Board and Staff develop five-year plan for our union
development of a five-year plan for our union.
We used our time together to discuss what the
future will hold, both for our current members
and for publicly funded workers who are not
yet organized.
We heard from experts about the future of
health care, public services and our communities.
We learned about similar conversations going
on in SEIU locals throughout the country, and
we had an opportunity to provide feedback on
the SEIU Healthcare and Public Division plans.
SEIU Board members and staff worked in groups to draft a plan for our future.
Our union has cornea long way.
We've grown from a state workers' association
into a strong union of state, university, local
government, nursing home, homecare,
non-profit, and childcare workers - and most
recently adult foster home providers.
We have doubled in size over the last eight
years, growing into a powerful force for
justice and fairness. We have brought
increased wages and improved benefits to
tens of thousands of workers, including many
who lived in poverty and lacked even the most
basic health care coverage.
Our work has improved services for Oregon's
most vulnerable folks - children, seniors and
the poor. We can only imagine the progress
we will make in the next eight years!
Our Board of Directors and staff came together
on October 26 and Z1 to do just that! We
reflected on our work, and we got to know
one another better. The retreat kicked off the
We grappled with hard questions. What
would it look like for the union to have a
stronger voice in shaping the services we
deliver? Is there a better approach than we've
found so far to the threat that privatization
poses for our members and öur services?
How can we make sure that we meet thé
needs of workers facing discipline without
fueling the illusion that the union's resources
are spent disproportionately on a small group?
We didn't find easy answers to these questions,
but the thoughtful discussion will be used as
input into the development of a five-year plan
for our local. As we've done in the past, a
committee of members and organizers will
draft a plan, which will be submitted to the
Board of Directors for approval.
PERS Investment Choices Matter to Members
by Joe DiNicola. President SEID local 503, OPED
SEIU Local 503, OPEU members who rely on
Oregon's Public Employees Retirement (PERS)
system for retirement security have every
reason to pay close attention to the investment
choices the Oregon Investment Council (OIC)
makes. Every dollar of the $65 billion Oregon
PERS fund belongs to active and retired members
and plan participants. For decades, those dollars
have been well invested by the OIC to meet
PERS obligations to pay promised benefits
when members retire. The OIC invests our
pension funds in stocks, bonds, real estate
and alternative investments including those
commonly referred to as "private equity."
There are two kinds of private equity investment
firms: Venture Capital and Leveraged Buyout
(LBO). Venture Capital firms finance smaller,
start-up companies with new ideas and allow
them to try to expand their ideas into bigger
markets. Google is a successful Venture Capital
example.
LBO firms are different. LBO's typically buy
public companies off the stock market and
then re-sell them a few years later. This can
generate hundreds of millions of dollars for
owners, company management and pension
fund investors. Where do LBO's find the money
for these deals? They use a combination of
other people's money—university endowments,
wealthy individuals, and pension funds like
PERS. They borrow the rest and leave the
companies they buy loaded with debt.
What is the role of private
equity in PERS?
The OIC has historically invested heavily in
leveraged buyout firms and earned excellent
returns. However, in the last few months, the
SE/U Local 503, OPEU - STRONGER TOGETHER
Wall Street Journal, Financial Week, the New
York Times, the Economist, Business Week and
British regulatory agencies have published
articles that raise serious business and ethical
concerns and questions about leveraged buyout
deals. Could private equity be a bad deal in
today's economy? Is private equity too risky?
The answer is: No one knows for sure. LBO
firms insist that they create jobs, make the
economy more efficient and help pay pension
benefits. Others, including SEIU researchers,
suggest that buyout industry practices may
actually undercut the tax base, increase wealth
disparity, remove transparency from business
practices and cut out workers and communities
from decision making.
Why should you care about
leveraged buyouts?
The retirement security of more than 20,000
public-sector SEIU Local 503, OPEU members
is invested with LBO firms through OIC. For
example, last year, OIC invested $1.5 billion
dollars with Kohlberg, Kravis & Roberts, known
as "KKR." A major firm in the buyout industry,
KKR has a long history of good returns. But KKR
has recently faced accusations of irresponsible
business practices that endanger consumers
and risky investment strategies that may not
adequately protect the interests of pension
fund investors and the members they serve.
In addition, some buyout funds slash jobs and
close down worksites. This recently occurred
right here in Oregon when Fortress Investment
Group shut down a Coos Bay rail line.
Incredibly, owners of buyout firms, many of
them billionaires, pay a lower tax rate on their
income than workers who make the companies
work. This unfair tax structure undercuts
revenue for vital public services and undercuts
pay and benefits for public sector workers.
What can you do about
private equity?
By letter and in public testimony, SEIU Local
503, OPEU recently asked the OIC to consider
these issues and concerns as it manages and
invests member retirement contributions.
SEIU has also begun to educate members
about private equity investments and PERS.
When you understand how retirement dollars
are invested, you can become involved in
direct conversations with Oregon officials
about the impact of private equity buyouts on
communities, worksites and retirement security.
Where can you find more
information?
Visit the SEIU website for more information:
http://www.behindthebuyouts.org/.
Contact me directly at dinicolaj@opeuseiu.org
or by phone at 503-581-1505, ext. 222. With
retirement security and stable funding for
public services on the line, it's important to
be informed about how member pension
contributions are
invested. Our financial
future and the future of
our communities may
depend on it.
Joe DiNicola
President
DECEMBER 2007