The union assault — covert and overt — on direct democracy

November 29, 2012 - By admin

Nov. 30, 2012

By Chris Reed

For decades, signature-gathering to win placement of measures on the local or state ballot in California has followed a basic script. Once proponents gathered some 30 percent more signatures than the minimum threshold necessary, they shut down operations, confident that their measure would easily make the ballot.

But in the past three years, this script has been rewritten, at least when it comes to measures that threaten the interests of public employee unions or that target their supporters. This new norm amounts to a brazen and illegal union assault on direct democracy, which in California is the most significant check on their hegemony.

In November 2009, an attempt to recall Assemblyman Anthony Adams, R-Claremont, never made the ballot even though proponents turned in 58,384 signatures –- 63 percent more than the 35,825 necessary to force a vote on whether Adams should be ousted. A random sample of 1,839 ballots had shown only 42 percent were valid.

Adams was a darling of unions for providing a decisive vote in the Legislature in February 2009 for $12.8 billion in higher income, sales and vehicle taxes, breaking past promises to his constituents. This led KFI 640 AM’s powerful radio hosts, John Kobylt and Ken Chiampou, to push for a recall.

In July 2010, a proposed initiative to force the outsourcing of more government services by the San Diego city government faced a similarly mysterious demise. Proponents, led by San Diego Councilman Carl DeMaio, turned in 134,441 signatures -– 39 percent more than the 96,834 needed. But a random sample of 3 percent of signatures showed so many duplicate signatures and ineligible signers that officials estimated only 74,732 were valid.

In July 2011, a proposed initiative that would have changed the makeup of the San Diego Unified school board and likely weakened the local teachers union’s control of the board also failed. San Diegans 4 Great Schools turned in 129,283 signatures –- 39 percent more than the 93,085 needed. But a full hand count found that just 90,027 were valid –- with a stunning 11.4 percent of the signatures being duplicates.

A leader of San Diegans 4 Great Schools expressed bafflement at this “aberration.” But in San Diego political circles, it was accepted as a given that local union members had monkey-wrenched both the 2010 and 2011 initiatives.

Now, thanks to the just-aborted attempt by former Los Angeles Mayor Richard Riordan to bring sweeping pension reform to the city of Los Angeles, unions have lost any plausible deniability. Two weeks ago, Paul Kim, a work-site organizer for  Service Employees International Union Local 721 in Los Angeles, sent out an email to SEIU members with this admonition:

“We need Union members hitting the streets signing Riordan’s petition with fake names/addresses and gathering retraction signatures from LA residents on our own petition. We need people power starting this Saturday.”

On Nov. 20, after reports on the attempt to illegally manipulate the signature-gathering process, SEIU leaders quickly disavowed Kim’s email and declared it a “non-issue.”

But given that Kim was rebuked by the SEIU only after his email became known to the media, it was hardly a persuasive disavowal. And to proponents of the measure, it was hardly  a “non-issue.” On Monday, Riordan dropped his push for pension change, saying he no longer believed he could meet the Dec. 28 deadline he had set to gather 265,000 valid signatures –- even though public sentiment in favor of pension reductions is strong.

Yet the Los Angeles Times’ article announcing Riordan’s decision didn’t even mention the SEIU email. And since then, there’s been scant follow-up on the Kim email or any effort by the mainstream media to connect the dots between what happened with the Adams recall, the San Diego outsourcing and school board petition drives, and the SEIU plot in Los Angeles.

Meanwhile, in Sacramento, Senate President Darrell Steinberg is proposing to use Democrats’ new “supermajority” status to pursue initiative “reforms” that would potentially let the Legislature tinker with the wording and intent of ballot measures and have some sunset after 10 or so years. This has won praise from the usual suspects, starting with the Times’ George Skelton.

Public employee unions have used their power to shape life in California for so long that students of the Golden State have grown to accept it as a given. But union critics at least have had the solace of knowing that direct democracy would always provide an avenue for the public to have its wishes honored.

Now, however, direct democracy itself is in the union cross hairs, both openly and covertly, and one key tactic involves flagrantly illegal behavior.  Nothing could make it more obvious that in California, union power has metastasized into something more akin to organized crime than organized labor –- or at least our old conception of organized labor.

It is still possible for direct democracy to succeed, as it did in San Diego in June with the passage of a massive pension overhaul. But that was only because those guiding the well-financed push for signatures for the measure committed early on to verify every signature before turning in ballot petitions — a vastly more costly and time-consuming process than the old practice of just turning in 30 percent more signatures than necessary.

Yet even the San Diego measure is imperiled because of an extraordinary effort by the state Public Employment Relations Board to have it thrown out in court for purportedly violating collective bargaining rights of public employees.

It’s plain that unions and their allies will do literally anything to maintain their chokehold on California’s local and state governments.

Tags: , , , ,

Comments(87)
  1. Ted "Eddy Baby" Steele, Associate Prof. says:

    I guess Mr. Reed learned little from the last election.

  2. Rex the Wonder Dog! says:

    Stop spamming Teddy.

  3. Kevin Dayton, Labor Issues Solutions, LLC says:

    Let’s not forget the $522,500 unions spent on the summer 2011 radio advertising campaign for “Californians Against Identity Theft and Ballot Fraud, supported by labor organizations.” It was meant to scare people into not signing petitions for proposed ballot measures such as paycheck protection, pension reform in the City of San Diego, and Fair and Open Competition ordinances in the City and County of Sacramento and the City of San Diego.

    Union officials took credit for sinking the Fair and Open Competition ballot measure in the City of Sacramento with the radio advertising (and numerous other antics).

    If you want the details on which unions gave the money and how it was spent, you can go to my web site:

    http://laborissuessolutions.com/charts-from-the-investigative-report-on-the-summer-2011-radio-ad-campaign-by-union-front-group-citizens-against-identity-theft/

    or see my FlashReport.org article:

    http://www.flashreport.org/featured-columns-library0b.php?faID=2009102307301360

  4. Rex the Wonder Dog! says:

    Yet even the San Diego measure is imperiled because of an extraordinary effort by the state Public Employment Relations Board to have it thrown out in court for purportedly violating collective bargaining rights of public employees.
    ==
    A ballot measure approved by the voters will not get overturned by the Public Employment Relations Board- a gov agency suing, they are not a court and the court will not side with them….IMO, the fact is courts are unpredictable, but it is a long shot..

  5. Ted Steele, Navigator says:

    courts are unpredictableoodle said–“courts are unpredictable”

    I think what he means is — Poodle is unable to predict ANYthing! Because– he is 0 for 14 ™!

  6. Hondo says:

    This massive illegal election fraud begats only one thing, violence. I am profoundly against violence. But when the voting process becomes so obvious in its fraud, people will start voting with their pitchforks. Its the welfare class that is going to be carrying the pitchforks, not the Republicans (they will have moved to arizona by then). When all the welfare class benifits are cut to pay for the immoral and gigantic pay and pensions of the public union class, watch out.
    See the french revolution. Everybody loses then. Especially the unions.
    Hondo…..

  7. Sean Morham says:

    As noted in the past, the public union class in California and their families will be food for the welfare hordes. Pitchforks are the essential item to drag dinner into the middle of the hungry pack. Hatchets will be good to “split” for Dinner.
    Chomp. chomp…

  8. stevefromsacto says:

    Direct democracy succeeded in November. Among other things, Prop. 32 was crushed, Prop. 30 passed by a wide margin and San Diego elected a Democratic mayor. But in the Dog’s wacky world, democracy only works when your side wins.

    And hang in there, Ted. Being called a spammer by Rexie Boy is like being called ugly by a frog.

  9. Ted Steele, Navigator says:

    Thanks Steve– It hurt, but I will soldier on.

  10. Rex the Wonder Dog! says:

    Poodle is unable to predict ANYthing! Because– he is 0 for 14 ™!

    :)

    teddy, don’t ever again lecture me on hijacking the comments ;)

  11. Rex the Wonder Dog! says:

    steve from sacto says:
    Direct democracy succeeded in November…….And hang in there, Ted. Being called a spammer by Rexie Boy is like being called ugly by a frog.

    The unions out spent Prop 32 opponents by 5-1, hardly democracy.

    And even Stevie is piling on old Rex. That made me cry Stevie, I thought we were friends ;)

  12. stevefromsacto says:

    I recall you saying some pretty nasty things about me Rexie, like that I was a “union thug” and a “taker”, you know, the usual right-wing garbage. And I just can’t help piling on when you make it so easy.

    For instance, it doesn’t seem to concern you that the Prop. 32 supporters got tens of millions from the Koch Brothers. Sounds like it’s OK for outside billionaires to meddle in our state’s politics, but California unions aren’t allowed to fight for themselves.

    And of course, we have that wonderful Arizona secret PAC and its money-laundering scheme that was worthy of a drug cartel or organized crime syndicate. But as long as they support the right-wing, that’s just dandy.

  13. Kevin M says:

    What can’t go on, won’t.

  14. SGT Ted says:

    Unions have been crooked from their inception. They are even more corrupt now and focused on raiding Public Treasuries since their membership has declined in the private sector. I have no opposition to private sector unions, other than their historic criminality and, yes, thuggery, but public sector unions should not even exist as it undermines the concept of selfless public service and forces the employee to serve two masters, when he should be serving the taxpayer who pays his freight. No one objects to the conditions of military employment and they have no union. Because there is an expectation of selfless service. Most folks have no problem spending the money to protect firefighters and the police. But the pensions going out have to match the money coming in. Unions and Government negotiating salary and benefits is two wolves and a chicken deciding whats for dinner. FDR was against public employee unions and he was right. Public servants cannot serve two masters. They work for the taxpayer, not the unions.

  15. judge arrow says:

    It is just too neat and clean that election results turn out so overwhelmingly for the corrupt. I think it would be interesting to follow a ballot from the printer to the voting booth to the counting board. Make that ALL of the ballots. I suspect there is a great deal of systematic fraud by the unions – anyone have the bucks to develop an investigation here?

  16. Mike K says:

    The Koch brothers are the latest boogie men for the lefties and union thugs. Steve there is one thing that will doom your efforts. Eventually, you will run out of other people’s money.

  17. Ted "Eddy Baby" Steele, Associate Prof. says:

    Post of the WEEK — STEVE from Sacto!!!

    The poor off topic poodle gadfly can’t keep up with ya!

  18. Ted "Eddy Baby" Steele, Associate Prof. says:

    Chris– It’s all a balance. Without labor unions employers’ greed and exploitation would run wild, we all know that. The right just likes to pretend that does not happen.

    Discuss–

  19. Jill says:

    This tactic suggests that the people practicing it are afraid to compete openly and aboveboard in the marketplace of ideas. The unions are well-funded and well-organized to make their case to the voters of California and present reasons why ballot initiatives they oppose should be rejected. In general the electorate of California does not strike me as a wildly right-wing bunch. They just elected a Democratic super-majority to the state legislature.

    So the only reason for this tactic is that the practitioners fear that they might not be able to convince voters to support their position. Rather than take their chances competing openly about big ideas, they’d rather poison the opponents’ attempts to ask the voters what they think. A rather sad commentary on what the political process has come to.

  20. thorgodofthenorth says:

    Ted Prof, it figures you are a prof. The labor unions you speak of are private sector, you know in the marketplace. This story is about government employee unions, there is no comparison. Show your lack of knowledge something I expect from profs these days.

  21. Rodney says:

    I voted with my feet. I’ll be voting from Texas in 2014. One less productive individual being sustenance for the parasitic class. By the look on my coworkers faces some of them will be joining me soon.

  22. guest says:

    unions and their activity should be banned…they are communists and most don’t even know it…when its bankruptcy time, the House of Representatives will say NO to a safe landing…let it crash hard.

  23. LordJiggy says:

    Not to stop all the ad hominem fun, but isn’t there something, you know, illegal about the union doing this to Riordan’s petition? It sounds like an organized action to commit fraud. Where’s the RICO prosecution?

  24. Hucklebuck says:

    Greetings from your sister state of IL! We have also just given the Dems a super majority in both houses. See you in TX.

  25. Tough Love says:

    Quoting …”Two weeks ago, Paul Kim, a work-site organizer for Service Employees International Union Local 721 in Los Angeles, sent out an email to SEIU members with this admonition: “We need Union members hitting the streets signing Riordan’s petition with fake names/addresses and gathering retraction signatures from LA residents on our own petition. We need people power starting this Saturday.””

    Paul Kim should be sentenced to a prison term of no less than 5 years.

  26. Tough Love says:

    Quoting … “Nothing could make it more obvious that in California, union power has metastasized into something more akin to organized crime than organized labor –- or at least our old conception of organized labor.”

    Metastasized is an accurate description of Public Sector Unions … a CANCER on Society.

  27. Tough Love says:

    Hondo, I believe you make a good point. While I always figured that those receiving Welfare voted Democratic and for more spending because they pay no taxes and are recipients of much of that spending, and that Public Sector workers do so for a contamination of their outsized pensions & benefits, they really are distinct groups that will likely one day be on opposing sides.

    As Hondo suggests, once the Businesses and Citizens WITH the ability to pay substantive taxes have move away, the Public Sector workers, now no longer being able to increase revenues to feed the pension monster, will resort to cutting such things as welfare expenditures to free up revenue for that pension monster.

    And while those who pay big taxes (those with good incomes and assets) rarely resort to violence as they have too much to lose, it’s certainly not clear that will be the case when the Welfare recipients are pushed to the wall.

  28. Rex the Wonder Dog! says:

    thorgodofthenorth says:
    Ted Prof, it figures you are a prof

    LOL..teddy the full tenuredprofessor of monronology ;)

  29. Ted Steele, Janitor says:

    Well, yes, sometimes I am the professor….and others…the janitor. But the Poodle is always…

    …wait for it…

    0 for 14 ™!

    It never gets old…

  30. SeeSaw says:

    You people are all so naieve, you can’t distinguish the difference between union money which is a collection of funds donated by thousands of individual, middle class workers, and donations from wealthy people like the Mungers who tried to become the “Lords of CA” with their combined 80+ million. The Mungers had their clock cleaned, and you wonder why! We live in a Constitutional Republic where elected officials make the important decisions–the collective masses only know what they are spoon-fed by the pundits. Direct Democracy would be a disaster!

  31. Tough Love says:

    SeeSaw, Saying that … “union money which is a collection of funds donated by thousands of individual, middle class workers,” is quite ridiculous. Without doubt 95+% of all union campaign contributions come from mandatory Union DUES … certainly NOT “donations”.

  32. Ted Steele, Janitor says:

    SeeSaw— Shhhhhhh—- these folks think the Mungers are on their side….shhhhhhhhhhhhhhhhhhhhhhhhhh

  33. Over but not out says:

    It is a real stretch to claim that someone or some special interest who hires paid signature gatherers is engagingin direct democracy.

  34. CalWatchdog says:

    Over but now out: How is it NOT democracy? How is it different from an activist senior at a senior center gathering petitions to send to a congressman backing Social Security and Medicare? How is it different from a union organizing a precinct walk?

    — John Seiler

  35. Rex the Wonder Dog! says:

    It is a real stretch to claim that someone or some special interest who hires paid signature gatherers is engagingin direct democracy.
    ==
    LOL…I bet you didn’t say a WORD when the CTA did it for Prop 98 18 years ago.

  36. Over but not out says:

    Cal and Rex – I disapprove of the hired signature gathering industry regardless of who or what organization is paying for it. In my opinion, there is a difference between a mission-drive volunteer gathering signatures vs. a hired employee being paid to gather signatures, often on a per signature basis. The motivation of the two signature gatherers is different – one is cause-driven (to which I say “go for it”), the other is money-driven (to which I say “go find a productive job”). Same with slate campaign mailers which are paid advertisements camouflaged as though coming from some legitimate organization. What bothers me is seeing the democratic processes of petitioning our government and voting on candidates and public policy issues being manipulated by such processes as the paid signature industry and intentionally misleading/camouflaged endorsements and mailers. I am sure everyone posting here is intelligent enough to not be misled or fooled, but there are a lot of people who are vulnerable to such trickery, in my opinion.

  37. SeeSaw says:

    OBNO: Right. The paid signature gatherers are working for a living, and most of them are not even well-versed on the subject matter of the petitition they are passing. I never sign anything that I do not have an opinion about–and I resent the signature gatherer saying, “Just sign, so it can get on the ballot–then the voters will decide”. Those signature gatherers are exploited by the sponsors–the one at my local Stater Bros. last year was only getting sixty-five cents per signature.

  38. SeeSaw says:

    Campaign contributions taken from union dues are not mandatory, TL. Every union member has the option to prevent his/her dues from being used for political purposes. Describe it any way you want–it is collectively the middle class and the middle class is the group I support, politically. Furthermore, as I have said multiple times–the public sector retirees who get, what you consider, lavish pensions were upper management who did not need to belong to unions–they did their own negotiating with their employers, and many of them receive more in salary than the President of the United States. Whose fault is that? Certainly not the fault of the unions!

  39. Party On says:

    I say the supermajority that the Dems have in CA is fantastic and is the best thing that could have happened to CA. Along with passing Prop 30. The majority has spoken, we all now eagerly await the golden age of CA to be ushered in. You know as they say – people get the govt they deserve. Outside of the takers in CA there is a general consensus that CA governance is in the dumpster so guess what kind of govt CA gets. I for one intend to enjoy the supermajority circus over the next 2 years. CA antics have always been entertaining but now we should see even that get amped up. Rock on unions, show it to all of them. On to repeal of Prop 13

  40. Party On says:

    To unions and supporters of unions. Ignore the bashers and soldier on guys. Supermajority and prop 30 are great wins but set your sights higher now. Onward and upward. Repeal Prop 13. Set Greece as your role model and ignore the uninformed fools who claim Greece to be a failed stae. Little do they know. I say you should aspire to the great San Francisco experiment of the 70’s. Bring back that golden age maan, free healthcare and LSD for all. Free love. But this time scale it up. How about printing our own money and discarding the loser USD which is holding back the great potential of our state. Ooh I shiver at all the possible paths to greatness that lay ahead for our state.

  41. Tough Love says:

    SeeSaw, Balony. If that “option” (to not allow Union dues for campaign contributions) were serious, it would be a requirement it OPT-IN, not OPT-OUT.

    And more nonsense, 85% of the middle class are not public Sector workers and THEY pay (and are still paying … even though you believe otherwise) for YOUR pension. You support ONLY the PUBLIC Sector Union middle Class, to the detriment of the other 85%.

  42. SeeSaw says:

    I support all citizens of this country, TL, but I favor the middle class and the poor when it comes to political decisions–it is the demographic group to which I belong. Sorry, you have only opinions–not facts. And, you may not put words in my mouth. Who in the heck do you think purchases the products and services that are sold in this country? I and all of my public sector/public retiree cohorts support a large percentage of that business–otherwise there would be no sustainable economy at all. My pension did not begin for me, until I was 72 years old, and it is not lavish by any means! And, you are not paying one penny of it! Poor TL–a half-empty glass kind of guy.

  43. Tough Love says:

    SeeSaw, Since little seems to stop in your head, simply passing in one ear and out the other, I’ll repeat an earlier reply to you (from a different discussion):

    The argument that … “the benefits the pensioners receive are put right back into the economy, benefiting society” is beyond pathetic. Would society benefit any less if the higher taxes needed to support your excessive pensions remained in the Taxpayers pockets to be spent BY THEM ?

  44. SeeSaw says:

    Well guess what, TL. You evidently can’t see it, but as a human being, who has not one ounce of humility in that arrogant head–you are beyond pathetic!

  45. Tough Love says:

    SeeSAw, Now that you got that off your chest, how many MORE times are you going to repeat that crap that the high Public Sector pensions are beneficial to society ?

  46. SeeSaw says:

    Probably as many times as you keep repeating your crap, TL.

  47. SeeSaw says:

    By the way TL, I do not have a high Public Sector pension, but the one I do have is beneficial to society, because I pay the grocer, the dentist, and the restaurant owner, among many more. Those things are necessary for our economy, and I have no problem with other pensions or other workers having more money than I, unless it was illegally obtained. The more money other people have in their pockets, the better it is for the economy.

  48. Tough Love says:

    SeeSaw, You’re right, and those “other (Private Sector) people” would certainly have more money in THEIR pockets to spend if their taxes did not reflect the cost of the excessive pensions promised ALL Public Sector workers (including the lower paid).

  49. SkippingDog says:

    Since “direct democracy” violates the very precepts of the “republican form of government” required of each state by our federal constitution, it is interesting that those who claim to revere that document support such anti-republican approaches to government at any level.

  50. Jake says:

    Hondo, and those supporting his view of welfare class turning on public servants are wrong. The money will not run out for a while because the govenrment will do the same thing that they did during this election. They were short of cash but did not want to trim public employee benefits/pay or welfare, so they figured out the next best thing – hold education hostage. Tell them that the money is for school (prop 30), then people want to support education, the money goes into the general fund and gets used as they want (public employees and welfare receipients get their share, schools are shortchanged). The next time more money is needed they will again cut schools, services for disabled, orphanages, etc., whatever people are emotionally sensitive to. The new money will go to the general fund and welfare and public employees will get their share. As for people leaving the state, most middle class people that work or have business in the state can’t, and you can rest assured that the public employees with their oversized pensions will be gone way before sh*t hits the fan. The wealthy will be gone too, they are generally not stupid, so you will eventually have the welfare class demanding more from the shrinking middle class, and that’s when the pitchforks (guns in today’s world) will come out. By that point it is too late to change anything. Keep in mind, that during the times of the French revolution the upper class could not escape with their wealth since most of it was in the form of land. Today’s wealthy and public employees can easily move their stocks/pensions anywhere in the world, so you won’t have that many of them left around once the pitchforks come into play.

  51. SeeSaw says:

    Jake, you are predicting anarchy, which is akin to sedition with me. You have mil understanding about how government works and nil understanding about public employees and pensions. Take your hate rhetoric somewhere else.

  52. Ted Steele, Janitor says:

    Well said SeeSaw—- these guys need a civics 101 lesson.

  53. Tough Love says:

    Quoting Jake …”As for people leaving the state, most middle class people that work or have business in the state can’t, and you can rest assured that the public employees with their oversized pensions will be gone way before sh*t hits the fan.”

    While the first part of that sentence is true (only so many can leave), with respect to the “public employees with their oversized pensions” escaping, while the can escape the State’s taxation by moving, when CalPERS fails, their pensions won’t be following them.

  54. SeeSaw says:

    CalPERS is not going to fail TL. It is 80 years old, and the actuaries have the ability to determine what has to be done so that it will not fail. No one vested with CalPERS right now is ever going to lose their pension, because of CalPERS failing. Sorry, but if you want to wait and see who is right and who is wrong, you will have to raise from the dead to find out.

  55. Tough Love says:

    SeeSaw, The initial “failures” will likely come in the form of reduced pensions for CalPERS participant city retirees when their city stiffs Calpers (because when there is insufficient money beyond that necessary for truly “essential” services, that’s what will happen).

    If San Bernadino or some other City stiffs CalPERS, and after the inevitable Court fights (and perhaps even a judgement favorable to CalPERS) CalPERS still can’t collect (because there is not now and will never be sufficient funds to fully pay for these excessive pensions) CalPERS will have no option except to reduce that city’s pension payouts to the level supportable by remaining Plan assets from that city.

    I suspect that the first such failure will closely be followed by others. The dominoes are now lining up.

  56. Skippingdog says:

    Just so you’re clear on the outcome of your suggestion, TL, CalPERS has the statutory authority to place liens on every account and piece of property owned by one of the contracting agencies if it fails to make its legally required payments to the retirement system.

    Take a look at the California Public Employees Retirement Law in our Government Code if you’d like more details. It’s the same state law that prohibits the discharge of pension obligations in a Chapter 9 bankruptcy action, and Chapter 9 prohibits the court from imposing any workout plan that violates any state law or regulation.

  57. Rex the Wonder Dog! says:

    Chapter 9 supersedes any and all state laws. Look up the Supremacy Clause Perry Mason Jr.

  58. Skippingdog says:

    Just look at the language of the Bankruptcy Code, F. Lee Wonder Dog. Since you claim to have legal training, you might also do a little review of the Chapter 9 legislative history.

  59. Skippingdog says:

    From the U.S. Bankruptcy Court itself:

    “Sections 903 and 904 of the Bankruptcy Code are designed to recognize the court’s limited power over operations of the debtor.

    Section 904 limits the power of the bankruptcy court to “interfere with – (1) any of the political or governmental powers of the debtor; (2) any of the property or revenues of the debtor; or (3) the debtor’s use or enjoyment of any income-producing property” unless the debtor consents or the plan so provides. The provision makes it clear that the debtor’s day-to-day activities are not subject to court approval and that the debtor may borrow money without court authority. In addition, the court cannot appoint a trustee (except for limited purposes specified in 11 U.S.C. § 926(a)) and cannot convert the case to a liquidation proceeding.

    The court also cannot interfere with the operations of the debtor or with the debtor’s use of its property and revenues. This is due, at least in part, to the fact that in a chapter 9 case, there is no property of the estate and thus no estate to administer. 11 U.S.C. § 902(1). Moreover, a chapter 9 debtor may employ professionals without court approval, and the only court review of fees is in the context of plan confirmation, when the court determines the reasonableness of the fees.

    The restrictions imposed by 11 U.S.C. § 904 are necessary to ensure the constitutionality of chapter 9 and to avoid the possibility that the court might substitute its control over the political or governmental affairs or property of the debtor for that of the state and the elected officials of the municipality.

    Similarly, 11 U.S.C. § 903 states that “chapter [9] does not limit or impair the power of a State to control, by legislation or otherwise, a municipality of or in such State in the exercise of the political or governmental powers of the municipality, including expenditures for such exercise,” with two exceptions – a state law prescribing a method of composition of municipal debt does not bind any non-consenting creditor, nor does any judgment entered under such state law bind a nonconsenting creditor.”

  60. Rex the Wonder Dog! says:

    Here you go Perry Mason Junior, try to learn a little before posting your usual “copy and paste” as you have no legal training, just “copy and paste” skills that have no application to any of the BS claims you make;

    ” The federal government cannot involuntarily be subjected to the laws of any state.”

    http://legal-dictionary.thefreedictionary.com/Supremacy+Clause

    So much for your nonsense “copy and paste” baloney.

  61. Skippingdog says:

    Note Standard number 4:

    “The standards for plan confirmation in chapter 9 cases are a combination of the statutory requirements of 11 U.S.C. § 943(b) and those portions of 11 U.S.C. § 1129 (the chapter 11 confirmation standards) made applicable by 11 U.S.C. § 901(a). Section 943(b) lists seven general conditions required for confirmation of a plan. The court must confirm a plan if the following conditions are met:

    the plan complies with the provisions of title 11 made applicable by sections 103(e) and 901;
    the plan complies with the provisions of chapter 9;
    all amounts to be paid by the debtor or by any person for services or expenses in the case or incident to the plan have been fully disclosed and are reasonable;
    the debtor is not prohibited by law from taking any action necessary to carry out the plan;
    except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the plan provides that on the effective date of the plan, each holder of a claim of a kind specified in section 507(a)(1) will receive on account of such claim cash equal to the allowed amount of such claim;
    any regulatory or electoral approval necessary under applicable nonbankruptcy law in order to carry out any provision of the plan has been obtained, or such provision is expressly conditioned on such approval; and
    the plan is in the best interests of creditors and is feasible.”

  62. Skippingdog says:

    I’m never surprised by you, Rex. Read Chapter 9 and even you will quickly find that it is the federal bankruptcy code itself that is making itself subject to the laws of the state in which it is applicable. That’s also why there have been a series of 10th Amendment cases that reinforce the limited power of federal courts in a Chapter 9 action.

    As your experience undoubtedly shows, the law is not necessarily what you think it should be.

  63. Tough Love says:

    Quoting Skippy …”Just so you’re clear on the outcome of your suggestion, TL, CalPERS has the statutory authority to place liens on every account and piece of property owned by one of the contracting agencies if it fails to make its legally required payments to the retirement system. ”

    Skippy, a town stiffing CalPERS would likely already be in bankruptcy (or in the process of entering bankruptcy, and likely with a court injunction halting any CalPERS actions while in such state … just as is the situation for San Bernadino today).

    Either way CalPERS can’t do squat …. we both know that. No Bankruptcy Court can or would allow seizure of City assets.

  64. Skippingdog says:

    Here’s more for you to consider:

    “Bankruptcy law is federal statutory law contained in Title 11 of the United States Code. Congress passed the Bankruptcy Code under its Constitutional grant of authority to “establish… uniform laws on the subject of Bankruptcy throughout the United States.” See U.S. Constitution Article I, Section 8. States may not regulate bankruptcy though they may pass laws that govern other aspects of the debtor-creditor relationship. See Debtor-Creditor. A number of sections of Title 11 incorporate the debtor-creditor law of the individual states.”

  65. Skippingdog says:

    TL – You’re making a circular argument. A town couldn’t “stiff CalPERS” if it were operating under an approved Chapter 9 workout plan overseen by the court. Your scenario would only be possible without court supervision, in which case the statutory lien provisions would be readily available.

  66. Tough Love says:

    Skippy, You and I could debate this stuff endlessly … meaning little.

    While there will likely be judgements (one way or the other in the Courts), the ultimate settlement of these issues will be in the Courts of “reality” and the “math”. In neither such Court, do CA’s Plans participants get their full pensions.

    It’s more a question of how many cities and how fast they will begin to fall.

    Greed HAS consequences.

  67. Skippingdog says:

    TL – The only thing missing from your ominous claim is a tag with a link to buy gold.

  68. Tough Love says:

    Skippy, The protections you suggest would likely apply nationwide. If they were indeed so strong, why do we already has examples of Public Sector pensioners getting hair-cutted ?

    Perhaps it really boils down to what I have been saying ….. when there is not now (and never will be) sufficient funds to pay all “promised” pensions, they simply don’t get paid.

  69. Skippingdog says:

    Every state has a different set of laws that apply to its pension programs. That’s why you’ll see different outcomes across the country – just as you do with insurance litigation in your own industry.

  70. Tough Love says:

    Skippy, Financial services (not insurance).

  71. Rex the Wonder Dog! says:

    Skipping Dog says:

    Take a look at the California Public Employees Retirement Law in our Government Code if you’d like more details.

    Once again, do not listen to the HS educated troughers and their spin. The “Gov code” is all state law, it does not apply in ANY federal case if it is in conflict with federal law. In an Article I federal case the federal law will trump and supercede ALL STATE law, including the old gov code.

    If CalTURDS had the legal authority to put a lien (oh brother, is that hilarious!!!) on any of San Bernardino’s (or any other participant) real or personal property they would, they would not even have to file papers or object to the SB BK case (which they are doing, right now, in court) they would simply start filing liens on everything they could.

    Hmmm…I wonder why they have not done that?? I wonder why they are in federal court arguing for preferred status??? Hmmm…OH, I know, because they don’t have the legal authority to put a lien on anything.

    Love spanking the ignorant “copy and paste” folks ;)

  72. marincountyman says:

    The absolute power these unions have over all of us is frightening…for me, its simply stunning that these pirates have gamed this system so well, that even with bright flashlights of truth and excesses, they don’t blink, let alone run. They believe this is their right…they are worth it…and with a straight face tell taxpayers “good luck trying to change the rules…we made em.” This County, this State and perhaps our Country, has been hijacked by these government employees who, sadly, supposedly work(ed) for us. They don’t…our Legislators, City Councils and Governor (and President), work for them…..and the credit card bills they have racked up…is undeniable evidence that. They don’t care about democracy..they look to undermine it daily…and the politicians, judges and voters that allow this bankrupting behavior for the benefit of only 4 – 6% of overpaid public employee union members at the expense of the next generation and today’s needy (who will be deprived of government services as more and more monies get hijacked to pay these thugs) need to sound the alarm…or we will be Russia or Greece (if we aren’t already). Today, tragically, by enabling them to continue to gain the system…we work for them. God help us.

  73. Skippingdog says:

    A little something for you to review from the California Public Employee Retirement Law:

    § 20487. Bankruptcy
    Notwithstanding any other provision of law, no contracting agency or public agency that becomes the subject of a case under the bankruptcy provisions of Chapter 9 (commencing with Section 901) of Title 11 of the United States Code shall reject any contract or agreement between that agency and the board pursuant to Section 365 of Title 11 of the United States Code or any similar provision of law; nor shall the agency, without the prior written consent of the board, assume or assign any contract or agreement between that agency and the board pursuant to Section 365 of Title 11 of the United States Code or any similar provision of law.
    (Added by Stats. 1996, Ch. 502; amended and renumbered by Stats. 2000, Ch. 1002.)

    § 20574. Lien on Assets of Terminating Agency
    A terminated agency shall be liable to the system for any deficit in funding for earned benefits, as determined pursuant to Section 20577, interest at the actuarial rate from the date of termination to the date the agency pays the system, and for reasonable and necessary costs of collection, including attorney’s fees. The board shall have a lien on the assets of a terminated contracting agency, subject only to a prior lien for wages, in an amount equal to the actuarially determined deficit in funding for earned benefits of the employee members of the agency, interest, and collection costs. The assets shall also be available to pay actual costs, including attorneys’ fees, necessarily expended for collection of the lien.
    (Added by Stats. 1982, Ch. 77, effective 3/1/82; renumbered by Stats. 1995, Ch. 379; amended by Stats. 2003, Ch. 462.)

  74. Skippingdog says:

    And a little something by Orrick, the law firm handling a number of Chapter 9 bankruptcy petitions:

    “chapter five

    The Tenth Amendment and Limitations on the Role of the Court
    Tenth Amendment Limitations

    The Tenth Amendment to the United States Constitution reserves certain powers
    to the states regarding the management of their internal affairs. In chapter 11 cases (which municipalities are ineligible to file), the bankruptcy judge wields significant power to control what the debtor may and may not do during the course of the case. For example, without court approval, any proposed action by the debtor outside the ordinary course of business must be approved by the court after creditors and other parties in interest have been provided with the time and the opportunity to object. Nor may the debtor borrow funds outside of the ordinary course of business, grant collateral for a new loan or settle a significant claim against it absent court approval. However, in light of the Tenth Amendment and provisions of the Bankruptcy Code that implement it, the court plays a significantly more limited role in a chapter 9 case, and state law restrictions on the activities of municipalities and their uses of funds must continue to be observed.

    Thus, for example, the court cannot take over the operation of the municipality, remove governing board members, direct the actions of the governing board or appoint a receiver or trustee to run the affairs of the municipality. Similarly, the court cannot permit the municipality to override state laws such as those requiring voter approval for new taxes, or limiting the use of restricted funds for particular purposes. Obviously, the court lacks the power to require the sale or lease of a park or a sewage facility in order to satisfy the municipality’s obligations to creditors.

    One important effect of the Tenth Amendment on municipal bankruptcies, distinguishing them from nongovernmental entity bankruptcies, is that there can be no forced liquidation of a municipality under the Bankruptcy Code. If a private firm files for bankruptcy under chapter 11 seeking to reorganize and thus continue “… the court cannot ‘take over’ the operation of the municipality …”to operate, but it fails to achieve that objective, the case likely will be converted to a liquidation case under chapter 7 of the Bankruptcy Code. In chapter 7, a trustee is appointed, and is charged with liquidating all assets for the benefit of creditors, who go away with whatever share they can receive. Assets are sold or foreclosed upon, the
    entity no longer operates, and it ceases to conduct business.

    For obvious practical reasons, and due to the Tenth Amendment’s limitations on the powers of the federal courts, there is no chapter 7 analogue for municipalities other than those that may be provided by applicable state law outside of the bankruptcy court system. Thus, if the chapter 9 case fails to produce a plan of adjustment allowing the municipality to exit bankruptcy, the case is dismissed and the municipality continues to exist with all of its problems and claims as it did before bankruptcy, with whatever remedies are available to the municipality and its creditors under state law.

    Role of the Bankruptcy Judge

    The primary responsibilities of the bankruptcy judge are to approve or disapprove the bankruptcy petition by determining eligibility, to oversee the assumption or rejection of executory contracts and unexpired leases, to decide avoidable transfer actions (i.e., preferences and fraudulent transfers) and to confirm or decline to confirm a plan of adjustment. The municipality may consent to the judge’s exercise of jurisdiction in many of the more traditional areas of bankruptcy court oversight in bankruptcy in order to obtain the protection of court orders and eliminate the need for multiple fora to decide issues. Indeed, these latter features reflect some of the benefits of filing for bankruptcy in the first place.

    Despite this limited role, the judge in a chapter 9 case does exert considerable influence over the parties and can be a very helpful neutral arbiter of difficult disputes. While, as described below, the only real “hammer” the judge ultimately has is to dismiss the case and throw the municipality out of court, the judge nevertheless is likely to be very helpful in bringing the parties to the point where a plan can be approved.”

  75. Tough Love says:

    Skippy, For a Public Sector retiree who professes to have absolutely no concern that his pension might be cut, you certainly are spending lots of time trying to convince those who will have no impact on that actual decision that you are right.

    I suspect that you are indeed concerned, but I think your concern, being focused the legal issues, is misplaced. The eventual lack of funds to pay these excessive promises will trump that (and any Court decisions) by a mile.

  76. Skippingdog says:

    No, TL. I just consider it my civic duty to correct the misinformation spread by sites like CWD and posters like Rex and yourself. My concern is certainly with the spirit of the law but, as I’ve posted previously, my own pension is not through CalPERS and is funded at somewhere around 94% right now. I’m not at all concerned with its viability.

    I’m also fortunate to have a good job with a well respected and well funded private organization, so the upheaval you predict would impact me even less than most.

    I am and will remain an unashamed liberal Democrat who strongly believes in the labor movement as well as the binding and protective nature of our laws. There are a lot of us out here still, which is one of the reasons Romney isn’t preparing to take office and the Tea Party tide is being rolled back.

  77. Tough Love says:

    Skippy, What “misinformation do I spread ? Could be be that:
    (1) When compared to their Private Sector counterparts, Public Sector pensions are excessive
    (2) When combined with cash pay and benefits, that they are overcompensated, again, when compared to their Private Sector counterparts
    (3) Their Unions bribe elected officials with campaign contributions and election support, and threaten those who do not support their agenda
    (4) That ALL of their own pension contributions (INCLUDING all of the investment income on those contributions) RARELY accumulates to a sum sufficient at retirement to buy more than 10%-20% of their very rich and costly promised pensions … with Taxpayers responsible for the balance.
    (5) That they provided exactly ZERO service or consideration for the significant RETROACTIVE pension boost via SB400
    (6) That they use every morally repugnant trick conceivable to spike their pensions
    (7) That given the very rich formulas, the inclusion of COLA provisions, the very young full retirement ages, the very heavily subsidized early retirement provisions, the liberal definition of “pensionable compensation”, etc., that the taxpayer paid for share of Public Sector pensions are ROUTINELY 2-4 times (5-6 times for safety workers) greater in value at retirement than those of their Private Sector counterparts

    I could go on and on, but starting with these, please tell me how any of this is “misinformation”.

  78. Skippingdog says:

    No, those are the same tired claims made here on CWD and on every other public pension blog. No matter how many times you post them, or how fervently you believe them, they are either blatantly false or materially misrepresent the facts.

    You’re smart enough to know that, so your interest must be in either generating clicks or shilling for the “financial services” industry in which you claim to work. I suspect the real truth is that you’re nothing more than a paid blogger for some group like Reason, Cato, or one of the Right-Wing funded anti-union and anti-public employee groups out there like the groups that created and support these “Watchdog” sites.

  79. Tough Love says:

    Skippy, Not one of the 7 items I listed is inaccurate, and I believe YOU know that.

    No person or group (or anyone else) pays me to do so. I comment solely because (by experience and training) I understand pension design and funding way better than most, and hence I know the true cost of the absurd pension promises that you, your ilk, and your Union have connived and bribed your way into getting …. and that it’s WAY past time to both STOP and REVERSE it.

  80. Donkey says:

    TL is right SKdog, the math will solve the greed of the RAGWUS feeders!! ;)

  81. SeeSaw says:

    TL: Nos. 1 and 2: There is no rule of thumb or law in existence that states public employee pay and private counterpart pay should be the same. Those of you who advocate such, are the first ones to decry any policy shifts by the government that you would consider Socialism.

    No. 3: Lie;

    No. 4: The payments made by the employer and employee to their respective pension plans are set by the Plan actuaries and the payers just do what they are told–The investment earnings take over from there.

    No. 5: I don’t think you can be everywhere TL, and you don’t know any more than I do about specific servies provided by any public sector worder.

    No. 6: Lie;
    No. 7: Lie!

  82. SeeSaw says:

    Stop it Donkey! Are you going to copywrite that acronymn or what! If not, throw it away! Nobody knows what the heck you are talking about–it is just hate rhetoric anyway.

  83. Justin Wonder says:

    The endless ying and yang arguments regarding pensions …but the original topic was on direct democracy and versus the so called power of unions. The author’s bias is well known in San Diego, so his writings/opinions are, or should be, viewed in the color of that light, not taken as gospel.
    IMO the exercise of any group, organized or not, to oppose, or support a citizen’s initiative is just another example of democracy in action and should be celebrated. Power should NOT rest with any ONE group. Two recent example of this were cited, albeit unequally (what a surprise) by the author in San Diego. The commonality between both were: one, the author, a multi-millionaire city councilman with a history of, we’ll let’s spinning facts to me his personal and political ambitions. And two, labor groups whose mission is to fight for their members.
    What the author leaves out, and most don’t understand, is LBFO. Last Best Final Offer combined with law which explicitly prohibit strikes by public employees. While public employees have collective bargaining rights in California, the cannot legally strike without risk of being fired. Government employers can and DO IMPOSE LBFOs. So unless negotiators are negotiating in bad faith and it can be proved so in a court of law, power swings like a pendulum from one side of the equation to the other.

  84. SeeSaw says:

    Good post, Justin.

  85. Phil says:

    Good article Chris, your numbers tell the truth on how corrupt these unions are. These unions have tons of money to promote their agenda and spin. But in the long run economics and the numbers always prevail. Unfortunately we will have to the learn the hard way that we are being screwed by the unions, but that is just the way it is (Hello Greece). And all you new union members you will be the first to get the shaft because of your lack of numbers in your unions, your members with seniority will suck up easily their own and your pension contributions, but fill comfortable knowing you are way ahead of the private sector and most of all the youth of this (kick the can down the road) state.

  86. Johnathan says:

    The first paragraph has an incorrect use of “then.” It should be “than” instead in the following sentence part: “30 percent more signatures then the minimum.”

    Editor’s note: Thank you. We fixed it in the text.

  87. YJ Draiman for Mayor of LA says:

    Who can save the City of Los Angeles from bankruptcy?

    I am a firm believer that you can accomplish more with honey than with vinegar.
    The City of Los Angeles is on the brink of Municipal Bankruptcy. If that happens all of LA City employees will sustain a severe economic and financial blow, which cannot be rectified. The people who reside in the City of Los Angeles will sustain much hardship if this financial situation is not resolved amicably.
    I propose that all parties handling the city finances and all Union organizations and other organizations that service the city should put all the cards on the table. Show all expenses and liabilities, a conservative approach to projected revenues, no fudging of expenses or revenues.
    It is in the best interests of all parties to come to a compromise. Remember a piece of cake is better than no cake at all. Eventually the cow runs out of milk.
    Today’s economic and financial situation throughout Los Angeles and the rest of the country as a whole is the worst since the depression.
    The City of Los Angeles must aggressively help businesses in trouble survive and court other businesses to locate in the City of Los Angeles. Businesses create jobs and revenues. We must look at the “multiplier affect of thriving businesses”, which creates economic prosperity.

    YJ Draiman

News Archive

Archive By Categories
  • Budget and Finance
  • Education
  • Health care
  • Infrastructure
  • Inside Government
  • Life in California
  • Politics and Elections
  • Regulations
  • Rights and Liberties
  • Waste, Fraud and Abuse