EngageRI creates new political dynamic in state

(Corrected, Jan. 19)

A new dynamic is emerging in Rhode Island politics.
Businesses and social-service agencies that enter the political arena by supporting actions that local unions oppose, such as pension reform, should be prepared for consequences when labor leaders call on the-rank-and-file to retaliate.
But they also have a backer with strong financial muscle in Engage Rhode Island, whose political clout will be fully tested in the 2012 elections.
Pension reform last year brought with it not only heightened talk of COLAs and 401(k) plans, but also formation of the highly visible, business-backed EngageRI to support the effort. In response, local unions whose leaders believe their members were shortchanged mobilized.
As a result, at least two key players in EngageRI at least initially saw their revenue streams narrowed after they publicly backed pension reform: Collette Vacations and Crossroads Rhode Island.
The National Education Association, the parent group of NEARI – the educators union with local chapters in 34 school districts and colleges/universities in Rhode Island – chose to award its national contract for travel services to a business other than Collette, which had held it for several years. The change came about two months ago “based on [Collette’s] anti-labor stance in Rhode Island,” the NEARI said on its website (www.neari.org).
Collette, located in Pawtucket with 328 employees, is a member of EngageRI and two Collette leaders were on its board of directors: Dan Sullivan, CEO and president of Collette; and John Galvin, chief financial officer, who is treasurer of the EngageRI board.
Robert A. Walsh Jr., executive director of the 12,000-member NEARI, said the national union took this step because of the “corporate entity’s” active involvement in EngageRI.
“It is not an unreasonable response,” Walsh said. He noted no one is asking local NEA members themselves to boycott Collette or any other business, nor has the union urged an end to charity donations for any particular agency. “Our folks can make their own judgments,” Walsh said.
Sullivan declined comment to Providence Business News on the loss of the contract. Crossroads, a Providence agency that helps the homeless, lost an estimated $100,000 in donations at the end of the year following its support for EngageRI, but Anne Nolan, president, last week said other factors, such as the stagnant economy, were also at play.
“There absolutely were other factors,” she told Providence Business News. “We never said [EngageRI support] was the cause.” In October and November, donations dropped by approximately $100,000 from projections, she said, a drop that “coincidentally” came at the same time debate over pension reform was at its height.
In December, however, donations came in above projections, with “a lot” of donors saying they gave in response to published reports about lost funding due to the agency’s backing of EngageRI, Nolan said. Figures on donation levels are still being compiled.
Crossroads, meanwhile, will not take a stand on municipal pension reform. Nolan withdrew from the EngageRI board, “not because I don’t back pension reform but because pension reform passed,” she said. She asked that Crossroads’ name be removed from the EngageRI website for the same reason, she said.
Philip Keefe, president of Local 580 of the Service Employees International Union that represents state workers, sent letters to his 1,000 members urging them not to donate to charities that supported pension reform, a move Crossroads blamed in part for its loss.
“We will continue to donate to charities,” Keefe told PBN, “but not to charities focused on anti-labor activities.”
The idea of unions backing those friendly to labor is nothing new, of course.
“Unions will always be active in terms of supporting people who they think will support them,” noted Maureen F. Moakley, political science professor at the University of Rhode Island. Decisions about union support, she said, were generally reached in ways that were not always obvious to the casual observer, particularly at election time.
Now, however, unions have a target – EngageRI and its supporters.
“What is interesting about this is that, for the first time in the business community, we have a counterforce [to the unions] in the form of Engage Rhode Island that indicated it is willing to engage in election activities also,” Moakley said. “This is the first time we’ve seen a collective, focused response from the business community and that is going to make a big difference with the elections” in 2012, Moakley said.
EngageRI is here to stay, promised spokesman Jon Duffy.
The group will support local candidates in the 2012 elections and will support reform efforts expected to address municipal pensions in the current legislative session, Duffy said, although he added it is too soon to identify possible solutions. He declined to discuss union retaliation against EngageRI backers.
EngageRI from October through December spent $622,984 on lobbying, advertising and other expenses during the state pension debate, according to reports on file at the secretary of state’s office.
The organization formed a political action committee last month that Duffy said will provide financial resources to help candidates that supported pension reform.
As a nonprofit, EngageRI itself is barred by federal law from campaigning for individuals. The PAC is chaired by Paul Choquette Jr., vice chairman of Gilbane Inc. in Providence, and its treasurer is Galvin from Collette. The PAC will be required to disclose its donors.
Keefe, for his part, offered no apologies because, as president of the local union, he said he felt an obligation to act. Charitable groups should stay out of politics, he suggested.
“I am not sure why anyone running a nonprofit … would involve themselves in the political process,” Keefe said. “What benefit could they possibly think could come from that? Are they that naïve?” It is too early to map plans for the November elections, Keefe said, but he will support candidates “with similar values to my members.”
Keefe also is vice president of the state SEIU Council and was a member of General Treasurer Gina M. Raimondo’s pension-advisory group.
J. Michael Downey, president of Rhode Island Council 94 American Federation of State County and Municipal Employees, one of the largest public employee unions in the state with about 10,000 members, does not accept the notion lawmakers approved “pension reform.” He calls it “pension fraud” because, he said, state workers for many years dutifully contributed part of their salaries to pension plans, only to have the state now say it cannot afford to pay back these same workers with the promised financial support.
Over the years, Downey said, unions generally were kept in the dark about the status of pension finances. “With all due respect, unions have paid attention and if we had known they were so under-funded we would have done something about it,” he said when asked why unions should not be held accountable for the pension mess. “The unions aren’t the ones making the laws.”
Yet, incensed as Downey is over the pension changes, he said he has not and would not ask his members to boycott a particular business or deny donations to charities.
He said he is particularly “opposed” to withholding donations to nonprofits because some of his union members, particularly retirees, may need help from such agencies.
At election time, Council 94 members “are smart enough to know who to support,” Downey said.
The head of the AFL-CIO in Rhode Island is keeping his cards close to the vest.
“It is too early to make any judgments,” said George Nee, president of the AFL-CIO Rhode Island, when asked about possible retaliation against those who supported pension reform. “Not at this stage. We have a process for that and we’re not at that point yet.”
A second round of reform is expected in the current session of the General Assembly to address municipal-based pensions, Nee noted, “so we’re still assessing where we are.”
Lawmakers led by General Treasurer Gina M. Raimondo and Gov. Lincoln D. Chafee in November approved what they call a comprehensive package of pension reform for the state-controlled system.
Major changes include: extending the years required to work before qualifying for a pension; freezing cost-of-living adjustments; and creation of a hybrid pension plan combining defined contributions with defined benefits. The changes were said to reduce by $3.9 billion what was a $7.3 billion unfunded liability, without raising taxes. •
Correction: Anne Nolan was incorrectly identified as the executive director of Crossroads. She is the president.

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