Union leader Stern leaves with questions over spending

Departing SEIU leader Andrew L. Stern said he was forced to spend money in order to protect the integrity of the 1.8 million- member union.
Departing SEIU leader Andrew L. Stern said he was forced to spend money in order to protect the integrity of the 1.8 million- member union. (Andrew Councill/bloomberg News)
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By Alec MacGillis
Saturday, May 15, 2010

In celebrating her election last weekend to head the Service Employees International Union -- the nation's fastest-growing and most politically active labor organization -- Mary Kay Henry vowed to "build on the success" of Andrew L. Stern, the charismatic, ambitious labor leader who is taking his influence to new arenas, such as President Obama's deficit commission.

But the state of the union Stern is leaving behind is more mixed than Henry let on. Even as Stern turns to the nation's spending problem, his own union's spending -- notably the multimillion-dollar tab from internal battles he has waged -- is drawing sharp criticism from within the labor movement. Stern has expanded his union, but his decisions have left it and the labor movement as a whole financially strapped, according to disclosure reports.

Stern has played an active role in Washington, visiting the Obama White House more than three dozen times and overseeing his union's prominent role in the health-care overhaul. The 1.8 million-member union has also grown in a time of labor decline, making Stern the most consequential labor leader of his era.

Spending by his union, however, increasingly has been driven not by the usual priorities -- organizing workers and helping elect political allies -- but by internal strife, records show.

In 2008 and 2009, SEIU sent hundreds of its officials to California for a turf war with a big breakaway chapter, spending $2.5 million each year on hotels in the state, a fivefold increase from 2007. In Fresno alone, the union spent $300,000 on lodging before narrowly winning an election over dissident leaders.

The battle in California helped drive up SEIU's legal costs last year by 64 percent, to $11 million. That amount also reflected a showdown with the hotel and restaurant workers union and the fallout from corruption allegations involving several Stern loyalists.

Other expenditures in 2008 and 2009 include a $17,000 bulk purchase of Stern's book; $46,000 to a little-known Hollywood actor for "public persona development" of SEIU officials; and $1 million to a filmmaker who made a movie about SEIU.

Stern vigorously defends the union's $300 million budget. He notes that its finances improved last year, into the range of other high-spending unions. And he said SEIU needed to expend money on internal battles for protection from people who sought to weaken it from within.

"It's a tragedy in terms of how the money was spent, but a necessity in terms of preserving the organization's integrity," he said. "I don't want to analogize this, but there is not enough money you can spend in America to protect us from terrorists. And you know, sometimes you have to spend money to protect the integrity of the institution from its own version of self-righteousness and terrorism."

'Destructive' battles

Critics note that the millions of dollars in union dues devoted to internal disputes -- both by SEIU and rival unions -- could have been spent on organizing or advocating for labor's top priority, stalled legislation that would make it easier to organize workers. To bring its spending closer into balance last year, SEIU cut dozens of organizers; its growth slowed to 50,000 new members, from 115,000 in 2008.

"These sort of fights have been absolutely destructive," said Bob Bruno, a labor relations professor at the University of Illinois at Chicago. They "are not focused on what the real objective should be. Too much money is being spent vilifying each other, chasing their own tail."

Since Stern, 59, rose from being a Pennsylvania social worker and took the union's helm in 1996, it has doubled in size and has become a political force. It has pumped millions of dollars into election campaigns, and purple-shirted SEIU workers are a regular sight at protest rallies.

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