A large Midwest brokerage abruptly withdrew from a business coalition that backs President Bush's Social Security proposals after the AFL-CIO staged protests at two of the firm's offices and attacked it on the Internet.
Edward D. Jones & Co., which operates under the trade name Edward Jones, resigned from the Alliance for Worker Retirement Security, a coalition of corporations and trade associations that has long pressed for the creation of private accounts as part of Social Security. The St. Louis company has been a member of the coalition since 1998, the year of its inception.
The AFL-CIO claimed Edward Jones's decision not to renew its membership in the coalition as a victory in its nationwide lobbying campaign against the president's Social Security proposals. In December, AFL-CIO President John J. Sweeney sent letters to 46 members of the Securities Industry Association (SIA). In January, he sent similar notes to SIA's board protesting its advocacy of private accounts.
The labor federation trained special attention on Edward Jones, Charles Schwab Corp., Wachovia Corp. and Waddell & Reed Financial Inc., in addition to the SIA, because all were members of the Alliance for Worker Retirement Security, which represents more than 40 groups and companies. Earlier this week, the coalition removed the names of its members from its Web site.
The AFL-CIO tried to focus on Edward Jones this week because its monthly video conference, which is made available to all 8,500 of its branch offices, was on the subject of Social Security. The labor federation staged rallies on Tuesday near the firm's St. Louis headquarters and outside its office in downtown Lincoln, Neb. It also instigated thousands of e-mails to the firm protesting its role in aiding the president's plan.
Edward Jones announced Thursday that it would not renew its membership in the coalition.
Steven B. Weingarten, a spokesman for the AFL-CIO's Office of Investment, said the labor federation targeted Edward Jones because it "played a leadership role in bringing key industry groups including the Securities Industry Association into the alliance." Douglas E. Hill, Edward Jones's managing partner, serves as SIA's vice chairman and chairman of its political action committee, which raises and doles out money to candidates for elective office.
Regina DeLuca-Imral, a spokeswoman for Edward Jones, said the firm withdrew from the alliance "because of the confusion some have expressed about Edward Jones's position on Social Security reform."
"We haven't taken a position supporting any of the reform proposals currently under consideration," she said.
The AFL-CIO, which opposes Bush's proposal to put 4 percentage points of payroll taxes into private investment accounts, demonstrated in front of Charles Schwab offices in San Francisco and Boston on Jan. 25. It also established Web sites attacking Schwab and Edward Jones.
Derrick A. Max, executive director of Alliance for Worker Retirement Security, said his coalition's campaign would continue despite Edward Jones's withdrawal. "Edward Jones has been a modest but faithful member, and I'm sorry to see it go," Max said. The firm contributes at the lowest level of the coalition's membership scale, which runs from $10,000 to $60,000 a year, he said.
The AFL-CIO plans to keep up the pressure. Sweeney wrote a letter to Edward Jones yesterday that urged it to press other industry organizations to withdraw from coalitions that back Bush's plans.