Unions pressure financial firms not to back Bush on Social Security
Cox News Service (from the Pulse-Journal, Warren County, Ohio)
Friday, April 01, 2005
WASHINGTON — "I don't know but I've been told — Wall Street wants the workers' gold," union members chanted in the financial district of the nation's capital on Thursday as organized labor rallied against President Bush's push for private Social Security accounts.
Along with their shouts, protesters delivered letters urging the financial firms of Charles Schwab and Wachovia Corporation to "withdraw all support for privatizing Social Security."
With $400 billion in pension funds, unions can exert considerable pressure on the investment community. The A.F.L.-C.I.O. has already convinced the brokerage firms of Edward Jones and Waddell & Reed to pull out of Compass, a business coalition supporting the Bush plan.
"This will be the biggest mobilization in the history of the labor movement," A.F.L.-C.I.O. President John Sweeney promised the protesters. Organizers said the unions staged similar rallies in 75 cities around the country on Thursday.
If the Bush plan is enacted, "politicians will be about to hand-pick which Wall Street firms make billions of dollars in inflated fees managing private accounts," he charged. "We're not going to let them line their pockets by cutting Social Security for everyone else."
But Republican Reps. John Boehner of Ohio and Sam Johnson of Texas have asked the Labor Department to investigate whether the unions are waging an illegal campaign.
In a letter to Labor Secretary Elaine L. Chao, the congressmen said they are concerned organized labor's pressure tactics on the financial firms and brokerage houses "raise serious legal questions involving federal labor and pension law."
Boehner is chairman of the House Committee on Education and the Workforce and Johnson is chairman of the committee's Subcommittee on Employer-Employee Relations.
The March 18 letter said the union tactics include "tacit and/or explicit notice to these firms that if they support the president's proposal, the union will withdraw its assets and invest through brokerages they find more politically palatable."
Such activities could violate the National Labor Relations Act and the fiduciary responsibilities owed to union members by their leadership under the Labor-Management Reporting and Disclosure Act of 1959 and the Employee Retirement Income Security Act of 1974, the congressmen wrote.
The unions counter that its members are only exercising their First Amendment rights to free speech.
"They say privatize. We say organize," the group of about 200 protesters chanted on the sidewalk outside of Schwab's Washington office. The workers' wardrobes showed a rainbow of loyalties: Blue T-shirts for the American Federation of Teachers. Florescent yellow T-shirts for the International Brotherhood of Electrical Workers. Steelworkers in black jackets with leather sleeves. Communication Workers of America in red sweatshirts.
"Charles Schwab, rich and rude. We don't like your attitude," they yelled.
"We already have corruption and greed on Wall Street," said Jim Bowles, 70, a retired meat cutter and Teamster. "Now they want to take our hard-earned money and give it to the fat cats."
Sweeney charged that financial companies have a conflict of interest in supporting personal accounts since they stand to profit if Social Security funds are invested in the stock market.
"Privatizing Social Security may be good business for Charles Schwab and Wachovia, but its a bad deal for working Americans," he said.
The firms themselves denied even taking sides in the Social Security debate.
"We feel these protests are misdirected and misguided," said Alison Wertheim, Schwab's vice president for corporate public relations. "We are not a proponent of privatization. We are not an advocate of any specific approach related to Social Security reform."
"Wachovia does not have a position on private accounts," said David Oliver, a spokesman for the company. The financial firm "believes in the fundamental importance of Social Security, and we think action to strengthen the system is absolutely necessary."
Sweeney said the firms were targeted because of their backing for the Alliance for Worker Retirement Security, an association of businesses supporting the Bush plan. In his letter, he demanded that the firms "cease all support" for such groups.
Supporters of the Bush plan said such warnings are inappropriate.
"Today's theatrics once again reveal that many labor unions are more concerned with partisan politics than the interests of their own members," said Tracey Schmitt, press secretary of the Republican National Committee. "Recent activities to intimidate organizations that support the president's Social Security efforts amount to thuggery and do nothing to encourage public discourse."
A national survey of union members showed that 60 percent would be interested in creating a personal retirement account if offered the option, according to backers of Bush's plan.
"We meet rank-and-file union members every day who are outraged that their union is obstructing reform," said Derrick Max, executive director of Compass or the Coalition for the Modernization and Protection of America's Social Security, which commissioned the poll.
Bob Dart's e-mail address is bobdart(at)coxnews.com
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