Archive for April, 2009

Labor tangles in race for CalPERS seat

April 30, 2009

Cathy Hackett and J.J. Jelencic once teamed up to oust a labor leader. Now they are running against each other for an open seat on the CalPERS board.

Some think the race could be similar to a clash between labor organizations two years ago when Henry Jones, backed by SEIU, defeated Perry Kenny, backed by the CSEA.

As several persons agreed in interviews, it’s not a simple situation.

Hackett and the Service Employees International Union, Local 1000, helped Jelencic defeat Kenny in a race for the presidency of the California State Employees Association in 2003.

Then Hackett and the SEIU helped defeat Jelencic when he ran for re-election in 2007, replacing him with the current CSEA president, Dave Hart.

What’s it all about?

The wise thing might be to fall back on an old cliché, “Rashomon,” the classic Japanese film where the witnesses and participants in an incident have different views of what happened.

But it’s safe to say there is a clash of strong personalities and a common cause of discord, money — in this case millions of dollars of union dues and control of political action committees that make campaign contributions.

And there is the evolution, if not eclipse, of the CSEA, an organization whose founding members came together to push for Proposition 5 in 1930, the ballot measure allowing creation of what is now the California Public Employees Retirement System.

CSEA had been the main state-worker organization for decades before legislation in the late 1970s allowed state workers to form unions and collectively bargain for labor contracts.

After years of in-fighting and court battles with the SEIU, the CSEA has become an umbrella organization providing accounting, travel and other back office services for four affiliates, which have their own political action committees.

Hart, the CSEA president, said the largest affiliate is nine bargaining units with roughly 70,000 members ranging from office workers to nurses represented by SEIU, Local 1000.

He said the other affiliates are CSEA Retirees Inc., with 29,000 members; the Association of California State Supervisors with 6,500 members, and the CSU Employees Union with 8,000 employees.

“We only get involved in the political realm if all four affiliates get together,” said Hart.

When Perry Kenny ran for a CalPERS board seat in 2007, before Hart ousted Jelencic, he reported receiving $7,200 in contributions from CSEA, less than a fifth of his total $38,505.

Henry Jones, who won with 52 percent of the vote in a runoff, reported receiving contributions totaling $66,731, more than half from eight labor unions including two SEIU organizations.

The Jones-Kenny race was for a seat representing retirees. Jelencic and Hackett are running in a seat being vacated by Charles Valdes, a 25-year board member, that represents about 1.2 million active and retired members.

A low voter turnout is expected, some think around 20 percent. One of the keys to the race is endorsements from organizations that regularly communicate with their members through newsletters and other means.

Hackett has been endorsed by the SEIU. Hart said he has heard people say that the CSEA retirees “may be more comfortable with J.J.” The supervisors endorsed Jelencic, then made it a dual endorsement by including Hackett.

If the CSEA retirees endorse Jelencic, said Hackett, “That one endorsement is not enough to get him elected.” Jelencic said he hopes to get the endorsement of “most of the unions, except SEIU, Local 1000.”

A potential third candidate, Robert Hill of Ventura, who may file before the May 14 deadline for the fall election, said he was surprised “those constituency groups made their endorsements without knowing what the whole field is.”

Six of the 13 CalPERS board members are elected by various member groups. The state treasurer and controller each have a seat. The Senate and Assembly legislative leaders jointly appoint one board member.

The governor controls four seats, two through appointments and two held by administration officials. Republicans have held the governorship for 20 of the 25 years since voters lifted a cap in 1984 that limited CalPERS stock investments to 25 percent of the portfolio.

The governor’s bloc of seats has given Republicans some input as a CalPERS board dominated by labor representatives and Democratic officeholders began wielding the clout of massive pension fund stock holdings.

CalPERS has been a leader in pushing for improved “corporate governance” to increase stock values and in “socially responsible investments” in energy, climate change and low-income areas.

When Sean Harrigan was ousted as CalPERS board president in 2005, he said Republican Gov. Arnold Schwarzenegger engineered the move because CalPERS had pushed corporate reforms, including attempts to unseat executives at Disney and Safeway.

But some at the Capitol said Harrigan was undone by the fine hand of Democrat Willie Brown, the former Assembly speaker and San Francisco mayor who had lost to Harrigan two years earlier when the CalPERS board elected a new president.

The election of Jelencic or Hackett would place another strong labor voice on the CalPERS board. But there is a big difference in their view of the CSEA, the proud old organization whose founders helped give birth to CalPERS.

Hackett and a colleague, Jim Hard, led a reform movement that fought for years to give the SEIU local more independence from CSEA. She said the job is done, the movement is shutting down, and boxes of records are being readied for the state archives.

In Hackett’s view, the old CSEA was dominated by retirees, managers who didn’t understand how unions should take on the boss, and an elitest view toward rank-and-file workers who toil in everyday jobs.

“We were the rebel-rousers, the upstarts,” said Hackett. “We were trying to change things.”

When he was CSEA president, Jelencic said, his view was that if something only affected the affiliate, the affiliate could act alone. But on something that affected all of the affiliates, they should work together.

“I think affiliates tend to look out for affiliates,“ Jelencic said of the current independence of the CSEA affiliates. “I think in time people will realize that was a mistake, and they will come back.“

To see a photo of Jelencic and Hackett in a group, click here.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Posted 30 Apr 09

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