Union Money Helps 'Dues Skim' Stay Alive

A law has been passed to stop the Service Employees International Union from taking money from home health care workers, and the dummy employer that was created to facilitate that action has been defunded.

Yet money is still being taken and the dummy employer is still in operation thanks to a donation of at least $12,000 from the SEIU to keep the scheme alive.

Emails obtained through a Freedom of Information Act also show that the executive director of the dummy employer, known as the Michigan Quality Community Care Council (MQC3), works from her house in Okemos but uses a different non-profit's address in Lansing as the mailing address for the MQC3.

Additionally, Susan Steinke, the MQC3 executive director, can only work three hours or less a month so she can continue to qualify for unemployment insurance benefits.

All this comes, seven years after the SEIU pulled off a scheme to divert taxpayer dollars to its coffers. The union targeted the Medicaid checks that are sent to help those who care for Michigan's homebound patients. The vast majority of those who were unionized are family members or friends taking care of loved ones and many of them had no idea they were being forcefully unionized.

To date, more than $30 million has been taken from workers despite plenty of actions that should have stopped the flow of money.

- In 2011, the legislature defunded the Michigan Quality Community Care Council with which the union had its collective bargaining agreement.

- The MQC3 no longer claims it is the employer of the home health care workers. Without an employer, the union's contract conceivably should have been voided.

- In April, Gov. Snyder signed the legislation designed to stop the “skim.”

Unraveling the bureaucratic and legal tangle created by the original scheme is complicated and has contributed to its continuance despite the law being in effect.

A major roadblock appears to be that the Snyder administration views the collective bargaining agreement between the union and the dummy employer, the MQC3, as valid. That means language in the contract, such as a timeline on a notice of termination, is being enforced.

"This arrangement was illegal from the beginning," said Patrick Wright, director of the Mackinac Center Legal Foundation. "These providers were never public employees. Furthermore, a public employer is not a three-hour a week entity operating out of a unemployed woman's basement that takes funding money from its so-called adversary in the collective bargaining process. You can't have public-sector collective bargaining when there are no public employees and no public employer."

The stated purpose of the creation of the MQC3 was to maintain a home health care registry, but the recently obtained emails also show that the unionization drive was a key component. In addition, the emails suggest maintaining this registry could be done by one or two state employees in any appropriate department or agency.

Based on the emails, facilitating the union dues flow took up a good deal of MQC3 staff time and focus.

The emails show that on October 24, 2011, Steinke provided an update to the MQC3 board of directors on how the MQC3 would continue to function. In it, she reported that MQC3 had received $22,000 in donations since Oct. 1, 2011, the date that state funding for MQC3 ended.

She said those donations were from: The Arc MI $5,000; Autism Society, Michigan Chapter, $1,000; Area Agencies on Aging Association of Michigan, $1,000; MDRC $3,000; and SEIU $12,000.

Steinke went on to explain how MQC3 would continue to operate (referring to herself in the third-person). Incoming calls to the agency were forwarded to a Boost Mobile phone belonging to someone named "Cathy." Cathy McRae was an MQC3 employee. The email and website for the MQC3 were moved to an outside service.

Given the millions of dollars the SEIU has taken in, the breakdown of hours worked for the MQC3 is minimal. Steinke originally worked five hours a week for the MQC3, but that later changed to a maximum of three hours a month, according to the emails.

“Our recommended and current staffing is Cathy at 20 hours a week, Dave at 5 hours a week, and Susan at 5 hours a week," one email read. "Cathy will handle phone calls, consumer intakes and financials. Susan will be handling criminal history checks, communications with DHS and whatever else needs doing. Dave [Cohoon] will be keeping the Registry running, the website up to date and managing the dues and bi-weekly provider files."

“...Speaking of Dues, staff has received a number of concerned inquiries from Board members and Union staff about whether we will be able to get the dues check to SEIU. The check is easy; the bigger question for staff was whether we can manage the dues file transfers. As you all know, there are legal issues that require the smooth and consistent transfer and management of dues files. Fortunately, with Dave's agreeing to stay on as part-time staffer, we have our end covered. And, yes, rest assured — the dues check has been mailed.”

Steinke updated the MQC3 board again on Dec. 12, 2011. Once again the emails show a preoccupation with facilitating the dues flow. In addition, Steinke recommended having the Michigan Department of Community Health (DCH) take over responsibility for the dues.

Interestingly, she did not recommend the DCH take over the registry because if it had done so, there would be no reason for the MQC3 to exist.

When asked why that recommendation wasn't made, Steinke didn't mention the registry.

"We thought DCH would have to take over the dues function at one point," she said. "Fortunately, we recieved funding in time to prevent that from being necessary."

In the Dec. 12 email Steinke wrote:

“As anticipated, we have run through all of our funding as of today. I have laid off Cathy McRae effective today and Dave Cahoon effective December 17th. I have already worked all of my hours for December. Dave will be able to do one final transfer of dues files which go to the State and contain the information regarding which Provider receives which deduction. After that, I will recommend that SEIU contact DCH's Chief Deputy Director to figure out a process for the dues information to continue passing back and forth until we secure more funding.”

On Feb. 2, 2012 Steinke notified the board that the registry might need to close temporarily. She pointed out that the staff worked only 20 hours a week and explained that she could only work 3 hours a month.

“Your (the MQC3 Board) staff only work 20 hours a week (Cathy) and three hours a month (Susan). Cathy's consumed by the Registry and Susan simply does not have time. If Susan works over 3 hours and still claims unemployment, she will be violating unemployment laws.”

It should be noted the emails also show that Steinke reported that the union offered to take over the consumer file. To her credit, she declined to do so because it would not be proper.

For the purpose of perspective, the registry is completely voluntary and, after existing six years, contained only 933 names. According to the MQC3 it has been used by less than 3,000 people seeking information. Yet as many as 60,190 so-called home health care workers have had dues taken from their taxpayer-provided checks.

Note: The Arc MI is a group that supports “children and adults with intellectual and developmental disabilities.” MDRC is a nonprofit, non-partisan social policy research organization.