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Tuesday, December 9

Steve Diamond on Blagojevich's proposal to Service Employees International Union

Given that Andy Stern and James Hoffa have been doing kowtow to China's government, Pundita's ears perked when I heard today that Gov. Blagojevich tried to strike an unsavory deal with Stern's SEIU.

For readers who are trying to fathom how U.S. labor unions got involved with the CCP, see Steve Diamond's April 25, 2008 On "democratic" centralism: Stern's illusion and democracy's nightmare and his May 29, 2008 Labor's Appeasers: Teamsters' Hoffa backs down on China visit.

Today, Professor Diamond writes:
Illinois Governor Rod Blagojevich met with an unnamed official of the Service Employees International Union to discuss a possible pay off of the Governor in return for his appointment of an unnamed individual to fill out the remaining two years of President-elect Obama's now vacant U.S. Senate seat, according to a criminal complaint filed this week in an Illinois federal court. The SEIU Official is identified as an "emissary" of the potential Senate appointee in the complaint.

Politico.com's Ben Smith reported today that the unnamed SEIU official was Andy Stern, the head of SEIU. It is widely believed that the unnamed individual is Valerie Jarrett, a close senior advisor of Obama.

The conversation with Blagojevich revolved around the possibility that Blagojevich would be named to head a non profit organization in return for the appointment of Jarrett. The conversation occurred as part of an effort by Blagojevich to "monetize" the appointment of the new U.S. Senator in order to provide for the governor and his family after he left office.

The complaint charges Blagojevich and an aide, John Harris, with wire fraud, mail fraud and corrupt solicitation, all crimes under federal law which carry a possibility of substantial prison terms. Harris and Blagojevich were arrested this morning, arraigned in a federal court in Chicago and released on bail. They were asked to surrender their passports.

Other conversations detailed in the criminal complaint indicate that Blagojevich explored the possibility of becoming head of Change to Win, a union alliance that includes SEIU. The current head of Change to Win, Anna Burger, was an active supporter of the Obama campaign.

In a press conference today, U.S. Attorney Patrick Fitzgerald described the scheme as follows:

"At one point, he [Blagojevich] proposed a three-way deal -- that a cushy union job would be given to him at a higher rate of pay where he could make money.

"In exchange, he thought that the union might get benefits from the president-elect, and therefore, the president-elect might get the candidate his choice."

Fitzgerald said the complaint makes no allegations about Obama himself.

Fitzgerald went on to say in response to press questions:

"[I]f you read the complaint carefully, one of the conversations describes how the job that Governor Blagojevich wanted for himself with the union couldn't be just given to him by the union because they already have people doing that job.

"So, when you say you want a job for four years; you want a salary of about $300,000, and you basically want to work on behalf of a union and cost them $1.2 million to basically add no value, because people are already doing your job, and part of that is an exchange, where -- an exchange, if you don't get that job, no one's getting the appointed Senate seat, we're comfortable in the law that someone who schemes to do that has broken the law.

"And we're not trying to criminalize people making political horse trades on policies or that sort of thing. But it is criminal when people are doing it for their personal enrichment and they're doing it in a way that is, in this case, clearly criminal."

Later, Fitzgerald said in response to a question about which union was involved:

"[T]he scheme that he had in mind with co-defendant Harris was a job with a coalition called "Change to Win," which was affiliated with SEIU, which is the Service Employees International Union. And that was their, you know, their scheme to sell the seat in that three-way exchange.

"That never happened. That scheme did not come to fruition. He curses later that it didn't happen. But the one being discussed was the SEIU union."

According to the complaint, the SEIU Official agreed with regard to the non profit entity to "put that flag up and see where it goes." Blagojevich later said, according to the complaint, that he told the SEIU Official to "broach the idea" to the unnamed Senate candidate.

It is not clear from the complaint why the SEIU Official agreed to consider the idea or whether he did so after the phone call. One possibility is that while some involved in the scheme thought that a non profit entity would be too closely linked to Obama that Blagojevich was unsure that a job with Change To Win would be secure. Thus, Blagojevich pressed for a non profit entity that he could head up since it would be around when he was no longer governor in two years time.

According to the complaint Blagojevich said "he likes the 501(c)(4) idea because he knows it will be there in two years when he is no longer Governor, whereas Change to Win might not be."

That might refer to the fact there is some discussion in labor circles that Change To Win might re-join the AFL-CIO in the post-election period and thus a position promised to Blagojevich now with Change To Win would not be kept.

It is not clear why an SEIU Official would have been an emissary for the potential Senate appointee to the Illinois governor.

SEIU has denied any wrongdoing by the union or any union official. Change to Win issued the following statement this afternoon:

“No one connected with Change to Win ever considered, discussed or promised any position at Change to Win to Governor Blagojevich, his staff or his advisors. In the affidavit released by the United States Attorney, a position at Change to Win is discussed only in conversations between the governor and his advisors. The first time Change to Win learned of any of the matters raised in the criminal complaint was with today’s public release of the affidavit.”

Stern is a powerful but controversial labor leader. SEIU has been on the defensive recently because of charges related to violations of internal union democracy of union members. In addition, Stern is part of a controversial effort to establish ties between the American labor movement and the Chinese communist government's labor body, the All China Federation of Trade Unions. SEIU raised $1.7 million to support the political campaigns of Blagojevich.

The U.S. labor movement as a whole, including the AFL-CIO, a competing labor federation, spent hundreds of millions of dollars during the recent election and was seen as a key source of support for Obama.

Recent appointments to the incoming Administration, however, have disappointed labor as they include individuals like economist Larry Summers who are viewed as hostile to some policies favored by organized labor.

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