Union fighting over bank (Click for article)

Juan Gonzalez - NYDailyNews.com
Friday, February 20th 2009

A group of reform-minded union leaders who broke from the AFL-CIO four years ago vowing to rebuild the labor movement are in a bitter battle for control of America’s only union-owned commercial bank.

Some leaders of the union accuse one of the country’s most powerful labor leaders, Andy Stern, of the Service Employees International Union, of scheming to seize control of the bank in a corporate-style takeover

The conflict has been brewing ever since a merger that created UNITE HERE in 2004. That merger brought together two smaller unions - the former clothing workers (UNITE) and the hotel and restaurant workers (HERE).

At the time, UNITE’s membership was plummeting as manufacturing jobs were shipped overseas, but the union was flush with cash thanks to the bank. The hotel workers group was growing rapidly in membership but was nearly bankrupt.

At first, Raynor and Wilhelm predicted a bright future. The marriage has instead sparked a virtual War of the Roses. Leaders on both sides are feuding over strategy, tactics and finances.

That’s where Andy Stern comes in. His 2-million member SEIU is fast becoming the Roman Empire of the labor movement. Stern is forever on the prowl for new workers to absorb into his empire and he doesn’t much care how he does it.

“We are not shy in saying that their members would be better off if they were all in SEIU,” Stern said yesterday.

A group of reform-minded union leaders who broke from the AFL-CIO four years ago vowing to rebuild the labor movement are in a bitter battle for control of America’s only union-owned commercial bank.

With nearly $5 billion in assets and 500 employees, the New York-based Amalgamated Bank has long been one of the crown jewels of organized labor.

Founded in 1923 by the Amalgamated Clothing Workers of America, the bank is owned by UNITE HERE, which represents 400,000 clothing, textile and hotel workers across the country.

Last year alone, Amalgamated Bank’s profits provided more than $23 million to UNITE HERE for its everyday operations.

Some leaders of the union accuse one of the country’s most powerful labor leaders, Andy Stern, of the Service Employees International Union, of scheming to seize control of the bank in a corporate-style takeover.

The conflict has been brewing ever since a merger that created UNITE HERE in 2004. That merger brought together two smaller unions - the former clothing workers (UNITE) and the hotel and restaurant workers (HERE).

At the time, UNITE’s membership was plummeting as manufacturing jobs were shipped overseas, but the union was flush with cash thanks to the bank. The hotel workers group was growing rapidly in membership but was nearly bankrupt.

So the unions arranged a shotgun wedding, with Bruce Raynor, the head of UNITE named president of the merged group, and John Wilhelm, head of HERE, made second in command.

At first, Raynor and Wilhelm predicted a bright future. The marriage has instead sparked a virtual War of the Roses. Leaders on both sides are feuding over strategy, tactics and finances.

Since Wilhelm’s division controls 60% of membership, he is almost certain to be the victor in those fights and is expected to replace Raynor at the union’s July convention.

As the convention approached, Raynor began looking for a way out.

“Our members want a divorce,” Edgar Romney, the union’s executive vice president and a Raynor ally, said yesterday. “We can’t live with them [the hotel division] and they can’t live with us.”

But as has often been said, it’s a lot easier to get married than to get divorced.

In the case of UNITE HERE, its constitution specifically forbids secession.

“We have a democratic process to resolve these matters,” Wilhelm said. “A resolution from Raynor to break up the union was defeated by a substantial margin. He’s trying to short-circuit ... that democratic process.”

That’s where Andy Stern comes in. His 2-million member SEIU is fast becoming the Roman Empire of the labor movement. Stern is forever on the prowl for new workers to absorb into his empire and he doesn’t much care how he does it.

“We are not shy in saying that their members would be better off if they were all in SEIU,” Stern said yesterday.

It is not an idle offer. Stern acknowledged he has assigned teams of lawyers and staff members to study legal documents and prepare proposals for such a merger.

Meanwhile, labor strategist Steve Rosenthal, Stern’s best friend and the husband of an SEIU vice president, is coordinating a campaign on behalf of Raynor to force the breakup of UNITE HERE and keep the bank away from Wilhelm.

“This is nothing less than a hostile takeover of our union by Andy Stern,” said another leader of UNITE HERE who sides with Wilhelm.

In late December, Raynor, who controls a majority of the bank’s directors, amended the rules to ensure he stays in control of the bank when Wilhelm becomes union president in July.

As you might imagine, the lawyers have a gold mine here.

This they call reforming the labor movement.

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