SEIU's Debt Problem

Published Mon, Apr 26 2010 10:46 AM

In today’s Washington Times RNLA Member, and former Bush Administration official, F. Vincent Vernuccio, outlines the financial mess that Andy Stern is leaving the SEIU in as he leaves his leadership post in Obama’s favorite union.

Purple may be the official color of the Service Employees International Union (SEIU), but Andy Stern is leaving the union deep in the red. Last week, he surprised the labor community by announcing his resignation as president of SEIU. Mr. Stern has claimed victories in helping pass health care legislation and getting President Obama elected, but his impact within his own organization shows gaping budget deficits and massive underfunding of pensions.

SEIU has seen its liabilities skyrocket during the past decade. The union's liabilities totaled $7,625,832 in 2000. By 2009, they had increased almost by a factor of 16, to $120,893,259. Meanwhile, SEIU's assets barely tripled, growing from $66,632,631 in 2000 to $187,664,763 in 2009. A significant portion of SEIU's current assets are from IOUs from hard-up locals.

Even more ironic is the shape that the SEIU’s pension funds are in and the rough shape that they are currently in.

SEIU's pensions are in even worse shape. Both of SEIU's two national pension plans, the SEIU National Industry Pension Fund and the Pension Plan for Employees of the SEIU, issued critical-status letters last year. The Pension Protection Act requires any pension fund that is funded below 65 percent of what it needs to pay its obligations to inform its beneficiaries of the deficit.

Even worse is the connection between the union and the Obama Administration, with several high ranking SEIU officials now enjoying prime positions within the Obama White House.  While the employee pensions are floundering, the goals of the SEIU have taken on a very political tone recently.

While SEIU's pension plans were failing and its liabilities growing, Mr. Stern seemed more concerned with electoral politics than with the internal workings of the union. Indeed, politics can account for much of SEIU's lavish spending in recent years. "We spent a fortune to elect Barack Obama - $60.7 million to be exact - and we're proud of it," he boasted to the Las Vegas Sun last year. In all, under Mr. Stern, SEIU spent more than $85 million to elect President Obama and give Democrats control of Congress. What has been Mr. Stern's reward?

Be sure to check out the entire Op Ed in the Washington Times.

 

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