SEIU’s Andy Stern on his relationship with Obama, Schwarzenegger and more

A partial transcript of remarks by the union chief to Times editors and reporters.


Posted May 20, 2009

Andy Stern, head of the Service Employees International Union, met with Times editors and reporters on May 19 to discuss his organization's advocacy in Washington and Sacramento. At the time, the Obama administration was threatening to withhold federal stimulus money from California because of proposed cuts in pay for state home healthcare workers. The state objected to the SEIU's role in the administration's decision-making. On May 20, the Obama administration backed off its threat to withhold the stimulus money.

Below is a partial transcript of the conversation between Stern and Times editors and reporters.

Jim Newton, L.A. Times: What's the status of the Employee Free Choice Act?

Andy Stern: I'd say … that the business community has done a remarkable job; I wish they had done a remarkable job running the economy as they have spending their time running against people's opportunity to try to get ahead. I think the bill is being -- I always like to say, we need to appreciate that the Senate is like a car wash: You put a Ford Explorer in, you get a Ford Focus out the other side. Whatever starts as a bill doesn't happen, so we are now in the process of seeing, you know, Sen. [Dianne] Feinstein suggested some ideas to think about.

I think everybody now agrees that there needs to be binding arbitration; not everyone, I'd say there's an overwhelming majority that agrees there needs to be binding arbitration.

Newton: A majority of the Senate?

Stern: A majority of the Senate, yeah. An overwhelming majority appreciates the election procedures are not right, they're not balanced, they're not fair, and the penalties are not adequate, and the speed is not appropriate. And there's a discussion about are there ways to change what is affectionately called card check to make it more like a secret ballot and less like what people are concerned about, being coerced or intimidated by the union side to try to sign it.

So I'd say there's an active discussion as opposed to for a while there was not much going on. I'd say the senator's comments are indicative that people are actually engaged in trying to find a way forward.

Robert Greene, L.A. Times: As an editorial page, we found it relatively easy and straightforward to support the organizing effort for the security officers and locally for the contract that they won. Speaking for myself, I'm finding it more and more difficult to get excited about the union in the context of representing government workers in both Los Angeles city and county, especially in difficult budget times when the government has to play off a union contract against steep cuts in services. I'm getting increasingly concerned about the unions' influence -- I mean, congratulations for it, but I'm getting increasingly concerned about the unions' influence and ability to support candidates and to get the backing of candidates. I realize that from your perspective that's a great success, but what's your response to --I'm not alone in this -- what's your response to people who are expressing that concern?

Stern: Democracy is an ugly picture sometimes, people do have rights, the business community does similar things from the outside. We used to always complain about how many of our members can give a $5,000, $25,000, $30,000 check to a candidate. How many people have the same ability to get their contract, subcontract? I think government has always been a place where a variety of interests -- if you go to Washington there's a whole K Street group of people that spend their life trying to shape policy. The fact that we're organized from inside as opposed to organized from outside you may think has more advantages, but any organized voting bloc of any kind, or any organized financial bloc, honestly impacts democracy. That's just the system we've set up, and no one seems to mind that the Chamber of Commerce can fly 100 people in and threaten to not elect people if they don't do things because they either don't have a union contract or they're not government employees. I don't know how you stop people from participating. …

So you really have to get to the question, are we going to ban public employees from participating in the political process, because it's not the fact they have a contract, it's the fact they have an organized amount of power to impact things. I don't think we're ready to ban that in this country. …

Greene: There was a time 100 years ago where Californians were so concerned about the influence of a particular interest -- in that case it was the railroad -- that they completely changes the state Constitution and the way elections are run in order to blunt that influence. It seems to me that there hasn't been any interest until SEIU that has even approached that kind of influence, and there are folks talking about changing the Constitution now to plug that interest in a similar manner.

Stern: There have been attempts for a long period of time to do a number of things about electoral reform. … There are obviously people like me who believe there should be … only public financing of campaigns. Anything else really distorts the system. There are people like me who believe the initiative process has been perverted by special interests who can afford to buy signatures to put things on the ballot. So I think we have a political process that has lots of different issues. I would say in a time of crisis people will focus on why did the unions do certain things. … I think there's another question of how did the government get bought and paid for by George Bush so that our regulatory apparatus didn't function and we ended up sort of crashing the entire American economy. …

I think democracy is an ugly thing at times; it just happens to be the best thing we've found, and I think there will always be a debate about what's the right financial support involvement that people are allowed to have. The public employee one has gone on for a long time, and I'm not sure it's going to end.

Newton: What do you expect from the president on the Employee Free Choice Act? I know he supported it as a senator; haven't heard much from him recently on it. As you mentioned at the outset you put a lot of time and money to get him elected. What do you want him to do?

Stern: One is to keep making clear as he did the other day in New Mexico that he is a supporter, that he has not backed away, he's not worried about unions. … It's enormously important for us that he keep this issue about the rightful place of unions in society on the agenda and his support for employee free choice, because if not, I think a lot of senators would use his lack of a voice. On the other hand, we appreciate that there are probably a lot of other problems in the country and in the world that at the moment he's trying to deal with, and it would be kind of selfish to say why doesn't he get to ours first, forget the crash, forget banking regulations, forget Afghanistan, Iran, the Middle East.

So we believe we have his support. We've tried to be responsible in trying to do our work in the Senate and the House to build a base, and I think we're totally convinced when the moment comes, his support will not only be there because it is there, but he'll actually act on it when there's a bill moving through and his support would matter.

Jon Healey, L.A. Times: Can I say whether the White House got involved in the In-Home Supportive Services issue, or is that purely you folks dealing with the [U.S. Department of Health and Human Services]?

Stern: We did not deal with the White House. This is just another interesting question of what people think went wrong here. The government passed a law called the stimulus; it had a very clear responsibility about maintenance of effort. We looked at what the state of California was doing; we didn't think they were living up to it. We actually called people in Congress like [Rep Henry A.] Waxman, who wrote the bill and was involved in the process and his staff, and expressed our opinion that this was not appropriate, went and did another round with our lawyers of due diligence, and we actually think we're write. We actually know we're right. We happen to be right about this, that what California has done, we don't think in flagrant violation of the law, they just happen to be in violation of the law. The law was written to try to make sure there was a maintenance of effort and we didn't specifically shift responsibilities from states to cities and counties. That's actually written in the law as well. You also have a violation in California about the [Children's Health Insurance Program], which you have to make changes with as well. …

We made our claim to HHS, to the group of career people. … I'm sure they talked to us a number of times; they talked to the administration, I know they talked to the administration a number of times. … And one time they asked both of us if we'd get on the phone and talk at each other instead of through them. And they asked both of our permissions, and we both gave permission to do that. And out of that request that each of us argue our case to each other and in front of them so they could do this at one cooperative moment instead of two separate parallel conversations. People have arisen that somehow we did something wrong.

I'll just say this, we happen to be legally correct. …

Nick Goldberg, L.A. Times: Back on card check versus secret ballot, do you think that the issue of union coercion is a red herring, or is that a legitimate concern? My second question is, you seem to suggest there's some kind of compromise discussion in the offing. What's the nature of that?

Stern: I'd say it's a statistical red herring. I mean, it's conceptually totally possible; statistically it's just not there. We've gone through and looked through all the cases filed and they're 50-to-1 employment coercion. … So yes it could happen, no it shouldn't happen, yes we should both be penalized if we're coercive. …

I would say we're not involved in the compromise … but it's clear the senators are all talking to each other about how to proceed. We've said we have a certain set of standards we're going to judge this by: Do people get a free choice? Is it quick? Are there penalties? Can people get a first contract?

Goldberg: Can you imagine a compromise out there that you could live with that would maintain some semblance of secret ballot?

Stern: Well, I think no matter what we do we're going to maintain secret ballot, because I think there's always going to be an election process. The question is whether we're going to go back to where we were in 1935, when workers had two choices: If a majority of them wanted to start bargaining right away they signed a card, and if 30% wanted to have an election, they had an election. The question is, can we restore that in some 21st century way, for the sake of discussion. I think you can. I think Sen. Feinstein had a bunch of ideas about mailing in cards by the individual, not by giving the card to the union.

Healey: Sort of like a proxy?

Stern: Yeah. I mean, as I like to say to CEOs, no one's ever objected when I get my packet at home with my proxy statement. I sign my name and send it in and elect them.

Newton: Do you think Sen. Feinstein will be with you in the end?

Stern: Yes.

Newton: She sent some mixed signals about that.

Stern: I know.


I noticed. …

Peter Nicholas, L.A. Times: Speaking of the IHHS … where does this stand now? The governor's in Washington, he's met with President Obama, he's probably going to meet with [Health and Human Services Secretary Kathleen Sebelius]. Do you know if the administration supposedly has this under review? Do you know where this is headed?

Stern: I don't know where it's headed. I would say there are three questions that have to be answered. One, if there's a violation, which there is, what's the penalty? Is it the $74 million that is in question? Is it all the money in the stimulus package that's due to come back to California? That's one question. What's the appropriate penalty to the state?

Two is, is there a way to resolve this by, if the state's not going to get the money, giving the money to the counties where it belongs -- so whether or not under the law the federal government could allocate the money to the counties as opposed to the state.

And the third, is there some way that logical people can -- do we want to hold up $6.8 billion that California after today's, I imagine, disaster at the polls in the sense of having no way forward in terms of a budget? No. I mean, the last thing we want is California not to have this money. It's just a question of we also don't think it's really right in violation of the law that [home healthcare workers] are going to lose $2 and maybe $4 an hour in wages because of something that was not done in accordance with the money that they're being given.

Nicholas: I'm confused about what happened here though. California says that it got an actual decision from HHS saying the state was in violation of this law and its stimulus money was going to be revoked, then its position seemed to change and they said it's under review. Were you given a consistent message from HHS and whether California was in violation?

Stern: We were never given a message that … they had made a final decision. They had made a preliminary finding that they thought the state was in violation; we were told there would be ultimately a letter had to be … generated to the state with a final finding, and that hadn't been done.

Nicholas: When you … decided California was in violation, did you communicate that to the White House, Patrick Gaspard, the political director? Did you have conversations with him?

Stern: I didn't, but I assume we told everybody we could find in Congress, the White House, HHS, lobbyists, friends, foes and family.

Nicholas: Can you say specifically if your representatives or agents talked to Patrick Gaspard about this?

Stern: I don't know.

Nicholas: Can you find out for us?

Stern: Yeah.

Nicholas: And also, were you suggesting that there's a remedy here that could be different from revoking all the state's stimulus money? Is there a middle ground here?

Stern: I would say there is an argument -- I mean, people made this law. They passed a law, this isn't like the Constitution, that there's a lot of precedence they relied upon. Like we saw with governors who didn't want to take the money around unemployment or stuff, there are different aspects to this. So we have always presumed there's a question that will have to be decided about all the money or the money effecting, but we have no idea what their interpretation will be of that provision.

Nicholas: OK. And the last question is, the state says it was highly unusual for SEIU to be on the call, for a third party to be on a government-to-government call, and they expressed some surprise. I think you touched on this, but how did this call come about, and did the state object to your participating in the call at the time?

Stern: The state leaked that point of view after having multiple discussions, I assume, with the federal government, and having the federal government ask both of us would we be willing to be on a call with each other. … So we acceded, I assume they acceded, or else they wouldn't have been on the call. It's like there's gambling the Casablanca -- they're shocked that we were on the call that they agreed to put us on the call.

Linda Rogers, L.A. Times: What's your relationship with the Schwarzenegger administration like these days?

Stern: We were, I'd say, good participants with him on the healthcare reform. … I'd say we're really incredibly disappointed about what he's doing with homecare workers particularly. We think it's kind of a targeted unfair set of decisions, but I guess everybody's unhappy with him about something in the budget, so it shouldn't be any different. We've always felt like we found ways many times with him to find our way through difficult sets of decisions and be good allies, particularly on the healthcare stuff, and we're just hoping that rather than just having this legal argument back and forth that thoughtful people will find a proper solution. …

Healey: You have a problem with more than just the governor on IHHS. … There have been efforts for a lot of years to cut that program, and it seems like there is a strong push from Republicans … [for] a deep whack at IHHS. And there's a number of state reports that suggest the program doesn't have enough accountability, that there's too much waste in it, things like that. So isn't part of the issue here shoring up the support in Sacramento for this program and making the program actually function better, as opposed to just looking at this element, this battle over what the state has done in the last budget deal?

Stern: Three things. One is this program grows every year because every year, two things happen: People get older, and more people need assistance, and two is, we can't afford to put people in nursing homes. So faced with two choices, we rightfully have chosen -- and not just here, this is all across the country if you watch the home care population, because states are doing what we call re-balancing, re-balancing between expenditures in institutional care versus expenditures in home care. Two things make that true. One is that consumers want consumer-directed care; they want a choice of where they live in the least restrictive environment. Two is that there's no place like home. Everybody wants to be in their home, given a choice. …

We believe that we should rid the program of every ounce of waste, fraud and abuse. It does nothing good … to have someone kind of scam the system. We've been for background checks. … Before we existed and authorities existed, this was like a Rube Goldberg: There was no employer, the clients got a voucher from the state to hire an individual with no screening, no anything to come into their homes, and they sent the voucher the state and then the home care worker got paid. And everybody said, "I'm not responsible." …

Healey: You are probably aware that the governor has called for pushing down the minimum wage in the post-May 19 [budget] revise. I imagine that your argument on that is that it's also in violation. …

Stern: Yeah, and I just think it's wrong. I just think at some point if we can't find a better way out of this budget crisis, people who are trying to get by, raise a family, spend money in their communities and cut their salaries even more, where does the spiral stop in California? If people don't make money, they don't pay taxes. And I also think it's really in the end an attempt to shift the cost to the counties from the state, which is just a shell game. That doesn't solve anything either.

This state needs a fiscal plan, and I appreciate they tried to put it together, and I appreciate their problems with whatever your three-fifths or two-thirds or whatever your rule is. But the victims of all that shouldn't be … working people taking care of other working people so they can age with dignity and be independent. If that's what we're doing as a state I don't think that's much of a plan.