. The Wilhelm side, which is trying to hold Raynor and others personally liable for their disputed pre-divorce expenditures, incurred more than $6.5 million in legal fees last year. And the meter is still running.

*To finance its re-building of UHW outside SEIU, NUHW operated in 2009 with $3.5 million in loans (from UNITE HERE primarily), grants, and contributions. The big-ticket item looming ahead in California health care is the SEIU decertification vote at Kaiser Permanente that NUHW will be seeking this summer.

In January, 2,300 KP hospital staffers in southern California already voted to switch to the new union by a large margin. If SEIU fails to block an election showdown involving another 45,000 Kaiser workers, its campaign will require tens of millions of dollars, including the deployment of hundreds of staffers to counter-act NUHW’s strong shop-floor network at Kaiser.

In light of all of the above, is it any wonder then that, as The Washington Post just reported, “SEIU membership growth has slowed — after growing by 300,000 workers from 2006 to 2009, it added only 50,000 workers last year, for a total of 1.86 million.” (In every press release, including the one announcing Stern’s retirement, SEIU turns that real number, as just reported by the U.S. Department of Labor, into “2.2 million.”) In addition, as Alec MacGillis of The Post wrote:

“The union’s finances are far more leveraged than those of most other unions — it owes $121 million, while much   of its $188 million in assets include IOUs from strapped locals.”

In all the tributes to Stern, the dollar figure that keeps getting repeated is the $85 million that his union spent electing Obama and other Democrats in 2008. Some reports even recall the $10 million SEIU set aside afterwards for a 35-state grassroots campaign (called “Change That Works”) designed to hold newly-elected officials accountable. The union spending that goes un-noted, for the most part, is the cost of labor’s civil wars, circa 2008-10. The total tab for progressive union mayhem, all SEIU-related, easily matches Stern’s much applauded expenditures on national politics during the same period. And that’s why The Washington Post headline, April 14, had it right when it called Stern’s record “a mixed legacy.” A financial day of reckoning is coming, but Andy won’t be around to settle up the bill.

STEVE EARLY worked for 27-years as an organizer and international representative for the Communications Workers of America in New England. He is the author of Embedded with Organized Labor, from Monthly Review Press, and the forthcoming The Civil Wars in U.S. Labor, from Haymarket Books. He can be reached at






Steve Early has been active in the labor movement since 1972. He was an organizer and international representative for the Communications Workers of American between 1980 and 2007. He is the author of four books, most recently Refinery Town: Big Oil, Big Money and The Remaking of An American City from Beacon Press. He can be reached at