What Has Become of Us?

The Shame of SEIU

An Open Letter to Leaders in SEIU
"Have you no sense of decency, sir?
At long last, have you left no sense of decency?"
On June 9, 1954 these words were spoken by Joseph Welch, a lawyer representing the
U.S. Army, in an exchange with the infamous Senator Joseph McCarthy of Wisconsin.
Welch's questions were in response to McCarthy needlessly and gratuitously engaging
in the character assassination and public humiliation of a young colleague. Welch
believed McCarthy's methods to be reckless, cruel and counterproductive. Ultimately
Welch found McCarthy to be consumed with power and domination in the service of
nothing larger or greater than power and domination for their own sake.
"Culture Eats Strategy"
I am reminded of this episode from one of the most unsavory periods in our national
history for the very reason that the internal political and organizational culture of SEIU
increasingly bears an uncomfortable resemblance to the paranoid and dogmatic style of
a Cold War witch hunt.
Perhaps this drift toward an ethic of lockstep obedience could be dismissed or ignored
were it not for the fact that SEIU, like many organizations in decline, is increasingly
prone to use what influence it has to project an inflated illusion of its own relevance and
centrality to the exercise of power, particularly political power, rather than the actual
achievement of worthy goals.
Not so long ago SEIU could have been fairly characterized as a workers organization
that engaged in politics; today, SEIU is very much a political organization of
workers. What was once a means to an end or a tool politics to accomplish
concrete objectives for union members has become an end in itself. Proximity to, and
familiarity with, elected officials, public bureaucrats and connected insiders has taken on
an outsize importance in the internal life of our organization. Sadly, "holding
relationships" with "powerful" people is now more highly valued than producing results
for the members of our union. The tail now wags the dog. And the dogs' standard of
living and quality of life is in decline.
Through the Looking Glass
Nothing could bring this new, surreal reality into sharper focus than recent events in
California.
As many of you know, we in UHW are deeply committed to finding a way to redefine our
organization among our own members, non-union healthcare employees, healthcare

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employers, healthcare consumers and patients, and the general public in such a way
that we can succeed and grow in proportion to the success and growth of our
industry. In particular, we believe that putting the "common good" of affordability,
accessibility and quality at the center of our mission is essential to success. We believe
that unions are often rightfully viewed as a narrow, special interest and we have to be
thoughtful and intentional in thinking about how our interests are compatible with the
larger notion of the "common good".
Despite the fact that the healthcare industry in America is undergoing an unprecedented
wave of consolidation, the SEIU Executive Board voted earlier this year to divide
healthcare workers in California in a manner that is so nonsensical it stands as a
singular example in our national organization. We, in UHW, saw 60,000 of our
homecare and nursing home worker members summarily removed from our
organization and placed in a "provisional" local union without a plan, a strategy or the
independent capacity to improve their lives.
We were told this was all for the best, these 60,000 members would still be in the "SEIU
family" and this decision would allow us to "focus" on organizing hospital workers
through the partnership we had created with the California Hospital Association.
Post Division
Within a short period of time following the division of California healthcare workers, the
following transpired:
1. The "personal representative" of Mary Kay Henry informed us that it would be
"inappropriate" for UHW to communicate with any of the 60,000 members
regarding our efforts to reform Medi-Cal funding for over 13 million
beneficiaries or pass a statewide ballot initiative (filed in April, 2015) to raise
California's minimum wage to $15. This was communicated with the full
knowledge that these members had been deeply involved in formulating the
plans to undertake these efforts.
We informed SEIU national leadership that we did not believe it was
appropriate or legitimate to view members as a commodity "belonging" to any
one local union and we would welcome the participation of these members as
we would any allies or supporters who shared our goals with respect to
reforming Medi-Cal or raising the minimum wage.
2. The largest nursing home company in California opted out of a statewide
organizing agreement jointly negotiated and administered by ULTCW and
UHW for about 60 nursing homes, because they wanted to benefit from the
work being done by UHW with hospitals and felt that would not happen under
the new jurisdiction.

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This agreement had been celebrated only weeks earlier by the SEIU
Healthcare Division as an important breakthrough. The letter canceling the
organizing agreement is attached.
3. Once homecare and nursing home members had been transferred from UHW
to the new provisional local, Local 2015, we received dozens of phone calls
from member leaders reporting they had been told by the staff at Local 2015
that they would be ineligible to run for the Local 2015 Executive Board if they
continued to participate in the Medi-Cal or minimum wage campaigns. These
conversations were widespread, systematic and explicit.
4. The head of Local 2015, Laphonza Butler, represented to members at both
in-person meetings and on regular conference calls that UHW's minimum
wage ballot initiative seeking to achieve a $15 standard was ill-advised and
likely to fail. Instead, she advised on multiple occasions that a figure of $13
would be more reasonable.
Moreover, Butler specifically made the argument, on multiple occasions, that
even if homecare workers (who had been specifically excluded from the
efforts supported by Butler in the city and county of Los Angeles) achieved a
$15 standard they would simply experience a corresponding reduction in
hours from the State of California.
5. We received the first reports from hospital employers that Laphonza Butler
and John Youngdahl, the Executive Director of the SEIU California State
Council, were engaged in regular conversations and meetings with the
leadership of the California Hospital Association. These meetings with the
Association representing all of UHW's hospital employers were never
disclosed by either Butler or Youngdahl to UHW and clearly were intended to
undermine and destabilize the hospital organizing work UHW was told to
"focus" on.
From Irritation to Obstruction to Sabotage
It is one thing to meddle. It is another thing to erect barriers to worthy objectives. It is
altogether something else to seek to destroy something because you, like Senator
McCarthy, are consumed with power and domination in the service of nothing but
appetite.

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The Fair Wage Act of 2016
In May of this year, UHW filed paperwork with the California Attorney General to place
an initiative (The Fair Wage Act of 2016) on the November 8, 2016 ballot whereby
voters would have the opportunity to raise California's minimum wage by one dollar a
year, beginning in 2017, until it reached $15 in 2021. This initiative would apply to
"tipped workers" and would be indexed to inflation after 2021. There is no provision to
exclude homecare workers or to allow for "collective bargaining exemptions" as has
been done with other recent efforts in Los Angeles with support from SEIU; in fact, the
measure explicitly includes them in the new wage.
Interestingly, as recently as two years ago, only UHW stood in support of a statewide
initiative (which ultimately failed to qualify for the ballot) to raise the minimum wage to
$12. Neither the State Council nor other SEIU locals were supportive. ULTCW was
affirmatively opposed.
Presently, our campaign is well ahead of schedule and has already succeeded in
collecting the necessary number of signatures to qualify. Our signature collectors,
including hundreds of our member leaders, are reporting great enthusiasm and
excitement in the field as people learn they will have an opportunity to vote for the
biggest pay raise many of them have ever experienced.
Our initiative has received official endorsements from the Lieutenant Governor, the
State Comptroller, the mayors of San Francisco and Oakland, county supervisors,
including in Los Angeles, and numerous state legislators.
Our initiative is being officially supported by over 100 community and grass roots
organizations. And we are just getting started.
UHW has completely financed this effort, and in a recent round of news stories it was
reported that the prominent independent, non-partisan Field Poll found that our
initiative is supported by 68% of California voters.
Nonetheless, rather than join forces to accomplish the goal of a $15 minimum wage, on
November 2, the State Council filed a competing initiative to both raise the minimum
wage to $15 and establish a six-day minimum for paid sick leave.
Because the initial filing just occurred it will be at least January before this competing
initiative receives Title and Summary and signature collection can begin. As such, The
Fair Wage Act of 2016 will have already been certified for the ballot before the State
Council version collects the first signature. The cost of collecting signatures at this late
date is expected to be between $3-$4 million.
In addition to duplicating the cost of minimum wage signature collection there are two
other important reasons as to why this competing initiative could be problematic.

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First, we fully expect that our opponents will challenge this measure, if successful, as a
violation of the state's "single subject" rule for initiatives. In fact, the competing initiative
seeks to amend an existing sick leave statute that is in no way connected to the
minimum wage. It seems unnecessary, given the level of public support, that we would
jeopardize success on the minimum wage by creating an avenue for legal
challenge. For the record, UHW offered to join forces with the State Council to file the
sick leave provisions as a separate initiative (since minimum wage has, as a practical
matter, already qualified) in order to close off the possibility of a legal challenge. This
offer was rejected.
Second, as we all know, including sick leave with the minimum wage will dramatically
increase the level of funded opposition to this effort. Again, this problem could be
mitigated by separating the issues.
Of course, what becomes more and more obvious is that the differences regarding the
minimum wage within the SEIU "family" are not honest disputes over resources, tactics
and strategies. In fact, they are rooted entirely in questions of control, internal power
and organizational dominance.
That is why elected officials who have endorsed The Fair Wage Act of 2016 are
receiving calls from SEIU local union and State Council staff threatening them for
having the temerity to publicly support a minimum wage initiative filed by someone other
than themselves. That is why labor council leaders in Sacramento and Orange counties
are getting the same type of phone calls from SEIU staff. To be clear, filing a competing
minimum wage initiative, especially when one has already effectively qualified, lessens
the chance that either will pass. This is what people do who value vanity over results.
It's not about achieving worthy goals; it's about projecting an illusion of power, centrality
and relevance.
Medi-Cal is Me
Over 13 million people, nearly one-third of all Californians, are now Medi-Cal
beneficiaries (Medicaid is know as Medi-Cal in California). This is a larger group of
people than the population of all but four of our country's fifty states. A majority of MediCal beneficiaries are children; a majority are Latino; and a super-majority are moms and
their children.
Because of the sheer size of the Medi-Cal population and its concentration within the
Latino community, which faces disproportionate levels of poverty, it is legitimate to
characterize the emergence of a two-tiered healthcare system in California as a
massive civil rights issue. California ranks 49th out of the 50 states in terms of funding
Medicaid services, and the fact that Medi-Cal is such a poor payer results in
beneficiaries, most of whom are people of color, being systematically denied adequate
and timely care.

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As part of the work we did in UHW to enroll over 20,000 people in healthcare coverage
as part of the implementation of the Affordable Care Act, we have been able to identify
and track large numbers of people who have profoundly compelling stories to tell about
their difficulty actually receiving care in the Medi-Cal system.
For all these reasons we resolved to reform California's Medi-Cal system as the
centerpiece of our strategic alliance with the CHA. Specifically, we adopted a model of
shared success in which we would build a labor relations strategy, including a Code of
Conduct, for organizing situations on a scale that was linked to the achievement of
reform within the Medi-Cal system. Simply put, as we reformed Medi-Cal we would
build, proportionally, a different model of labor relations that included a non-traditional
approach to representation elections. Financial reform and labor relations reform would
proceed in tandem.
We very consciously linked success around the "common good" of reforming Medi-Cal
for 13 million, predominantly among people of color beneficiaries, to the success of both
the union and the hospital industry.
Last July, UHW developed an idea to create a ballot initiative, with a unique and
unprecedented coalition of children's advocates, higher education advocates, public
education advocates and Medi-Cal advocates. In short, our initiative would rely on the
extension of personal income taxes, slated to sunset in 2018, for individuals making
over $300,000, with the addition of two new rates for individuals making over $1 million
and $5 million annually. In combination, these would produce $10 billion of annual
revenue which we proposed would go to K-14 (45%), higher education (5%), Medi-Cal
(40%) and early learning programs (10%).
If successful, this measure would produce $4 billion of permanent annual revenue for
Medi-Cal, with the bulk of the money going to doctors and hospitals. Similarly, this
would allow us to make a proportional advance in our work to create a new labor
relations paradigm, including a new election context.
When word of our efforts reached officials at the California Teachers Association they
went ballistic. They went ballistic not because our initiative was bad public policy or
because it was bad for public education or because it was bad for teachers or
students. No, they went ballistic because they thought we had encroached on their
domain and they, like SEIU, are more interested in image and illusion than results.
In addition to refusing to talk to us (UHW and CHA) in September they proceeded to file
their own, competing ballot initiative that produced 30% less revenue (including less
revenue than our initiative for K-12 education) and did nothing for Medi-Cal, higher
education or early learning. And then the CTA, along with Laphonza Butler and the
SEIU State Council, focused their attention on Duane Dauner, the CEO of the Hospital
Association.

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First, they made it clear to Dauner that they were working together and they wanted to
see UHW fail. If Dauner would join forces with the Teachers and SEIU he would be
able to avoid both his labor-management relations and organizing conduct
commitments to UHW and still make some progress on financing Medi-Cal, albeit at a
greatly reduced level. The other beneficiary of this tawdry deal is Governor Brown, who
has made it very clear for years that his strategy is to "starve" Medi-Cal; the fact that
Medi-Cal is an objectively substandard program for 13 million human beings is well
documented and well known within the Brown Administration and Sacramento policy
and political circles.
It has been breathtaking to observe the CTA and SEIU aggressively collaborate to
literally produce an opportunity to secure less funding for K-14 education; two-thirds
less funding for Medi-Cal with the remainder being badly skewed towards hospitals and
away from doctors, particularly primary care doctors; no funding for early childhood
learning programs and no funding for higher education.
Again though, it is not results that matter, but rather proximity and familiarity with power
that helps with the illusion of self-importance and relevance.
In addition to aggressively courting Dauner and the CHA to undermine years of work by
UHW to make a breakthrough in the hospital industry, Butler has also been calling UHW
employers to inform them she wants to work with them so that UHW is more likely to
fail. Again, these calls have not been disclosed by Butler, but rather by those she has
called.
What are the implications for SEIU as a whole when the elected leader of the State
Council takes it upon herself to secretly communicate with another local's employers
and the employer association for the sole purpose of sabotaging both the organizing
and political work of that local?
What are the implications when the motivation for this type of action is the desire to
prevent successful efforts to raise the minimum wage and reform the financing of the
largest healthcare plan for California Latinos?
What are the implications for the health and future of SEIU when UHW is forced to pay
$2.5 million per year or be threatened with all manner of retaliation to a State
Council that has license from the national leadership of SEIU to sabotage with impunity
the legitimate work of UHW?
What does it mean when the national leadership of our union, and the state leadership
of our Council, is so insecure and weak that they could even contemplate, let alone act
upon, the sort of destructive behavior we have recently been subjected to?

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And what does it mean when eight months from a Supreme Court decision that is likely
to create a national "open shop" in the public sector, we believe we have the perverse
luxury of sabotaging people who get up every day to do their level best to resuscitate a
labor movement that gets weaker and weaker every day and is in danger of becoming
irrelevant for all but a small number of American workers?
But there is more.
This Is What Fealty Looks Like
Amidst the flurry of activity this week involving SEIU colluding with the CTA and hospital
employers to file competing minimum wage and Medi-Cal initiatives, we were received
the news that the Brown Administration had completed their "negotiations" with the
Obama Administration on what is known as the 1115 Medicaid Waiver.
In short, this is an agreement between a state and the federal government, typically for
5 years, which codifies a set of customized agreements tailored to the needs of a state
so that it can best deliver Medicaid services in accordance with national policy. It is
common for large amounts of federal funding to be tied to accomplishing national
priorities with respect to the way in which a state's Medicaid/safety net system delivers
care.
In 2010 California negotiated an 1115 Medicaid Waiver totaling $10 billion over five
years. In preparation, for this round of negotiations, the Obama Administration made it
completely clear that California would be expected to proceed from the premise that the
ACA has cemented the reality that the safety net system in our state is, in fact, a
combination of public and private providers. The Obama Administration was clear that
national policy had evolved beyond exclusive, public sector waivers and they would not
look favorably on an application similar to what was approved five years ago.
However, if California accepted its responsibility to increase state-level investment in
Medi-Cal, and if an application was premised on the reality of a public-private system
then not only was the response likely to be favorable but unprecedented funding for
Medi-Cal could be achieved.
Of course, what has actually played out over the past year is that, once again, the CHA
and SEIU worked together against the advice of the most accomplished professionals
available to adhere to a healthcare worldview that is obsolete. The refusal by our State
Council and the CHA to acknowledge what is taken for granted by every informed
person who works in this domain is driven by a desire to appease the Governor.

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Again, the Governor has made his views on Medi-Cal abundantly clear: he wants to
"starve" the program out of an abstract desire for fiscal prudence that is disembodied
from the reality of how healthcare is now delivered to 13 million people.
Consequently, in the end the new waiver which California has negotiated and the State
Council fawns over in an attached November 3 press release is for $6.2 billion over 5
years. That is 40% less money, for a woefully underfunded healthcare program, than
was gotten five years ago. As a point of reference, Texas (a smaller state with a
significantly smaller Medicaid population) recently secured a $24 billion five-year waiver
from the Obama Administration that includes $17 billion in new federal dollars.
Forward?
I began this letter by recalling what is now viewed as the turning point of
McCarthyism. When Joseph Welch confronted Senator McCarthy and eloquently
insisted that he had crossed a line demarcating legitimate disagreement from foul,
dishonest cruelty, that moment marked the beginning of the end for McCarthy. That
exchange was broadcast on national television and the country was repulsed by
McCarthy's tactics.
We in UHW are repulsed and disgusted by the tactics of the SEIU State Council and its
leadership in California. We are repulsed, but not surprised, by the willingness of the
national SEIU leadership to suborn this behavior.
What has become of us? Have we lost our sense of shame?
In the coming days, the SEIU State Council will work furiously to "frame", "spin" and
"message" that which is dishonest and shameful. They will do so in the service of only
appetite and vanity and not because it serves the interests of SEIU members, other
workers, or 13 million people in need of healthcare.
I expect SEIU's efforts over the coming days and weeks to frame, spin and message
their actions to be reminiscent of what the greatest of all students of human weakness
and dysfunction once called a "walking shadow, a poor player, that struts and frets his
hour upon the stage, and then is heard no more. It is a tale, told by an idiot, full of sound
and fury, signifying nothing."
More to come.

Respectively,
Dave Regan