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by Lillian roberts

Executive Director, District Council 37 AFSCME, AFL-CIO

Call for accountability

Public Sector Union Tells Congressional Leaders Contracting Out Endangers Jobs and Services
ecently, District Council 37, of the American Federation of State, County and Municipal Employees (AFSCME), convened a Congressional briefing at union headquarters. Our union which represents 121,000 public employees who help make New York City run, wanted to explore the connection between how our city spends federal tax dollars, its failure to adequately monitor the contracting-out process and the impact these issues have on public services and the jobs of the men and women who provide them. Ours was, I believe, the first-ever union-sponsored congressional inquiry into runaway contracting out and the inadequately monitored use of federal funds. We felt the time was right, especially with the mounting attacks on the civil service system, the increase in high-profile scandals involving the theft and waste of hundreds of millions of tax dollars, and the pain and suffering caused by the layoffs of thousands of city employees. At our briefing, we were joined by four members of the New York City Congressional Delegation Congress members Carolyn Maloney, Edolphus Towns, Jerrold Nadler, and Yvette Clarke as well as some 20 state and local politicians, public-policy experts and top union elected leaders and staffers. The discussion occurred against the backdrop of stories revealing how the Bloomberg administration has been tarnished by criminality and waste associated with city contracts, including the CityTime fiasco that New

Our federal, city and state elected officials praised District Council 37 for acting as a watchdog for taxpayers and fighting to protect the civil service system, which for decades has provided a pathway to the middle class. The Congress members attending our briefing were alarmed at the endemic corruption and they pledged to conduct an inquiry and take steps, including setting up a contract caucus in the U.S. House of Representatives, to prevent the improper spending. Congress member Jerrold Nadler called upon DC 37 to work with the delegation on legislation that would allow unions and individuals to sue the city if they uncovered improper and illegal contracting practices. According to AFSCMEs Director of Legislation Chuck Lovelace, a compelling case exists for the federal government to monitor the city because Washington allocates millions of dollars to New York City every year. At our Congressional briefing, DC 37 Associate Director Henry Garrido, who has led the unions eight-year white paper investigation to expose contracting abuses and identify potential recurring revenue sources for Outraged abOut cOrruptiOn

York City Comptroller John C. Liu described as perhaps the greatest instance of municipal corruption in the citys history. Over 12 years, the budget for the CityTime automated payroll project mushroomed from $68 million to over $700 million. Today, more than 10 CityTime consultants face charges of stealing a total of $80 million.

city services, reported that the city apparently has used federal funds for social services and education to send municipal work overseas. Garrido pointed out that a Dept. of Education contractor, Future Technology Associates, has diverted federal funds intended for child care to charter schools. And I, along with Mr. Garrido, Sr. Assistant Director Moira Dolan of the DC 37 Research and Negotiations Dept., described how it is our unions firm belief that contracting outbeyond its waste of tax dollarsis undermining the civil service system and eroding solid unionized jobs. In recent years, District Council 37 has lost 10,000 members as the Bloomberg administration spends more on contracts, which account for over $10 billion of the citys $66 billion budget. In October, the Dept. of Education laid off 642 mostly low-wage school support workers as the agency continued to pour billions of dollars into information technology and other contracts. The city has begun to recover some of the stolen funds, and our union is pushing for the Bloomberg administration to use those moneys to rehire laid-off members. I have already made that demand in a letter to Mayor Michael R. Bloomberg. U.S. Rep. Carolyn Maloney, who helped establish the City Council Contracts Committee and the citys Vendex contract when she served on that body years ago, said, The CityTime scandal makes clear that fraud, inefficiency and waste can occur when there is not enough oversightAs more and more federal dollars flow into the city, the need increases for federal oversight. Questioning whether contracting out saves money, Maloney asked if it is being done to avoid employing civil servants and unionized workers. City Council members Darlene Mealy, who chairs the Councils Contracts Committee, and Letitia James, the former chair, described legislation to strengthen Local Law 35, which requires a cost-benefit analysis of proposed contracts and provides protections against displacement for municipal employees. In fact, shortly after our Congressional briefing, the City Council took a major step towards good government, transparency and accountability and overrode Mayor Bloombergs veto of the legislation that strengthens Local Law 35. Congress member Edolphus Towns added a little levity to our discussion when he suggested adding stupidity to the description of contracting out as waste, fraud and abuse. More seriously, he pointed out that outsourcing undermines the economy by destroying local jobs. Capitalism does not work unless you have a big middle class, Towns said. You need to have someone ready to buy. Participants in our briefing agreed that as mayors and governors turn to contracting out under the misguided belief that it helps save limited tax dollars concerned citizens must fight for recurring streams of revenue to support vital government services.

James Parrott, deputy director and chief economist of the Fiscal Policy Institute, noted that taxing interest earnings of hedge fund managers at a higher rate could bring in $500 million and help address the sharp inequality that plagues the country. Nationally, a financial transaction tax would bring in $20 billion a year, he said. Speakers endorsed that step along with additional spending for another economic stimulus and jobs creation. They expressed support for the extension of the states millionaires tax, which provides $5 billion in revenue each year. the crisis is JObs

DC 37 is New York Citys largest public employee union, representing 121,000 members and 50,000 retirees.

Our biggest problem right now is more federal stimulus is needed, Parrott said, noting that the current recovery is the weakest since World War II. New York State needs 500,000 more jobs to return to the level of employment before the recession, he said. Congress member Nadler said, The crisis is not the deficit, the crisis is unemployment. We should not be doing anything about the deficit until unemployment returns to 5 percent. Today, the rate exceeds 9 percent and approaches 20 percent once hidden unemployment (people working part-time who want a full-time job and others who have checked out of the labor search market because theyve lost hope) is included. Garrido pointed out that 40 percent of the contractors do not come from the city. Work is even outsourced to India, Turkey and Bangladesh. Domenic M. Recchia Jr., chair of the City Council Finance Committee, said such contracting could be limited by giving a preference to local businesses. At the briefing, Local 372 President Santos Crespo Jr., Local 1549 President and DC 37 President Eddie Rodriguez and Local 371 President Anthony Wells discussed how the city is reducing its workforce in federallyfunded social services and education. DC 37 Retirees Association President Stuart Leibowitz discussed Social Security and Medicare, which many Republicans would like to see privatized and cut. He said politicians have promoted the false impression that Social Security faces a crisis in order to justify a reduction in benefits. He described the debate over the future of Medicare as more about ideology than finances. District Council 37 Political Director Wanda Williams correctly pointed out that the recommendations from the Congress members and other participants provide a good foundation to work for jobs creation, government accountability and protecting civil service jobs from contracting out. I believe that our Congressional Delegation learned a lot from the briefing just as we in turn learned how we can be more effective in opposing and fighting contracting out.