Vol. 31, No.4                                                      April 04, 2006

WELFARE FUNDS AND GAMES:
RUMORS OR FACTS?

The contest between the CUNY Alliance and the New Caucus has brought to light a good deal of information about the perilous state of the Welfare Fund, and about the grim future facing all of us who rely on it for benefits. We've learned that under New Caucus stewardship the WF Reserves have dropped from $15,000,000 to below $2,000,000; that "Foggy" London and "Luau Larry" Morgan plan on imposing dramatic, draconian deductibles on prescription drugs once the Reserves dip under the $1,000,000 mark; and that the New York City Comptroller's Office has determined that the WF is in "short-term risk of insolvency within 1-2 years."

It has also been distressing to learn that MEDCO, Steve and "Luau Larry's" favorite mail-order pharmacy, has been successfully sued for fraud by Ohio teachers, and now is threatening to lock out its own workers! One would hope that things could not get worse. But perhaps they have.

We've heard very troubling rumors that in order to keep the Reserves from dipping below the magic $1,000,000 mark, the New Caucus has been taking out short term loans at very high interest rates. Rumor has it that over $9,000,000 in borrowed bucks have been channeled into the WF. In the event of a New Caucus victory, the reserves again will be allowed to drop, and we will all be swallowing a pricey, poison pill. Should the CUNY Alliance prevail, they will be left holding the medicine bag, as it were, and the PSC's membership will be paying the price.

That elected union officers and appointed Welfare Fund trustees would fiddle with the finances for short-term political gain, and violate their fiduciary responsibilities is, quite simply, difficult to believe. In order to dispel these rumors, The Patriot Returns poses the following questions to Barbara Bowen and Steve London:

• We know that 80th Street has provided short-term relief for the Welfare Fund by transferring professional development monies intended for HEOs. Have any other union or university dollars been used to shore up the Reserves?
  
  
• Is there any truth to the rumors that short-term loans have been taken out in order to keep the Reserves from dipping below the one million dollar mark?
  
  
• If so, from whom were these loans taken out? At what rates of interest? Under what repayment terms?

All of us who depend on the stability and security of the Welfare Fund---full and part-time faculty, HEOs, CLTs, and especially the retirees---need answers to these questions. And we need them now!

THE DEAR LEADER'S CONTRACT WHIPLASH

The activities of our Dear Leader, PSC president Barbara Bowen, recall memories of Kremlin watchers during the Cold War. The Soviet regime admitted neither errors nor changes in policy. So outsiders scrutinized Pravda's text for subtle changes of rhetoric, or omitted names and events, to forecast future shifts.

The Dear Leader, of course, also makes no mistakes nor reconsiders any of her union strategies. But some Pravda watching, PSC-style, provides a sense of where things are going.

The November 2004 contract update stated, "The PSC proposed . . . increases of about 15 percent over the life of the four-year contract. 'We made clear that a critical difference was that our Welfare Fund covers prescription drugs and faces acute needs this year,' said Barbara Bowen, the PSC's president and chief negotiator. 'These needs cannot be addressed, as in the past, simply by allocating a fraction of a percentage point in salary to the Welfare Fund--- nor can we eviscerate our raises to maintain our benefits."

This commitment seemed honorable. The Dear Leader promised not to financially penalize CUNY faculty, by "eviscerating" our raises, to compensate for "Foggy" London's mismanagement of the Welfare Fund.

As careful Pravda-watchers from around CUNY have realized, the party line has now changed. In her March 16 contract update, the Dear Leader stated, "Under the union's counterproposal, stability for the Welfare Fund would be created by devoting a portion of the collective retroactive pay to the Welfare Fund reserves. There would still be retroactive cash as part of the settlement, but collectively we would get more value for our money and more lasting value if we direct some of it, pre-tax, to the Welfare Fund reserves."

If getting "more value for our money and more lasting value" by funneling raises into the Welfare Fund is the best policy in March 2006, why did the Dear Leader describe this exact approach in November 2004 as "eviscerat[ing] our raises to maintain our benefits"? Is her propaganda shift preparing us for a "contract cave-in"?

REINVENTING THE PAST

Another favorite Pravda tactic was "reinterpreting" the past to serve the needs of the current propaganda line. No one in CUNY performs this task with the zest (some might say chutzpah) of the Dear Leader.

Here was our Dear Leader in her February 2 contract update, discussing state officials' refusal to sign off on the contract's "draft conceptual framework":

"While the PSC bargaining team is aware of the legal requirement for City and State approval of our contract, we expected CUNY to come to the table each time with the authority to close the deal."

And here's the Dear Leader in her March 31 contract update:

"The Legislature has presented to the Governor the best budget for CUNY in more than a decade. The PSC played a major part in achieving the Legislature's budget."

So, the Dear Leader had the political clout to get an increased budget for all New York public universities, but lacked the political clout to work with the Chancellor and get state officials to approve the draft conceptual framework? If you believe that, The Patriot Returns has a bridge in Brooklyn we'd like to sell you.

Moreover, we were told months ago that the legislature would increase funding for CUNY if the Trustees adopted the Chancellor's proposed CUNY Compact. When the Dear Leader said that the PSC "played a major part" in getting CUNY more money, perhaps she meant that the PSC's efforts on behalf of the Compact paved the way for the legislature to boost funding for CUNY.

There's only one problem with this version of events. The Dear Leader bitterly opposed the Compact (though in typically ineffective fashion, as the Trustees unanimously approved it). So, in the end, it looks as if CUNY might get more funding despite the Dear Leader's efforts, not because of them.

Sharad Karkhanis, Ph.D.
Professor Emeritus

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