Kamala Harris Goes to Bat for the SEIU

Kamala Harris, the junior U.S. senator from California, is a woman in a hurry. Elected in 2016, Harris today announced her candidacy for president in 2020. “I’m running for president of the United States, and I’m very excited about it,” she told ABC’s “Good Morning America.” Her track record, however, suggests she would be the kind of president who among other things would cut ethical corners on behalf of labor unions. Back in 2015, Harris, as California attorney general, helped a powerful affiliate of the Service Employees International Union (SEIU) scotch the purchase of a half-dozen nonprofit health care facilities by a corporate buyer to protect union jobs. While a federal judge twice has dismissed allegations by the buyer, Prime Healthcare, that she abused her office, the case deserves another look.

Kamala Devi Harris, now 54, is a fast-rising Democratic Party star. Of Indian and Jamaican descent, she’s emerged as a leader of the party’s progressive wing, which is to say at this point in time, virtually the whole party. She’s been hinting at a run for the White House for the last two years, making no secret of her dislike of its present occupant. Two years ago, she denounced President Donald Trump’s inaugural address as “dark” and his anti-terrorism executive order days later as a “Muslim ban.” Along with Cory Booker, Kirsten Gillibrand and several other Democratic senators, she vocally opposed a succession of Trump cabinet and judicial nominees.

Like any Democratic politician, she needs support from organized labor. And she’s delivered for at least one major union. During her second term as California attorney general, she went to bat for the Oakland-based United Healthcare Workers West (UHW), a 150,000-member affiliate of the Service Employees International Union (SEIU), to quash the sale of five hospitals and a nursing home operated by a Catholic sisterhood, the Daughters of Charity, to the Ontario-Calif.-based Prime Healthcare Services, which operates several dozen for-profit and nonprofit hospitals around the country. As the sale threatened the interests of the union, its leaders called on Harris to discourage the deal.

Back in October 2014, Prime Healthcare had just reached an agreement with the Daughters of Charity Health System to purchase five financially-troubled California hospitals and a nursing home for $843 million. As attorney general, Harris had the authority to approve or reject the sale. And she used that power, approving the deal in February 2015, but with the stipulation that Prime Healthcare keep all facilities open for at least a decade. The following month, the company pulled out. Faced with the possibility of having to close some of its facilities, the Daughters of Charity looked for another buyer. They found it in a New York-based hedge fund, BlueMountain Capital Management. BlueMountain in December 2015 agreed to pay $260 million to acquire management rights to the hospitals and the nursing home for three years with an option to buy. As the owner, the hedge fund then would keep the facilities open for at least 10 years. Attorney General Harris quickly signed off on the transaction.

When word of the deal got out, Prime Healthcare did not take it well. The company filed suit in federal court against Harris, accusing her of conspiring with UHW to block the proposed sale. There was good reason to suspect that the union had worked to pull the rug from under the deal. In its lawsuit, Prime Healthcare noted that the union had donated substantial sums of money to Harris’ two campaigns for attorney general and had promised large contributions to her Senate campaign if she blocked the company’s acquisition of the Daughters of Charity facilities. Any hospital closure would mean fewer union jobs. For the union, it thus was crucial to keep those hospitals open at whatever cost.

Gonzalo Curiel, U.S. District Judge for the Southern District of California, an Obama appointee, was unimpressed by Prime Healthcare’s contentions. On October 31, 2016, he dismissed the claim that Attorney General Harris had engaged in a conspiracy. Her decision, said Judge Curiel, was merely “discretionary state decision-making.” The state law giving the attorney general broad powers over business transactions has “plausible reasons,” including “access to continuing health services.” Following this display of judicial sophistry, Prime Healthcare then filed another suit, claiming Harris had engaged in “governmental overreach.” It was to no avail. On August 16, 2017, Curiel threw out that complaint, too.

SEIU-United Healthcare Workers West, needless to say, was elated over these developments. Union President Dave Regan put it this way following the initial court decision in October 2016: “It’s time for Prime Healthcare to stop wasting money on fringe conspiracy theories. The most recent in a string of major losses in court should worry Prime Healthcare stakeholders concerned about the company’s ongoing legal fight with the U.S. Justice Department and the devastating financial impact a loss could have on the company.”

Kamala Harris might not have broken the law during this episode, but that should not give her a free pass with the general public. She can be bought. A protégé and former paramour of retired California House Speaker and San Francisco Mayor Willie Brown, an unusually corrupt public figure, Harris now wants to apply her political skills to the White House Oval Office. She’ll have plenty of practice in her remaining years as a U.S. senator. If she becomes president, organized labor may have the best possible friend in Washington to the detriment of taxpayers and dissenting workers.