Executive Greed: Scandals That Hit Home
By Susan Ellen Holleran
The victims of the corporate greed epidemic number even more than the employees and retirees of individual corporations. It has also affected our AFSCME sisters and brothers, other union members and the public whom we serve.
GM Rolls Over Flint
Vickie Rose's job as Employee Health Clinic Coordinator in Flint, Mich., has been eliminated as the city tries to deal with its $42 million deficit. Flint was a major General Motors manufacturing center. But "GM has not been a good corporate citizen," says Rose, president of Local 1799 (Council 25). It consistently demanded tax abatements, forcing the city to implement a city payroll tax. As the company has shut down plants, outsourced the work and moved manufacturing overseas, "We've lost 70,000 jobs averaging $40,000 a year."
Buffalo Heartbreak
The fall of Adelphia Communications smashed Buffalo's best hope to pull itself up by its bootstraps. "Adelphia planned to move its headquarters here," says Local 650 (Council 35) Pres. Michael Hoffert. "Their office tower would have been the centerpiece for waterfront development." Now that prospect is gone, along with the well-paying jobs Adelphia would have brought into this struggling city. Hoffert's local has lost 57 percent of its members over the past two years.
Council 35 Pres. Dave Christopher is also concerned about the Buffalo Sabres hockey team. "They have been here for 30 years and are a big part of this city." Adelphia owned the team, which is now up for sale.
Take the Money & Run
Fran Neilsen has been a state worker for 12 years, and she finds Florida's answer for any problem is to privatize. Florida paid Lockheed Martin and Maximus $4 million to collect child support, says the Local 3174 (Council 79) member. They collected a grand total of $162,000 and quit — but they kept their millions.
Another privateer was given state office space, and when its staff left, "They took our equipment, desks, chairs."
Jeopardizing Retiree Security
Pension plans have been particularly vulnerable to corporate antics. That makes the pro-participant activism of organizations like the California Public Employee Retirement System (CalPERS) so important.
"CalPERS' board is the most involved pension board in the United States," says Local 3993 (Council 57) member Mike Flaherman, an employee representative. "That makes CalPERS more willing to stand up and be a leader."
CalPERS was an active — and early — supporter of U.S. Sen. Paul Sarbanes' bill calling for corporate accountability. "These are appropriate checks," says Flaherman. But he urges ongoing caution.
New Jersey to Greenbay to Bombay?
As if stealing public jobs isn't bad enough, greedy privateers are now shipping those jobs "offshore" — to Africa and India. Watch out: This scam may be headed to a bargaining unit near you.
New Jersey officials privatized the call centers used by Food Stamp and public-assistance recipients. In March, the state discovered that eFunds Corp. had transferred the work from Green Bay to Bombay, India, because of the alleged difficulty in getting U.S. workers to take on these entry-level jobs. The truth: Pay in Green Bay is $10 to $12 an hour, compared with Bombay's $2 to $3 rates.
Then, New York City learned that its privatized ticket-processing work was really being done in Africa. Hand-written tickets are scanned into a computer and forwarded to the Accra office where Ghanaian typists get $70 a month for working in sweatshop conditions.
Enronned in San Diego
Applying for assistance with her electric bill, at the height of California's energy crisis, was a very painful experience for Joan Hernandez. "I kept asking myself, ‘Do I really want to do this?' It has a stigma to it."
A 30-year San Diego employee and secretary-treasurer of Local 127 (Council 36), Hernandez's bill for ENRON-supplied power had quintupled. "It was the equivalent of a week's pay for our entry-level employees. A number of them had their electricity turned off."
When the scandal broke, Hernandez and her co-workers were not surprised. "Some of our guys said, ‘See, we told you there was something crooked.'"
Piracy in Connecticut
For more than 150 years, Stanley Works was the economic backbone of New Britain, Conn. Then CEO John Trani decided to re-incorporate in Bermuda and save about $30 million in taxes. To get the needed stockholder votes, management pressured workers — pulling them off the plant floor — and visited retirees' homes to harass them about doing the "patriotic" thing to keep Stanley competitive.
On July 29, more than 300 workers, including many AFSCME members, rallied in front of the factory as AFL-CIO Pres. John Sweeney called Stanley Works "the poster child of corporate greed." Trani backed down.
Taking it to Bank One
Don't tell Leslie Dell that the private sector is more efficient than the public. Both have handled child support for her three children, and "When it was in the county's hands, I got the money on time." Not so with Bank One, which did such a bad job that Ohio state officials canceled its $39.1 million-a-year contract.
"It has been horrible," Dell says. "I live on a disability pension, and never know when the child support will come."
Last Christmas Eve she was making frantic calls to find out where the checks were. She considers herself lucky. They arrived just in time for her to prepare a Christmas celebration.
