Union Slush Fund Revealed, Card Check Maneuvers Continue

While Congress is away on its two-week Easter break, the legislation deceptively-named the Employee Free Choice Act, better known as “Card Check,” continues to make news as Senators Mark Warner (D-Va.) and Mark Udall (D-Colo.) this week announced their support.  

Earlier opposition from Sen. Arlen Specter (RINO-Pa.) raised grave doubts about the bill reaching the magic 60-vote tally needed in the Senate to overcome a Republican filibuster.  On Monday, Sen. Blanche Lincoln (D-Ark.) landed another blow against Card Check as she told a local Arkansas political gathering that she opposed the legislation as written.

Which begs the question: is this bill really dead or just mostly dead?  

Union bosses have made the bill’s passage their top priority.  Yet opposition is growing exponentially as the awful smell of this legislation wafts across the public, exposing a bill that is poised to facilitate the hostile union-government takeover of small business.

HUMAN EVENTS spoke with Steve Forbes, President and CEO of Forbes, about another recently-exposed element secreted in the bill:  mandated government arbitration.

“If a company or unit is organized and you don’t get an agreement between parties within, say, a 90-day period, the government can appoint an arbitrator to come in and dictate — dictate — a contract,” Forbes said.  “This would be very, very damaging to small businesses. You would have arbitrators who have no real understanding of small business, workplace conditions, no expertise, making decisions on benefits, wages, and its workplace conditions. Small businesses would be especially hurt by this forced arbitration.  The employer and the employee would have no say in terms of the first contract, a two-year contract, dictated by the government.”

This structure gives unions a huge incentive to reject reasonable organizing contracts and wait for the government arbitrator to dictate terms of the original, baseline contract that the union could not obtain in a fair negotiation with the business.  

When asked about the bill’s chances, Forbes replied, “I think that one of the key things is to make sure [senators] have to take a position, because if they feel this is something that might get pushed through, they might hold their noses and do it and figure that it’s like an operation without anesthesia, do it quickly and make up for it later, try to repair the damage done later in terms of electoral politics.  Even though opposition is mounting to card check and, I think, more and more to binding arbitration, these won’t be dead until enough people come out firmly against it.  Labor’s going to work very hard to try to get this thing through one way or the other.  Until this thing is under the ground with a stake through its heart, we cannot rest.”

New Study Exposes $1 Billion in Construction Union Labor Slush Funds

Yesterday, a new study conducted by George Mason University’s John M. Olin Institute was released which exposed the existence of construction union slush funds that have expended more than $1 billion in union wages from 2000 to 2007 on a scheme known as “job targeting” aimed at bankrupting non-union businesses.

Union construction contractors — who are paid much higher wages and benefits than non-union workers and comprise fewer than 15% of the work force today — rely on the government-controlled, “prevailing wage” diktats on public-sector projects for their bread and butter.  The study used open-source, government mandated financial paperwork filed by unions, such as LM2s, to reveal the job targeting schemes, also known as “market recovery funds.”  

Through these programs, organized labor officials collect fees from union members then funnel that money to union contractors — and in a few cases non-union contractors — to subsidize wages for the purpose of circumventing prevailing wage mandates and submit a winning low bid.  In many instances these unfair business practices are used to target specific competitive, non-union businesses for extermination.

I spoke yesterday with Greg Hoberock, a member of the Association of Builders and Contractors Job Targeting Taskforce about this new study.  Hoberock has been on the receiving end of these practices for approximately 15 years as president and CEO of HTH Companies, a Missouri firm specializing in the insulation of pipes, ducts and vessels with commercial and industrial applications such as heating and cooling systems.

Hoberock told me, “Traditionally, under the union setting, that work would be claimed by the Brotherhood of Specialist Workers or International Brotherhood of Heat and Frost Insulators.  Out of St. Louis this is Local #1.  Over the course of the last 15 years I have followed the LM2s of the Specialist Local #1.  They have spent somewhere between $12 and $15 million in job targeting funds.  During the bulk of that time, over 15 years, there’s only been primarily myself, HTH Companies, and another firm called Thermal Tech that were the only open shop contractors that work in the jurisdiction of Local #1 on a regular basis.  We do a substantial amount of the work.  You’re talking $15 million spent over 15 years targeted against two firms.”

“The State of Missouri or the federal government within the State of Missouri would establish a prevailing wage rate within the state of anywhere, from year to year, of $25-35 per hour to be paid for that task,” Hoberock continued.  “We are bound by law to pay that effective rate. What we found through depositions was that unions were subsidizing back to the contractors, our direct competition, as much as $10 an hour in wage subsidies to support the contractor so that he can become more competitive [in the government bidding process].  The result of that is we’ve lost a tremendous amount of work that we normally would have gotten or should have gotten had it not been for the subsidy of the union.  So you have the unions taking money from employees — their members’ paychecks — putting it into a fund and selectively deciding who to fund in order to try to put the open shop sector out of business.  The goal over time is if they can put the open sector out of business, then the union controls the monopoly of the work and is therefore free to charge whatever they want.” (Read more about this new study and its implications.)

With government takeover of the business contracting process as facilitated by the Card Check bill, and bankrupting of non-union businesses through job targeting, you get a clear picture of the Soviet-style plan the Obama administration has for America’s future.