Vol. 32, No.2                                                      April 07, 2006

ANGRY MEMBERS WANT TO KNOW:
WHY "GIVE BACKS" TO THE WELFARE FUND?

Of the many issues that have emerged in the election campaign between the CUNY Alliance and the New Caucus for leadership of the PSC, none have caused more consternation and confusion than the current state, and the troubling fate, of the Welfare Fund. Here at The Patriot Returns, we've been shocked to see that the Fund's Reserves have dropped from over $15,000,000 to less than $2,000,000 under Steve London's stewardship, and that they continue to disappear at an alarming rate. We've been distressed by London's pending plans to drastically diminish our prescription drug benefits. And we've been advised by the New York City Comptroller that the WF is at risk of insolvency in the short-term.

All of this, of course, has gone down while Larry Morgan, the WF's Executive Director and long-time London crony, was awarded an 8% annual raise, while Steve and Larry switched drug providers from NPA to MEDCO, and while MEDCO was busy being sued by teachers in Ohio, and was busily intimidating its own workers.

What the h**l has been going on here, one might wonder. And what will become of the Welfare Fund? From the flood of e-mails and faxes that we've received here at The Patriot, we've chosen to share a few with you.

The most recent spate has come in response to the contract proposal by Barbara Bowen that includes a sizeable "give back" by the long-suffering membership. As Steve London so lucidly explained it as part of April 5th e-mail to a concerned HEO:

"5) The City's position on the Welfare Fund. The City will not allow us to put a full 1.5% of our settlement into the Welfare Fund. There is a long-standing convention (25 yrs), agreed to by other unions, which means that we would receive only $.58 for each $1.00 we spend on the Welfare Fund. This complicates our ability to fund the Welfare Fund. We are negotiating with CUNY and the City to work out the best possible deal that will not waste our money. One of the proposals we have advanced is to use the $800 in cash in the first year, 2% of the 2.5% in retro money in the second year, and additional percentage amounts (not from salaries) to establish a reserve fund and recurring funding. Discussions about these items are continuing."

Or, in non-New Caucus English, Steve is telling us that we'll all be giving back $800 out of an $800 retroactive pay increase (first year of the contract) and 2% of a 2.5% retroactive pay increase (second year of the contract) to the Welfare Fund.

The April 6th response of his HEO e-correspondent was quite telling:

"Could anyone tell me how par.5...has crept into the contract negotiations...?

Am I the only one who thinks that my increases and retro money belong to me and that NO ONE but me should decide how it is to be used? The Welfare Fund is busted because of mismanagement and I have no intention to pay for this. Forgive me, I get crazy when I see this! I have worked at The Graduate Center since 1990; does anyone know if there was any give back of monies received in former contracts? Please let me know."

As were these replies by others:

"RIGHT ON!!! I TOTALLY AGREE W/YOU!!!"

And:

"I have worked at the Grad. Center for 32 yrs. We have always gotten retroactive monies from contracts that were negotiated. We have NEVER had to put any of our retroactive monies into the Welfare Fund! Why is it our responsibility to bail out the Welfare Fund which has been mismanaged.

Yes, this is our money which we have earned and no one should decide for us what to do with it. ...The current PSC officers are a disgrace. We have NEVER had to wait this long for a contract!"

Finally:

"I don't recall any give backs. I came here in 88 when a contract was just settled."

Why, then, this need for give backs to stop the hemorrhaging Welfare Fund (and to cover Steve's sorry a**)? A few explanations come to mind:

A NEW CAUCUS "MILITANCY PENALTY"

The failed negotiating tactics of Bowen, London, and the New Caucus---spending months seeming to want a strike; making wildly unrealistic demands; needlessly antagonizing management; recklessly siding with the TWU when our contract proposal was under review in Albany---have produced an unprecedented delay in reaching a contract settlement. Apart from the TWU, the PSC is the last municipal union without a contract, by a factor of nearly a year. (All of us have friends in other city unions; ask them when they settled, working with the same kinds of management.) Moreover, the NC's latest proposal comes in far below the rate of inflation since 2002. So not only have we not gained from the NC's bizarre tactics, but we will have lost money by not agreeing to comparable terms earlier.

Think of it as the Dear Leader's "militancy penalty," to paid out by each and every PSC member.

A STEVE LONDON "INCOMPETENCY SURCHARGE"

The incompetent management of Steve London and the other New Caucus appointees---overpaying adjunct health care without cutting full-time health care by an equivalent dollar amount; hiring an unemployed crony and then giving him a healthy raise even as reserves shrunk; changing prescription drug coverage to a labor-baiting firm that a court ruled bilked Ohio teachers out of millions of dollars; now (from what we hear) taking out high-rate short-term loans to obscure the extent of the WF's dilemma until after the election---have brought the Welfare Fund to near bankruptcy.

Think of the "emergency" co-payment hike authorized by the Welfare Fund board as a Steve London "incompetency surcharge," imposed on each and every PSC member.

A RECKLESS "GIVE-BACK" SCHEME

Barbara and Steve now want to shift the bulk of the below-inflation-rate back pay that we'll get from their contract cave-in to fill the holes caused by their Welfare Fund mismanagement. When something's mismanaged, you change policies---or, better yet, change managers. You don't deny union members a salary increase so you can continue to implement the same flawed policies that created the crisis.

And what does Steve have to say in his defense? He complains that "the City will not allow us to put a full 1.5% of our settlement into the Welfare Fund."

This is a new low, even for the inept ideologues chosen by the New Caucus: Management is doing more than the Dear Leader and cronies to ensure that we at least receive some retroactive pay???

Maybe the Dear Leader and "Solidarity Steve," who've each arranged to have their salaries hiked by more than $20,000 at our expense, don't see anything wrong with this arrangement. But when we've reached the stage when a union leadership is more miserly than management, it's time to take a hard look at the composition of the union leadership.

Otherwise, we'll be paying "militancy penalties," "incompetency surcharges" and salary kick backs far into the future. Re-directing part of our retroactive salary to the Welfare Fund may constitute what the IRS calls a "taxable event." It is little wonder, then, that The Patriot Returns has been getting so many angry faxes and e-mails. We do hope that the membership is finally getting the message about Barbara, Steve and the New Caucus.

Sharad Karkhanis, Ph.D.
Professor Emeritus

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