UPDATE: Meeting was apparently postponed until this morning and was to begin at 10:00.
1. Big Labor Meeting Will Discuss ‘the Greg Diamond Problem’
As the moon rises tonight, it won’t be on its way to becoming the beautiful ruddy “blood moon” that many of us enjoyed last night. But some people in the Building Trades, and perhaps other unions, will be out for blood at a special Executive Board meeting of the Orange County Labor Federation — and, as it happens, it’s mine. SEE UPDATE: MEETING WAS POSTPONED UNTIL WED. MORNING.
I have applied for exactly two institutional endorsements in my late-starting run for District Attorney: that of the Democratic Party of Orange County and that of the Orange County Labor Federation. Given my issue positions and the work I’ve done in support of both, that seemed appropriate. The former goes to a vote of the DPOC Central Committee on April 28. I did not receive the latter one. In fact, to my knowledge I was one of only two candidates I know of who were not running against someone endorsed by the OCLF Council who was specifically recommended not to receive an endorsement.
A vote of the 93 various locals within could have collectively overridden that decision, but a faction within OCLF — the Building Trades — were apparently working hard to ensure that that wouldn’t happen. To seal that non-deal, shortly before OCLF “Solidarity Dinner,” the Trades sent out a letter attacking me and threatening to withhold further support from the Democratic Party of Orange County if I were not removed as Vice-Chair. I composed what I thought was, under the circumstances, a pretty gentle and understanding reply. I came to the dinner anyway and enjoyed the chance to learn more about and applaud Labor’s accomplishments.
Next, the Building Trades called for tonight’s special Executive Board meeting to discuss the problem. I don’t begrudge that meeting; they have to do what they have to do. (Or, in this case, what they think they have to do.) But I think that it’s ironic — and I want to explain why. And I also think that it’s counterproductive — because it means that I have to do what I have to do — write pieces defending my actions and bringing the controversy further into light. Frankly, I don’t think that that hurts me as much as it hurts them.
2. The Construction Bonds for the Convention Center Expansion (Plus Another $120 Million)
Apparently, I didn’t receive that OCLF endorsement because of my actions regarding a $300 million bond sale put out by the City of Anaheim’s Anaheim Public Financing Agency (“APFA”) — or, as I believe it should properly be called, “The City of Anaheim.” The APFA was an Joint Powers Agreement between the Anaheim Redevelopment Authority (“ARA”) and, representing the City, the Anaheim City Council. When Jerry Brown, legislative Democrats, and a few honorable Republicans such as Chris Norby eliminated Redevelopment Agencies because they had become expensive boondoggles, the ARA’s powers devolved to a “successor agency” — the Anaheim City Council itself.
That means that the APFA is now an agreement between the Anaheim City Council and the Anaheim City Council — and I think that it is fair to conclude that the APFA’s powers cannot exceed that of the Anaheim City Council, no matter what hat the Council is wearing.
Does this mean that the APFA — meaning the Anaheim City Council — cannot take on bond debt for a purpose such as expanding the Convention Center? No, it does not. What it means is this: under the City Charter spelling out the powers of the City Council, the bond measure has to go to a public vote.
When the City passed the Bond Indenture on March 11, they did not put it on the ballot for a public vote. That means that it’s illegal. Both Cory Briggs, a Government Accountability attorney who has been done this particular path before, and Cynthia Ward, President of CATER (the Coalition of Anaheim Taxpayers for Economic Responsibility, for which I am General Counsel), warned the City Council — respectively in writing and verbally at Public Comments prior to their vote — not to put out these bonds without a prior public vote.
The Council did so anyway. Two weeks later, on March 25, I came to Public Comments and told them that they should hold off on the bond sale, slated for April 1, because they were going to be sued over this: either Briggs would sue them, or CATER would — or we both would. They did not reconsider and — so far as I know — the city did not inform investors of threatened litigation as required by law. (This needlessly put the City’s credit rating at risk.)
What’s really ironic about this is that had the Council acted just a week or two earlier, it could have put the issue before the voters on the June ballot. They actually had to time this so that they would miss the deadline to make that ballot — meaning that now, barring a special municipal election, it cannot be voted on until November. I didn’t make that stupid decision; they did. And, in doing to, they hurt the interests of the Building Trades and other unions.
Why don’t they want this to go before voters? It’s not clear, but I can think of two related reasons:
(1) They may think that the proposal may lose.
I don’t think that this is a realistic fear. Particularly, if they authorized only $180 million in bonds rather than $300 million — the Convention Center expansion is budget to cost only $180 million — I think it would be a slam dunk. If the voters oppose it, then I think that they should be able to prevent it — that’s democracy — but I don’t expect it. I personally favor it, as do the officers of CATER — and I’d do my part to help it pass, by endorsing such a ballot measure. Let me state that really clearly:
I endorse voters approving $180 million in bonds to fund Convention Center expansion!
So, if I’m really interested in killing construction jobs — then I’m not very good at it. I want to see workers in the Building Trades employed in construction and additional jobs for hotel workers and service employees. Why? Because that helps build the middle class and protects the national and local economy.
However — I do want to see it done legally. Partly, that’s because doing things legally tends to bring sunlight into the process — and that helps to prevent corruption. And I think that Anaheim can use more fending off corruption! And that brings me to the second reason why they may want this to come to a vote:
(2) They want to use the Convention Center Expansion as a way to get money for other purposes
If you’ve followed recent Anaheim politics, you’ll recognize the ploy: it has a lot in comment, for example, with using the threat of the Angels leaving as a way of giving Arte Moreno a 66 to 99-year lease allowing control of 150+ prime acres of property around Angels Stadium that he can assign to someone else for a profit — that “someone else” possibly (personally, I’d go with somewhere between “probably” and “definitely”) being someone associated with, and a contributor to and/or fundraiser for, the people on the City Council making the decision. (CATER is already suing the City of Anaheim over those agreements. Discovery in that case should help nail down which adverb I should use above.)
So, again: they’re asking to issue $300,000,000 in bonds. The Convention Center expansion itself costs only $180,000,000. They say that $20,000,000 will go to popular initiatives like building firehouses and doing street repairs — by the way, you don’t use long-term bonds to do street repairs that won’t last for decades — to toss some crumbs to the public.
And then there’s the other $100,000,000. What’s that all about?
You (and the City Council members) were supposed to be able to figure that out by reading this March 11 staff report (warning: it’s a PDF.):
http://www.anaheim.net/images/articles/5240/FinancingACCStaffReport.pdf
Good luck figuring it out. It appears to involve refinancing $45,000,000 in existing bonds from as far back as 1992 — that sounds reasonable, but it does raise certain questions — such as the use of “capital appreciation bonds” (much like “balloon payment mortgages”) and their implications for city finances that I’d want answered first. I’m also not sure about the intended use of the other up-to-$55,000,000 of bond indenture. I’d like to know. Wouldn’t you like to know? In an election, I would think that voters might demand to know.
And that may be the real reason why the City Council and City Staff — probably not so much the Building Trades, who just want that $180 million approved, but who themselves have nothing to hide — don’t want this to go to an election. If it happens quickly and quietly, no one has the chance to ask any uncomfortable questions.
CATER and I think that those uncomfortable questions need to be asked. That’s why we’re willing to sue. Not because we don’t like the Convention Center or the Building Trades — but because we don’t like corruption.
If that is the reason that the Building Trades want to take action against me, that’s a shame. It doesn’t speak well for them — and it contributes to the low opinion that many (not all) voters have of unions as out only for themselves, a stereotype that the OC Labor Federation itself has done a great deal to oppose. That’s why I have had a good relationship with the Labor Fed for years — because they represent Labor at its best.
So why didn’t they endorse me? Hey, let’s check the statement I gave them when I ran!
3. What I Said to the Labor Fed
I had an interview with the Labor Fed Executive Board, which out of courtesy I’m not going to discuss except that I said one thing that is an absolute truth regardless of what they do tonight: if elected, I will make protecting the right of workers to organize a top priority. I doubt that that’s the reason that I wasn’t endorsed. (I also doubt what other District Attorney candidates have ever said that to them. And, again, I would not be doing it for them, I’m doing it for all of us, who collectively benefit from the strong middle class accompanying unions. But I think that they’d appreciate it more than they apparently do.)
I don’t want to give out the questions to the written questionnaire I filled out — but I think that you can learn a lot about my positions from my answers. So here, in somewhat edited form, are the answers of a candidate for District Attorney of a conservative county who did not get the endorsement that his opponent, endorsed by the Republican Party (and, I think, Labor’s great enemy the Lincoln Club), did not even bother to seek. I’ve recast it as a speech that I would have been happy to give publicly — and in fact I still would.
My key priorities as District Attorney would be (1) cleaning up Orange County politics and business practices and (2) Ensuring proper respect for people’s constitutional and statutory rights – including the right to organize and collectively bargain. I’ll serve the interests of the public, not of corrupt interests and cronies. I’ll be guided by doing what’s right, without concern over what plays well with the voters. And, unlike his Chief of Staff (Susan Kang Schroeder), I’m not vindictive with people who disagree with me or don’t do what I want.I’d be happy to feature the OCLF endorsement on my campaign materials. I’m already in regular contact with the OCLF on important issues involving California’s workers; that would continue. When I ran for State Senate in 2012, I made “yes on 30, no on 32” one of the issues in my platform and pitch to voters. (I still have the “No on 32” bumper sticker from the Building Trades on my Taurus!) I also opposed Prop 187, even from out of state. I oppose any effort to make California a so-called “right-to-work” state. I wouldn’t seek the endorsements of the Lincoln Club or the OC Taxpayer’s Association, although if they wanted to endorse me in some election I wouldn’t care. (I don’t expect to ever face that situation.)
I support card check and other members to facilitate collective bargaining. I can’t recall a proposal on that topic that I’ve opposed, so long as it was constitutional. I’d urge employers to remain neutral during organization drives.
I’ve joined with Labor in rallies for worker’s rights in the past. I may not do so as DA if it seems inappropriate – but what I can do in that office to protect labor rights is more important. I would use my power to go after illegal efforts to stifle organizing, such as intimidation. In saying that, I’m not promising you anything that you don’t already deserve: enforcement of the law.
I support greater health care benefits for workers, including providing health care coverage to all Orange County children regardless of their immigration status. (Maybe our whooping cough problem would have been better with this!) I favor fully funding safety net services such as public hospitals, community clinics, and emergency rooms.
I’ve been involved in supporting the economic status of workers for decades — including NAFTA (to my detriment, as a political science professor in a conservative department) which it was first introduced and assigning one of the public first stories (on the blog I help manage) opposing TPP. As a plaintiff’s employment lawyer, I have opposed and will continue to oppose any efforts to weaken basic worker protections, such as the eight-hour day, guaranteed lunch breaks, and prevailing wage — and I have supported efforts to enforce labor law in the “underground economy” — including with my own clients.
As to general public policies, I oppose privatization of or contracting out government services except in cases of truly intractable corruption and truly incorruptible and efficient private alternatives – and I don’t think I’ve seen one here. I favor requiring contractors to pay prevailing wage rates to workers and developers agreeing to Project Labor Agreements (PLAs). I strongly oppose privatizing retirement benefits, including public pensions in California and Social Security benefits at the national level. I have brought claims against employers who intentionally misclassify workers as independent contractors to avoid providing benefits and workers compensation insurance — and I’d like to see harsher and quicker penalties for it.
And there’s more I could say along those lines. BUT, I’m willing to sue to prevent Anaheim from passing a murky $300 million bond indenture without following the legal requirement that it take it to a public vote — so … to hell with me — because that makes me an “enemy of Labor”!
Here’s the letter sent to organizations, from which someone leaked it to Dan Chmielewski, in case any readers missed it. I’ll let you know, after I find out, what happened at the OCLF Executive Board meeting tonight.
Yeah, I was wondering about that Big Hole in the ACC financing, too.
The total current debt is listed as $85 million, but $31 million is not eligible for refinancing. So what’s the other $45 million for? Of course the staff report was so unintelligible it’s hard to decipher, but it looks like the Kleptocracy has a nice shiny toy to play with.
The co-mingling of outside projects and non-capital expenses should have absolutely nothing to do with the Convention Center. And the whole scam hinges on the nonsensical “cost avoidance” numbers that somebody seems to think they can fool us into believing is some sort of obligation.
Of course I’m not surprised that the trade unions don’t mind being part of the scam. In fact it looks like this Adams character is a card carrying member of the Kleptocracy.
I can’t hang out here much today, but this is an answer to you and the rest of the first four comments.
I wish that the trades were acting differently here, but they’re simply nowhere near as morally culpable as the people in and around City Government who are behind these deals. Whatever you think of labor officials (and I’m betting I like them a lot more than you do), their job is to represent the interests of workers — which means getting jobs. When they are told that “you’re only getting jobs if we do it our way — which makes us politicos and our supporters rich,” they aren’t in the same position as others of us to refuse — because the moral choices that they make gamble with other people’s livelihoods. And these days, those “other people” in the Trades are hurting.
So I think of them as being like a family from whom kidnappers are demanding ransom: it’s better for society if they don’t pay, because paying only encourages more kidnappings — but I can’t really blame them for paying. I blame the kidnappers — who, in this analogy, are the people putting them in a morally untenable situation. It should not be up to labor leaders to refuse to go along with lawbreaking politicians.
That still doesn’t make my situation comfortable, of course.
So how come this Adams guy is endorsing Kris Murray? That didn’t come cheap.
Because he knows who can release the hostages.
Maybe he knows that there really are no hostages. That he just needs to make it look good for the folks back home. As you pointed out the deal could have been done on the up and up. To “progressives” it should be quite alarming that construction labor would so easily climb onto the kleptocratic bandwagon. My guess is the hard hats don’t give a damn about CEQA, either.
Of course there are hostages. The unions have no say in how these deals are structured; they just know that if they go out and sell it, there will be jobs — and if they don’t, there won’t. Yes, it could have been done on the up-and-up — but not by the Building Trades themselves.
Useful idiots.
Well, I presume that I’ll probably receive some sort of contact about the results of last night’s meeting; if so, I’ll let everyone here know how useful they were.
Let’s face it: labor, especially trade labor has been the most unruly and selfish of FDRs children. A huge share of them went for Wallace and Nixon in ’72 and Reagan in ’80 and ’84; and W probably got a fair share, especially in ’04.
And yet who else focuses directly on the economic health of the middle and working classes? Who else stands so clearly against hoovering up all of the economic gains of the past 30 years into so few hands?
I’m disappointed that Labor doesn’t support Democrats more (as you presumably are not) — and I’m disappointed that Democrats don’t support Labor more. When it comes to existential issues — and Prop 32 was one — I am completely on their side. It’s only when their understandable desire for jobs leads them to work with (or accept the crumbs tossee their way by) kleptocrats that I can’t support given projects. I make no apologies for that.
GD: “When it comes to existential issues ..”
I don’t think that the Building Trades get into existentialism very much. Although, I seem to recall that at one time Martin Heidegger was president of the Steamfitters union.
Here’s my bet: every time the Kleptocracy wants a big giveaway Mr. Adams and his troops will mobilize to pack the chamber.
Remember Harry Sidhu’s mantra? Jobs, jobs, jobs.
Sometimes it’s a lonely road (but well worth it) to speak your mind and go against the crowd when you believe something doesn’t sound right. This is an example of why I don’t join “groups” because members think we should go along with everything those “in charge” want done.
They maybe started out with good intentions but many (especially political) groups seem to turn into cults or at the very least one is expected to give up their critical thinking skills and join the “group-think.”
I am voting for you as DA because you speak up and do not fold under pressure.
Someone once said “you can be right or you can be liked” in the case of Dan C. He has repeatedly proved to be neither.
Classic. But he and Cunningham like each other.
My dad, the Puerto Rican version of Mr. Rogers, was a member of NYC’s Local 32B-J – the property services union. Shame on this union for trying to put lipstick on the Anaheim/Garden Grove mafia-like corruption pig. Transparency is a bad thing you say.
I have long wondered about how these massive projects affected our bottom line in comparison to pension obligations. You want a real ticking time bomb, go looking at Anaheim’s Bond Obligations. They are using some funky financing instruments that include Capital Appreciation Bonds, which accrue compound interest over decades until a balloon payment is due! Example: in 1997 Anaheim sold $500M in bonds for a $200 M Convention Center expansion, a parking garage (Mickey and Friends) and street improvements that paved the way (literally) for the expansion of Disney’s 2nd gate at Cal Adventure, Downtown Disney, Grand Cal Resort hotel, and when we are done paying that $500M off we will have shelled out ONE AND A HALF BILLION DOLLARS. We are paying for it by diverting ALL sales, property and bed taxes off the above named Disney improvements, out of the General Fund and into the bonds. Those payments increase into ridiculous amounts toward the end, what we pay today is NOT what we pay in 10 or 20 years.
That is one of MANY bonds issued for improvements that won’t last anywhere near the length of the bond payments, much like the neighbors sucking the equity from their homes to go on vacation…and if you look across the street the neighbors aren’t in that house anymore, are they?
To get around those inflated numbers many cities are using even worse financial instruments like “swaps” that have been the utter destruction of cities like Stockton and Detroit. In fact we now know that those bonds and the funky financing behind them were worse for the cities than the public employee pensions that politicians love to jump all over!
http://www.4thmedia.org/2014/01/09/wave-of-us-municipal-bankruptcies-caused-by-wall-street-predatory-interest-rates-not-pensions/
But when the ponzi scheme implodes, the banks funding those notes are protected, cities do not get out of paying them. And of course the building trades got theirs on the front end, taking home paychecks that taxpayers had to BORROW to pay out! Instead cities default on their pension obligations, leaving our librarians and clerks left holding the bag, without Social Security and now without their pension, or with a percentage of pension bought out in pennies on the dollar!
http://urbanlawjournal.com/city-governments-and-predatory-lending-revisited/
I would very much invite these fine gentlemen to reconsider their position against Greg Diamond, as he is simply doing his job for a paycheck, just as the Building Trades are trying to do. If Greg Diamond is expected to review and endorse the moral rightness of his clients’ projects prior to accepting the work, then I would challenge the Building trades to do the same. We all see the wisdom in expanding the Convention Center, and the unions may recall that I got up and spoke as the ONLY person in the room in favor of the expansion who was NOT directly benefitting financially from it. I was also the only one in the room who asked to ensure that union workers in the room expecting jobs would be assured of jobs, something their precious Kris Murra and Jordan Brandman failed to do for them. But we cannot afford to do it AT ANY COST. Look around Anaheim, we are a city in distress, desperate for investment in our infrastructure outside of the Resort, and none of that will happen if bad funding choices bankrupt our city.
I challenge the Building Trades to live by the standard they have set for Dr. Diamond, and endorse the underlying deal points of their clients’ positions. They can begin by putting their own pensions into a fund that relies upon Anaheim bond payments for its ultimate health, and stand in solidarity with their union brethren at AMEA who will be hosed for their pensions if the house of cards falls down.
http://ourfinancialsecurity.org/2013/04/municipal-finance-preventing-exploitation-of-taxpayers-and-the-public/
I do not understand finance well enough to know in total how deep Anaheim is in, and I am waiting on a public records request for those numbers. But given the track record of other municipalities in similar situations, and given the odd holes in the totals being borrowed here, is it not prudent to wait and make sure we have those answers, something we could be doing leading up to the election, while doing this within the City’s Charter?
Or would Jim Adams like to explain to Brian Beger why it is OK to screw his people out of pensions tomorrow in exchange for paychecks today?
*Yep…..we have those for our $142 million dollar (empty) Civic Center Complex…here in Newport Beach. “Someday our Prince will come….” isn’t that what they say? Dr. Diamond is too much. We are very proud of him. Heck, you never know…he might even get 40% of the vote….if he keeps this up.
*Woody Woodpecker…now there’s a rare bird…would get 40% against Rackaukas. We remember back in ’90…Fullerton’s Don Bankhead got 45% against Brad Gates!
Zenger – I cry foul.
You are just being mean to Diamond.
That attitude is what got me fitted with Vern’s speech strangulation collar.
Watch it buddy or the speech police will come and ram down your door.
Making a precis tonight. Will send it for your ok to post tomorrow after 12.
I know labor – labor is not impressed.
I have had several bad personal experiences with Union Labor. I also had a grandfather that was part of the Pendergast machine in Kansas City in the 30’s. My mother in NYC in the 40’s, I’ve heard way too many stories about how things worked. I’ve witnessed some things over the years, I wished I hadn’t in the politico kabuki. It’s so depressing when you find out how the sausage is made and why it ain’t Kosher.
None of this surprises me, it is the beast it is, neurotic and aggressive and it’s hungry.
I still believe way too much money is spent on things govt has no business in funding. I’m certainly in favor of public funding done legally and prudently, I would like to see a lot less of it.
I have wondered on several of the financing bonds who wrote them, then who’s the idiot(s) that approved them. I swear most of the people that get elected must not have any clue about financial solvency and fluidity much less balance.
Stick to who you are Greg, be honest and be fair. We don’t agree about a lot of things, but honesty is a must even when it’s not the popular thing to be or do. Yes, you might piss me off, but you might also get my vote.