Rightwing Attack on Unions' 'Enron';

Watch GOP Talking Points in Action

Let's talk about union financial scandals. Or rather, let's talk about the hypocrisy of the corporate media's attempts to talk about them and their attempt to distract attention from the crimes by Enron and WorldCom and Bush's financial non-regulators.

Specifically, let's talk about the financial problems at the union-run Ullico investment fund: "Union $Leaze Bared" blared the New York Post in big headlines in late November; "Big Labor's Enron" declared the rightwing Washington Times.

Let's remember, the Enron scandal is estimated to have cost investors as much as $93 billion and is merely the headliner in a series of corporate crimes that have cost consumers and workers literally trillions of dollars. As well, Enron was involved in billions of collars in consumer ripoffs to energy users in California in the year 2000.

Okay, with that little perspective, let's look at the Ullico scandal, which is obviously the worst thing the rightwing press could dig up about the unions, or else they'd be blaring another story from the media rafters. Ullico is a fund set up by various unions to invest union pension funds in various companies. What happened is a real scandal for a few minor union hacks on its board who were involved in a grand total of $6 million in insider trades by directors at the expense of union shareholders. That's substantial moolah but probably equivalent to the couch change of Enron's Ken Lay.

The key to the rightwing attack is make it sound like the AFL-CIO leadership somehow was involved, so they now have no legitimacy to attack corporate greed.

Read this first paragraph from the Nov. 29 New York Post story: "Big labor unions are facing their own executive-greed scandal after a scathing report was leaked on how labor bosses voted themselves big bucks on inside deals -- a report one top union official tried to hush up."

Makes it sound like top AFL-CIO leaders like John Sweeney -- the hate figures of rightwingers like Rupert Murdoch who runs the Post -- are hiding their misdeeds.

Yet note this: The most recent round of stories comes from information leaked from an investigation ordered by the Ullico board itself. And it turns out that the central figures in the Ullico scandal are an old conservative union hack, Robert Georgine, and Bush's favorite union guy, the Carpenter's head Douglas McCarron, who apparently made a few hundred thousand dollars in illegitimate insider trading. And check out this paragraph buried late in the article:

"Details of the report -- said to be scathing about Georgine -- were leaked to a newspaper while Georgine reportedly was trying to keep it secret over the objections of AFL-CIO President John Sweeney."

So basically the real story here is that a few minor union officials enriched themselves at the expense of union funds and are trying to defy top union leadership who are working to clean up the mess. In fact, Sweeney resigned from the board to protest any attempts to keep the report secret, thereby triggering most of the stories that the press are now using to attack the union movement.

You gotta love the cynicism of the rightwing media, using a report demanded by top union leadership, and a principled public resignation by Sweeney, to turn around and attack him and the union movement. It's called disciplined talking points, folks. Lie, repeat lie, repeat again -- and pretty much the rest of the sheep media falls into line.

When Al Gore recently said that papers like the New York Post and the Washington Times just act as conduits for propaganda straight out of the Republican National Committee, some (mostly rightwing media folks) mocked him, but check out this line, again from the same New York Post story:

"This takes the wind out of any effort by unions to talk about 'us vs. them' or about corporate crooks taking the money out of babies' mouths. Labor unions are just like any other big business," said Republican strategist Rich Galen.

And this is the point, isn't it? Highlight a tiny union scandal, one that happened at the expense of unions themselves and which the top union leadership is cleaning up, a scandal that amounts in dollar terms to less than one dollar for every ten thousand dollars involved in Enron alone, and the rightwing media hopes to silence labor leaders like Sweeney, leaders who have been battling for justice for victims of Enron and other corporate criminals.

This is typical media equivalence between "Big Labor" and "Big Business." Top corporate buddies of Bush steal billions of dollars in blatantly illegal ways and the media seeks to treat as an equal scandal petty dealings of a few thousand dollars by hacks no one has ever heard of.

Actually, turn the story around and you have to realize how almost astonishingly squeaky clean the union movement is overall. Think about it -- out of the hundreds of billions of dollars invested by various union officials in different funds all over the country, this was the worst the rightwing media could dig up. If anything, the fact that these union hacks at Ullico couldn't even get away with stealing these relatively petty amounts speaks pretty well to union corporate accountability controls, controls obviously far better than the corporations plunged into bankruptcy because of money gone and unrecoverable.

What is most disgusting about this whole rightwing attack is that the vast number of union leaders work hard and honestly for their members.

Some make decent pay but by corporate standards, they are paid peanuts. Take Sweeney himself, president of the AFL-CIO, with its 66 affiliate unions and 13.2 million members, who was paid $225,000 in 2000 -- a respectable amount, unless you were a second-year law associate or a 26-year old commodities broker on Wall Street.

And get real about most union salaries. When I was a union organizer, I was paid $16,000 per year -- pretty sad money even back in 1988. And a good friend who is one of the best organizers I know and head of a union local for much of Northern California makes just over $40,000. Many long-time union leaders make a bit more but it's basically propagandistic rotgut that many union staff are living high off the hog from member dues.

There are still pockets of corruption around unions (although actually very few at this point), but the GOP should keep their mouths closed, since those areas, such as the Carpenters leadership or some of the old guard of the Teamsters, are the most likely to support Bush and his policies.

So ignore the GOP talking points. The real story is how honest the unions are in managing their members' money and, unlike the corporations, the fact that they catch the tiny number of crooks in their midst while they can still retrieve the money.

Nathan Newman is a union lawyer, longtime community activist, a vice president of the New York City National Lawyers Guild and author of the just published book Net Loss [Penn State Press] on Internet policy and economic inequality. Email or see

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