06/07/2012   Primary Election Coverage: PLA Bans Approved and Public Pensions Revised

The voters in the City of San Diego largely ignored the more than $1.0 million in misleading advertising and voted to prohibit the City from mandating the use of a PLA on City projects. Little noticed in the same region was the adoption of a new city charter in the City of El Cajon that includes a Fair and Open Competition provision and authority to establish its own prevailing wages for city projects. More widely covered by the media was the passage in both San Diego and San Jose of measures to change public worker pensions - and we cannot forget the stunning victory of Wisconsin Governor Scott Walker, the Lt Governor and three State Senators who were subjected to recall by unions angry with the decision of Walker and the Wisconsin legislature to change the status quo of public employment and benefits in the State.

Labor unions in San Diego and San Jose have already launched potentially lengthy court challenges. The San Jose Police Officers Association filed a lawsuit in state court Wednesday, saying the measure violates vested rights.

Mike Zucchet, general manager of the San Diego Municipal Employees Association, said the union decided long ago against mounting a vigorous campaign to sway public opinion, instead saving its resources for a court battle.

Apparently the thought is public pensions are sacrosanct and can never be modified even if they result in insolvency of the City - it will be interesting to see how the courts eventually rule in these cases.

California Republican leaders seized on this week's votes to try to revive Democratic Gov. Jerry Brown's attempt to reduce retirement benefits for new and current government workers. Brown called the referendums "a powerful wake-up call."

Almost simultaneously with that "wake-up call," Brown appointed a labor union representative to be deputy director of legislative affairs at the Department of Personnel Administration. The appointment of Nancy Farias, legislative director for Service Employees International Union Local 1000 since 2009, comes before the Legislature is expected to consider pension changes proposed by Brown. The appointment was announced by the Democratic governor's office Wednesday.

The Legislature is expected to consider public employee pension changes following adoption of the state budget this month.

It will also be interesting to see what happens next in San Diego. Will the Democratic Legislature and Governor make good on their threats to eliminate "$150 - $200 million" in state transfers to the City - punishment as it were - for exercising their constitutional rights to control "municipal affairs?" Will the Democratic members of the Legislature from San Diego really pull the pin on this financial hand grenade - or was the passage of these bills really just a smoke screen to affect the outcome of the election? We will have a better idea when the State Supreme Court releases its opinion on the Vista case sometime before they adjourn this summer. In Vista, the State Building Trades argued that prevailing wages were of "statewide interests" and so could not be changed by a city charter - something the city of Vista has attempted.

Jim Ryan of AGC San Diego (one of the key Prop A supporters) was blunt in his criticism of the opponents.

"Bob Balgenorth, head of the State Building and Construction Trades Council and former IBEW official... and his San Diego friends.....Lorena Gonzalez, head of the AFL CIO in San Diego, and Tom Lemmon, head of the San Diego Building and Construction Trades Council, panicked in September of 2011 when the coalition of associations that support FOCO turned in over 90,000 signatures of citizens of San Diego that petitioned the City Council to put Prop A on the ballot in yesterday's election. Instead of planning a campaign to defend the concept of using PLAs on public projects, Union Boss Bob, Lorena, and Tom turned to the State Legislature. They convinced their cronies in Sacramento to pass SB 922 and SB 829 which were designed to intimidate San Diego voters. Both bills, which most feel are unconstitutional, threatened voters with cutting off state funds for construction projects if the voters dared to approve Prop A.

Union Boss Bob then evidently told Lorena and Tom to get out of the way.....he would show them how to run a campaign to defeat Prop A. He hired Sacramento consultants and lawyers and used a "slush fund" called the California Construction Industry Labor Management Cooperation Trust to finance the campaign. He spent somewhere around $1.2 million to run the campaign which included mail, radio ads, and TV. The campaign tried to emphasize the threat of losing state funds and how PLAs that eliminate competition are actually good public policy."

ABC's Bill Baber and CFEC's Eric Christian wrote a wonderful piece for the San Diego Business Journal that described this effort, called "Labor Union Leaders Create a Munchausen Problem for San Diego."

"Georgia Tech business professor Nathan Bennett coined the term "Munchausen at work" to describe employees who quietly cause problems so they can later take credit for fixing them. The Munchausen label is used because it resembles a psychological disorder (Munchausen Syndrome) in which sufferers seek attention by making up an illness.

Phred Dvorak of the Wall Street journal identified several "Munchausen at Work" symptoms. For example, the salesmen who withholds key information until the last moment and then steps in to save the day; or the manager who under minerelationships then leads the group session to "clear the air." These employees create the workplace "illnesses" so they can cure them and gain attention.

To expand upon Bennett's theory, I offer an example of "Munchausen in politics." The San Diego County Building and Construction Trades Council AFL-CIO helped cause a problem that they now promise to fix for San Diego.

Local Big Labor bosses are asking voters to reject Proposition A - the Fair and Open Competition ordinance - because they claim this is the only solution to a new law (SB 892) that they believe could eliminate construction funds for cities that won't consider costly project labor agreements. The Munchausen label is apt here because local Big Labor bosses like Lorena Gonzalez and Tom Lemmon actively lobbied to pass the law that they are now worried about. They are offering to save the City from the problem they created.

SB 829 is the latest attempt by labor-backed lawmakers to "game the system" against San Diego reformers. After heavy Union lobbying, this "gut and amend" bill passed the State Senate and Assembly on a straight party line vote. Several members on the floor of the Assembly vigorously questioned the constitutionality of a bill that would interfere with the independence of charter cities to manage their own public contract decisions. The entire "No on A" campaign is funded by the same labor groups that sponsored SB 829.

This new law has glaring constitutional problems, and no law like it has ever been upheld in California's history, but those facts are irrelevant to union bosses. It was amazing that they were able to create this problem just in time to allow the "No on A" campaign to solve it at the June 5th election. Union bosses complain about the dangers of SB 829 but fail to mention they sponsored the law.

Prop A is about construction competition that is fair, open, and transparent. We call on local union bosses to be fair, open, and transparent and confess that they helped create the "illness" that they now claim to cure. We hope the voters will see through this hypocrisy, let the Court handle the unconstitutional SB 829, and allow Prop A's reforms to help save San Diego taxpayers money on its City construction projects while protecting worker rights in the process."

One of the more interesting "takes" on the outcome was from the Labor Feds "representative" - here. Please note her explanation that they were "outspent 7-1" is a lie that unfortunately, the reporter failed to catch.

Here is coverage from the victory press conference.