Carl Horowitz's blog

Pension Benefit Guaranty Corporation, like Fannie Mae and Freddie Mac, is a case of "too big to fail." At least various members of Congress see it that way. And they are planning a push for legislation designed to shore up underfunded multiemployer private-sector pension funds, but which would put taxpayers on the hook for billions, if not tens of billions, of dollars over the long term. Sen. Bob Casey Jr., D-Pa., and Reps. Earl Pomeroy, D-N.D., and Patrick Tiberi, R-Ohio, the driving forces behind this measure, seek to shift the primary responsibility of keeping pensions adequately funded from unions and unionized employers to the general public. It's another example of the bailout culture in action.

The revolution in tort liability has claimed another victim. Chipotle Mexican Grill Inc. is now traveling lighter by around $140,000. The reason is a decision handed down about a month ago by a three-judge panel on the 9th U.S. Circuit Court of Appeals concerning two of its San Diego-area outlets that supposedly wouldn't comply with the Americans with Disabilities Act (ADA). The award might not be a king's ransom by the standards of one of the nation's most successful restaurant chains. But the ruling could have major consequences for the way business as a whole operates in this country.

On May 19, Stacey Spalding, former bookkeeper of International Brotherhood of Teamsters Local 215, pled guilty in U.S. District Court for the Southern District of Indiana to embezzling $29,516 in funds from the Evansville union. She had been charged in March. The guilty plea follows an investigation by the Labor Department's Office of Labor-Management Standards.

On May 14, Jeffrey Kenney, former secretary-treasurer of Graphic Communications International Union Local 205-C in Youngstown, pleaded guilty in U.S. District Court for the Northern District of Ohio to embezzling $10,305.70 in union funds and filing a false financial report. He had been indicted in February for embezzling more than $14,000. The GCIU has been affiliated with the Teamsters since the start of 2005. The guilty plea follows a probe by the Labor Department's Office of Labor-Management Standards.

On May 12, Warren Demmin, formerly president of Local Lodge 449 of the International Brotherhood of Boilermakers, was sentenced in U.S. District Court for the Eastern District of Wisconsin to four months in prison, four months electronic monitoring and three years probation for embezzling $169.12 from the Sturgeon Bay union. The actual theft was a good deal higher, as evidenced by his previously having made $14,045.48 in restitution. Demmin, who also must pay a $100 special assessment, pled guilty in February. The actions follow an investigation by the U.S. Labor Department's Office of Labor-Management Standards.

Admirers may still call her "the queen of American labor," but Anna Burger (see photo) is now without a throne. Last week Burger stepped down as secretary-treasurer of the Service Employees International Union and as chairwoman of the SEIU-driven labor federation, Change to Win. Her resignations, which came on the heels of her announcement, wasn't unexpected to those who know her. Her boss and longtime ally, Andrew Stern, only a few months earlier had resigned as Service Employees president. And Burger couldn't secure the needed support from the union's executive committee in her bid to become Stern's successor. The top spot went to Executive Vice President Mary Kay Henry. Though publicly she welcomed Ms. Henry's ascension, privately she was planning her exit. That's the nature of power struggles in any type of organization: Odd person out leaves.

The divorce within the American labor movement five years ago is fast approaching reconciliation. Last Friday, the Laborers International Union of North America, or LIUNA, announced it would be rejoining the AFL-CIO following its spell as a member of a breakaway federation, Change to Win. The move is expected to be complete in October. This makes the third union to have journeyed home; last year former Change to Win members UNITE HERE and the Carpenters rejoined. The latest move speaks of organized labor's reenergized focus on securing congressional passage of the Employee Free Choice Act and other pro-union legislation. It also underscores the extent to which Change to Win from the start has been a hobbyhorse of Andrew Stern, who this spring retired as president of the rival federation's lead union, the Service Employees International Union (SEIU).

Whatever guises the discredited Association of Community Organizations for Reform Now, or ACORN, assumes in the future, taxpayers now have less reason to worry about being conscripted into funding them. This past Friday, a Manhattan federal appeals court ruled that Congress last fall had acted within its authority in deleting funds for the radical nonprofit community network. In overturning a lower court, the Second Circuit Court of Appeals determined the appropriations cutoff had not punished ACORN without trial and thus was not in violation of the constitutional ban on bills of attainder. The decision was partial; the appeals court sent the case back to U.S. District Judge Nina Gershon to decide whether ACORN's free speech and due process rights also had been violated. Even on those grounds, the plaintiffs' case looks shaky.

The transformation of Reverend Al Sharpton from street provocateur to civil rights eminence ranks as one of the more remarkable image makeovers in American public life. And mainstream journalism has played a central role. Anyone doubting as much should read the recent (August 2) cover story of Newsweek magazine, "The Reinvention of the Reverend." Written by Allison Samuels and Jerry Adler, the article is a fawning and misleading portrait of the Harlem-based preacher/politician. The piece doesn't quite beatify Sharpton. But it does make a highly selective use of information, some of it factually wrong, in stating the case for "the Rev," as he is commonly known, as a moral conscience of the nation. It also stands as an example, as if any more were needed, that "diversity" in the newsroom isn't about a diversity of opinion.

On May 12, Patrick James Brennan, former business manager and secretary treasurer of International Union of Painters and Allied Trades District Council 711, pleaded guilty in U.S. District Court for the District of New Jersey to three counts of embezzlement of nearly $25,000 in funds and other things of value from the Egg Harbor Township (near Atlantic City) union. He used the district council credit card to make $4,862.12 in unauthorized charges; converted to his own use a union-owned vehicle worth about $11,000, and issued himself unauthorized holiday bonuses between December 2004 and December 2006 totaling $8,652. The guilty plea follows a probe by the Labor Department's Office of Labor-Management Standards.