Gov.-elect Terry McAuliffe courted Va. labor and business. Can he keep both sides happy?

Correction: An earlier version of this story incorrectly stated that Governor-elect Terry McAuliffe had asked Virginia Secretary of Health and Human Resources Bill Hazel to stay on. McAuliffe has not made a final decision and has made no formal offer, according to his transition team. This version has been updated.


Virginia Gov.-elect Terry McAuliffe gestures along with his wife, Dorothy, during a news conference to announce his transition team at the Capitol in Richmond on Nov. 6. (Steve Helber/AP)

Virginia’s top corporate executives, including many who have backed Republicans before, are betting that Gov.-elect Terry McAuliffe (D) will be good for business. Top union leaders think he’s their man, too.

Can McAuliffe satisfy both?

While unions were pouring money and muscle into electing McAuliffe, he was busy promising to uphold the state’s anti-union “right-to-work” law and winning endorsements from business groups. As a result, both big business and big labor consider McAuliffe an ally, each convinced that he could not have won without its support.

“I’m optimistic Terry McAuliffe will be a pro-business governor,” said Barry DuVal, president and chief executive of the Virginia Chamber of Commerce, which has a membership of about 13,500 businesses.

“We feel good with him right now,” said Tim Waters, national political director for the Pittsburgh-based United Steelworkers, whose 27,000 Virginia members toil in shipyards, tire factories, paper mills and other industrial sites. “But we’re cautious in our optimism.”

Although corporate executives and union leaders express confidence that McAuliffe can somehow be both pro-business and pro-labor, there are signs that McAuliffe is still trying to find the right balance after running as a liberal Democrat on some issues and promising to govern as a centrist on others.

Lately, McAuliffe has found himself in a somewhat similar situation on the abortion issue. He campaigned hard as a defender of abortion rights but then angered women’s groups when reports surfaced that he was courting Republican Gov. Robert F. McDonnell’s health and human resources secretary, Bill Hazel, to stay on despite Hazel’s apparent support for tough new regulations on abortion clinics.

After contributing nearly $3 million and mustering an army of union members to work the streets, labor leaders believe they have done more than put a friend in the Executive Mansion.

Besides pushing to expand Medicaid coverage under the Affordable Care Act, McAuliffe is expected to use executive appointments and regulatory policy to alter the balance between business and labor, union leaders said. Others want McAuliffe to prevent any tinkering with state employees’ retirement benefits, such as attempts by Republicans to shift from a traditional defined-benefit pension plan to a 401(k)-style defined-contribution plan or a hybrid approach.

Above all, union leaders said organized labor strongly backed McAuliffe to send a message beyond Virginia.

“We looked at this as a watershed,” said Harold Schaitberger, general president of the D.C.-based International Association of Fire Fighters, which gave $325,000 to McAuliffe and other Virginia Democrats. “If we’re able to elect a business-friendly progressive in the commonwealth of Virginia, then you could see this as a measurable moment and maybe a reflection or a harbinger of where we see ourselves going in 2014, when we have 36 gubernatorial races.”

The United Steelworkers’ Waters said: “We really saw Virginia as the first shot in that battle.”

Even if McAuliffe falls short of labor’s hopes, union officials said, he cannot be worse than the Republican candidate he defeated, Virginia Attorney General Ken Cuccinelli II. Cuccinelli and other Republican heroes of the tea party have spent much of their careers demonizing the labor movement, union officials said. McAuliffe, in contrast, has offered them his cellphone number.

“We’ve had a long, long working relationship with Terry,” said John Niemiec, president of the IAFF-
affiliated Fairfax County Professional Firefighters and Paramedics. “It’s just a very simple expectation: to have a seat at the table. And Terry has said over and over again that the firefighter will have a seat at the table. In a right-to-work state, that is huge.”

During the campaign, McAuliffe chose his words carefully when discussing organized labor. Touring a Metro station under construction in McLean, McAuliffe declined to say whether he would defend Virginia’s right-to-work law, which bans compulsory union membership as a condition of employment. He also skated past a question about whether he would support union-friendly project labor agreements that require contractors on public projects to negotiate wages and workplace rules.

Later, McAuliffe made clear that the state’s right-to-work law is here to stay. The Fairfax County Chamber of Commerce’s political arm, when endorsing McAuliffe, took pains to say that he had expressed opposition to mandatory project labor agreements and had “vowed to veto any attempt to chip away at Virginia’s long-standing right-to-work laws.”

But McAuliffe called union heads before the endorsement became public to reassure them that whatever the chamber might say, he would be their ally, Waters said.

“The chamber — especially local chambers — can be aggressive and oftentimes want to push a candidate to try to say what they want him to say. And they want to hear what they want to hear,” Waters said. “I think they’re the ones who should be concerned about Terry McAuliffe.”

McAuliffe has a tangled and sometimes controversial history with unions. In the 1990s, he partnered with the International Brotherhood of Electrical Workers’s pension fund on a Florida real estate deal in which the union fund put up nearly all the money but gave McAuliffe a 50-percent share. The U.S. Labor Department deemed the deal a sketchy investment for the union and took legal action, eventually reaching a settlement.

Also in the 1990s, McAuliffe was questioned by federal investigators in a Teamsters money-laundering case that led to criminal convictions of several people. A Democratic National Committee official testified at the time that McAuliffe was behind a scheme to have Democratic contributors illegally raise money for then-Teamsters President Ron Carey’s reelection campaign in exchange for union contributions to the Democrats. McAuliffe denied wrongdoing and was not charged.

But that history is one reason Cuccinelli argued repeatedly on the campaign trail that McAuliffe would do the unions’ bidding if he won. “I think our small-business owners are really concerned,” said Nicole Riley, state director of the National Federation of Independent Business.

Even union leaders say McAuliffe is unlikely to make a dent in Virginia’s right-to-work tradition as long as the House of Delegates remains in GOP hands. They say McAuliffe won labor’s vote for other reasons, particularly because he vigorously supports a Medicaid expansion as part of the state’s response to the federal health-care overhaul. Cuccinelli, in contrast, opposes it.

“A majority of folks who will get access to health care are the working poor” if Medicaid is expanded in Virginia, said David Broder, president of a Service Employees International Union local, Virginia 512, which represents about 2,600 workers, including county employees in Fairfax and Loudoun counties and home-health-care providers statewide.

Union leaders also hope McAuliffe’s administration will simply be more accessible to labor, perhaps by following a labor-relations practice referred to as “meet and confer.” In Fairfax and right-to-work states including North Carolina, government officials regularly confer with unions about workplace issues. But any agreements are not binding.

“Right-to-work in this state is firmly entrenched,” said Karen Conchar, secretary-treasurer of SEIU Virginia 512 and former head of the local’s Fairfax County unit. “At this point in the state, we’d be happy to get meet and confer.”

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