California State Employee Blast SEIU, Move to Disaffiliate

The Cal. State Employees Ass’n announced Oct. 29 that it is seeking to end its affiliation with the Service Employees Int’l Union, arguing that recent SEIU’s actions have violated the state employee union’s rights. The disaffiliation is also considered the result an internal fight for control of the union. CSEA’s Board of Directors voted in an Oct. 26 closed session to take legal action to disaffiliate and invalidate its 1988 affiliation agreement with SEIU. “SEIU’s interference in association matters has proved very costly to our members,” CSEA President Perry Kenny said. “[W]e resist this raid on our identity, our autonomy, and our resources by [SEIU].”

CSEA expressed dismay with SEIU’s opposition to a 1999 bill in the Cal. Legislature that gave state workers and retirees the largest pension benefit in 20 years and the SEIU’s opposition in 2001 to a bid from W. Health Advantage to contract with the Public Employees Retirement Sys. to provide health care to its members. CSEA said SEIU also denied its executive officers a seat on the SEIU’s state council earlier this year, and denied representation to one of its division at the 2000 SEIU convention. Additionally, CSEA has refused to participate in SEIU’s unity plan, launched in 2000, which required locals to abandon their names and logos, and use the purple and gold SEIU banner. The unity plan also called for fees that would cost CSEA $18 million over five years, in addition to an increase in its per capita dues payments.  Kenny summarized CSEA’s complaints: “SEIU has disenfranchised CSEA.”

Steven Bassoff, CSEA’s Sacramento attorney, said CSEA will seek a court or arbitrator finding that the affiliation agreement is void because SEIU has not complied with its terms. Under such a finding, SEIU would have some time to address the issues raised before the CSEA general council would vote to disaffiliate.  CSEA also could invoke provisions in the affiliation agreement that set out the process for disaffiliating. [BNA 11/2/01]

Oregon Pension Manager Pleads Not Guilty
Jeffrey L. Grayson, the Portland, Or., union fund manager accused of bilking his clients out of hundreds of millions of dollars, pleaded not guilty to all charges Oct. 26. A federal grand jury   Grayson on Oct. 2 on twenty-two counts of mail fraud, conspiracy, money laundering, witness tampering, and making illegal payments to a  union pension fund trustee. Grayson’s clients, many of them union pension funds, have lost $355 million in failed and allegedly fraudulent investments.  U.S. Dist, Judge Anna J. Brown (D. Or., Clinton) scheduled Grayson’s trial for Mar. 26, 2002.

The indictment alleges that Grayson paid more than $200,000 to an ex-boss of the Laborers’ Int’l Union of N. Am., John D. Abbott, who steered millions of dollars in pension and trust fund money to Grayson’s firm, Capital Consultants. Abbott, ex-chairman of four of LIUNA funds, allegedly conspired with Grayson to conceal the payments. Grayson also allegedly tried to pressure an employee to lie to a grand jury about the payments to Abbott.  Abbott was business manager of LIUNA’s Or., S. Idaho & Wyo. Dist. Council and a trustee on two pension plans, a 401(k) plan, and a health and welfare plan. He pled guilty in Feb. to taking payoffs from Grayson and filing a false tax return. [Oregonian 10/27/01]