Beyond Chron: SEIU President Henry faces test over Raynor bombshell

NewsMay 10, 2010

By Randy Shaw

A three-member judicially-sanctioned panel has found that SEIU Executive Vice-President Bruce Raynor accepted a salary from UNITE HERE while working actively to deprive his union of bargaining rights – in favor of an Ontario affiliate that had seceded from UNITE HERE two months earlier. The finding poses an early test for new SEIU President Mary Kay Henry, who has vowed to repair SEIU’s relations with other unions. Since Raynor was paid by one union while working to benefit another, he engaged in the same type of conduct that SEIU found so wrongful that it spent over $10 million to punish NUHW in a lawsuit. Yet SEIU rewarded Raynor with a top union position for engaging in conduct it told their workers and the court that SEIU opposed.

The panel also confirmed that Raynor and his allies misappropriated $15 million from UNITE HERE, a clear violation of SEIU’s own ethical standards. SEIU’s standards, which Stern adopted with great fanfare in June 2009 after Tyrone Freeman, the union’s highest California official, was forced to resign, state that “misuse of funds or leadership authority undermines the confidence members have in the Union and weakens it. Corruption in all forms will not be tolerated in SEIU.” Henry now either moves quickly to remove Raynor from power and walk the talk of reform, or else expose SEIU’s new ethical standards as a joke and SEIU’s legal and public relations campaign against NUHW as a hoax.

Originally broken by Juan Gonzalez in the New York Daily News, the findings by the independent panel of James Thompson (former Republican Governor of Illinois), Archbishop James Keleher of Kansas City and former federal prosecutor Kurt Muellenberg were extensively documented. Such befits a panel created as part of a federal court decree in 1995, and that exists to investigate the type of misappropriations that Bruce Raynor engaged in while formerly President of UNITE HERE.

The panel’s detailed findings on Raynor’s violations of federal labor laws were forwarded to the Departments of Justice and Labor on February 25. Yet SEIU has taken no action in response. The union apparently wants to avoid calling attention to the fact that its own Executive Vice-President Raynor’s conduct was a far more destructive and illegal version of what SEIU charges NUHW with doing in its lawsuit and in its anti-NUHW campaign in hospitals and nursing homes.

The Stern-Raynor-NUHW Connection

Since February 25, two major events have occurred.

First, the SEIU-NUHW trial ended, bringing SEIU less than 4% of the damages it had sought and exonerating NUHW leaders of the most often repeated SEIU charges.

Second, Andy Stern resigned. The traditional media accounts of his legacy ignored Raynor remaining an Executive Vice-President despite violating SEIU’s own ethical guidelines. And reporters could not have known what Stern knew when he resigned, which is that the three-member panel had found Raynor and some of his allies guilty of conduct – working for a rival union while on the payroll of another – that formed the entire legal framework for SEIU’s lawsuit against NUHW.

Of course, Raynor’s conduct was significantly worse, a fact that has never bothered SEIU. Whereas some NUHW staff were found by the jury of not using their January 2009 $6000 monthly salaries to work for SEIU-UHW, Raynor was collecting a salary from UNITE HERE and shifting $15 million to affiliates loyal to him and disloyal to the union who paid his salary.

As the panel put it, “Raynor was more interested in sending as much of UNITE HERE’s money as he could do affiliates loyal to him before they seceded than in acting as a wise steward of the union’s resources.” And in a great irony, Raynor transferred $2 million of these funds on January 26, 2009, the day prior to Stern placing SEIU-UHW in trusteeship.

Stern soon appointed Raynor SEIU Executive Vice-President. In contrast, former SEIU-UHW leaders were individually sued, and SEIU defamed Sal Rosselli, John Borsos, Barbara Lewis and other key leaders for over a year with false charges that they misappropriated SEIU funds.

While former SEIU-UHW leaders now with NUHW acted in accordance with their local union constitution in resisting trusteeship – which the jury found was akin to getting paid by SEIU in January 2009 and not performing – Raynor had no authority for misappropriating $15 million from UNITE HERE. And the recent federal jury verdict confirmed that no SEIU funds were removed from accounts and funneled to NUHW, whereas Raynor removed money from UNITE HERE accounts and distributed it to the union’s opponents.

This is not a question of what Andy Stern knew, and when.

Stern always knew that Raynor misappropriated funds while on the UNITE HERE payroll. He also knew that Raynor and his ally Edgar Romney stole $5.7 million from a special ILGWU fund controlled by UNITE HERE.

Stern justified Raynor’s action, along with SEIU’s war on UNITE HERE, by repeatedly arguing that he and Raynor were protecting the legacy of Stern’s ILGWU-member grandmother (he told me this directly). But Raynor did not build the ILGWU real estate and banking empire; to the contrary, he acquired it in a 1995 merger with his own ACTWU, and then dissipated it by tens of millions of dollars in less than a decade.

One noteworthy part of the Raynor misappropriation cited by the panel was the wrongful payment of $460,000 in UNITE HERE funds to Stern confidante Steve Rosenthal for “direct mail and phone campaigns critical of HERE officers and supporting a merger” with SEIU. Rosenthal, who owns a house with Stern and whose wife works for SEIU, was among those selected by New York Times reporter Steven Greenhouse to comment on Stern’s legacy upon his resignation announcement.

Mary Kay Henry’s Choice

If Mary Kay Henry wants to move forward with real reform, Raynor’s ethical problems cannot continue to be ignored. SEIU’s ethical standards look very strong on paper, but if they are not applied in a case when a court-appointed panel finds evidence that an Executive Vice-President has engaged in “willful violation” of LMRDA Section 501(c) – which prevents union officials from diverting funds to the minority of members that support them – then Henry should remove the ethical guidelines from the union’s website.

SEIU guidelines do not require a criminal conviction or government prosecution. And recall what a big deal Stern made after the Tyrone Freeman scandal broke, insisting that he knew nothing about it and that new ethical guidelines were needed to ensure such wrongs were not repeated.

Mary Kay Henry now must remove Raynor from power now or undermine her entire credibility as a reformer.

SEIU Must Come Clean to Workers

In light of the panel’s conclusions, SEIU’s accepting Raynor’s wrongdoing while telling California workers that NUHW leaders engaged in conduct that violated SEIU’s core principles has all the makings of an elaborate hoax. Henry should ensure that while SEIU aggressively campaigns against NUHW, it stops falsely accusing NUHW officials of fiduciary breaches and misappropriation of funds.

Last week, NUHW and SEIU faced off in three elections a
mong Sodexho workers in California. SEIU got a total of one vote in the combined contests, and lost 38-0 at USC University Hospital (the USC vote of hospital workers has finally been set for May 26-7). SEIU is winning its share of home health care units, but also faces an imminent major defeat when votes are soon counted in an 850- worker unit at Salinas Hospital.

Andy Stern left Mary Kay Henry with many problems. But if Henry cannot even get Raynor out of power, her chances of repairing conflicts with other unions, labor councils, and progressive political leaders, and of repairing the SEIU brand, are virtually nil.

Source: Beyond Chron