• authored by Members for Democracy
  • published Sat, Feb 21, 2004

Men Who Sleep With Wolves: Conspiracy or Stupidity?

If you run with a pack of wolves, are you destined to eventually become one yourself?

If you are a labour leader, can rubbing shoulders with anti-labour corporate gurus affect your perspective or your integrity? Do you start thinking like one of the big boys once you've been hanging out with them long enough? And once you are thinking like them, do you start acting like them?

These are questions that need to be addressed in relation to the leaders of Canada's mainstream labour movement before they piss away all our money and propel us into a future that resembles the 19th century.

In 1872 the government of Prime Minister John A. Macdonald introduced the Trade Unions Act. Canada's first piece of pro-worker legislation, the Act recognized that when workers banded together to fight for better conditions, their actions were not to be considered an illegal conspiracy.

The Trade Unions Act was Macdonald's response to the labour turmoil of the times. Many Canadian workers that year were supporting the "Nine-Hour Movement" whose aim was to reduce the workday to nine hours from as much as twelve. That same year, 1,500 workers marched through the streets of Hamilton, and Toronto printers went on strike against George Brown, founder of The Globe. Workers wanted to be treated like they were more than just interchangeable parts in the machinery, like gears and levers, to be casually replaced when they wore down.

The businessmen of the late 19th century were not amused by the passage of the breakthrough labour legislation. The decriminalization of collective action led to an upsurge in activism across the country. If workers' activism could no longer be considered a conspiracy to restrain trade, the bosses got busy conspiring to restrain workers' militancy. A wide range of methods were employed to discourage working people from asserting their rights: Economic terrorism - arbitrary firings and the blacklisting of labour activists - along with physical violence were used to deter workers from forming unions. Where unionization could not be avoided, company unions and yellow dog contracts were implemented to provide workers with the illusion of representation. Their actions were supported, sometimes quietly sometimes vocally, by governing administrations at both the federal and provincial level. But having accessed the power of collective action working people could not be restrained.

In the decades that followed, these conspiracies of bosses were banned and more substantive rights were legislated for workers and their unions. Organized labour went on to make great gains. The fanatical anti-union behaviour of the turn of the century businessmen and their political enablers seemed like a throwback to some distant dark age.

As the 21st century unfolds something's very wrong. It seems as though we are drifting backwards to the distant dark age of conspiring businessmen and government helpers rather than moving forward to something better.

Over the last two decades the anti-labour corporate gurus have been successful in rolling back the clock. Progressive laws that protected workers' rights to collective action have been repealed in many jurisdictions. At the bargaining table, concessions are being wrung from workers that, in many instances, make it hard to tell a union job from a McJob. Economic terrorism is employed with enthusiasm to discourage protest. The mainstream labour movement with all of its leaders and its considerable resources seems impotent in the face of the onslaught.

While the reasons for the assault on workers' livelihoods and, by extension, their lives, is the product of many factors, one that needs to be discussed openly and publicly is the complicity of mainstream labour leaders in the businessmen's exploitive agenda.

After two decades of telling union members that partnering with business and collaborating with employers is good for them, it's time that union members ask their leaders for the proof. It's not likely that they'll get any because there isn't any. Are the leaders likely to do an about face and rethink their strategy of business-appeasement? Not likely. From all indications, the labour leaders have become so cozy with the business community that they're little more than businessmen themselves. They've adopted the values and the principles of free enterprise and - just to paper over the gaps between business interests and workers' interests - have swallowed a heaping dose of business mythology to get them through the night. Conspiracy or stupidity? It doesn't really matter; the end result is the same. Workers are getting screwed and can no longer depend on the lords of organized labour to defend them. Are we being too harsh?

Let's take a look at the troubling case of Canadian Labour Congress President Ken Georgetti:

Nowhere have the neo-cons been more brazen and aggressive in their efforts to bring the 19th century to 21st century workers than in British Columbia, where the government of Premier Gordon Campbell is proceeding in leaps and bounds to make the world a better place for profiteers. Since Campbell's election in 2001, the floor under organized labour in BC has shifted through sweeping changes in legislation that other neo-con administration in Canada has had the balls to try.

Reaction to the Campbell administration's efforts has been intense. Various unions have expressed outrage and a number of community-based groups have sprung up to protest the rollbacks in workers' rights. The Canadian Labour Congress and the BC Federation of Labour have condemned Campbell's anti-unionism in media releases and sermons from the podium. What is missing, however, is any concerted action on the part of the leaders of organized labour. On the ground, workers are spoiling for a fight. Many grassroots groups are lobbying for a general strike and other forms of direct action. So far, they have been frustrated by the leaders' reticence about such things. There is a lot of talk but no action.

And as the leaders fiddle, the workers continue to get burned. Rather than putting out the fire, the leaders tell the workers to stop screaming. Thousands of health care workers have been replaced by cheaper alternatives. The cheaper alternatives are covered by awful yellow dog contracts signed by a union affiliated with the CLC and the BC Fed. When the laid off workers began complaining, CLC Pres Georgetti chastised them for calling a yellow dog a yellow dog. Striking ferry service workers found themselves on the receiving end of some finger-wagging by the mainstream labour leaders for refusing to hold still when their right to strike was swept out from under them. The Canadian Labour Congress - especially - has done little to stand up to the onslaught by the Campbell gvoernment. Georgetti, apart from his verbal condemnations of the BC Premier and his periodic exhortations to the faithful to get on the anti-privatization bandwagon, has done nothing of any real substance to fight back.

Come to think of it, the King of Canadian labour hasn't done much to stem the tide of concession bargaining and McJobifcation that has evolved during his tenure as CLC Pres or his previous gig as head honcho of the BC Fed. Indeed, as recently as last month, Georgetti was defending concession bargaining and as something that helps businesses stay competitive. As workers get screwed by the Campbell government, Bro_Ken is busy rubbing elbows with Campbell's business cronies and sitting on their boards of directors and helping to pump union members' pension money into their ventures. Conspiracy or stupidity? Or is it intelligent militancy?

Georgetti and his crew of mainstream labour leaders would tell us that it's the latter. We don't think so and here's why:

"Intelligent militancy" is a concept Georgetti discovered during his time as head of the BC Fed. In our view, it's a bogus concept that's been used to facilitate a decade of coziness between business unionists and businessmen that has netted a lot of goodies for the suits in both camps and nothing much for millions of working people whose resources they've been playing with.

This biographical blurb about Ken Georgetti on the web site of the Organization for Economic Cooperation and Development sheds some light on what intelligent militancy was supposed to be about:

Part of a new generation of Canadian union leaders rising to the challenge of a changing economy, Georgetti has long advocated what he describes as "intelligent militancy". This proactive approach makes use of a wide range of strategies and tactics to achieve labour's goals. For example, as B.C. Fed President, Georgetti in 1987 led unionized workers in British Columbia in the largest one-day general strike in Canadian history, followed by a successful five-year boycott to protest oppressive labour laws and institutions established by the then Social Credit government.

It sounds impressive but it's a little misleading. The general strike and boycott mentioned in the blurb are forms of protest... of a kind that we did not see much of after Bro_Ken settled in at the BC Fed in the late 1980's.

The best that we can make of it is that Georgetti's intelligent militancy was a concept whereby resort to direct action by workers would be significantly reduced in favour or other, more genteel activities, like pension fund investing and venture capital lending. Through intelligent militancy, protest would become largely symbolic, public relations events planned and choreographed by the leaders. Rallies would be media relations events and photo ops for union leaders. The rank and file would still be invited of course but they would more like props for the leaders and less like people expressing their views.

Of course this would make public protest ineffective as a tool for advancing the interests of anybody, but that was OK because by the early 1990's the biz union leaders who controlled the Canadian labour movement were getting pretty tired of protesting and protesters. Advancing the interests of workers by playing with the capitalists, with workers' money, and by the capitalists' rules was a much more appealing strategy. Their intelligent militancy enabled them to choose from a range of strategies and they didn't waste a lot of time deciding which one suited them the best. As Bro_Ken established himself as a mover and shaker on the Canadian labour scene, playing with members' money became all the rage among mainstream union leaders.

A leaky theory evolved to support this new direction in unionism that went something like this: We need the capitalists. They create jobs and, by extension, union members. The capitalists are turned on by money. The more money they have, the more jobs they create. The more jobs they create, the more union members we get. If we get more union members we'll be bigger and stronger and make a better world. We've got piles of money sloshing around in our pension funds. If we lend it to the capitalists, they can use it to be more competitive and more profitable. In return they'll create jobs which will create more union members and bigger stronger unions and a better world. We can even ask the capitalists if they'll be nicer to people and their communities in exchange for borrowing our money.

And with that - millions upon millions of dollars of union members' dough were poured into the pockets of capitalists. Union pension funds got into the real estate biz, loaned money to people that conventional lenders wouldn't touch with ten foot poles and started their own investment funds offering tax breaks to investors and loaning workers' money to businessmen who needed a break.

The business guys did well out of it. Today nearly 40% of all venture capital in Canada is found in Labour Sponsored Investment Funds. A lot of union leaders did alright out of it too. They sit on Board of Directors of companies that lend the money and invest the money and borrow the money. What's the payoff for the workers whose millions have been loaned out? It's hard to say. How many jobs were created remains something of a mystery. How much social responsibility was infused into the corporate culture is an even deeper mystery.

The cash nexus between labour leaders and businessmen, however, is what "intelligent militancy" was really all about. Not all unions or their leaders were supportive of the notion that workers' interests could be advanced by giving their resources to businessmen but the business unionists got on the bandwagon and never got off. Their eagerness to wheel and deal and rub elbows with other moneymen is at least partially responsible for Bro_Ken's rise to the throne of the Canadian labour movement in 1999.

During the 1990's Georgetti's intelligent militancy won him many supporters among the leaders of the mainstream unions. He could turn on the angry rhetoric for the little folks - at the right times, and shmooze the business crowd the rest of the time. He set up a string of businesses to help them invest their members' money in businesses.

Georgetti once chaired a holding company, Working Enterprises Limited, which is owned by six unions and the BC Federation of Labour. Working Enterprises, in turn, owns an insurance company, Working Enterprises Insurance Services, which is one of the largest in the province behind the BC Automobile Association. The holding company also owns a large travel agency, called Working Enterprises Travel Services, which has an office in Ottawa and which books union travel across the country. Another subsidiary, United Capital Corporation, is a full-service brokerage firm that manages $400 million, including several union funds as well as individuals' investments. Socialist Action

While he was at it, he helped infuse the NDP with intelligent militancy as well making the party of labour, the political appendage of business unionists. "Georgetti is at heart a conciliator and adopts this solution for pragmatic resolutions of seemingly intractable battles", yet another biographical blurb proclaimed.

His pragmatic use of union members' pension funds won him acclaim in business circles. Business guru Peter Drucker called it "pension fund socialism". Even Karl Marx would be happy with these schemes, Drucker opined, since in effect, workers own the means of production through their pension funds.

We doubt that Marx ever envisioned the proletariat rising up to line the pockets of the business class but that's a whole other discussion. Whatever Georgetti's intentions were and whether he really believed that "pension fund socialism" was going to benefit the community of workers, it hasn't. The highway to hell is paved with good intentions. Georgetti and his crew of biz unionists should know that that by now since they helped to pave it. But it doesn't seem to bother them that their leaky job creationist theory is now so full of holes that a fleet of trucks could drive through it. They just keep getting in deeper and deeper with the business crowd.

The case of the Bamberton project provides a great example of what happens when biz unionists float high-minded principles as justification to play with money, where the money ends up and who it benefits.

The Bamberton project was a plan that evolved in the late 1980's to construct a model community on the site of an abandoned cement works on Vancouver Island. The objective was to build a town for 12,000 people over a 20 year period which would "serve as a model of new urban design and ecological sustainability, with a relatively self-contained local economy". The project would be financed by four major union pension funds (UFCW, Carpenters, IWA and Telecommunications Workers) which between them put up $30 million dollars for the venture.

The project drew international interest but never got off the ground. It quickly became mired in a multitude of issues that included conflicts of interest on the part of the pension fund administrators (who were directing monies into companies where they sat as directors). In 1997 it was officially declared dead. By that time about $24 million of the original $30 million put up by the union pension funds had been spent. The pension funds turned the whole thing over to a Vancouver-based property development firm called Greystone Propertie, Ltd. which will develop it along more conventional lines (i.e., will build properties that will be sold on the open market).

Greystone Properties is a business that also had socially responsible roots. It was started in 1989 as VLC Properties by the then Mayor of Vancouver, Gordon Campbell and BC Fed head Ken Georgetti. VLC got access to some $48 million worth of public land and about $2 million worth of taxpayers' cash for a scheme to build affordable housing. The affordable housing never materialized. By the mid-1990's the original plan morphed into a scheme, promoted by Geoergetti, to build a Las Vegas style casino in Vancouver. That idea was eventually killed by the provincial government and VLC morphed into Greystone. Greystone's stated goal was "to make money for the pension funds through ethical real estate development".

In a 1994 interview with the Vancouver magazine The Georgia Straight, Georgetti, then President of the BC Fed and a director of Greystone articulated Greystone's high-minded mission: "We're trying to break the cycle of this fiscal roulette that money managers and financiers keep playing with capital, where its ultimate goal is just seek a return and not seek productive things for the economy or to create jobs".

And Greystone developed a lot of real estate - with millions of dollars of union members' pension money. How ethical was all this development? What productive things did it generate for workers? Nobody's had much to say about that.

Greystone was a real estate development business like any other. There was nothing especially ethical or socially responsible about it that we can see. It was a company whose objective was to make money. The only thing that distinguished it from other property development firms was that it was funded entirely through union members' pension funds.

Today, Greystone is known as Concert Properties Limited. According to itsweb site, Concert:

"... is the largest construction company in Western Canada. Its real estate activities include the development of residential condominiums for sale, rental apartments, resort properties, seniors' residences, as well as industrial and commercial properties for lease and sale. The company has also provided a broad range of construction and development management services to its shareholders, government agencies and other real estate clients.

Since Concert's creation in 1989 it has completed developments in excess of $750 million and built close to 5,000 rental and condominium homes (includes projects currently under construction and projects managed for other parties). The company has assets in excess of $500 million and shareholder's equity of approximately $250 million."

Concert Properties'Board of Directors reads like a who's who of BC's mainstream labour movement. Representatives of the UFCW, IWA, Teamsters, Telecommunications Workers, Pipefitters, Carpenters and Electrical Workers are directors of the company as is Ken Georgetti.

But the guys who hold the two key positions of Chairman of the Board and CEO at Concert Properties are two old cronies of BC Premier Gordon Campbell, Jack Poole and David Podmore. In addition to their long-standing ties to Premier Campbell, Chairman of the Board Pooleand CEO Podmore are big players in BC's business community. Poole is also a big backer of Premier Campbell and has played an instrumental role in his political career.

Poole, Podmore, Georgetti and Campbell all go back a long way. Now they have yet another business venture on their dish: Podmore and Poole headed BC's bid for the 2010 Olympic Games and are directors of the 2010 Olympic Bid Corporation (Poole is the Chairman and CEO) along with CLC president Ken Georgetti and Tony Tennessy, past president of the IUOE Local 115

The Olympic project is being touted by Georgetti and his biz unionist crew as another great job creation program. Among mainstream labour leaders, the salivating has already begun:

"It's refreshing to see Sun editorial writers validate a point that the labour movement has been making for a long time: Building a truly modern economy only really happens when governments regard labour as a partner rather than an obstacle to be overcome." BC Federation of Labour President Jim Sinclair, recently in the Vancouver Sun.

Let's hope there's something in it for workers other than the use of millions of dollars of their taxes and their pension funds. Campbell has committed hundreds of millions of taxpayers' dollars to fund the Winter Games as well as any cost overruns. Concert is billed as one of the project's "community contributors".

Concert however, is mostly financed by your union pension funds. The rationale for pumping union members' money into this latest mega venture is that it will create good union jobs. Presumably the union presence in the capitalists pockets will also make it ethical. We doubt it. If history teaches us anything, the Olympic enterprise will be another trip to the trough for a lot of business guys with their union partners along for the ride. The rich will get richer, the public will get fleeced and the union leaders will move on to the next adventure in pension fund socialism, continuing their evolution from business unionists to third rate businessmen. Is it any wonder that there seems so little appetite for direct action on the part of labour leaders like Ken Georgetti against the Campbell government's anti-labour agenda?

Conspiracy or stupidity? Maybe our labour leaders have been sleeping with the wolves for so long that they've become wolves themselves. Or maybe our leaders think that their den mates are, like themselves, just cuddly old sheep in wolf costumes? One way or the other, it's time to stop calling them our leaders and letting them control our money.

The case of the Olympics example is particularly egregious since the project originated under the NDP in a bizarre partnering with some of the more rapacious corporate hucksters of the province. Can the NDP explain how two of their key players, Ken Georgetti and Tony Tennessy sit so comfortably on the board of directors of Concert Properties, a company of many faces, self promoters of mega real estate developments and high profile Olympic boosters. Isn't it odd that Concert's president is none other than Jack Poole, one of the men who put Gordon Campbell in office? The BC Green Party

"I think in the end people act in their self interest, and I think it is very much in the self-interest of the Olympic movement to bring the Games to Vancouver." Poole from Van Sun article February 18, 2004

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