News Story

SEIU Fined Almost $200,000 Over Actions Tied To 2012 Ballot Proposal Campaign

Union suffers another loss related to dues skim, which took more than $34 million from home-based caregivers

The Service Employees International Union, the labor group behind the home health care dues skim, has been fined $199,000 for concealing that it bankrolled Proposal 4 in 2012, which would have locked a forced unionization scheme into the state constitution.

The fine for campaign finance violations is the second-largest ever levied in Michigan, according to a press release from the secretary of state's office. 

Between 2006 and when the dues skim finally ended in early 2013, the SEIU took more than $34 million from home-based caregivers, most of whom were taking care of family and friends.

Secretary of State Ruth Johnson announced this week that the SEIU will pay $199,000 in penalties for campaign finance violations surrounding Proposal 4. According to a press release from Johson, the "violations included commingling of funds; late filings; not identifying all accounts used; and not providing complete or accurate campaign statements. When combined with late filing fees already paid, the SEIU will have paid more than $205,000 in fines in connection with its backing of the failed ballot proposal."

The penalties are part of a conciliation agreement reached by the department with Citizens for Affordable Quality Home Care and Home Care First Inc. Citizens for Affordable Quality Home Health Care was the name of the campaign committee for Proposal 4. Home Care First was the shell corporation created at the start of the Proposal 4 campaign to shield the fact that SEIU was virtually the only entity providing funding for the proposal.

"We suspected all along that the SEIU was trying to hide its real intentions, which were to prolong the dues skim so it could continue to steal money from some of the state's most needy people," said Patrick Wright, director of the Mackinac Center Legal Foundation.

The Secretary of State's investigation of the Proposal 4 campaign resulted from an August 2013 complaint from Gideon D’Assandro of the Michigan Freedom Fund. In that complaint it was alleged that Home Care First filed its committee's statement of organization late to delay publicly reporting that SEIU contributions were the main source of support for the ballot question, which cost more than $9 million. Despite the late filing, the effort to hide what was really happening proved to be a charade that most of the news media saw through and speculated about during the 2012 campaign. 

Proposal 4 was devised by the SEIU in an attempt to keep the flow of dues it had been receiving from the Medicaid checks of as many as 60,000 home-based caregivers in Michigan since 2006. Michigan voters rejected the proposal by a wide margin, 57 percent to 43 percent despite their being almost no organized opposition.

In the mid-2000s the SEIU targeted as a potential source of revenue the assistance checks of Michigan participants in the federal Home Help Program. That program began in the 1980s and allows the elderly and disabled to be cared for in their homes instead of being put into institutions.

The SEIU's scheme was orchestrated in 2005 when Jennifer Granholm was governor. The dues skim featured a dummy employer, a mail-in stealth election, and the use of the term "home healthcare workers" to describe caregivers in the Home Help Program.

In 2011, the dummy employer, the Michigan Quality Care Community Council (MQC3), was defunded by the Legislature. It was believed that would end the forced unionization and the dues skim. But the SEIU funneled money to the MQC3 and kept it from folding so the union could continue to receive dues from the Medicaid checks. At one point the MQC3's executive director could only work three hours or less a month or she would lose her unemployment benefits.

In early 2012, Michigan Capitol Confidential began regularly posting articles about the dues skim and a skim tracker that tallied the SEIU's mounting bankroll from the skim. The skim tracker became a permanent feature on the Capitol Confidential website. In late March 2012 the Legislature passed legislation to outlaw the dues skim, and in April, Gov. Snyder signed it into law.

The SEIU then turned to federal court to keep the dues flowing into the union's coffers. The court ruled that the union could continue take dues from the checks as long as a collective bargaining agreement existed between the union and the dummy employer.

Sensing that the dues skim was nearing its end unless action was taken, the SEIU bankrolled Proposal 4. Backers of the proposal tried to get it passed by claiming it would create a program just like the Home Help Program, which had existed since the 1980s, and that it would create a registry to ensure the safety of those receiving care at home.

However, such a registry already existed and after the dues skim ended the state began operating it without having to add a single employee to do so.

Gov. Snyder then replaced the MQC3 board of directors with new members who would represent workers and taxpayers instead of the union. In December 2012, the new board members voted to disband the MQC3, which led to an end to the dues skim as soon as the collective bargaining agreement expired at the end of February 2013.

Dohn Hoyle was a member of the MQC3 board before Gov. Snyder replaced members. He also was treasurer and co-chairman of Proposal 4 campaign, and head of Home Care First. He also is executive director of The Arc Michigan, an agency that helps people who have developmental disabilities. The Arc donated $50,000 to the MQC3 in the spring of 2012.

Hoyle also called Robert Haynes, a retired Detroit police officer who with his wife takes care of their disabled adult son and daughter, an "idiot" while the Proposal 4 campaign was being waged.

Hoyle did not respond to a request for comment.

In a prepared statement for the news media Hoyle said, "While we disagree with the Secretary of State's portrayal of the campaign, we have decided not to challenge it. The mistakes that were made were a result of errors in filing of reports."

Zac Altefogt, spokesman for SEIU Healthcare Michigan (the SEIU affiliate most directly involved) did not respond to a request for comment.

The Mackinac Center Legal Foundation has filed a complaint against the SEIU to try to get back some of the dues that was paid to SEIU. That case is still pending.

The largest fine for campaign finance violations was levied in 2009 against three political fundraising campaigns and involved Mark Schauer's state Senate campaign funds, according to the secretary of state's office. The committees paid a total of $225,250 for excess contributions. Schauer is now the Democratic candidate for governor.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.