Union’s Fight With Hotel Reverberates Across L.A.


Since it began nearly five years ago, a relatively minor labor dispute over whether maids and bellmen at a downtown hotel deserve $2 more per hour has radiated to the furthest corners of Los Angeles’ political universe.

It has played a critical behind-the-scenes role in the decision on how to use one of the largest open spaces left in the San Fernando Valley, influenced how a billion-dollar contract to build a railway to the port should be awarded and, most recently, affected the race to elect a new state Assembly member to represent an inner-city district. It has involved the mayor of Los Angeles and the governor of California, and may play a part in deciding whether another professional football game ever is played in the Coliseum.

The dispute has been propelled into these seemingly unconnected realms by the diverse interests of the New Otani Hotel’s principal owner, Tokyo-based Kajima Corp., which is one of the world’s largest construction firms, and by the determination of the union seeking to represent the hotel workers, which has attached itself to the company like a flea to an elephant.

As Kajima has moved from one business opportunity to the next, the Hotel Employees and Restaurant Employees Union has moved with it, forming alliances with other interest groups that oppose Kajima’s aims for their own reasons and pressuring politicians and civic leaders to freeze Kajima out.

The effect of the union’s efforts on the conglomerate’s multibillion-dollar bottom line may be only incidental. The most recent independently prepared analysis of the company’s finances does not even mention the dispute. And a spokesperson for one of the company’s major U.S. subsidiaries says there has been no effect.


But the impact of the Hotel and Restaurant Workers union in roiling local political waters is an unmistakable testament to labor’s surprising clout in the politics of largely nonunion Los Angeles.

The 7,500-member hotel workers union local even has forged a key alliance with Republican Mayor Richard Riordan. He offered his services as a mediator on the same day he received a countywide labor union endorsement of his reelection bid.

It also has enlisted the support of a majority of the largely Democratic City Council to block development of one of the largest open parcels in the San Fernando Valley because Kajima would have profited from it. In doing so, the council risked millions of taxpayer dollars in a lawsuit brought by the frustrated developer.

And the union has punished a politician who would not go along with its efforts to punish Kajima economically by helping to engineer her defeat at the polls.

Union Engineers an Election Upset

Los Angeles School Board member Victoria Castro angered the union by voting to give Kajima a big contract for the development of the controversial Belmont Learning Center school and retail complex in a largely immigrant community in her district on the fringe of downtown.

When Castro entered a Democratic primary race for an inner-city Assembly seat, the union saw an opportunity to strike back and send any similarly defiant politicians a message: “You mess with our members, we’re going to mess with you,” said the union’s California political director, Jack Gribbon.

Gribbon was the principal architect of an ingenious campaign, in which the hotel workers joined with other unions and immigrant rights groups, to contribute to the front-running Castro’s surprise defeat two weeks ago.

Their campaign targeted a large bloc of recently naturalized and registered Latino voters who would not normally have been expected to turn out in a relatively low-key, off-year special election.

The union’s message to these new voters mentioned neither Castro nor Kajima. It was that Gov. Pete Wilson’s “anti-immigrant agenda” had to be stopped and that Castro’s principal opponent, former county employees’ union chief Gil Cedillo, was best equipped to help stop it.

“Making Pete Wilson the issue . . . was . . . like having Hitler on the ballot for the Jewish community,” Gribbon said. “These new immigrants [believe] that Pete Wilson has used them opportunistically for his own political purposes in a way that has been extraordinarily painful.” Gribbon was referring to Wilson’s vocal stances in support of legislation such as Proposition 187 and to cutting some government services to legal immigrants.

Cedillo won his Democratic primary race handily with a turnout that was much larger than had been predicted.

Political analysts believe that the increased turnout was the result of the hotel workers’ campaign among new Latino voters.

Gribbon’s role in the campaign was confirmed by Assembly Majority Leader Antonio Villaraigosa (D-Los Angeles). “It’s true that they [the hotel workers] came up with the idea,” he said.

But Castro said the only lesson the unions taught her was that, in elections, “money counts.” She said that, in supporting Kajima’s role in the Belmont Learning Center project, she had acted in the best interests of students and would do so again.

The hotel workers have gotten excellent cooperation from the City Council, which is often responsive to unions because of their ability to mobilize large numbers of volunteers and raise funds in low-turnout city races.

At least 10 of the 15 council members have endorsed a boycott of the New Otani, which was for some of them, until the labor strife, a popular lunch spot across the street from City Hall.

These members also voted to rebuff Kajima last summer, when it stood to recoup millions owed to it by a developer who wanted to build a golf course on a vast expanse of open land in Big Tujunga Wash.

The developer, who had already received Planning Commission approval, reacted by suing the city, claiming that the council unfairly interfered with its right to use the land in a reasonable fashion to make a profit. The lawsuit is pending.

In overruling the Planning Commission, the council declared publicly that it took the action in response to pleas from a new union ally--environmentalists concerned about preserving pristine open space and the habitat of the endangered slender-horned spine flower.

But City Councilman Joel Wachs, who favored the golf course, which would have been in his district, said three colleagues admitted to him privately that the real reason they voted against the project was to demonstrate support for the union.

The next day, two of the council’s most liberal members publicly expressed anti-Kajima sentiments.

During a discussion about bid procedures for a $1-billion section of the Alameda Corridor high-speed railway between the port and downtown, Councilman Mike Hernandez said: “Companies like Kajima that we have other issues with will be bidding on these contracts. . . . What do we do if we have a company that, for example, we don’t want to work with?”

Councilwoman Jackie Goldberg added: “I too am concerned about the Kajima issue. . . . I think it is very important that we do things with large contracts that promote peace and harmony in the city.”

Their solution was to require that Hernandez, as head of the council’s economic development committee, get a crack at reviewing standards for bidders before the standards could be approved by the Alameda Corridor Transportation Authority--a creation of the cities of Los Angeles and Long Beach that will ultimately award the contracts.

The council went along with their suggestion.

Kajima has not sought the Alameda job, although one of its former executives and a competitor both cautioned that its decision probably had nothing to do with the union and local politics. Kajima probably just had its hands full with other work, they said. Kajima subsidiaries did not respond to requests for comment on this point.

Riordan Tries to Calm the Waters

Mayor Richard Riordan, a venture capitalist in private life and a moderate Republican in public, has taken his own behind-the-scenes role in attempting to resolve the New Otani dispute. Last February, he wrote the president of Kajima Corp., Sadao Umeda, to offer his services as a mediator.

“Having recently become acquainted more closely with the long and now ongoing disagreements between the New Otani and Hotel and Restaurant Employees Union Local 11,” the mayor said, “I write to urge the need to bring reasoned closure. . . . The good offices of my administration are available.”

Riordan was at the time in the middle of his reelection campaign against liberal state Sen. Tom Hayden (D-Los Angeles), who has personally picketed the New Otani.

Both men were campaigning to receive the endorsement of labor’s umbrella organization, the County Federation of Labor, which is headed by Miguel Contreras. Contreras’ wife, Maria Elena Durazo, is president of the hotel workers union local trying to organize the New Otani.

Riordan won the backing of the hotel workers and of the federation’s executive board in stunning upsets.

The executive board’s endorsement was delivered on the same day that he dated his letter to Kajima.

Riordan’s chief of staff, Robin Kramer, who made public the mayor’s correspondence with Kajima in response to a reporter’s inquiry, said she had not been aware that the endorsement and the letter shared a date.

“I would say that was totally a coincidence,” Kramer said. “I had been working on this letter with the mayor for some time. . . . The letter was a strategy which followed many discussions about the issue with Maria Elena Durazo . . . about how the mayor could be helpful.”

Umeda wrote back to say: “We are not in a position to utilize your assistance.”

By then, the federation’s executive board had backed away from its endorsement of Riordan, in response to an outcry from city employee unions that Riordan was not a good friend. The executive board decided to remain neutral in the race, which Riordan won handily.

Riordan later wrote again to offer his services, which led to a meeting with the New Otani’s general manager. But Kajima never took him up on his mediation offer, his staff said.

Workers Approached Union in 1993

The labor dispute at the New Otani dates from 1993, when some of the hotel’s 285 workers, who had years earlier rejected union representation in an election, approached the union anew, seeking improved wages and benefits.

The union calculates that these would be worth about $2 per hour, when added to the starting salary of housekeepers, which management told the Japanese American newspaper Rafu Shimpo last year was about $7 per hour. A hotel spokesman said the union’s $2 figure is highly inflated, but that because there are many wage categories at the hotel, a correct overall figure would be too difficult to calculate.

Umeda said in his letter to Riordan that management does not oppose an election. “The decision as to whether an employee wants to join a union should be made by the employees in a democratic way,” he said. But the union says it views an election campaign as an opportunity for management to pressure workers. It wants to be recognized as soon as a majority of the employees sign membership cards.

Another part of the union’s pressure campaign against Kajima focused on a construction site down the street from the New Otani in the heart of Little Tokyo, where the Japanese American National Museum was planning a major expansion.

The union learned that Kajima was performing “pre-construction services” for the museum. Fearing that it would also get the multimillion-dollar construction contract, the union organized a letter-writing campaign from civil rights luminaries suggesting that it would be inappropriate for a museum dedicated to humanitarian values to associate itself with a company that had, according to the testimony of survivors, used Chinese slave laborers during World War II. In what is known as the Hanaoka incident, 113 workers who rebelled were killed. “In light of Kajima’s negative reputation, I hope you will search elsewhere for contractors,” wrote civil rights activist Yuri Kochiyama, who had been honored by the museum.

Museum director Irene Hirano said such letters were “one factor” in the museum board of directors’ subsequent decision to open up the construction process by soliciting bids from other firms. The primary motivation, she said, was to ensure that the museum got the best possible price. Kajima did not submit a bid.

The union has also inspired state legislation aimed at hurting Kajima. In 1995, the union said, state Sen. Richard G. Polanco (D-Los Angeles) agreed to carry a bill that would have required construction firms competing for public works contracts to disclose overseas as well as domestic bribery convictions and would have enabled public agencies to suspend their eligibility to receive contracts for up to three years.

Kajima has been one of the firms at the heart of a blossoming scandal in Japan over a long-standing practice called dango, in which competitors pay public officials so that they can essentially take turns getting contracts. The scandal broke as foreign firms seeking access to the Japanese construction market complained that the practice amounted to bribery, and some Japanese prosecutors agreed.

The legislation passed in 1995 but was vetoed by Wilson, who said enforcement would be impractical and would invite retaliation against California companies.

David Koff, a senior research analyst for the union, said it might soon try to revive the legislation.

Meanwhile, from his office at union headquarters downtown, Koff monitors Kajima developments around the country, supplying derogatory information wherever he can. He recently outfitted a New Jersey township fighting a huge Kajima construction project in the nearby Meadowlands and regularly provides leaflets for construction industry conventions that say: “Looking for controversy? Chances are you’ll find it with Kajima.”

But even in the Los Angeles area, Kajima keeps on coming. The construction giant has three Metro Rail tunneling and station contracts, is building the Long Beach aquarium and even has a foot in the door of plans for a revived Coliseum.

Kajima owns 15% of the design firm HOK, which the Coliseum Commission and private interests seeking to bring back NFL football used--in part because the firm has a track record of designing NFL stadiums.

Upon learning from a reporter that Kajima holds a minority interest in the firm, Councilman Mark Ridley-Thomas, who is leading the effort to bring professional football back to the Coliseum and supports the New Otani boycott, reacted gingerly.

“I support the [New Otani workers]. . . . But in terms of the quote-unquote Kajima connection it has had no bearing on this project,” he said.

If it becomes an issue, “we would simply have to revisit the matter,” he added.