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Unions Try to Monopolize California's Global Warming Solutions

California’s quest to end global climate change is inspiring many obscure, complicated, and costly regulations. And when state executive branch agencies propose new regulations to save the planet, unions are there with their own agendas.

California Can’t Let Just Anyone Check Your Dimmer Switches

The 2013 revisions to California’s Building Energy Efficiency Standards (in the California Building Standards Code, California Code of Regulations, Title 24) include new requirements for commercial buildings to reduce electricity use through lighting controls. Examples of such controls include dimmers, automatic daylight controls, occupant sensing controls, and timers.

How does the state ensure compliance with these standards? After an electrical contractor installs these lighting control systems, a professional, certified field technician must test them and produce documentation confirming that the systems work and conform with the Building Energy Efficiency Standards.

These field technicians must be trained and certified through “Lighting Controls Acceptance Test Technician Certification Providers.” Programs interested in becoming providers submit applications to the California Energy Commission to show they fulfill the requirements to be a legitimate source of technician training and certification.

Dimmer Switches Were Supposed to Brighten the Future for Unions

Government-regulated certification can benefit the public, but it is also vulnerable to political manipulation by interest groups who see it as a mechanism to control who and how many people are employed in an occupation. For example, construction trade unions have long used the California Apprenticeship Council and other executive branch agencies to resist potential training competition from Merit Shop associations, individual contractors, and even from other unions trying to expand their trade jurisdiction.

At the California Energy Commission, the International Brotherhood of Electrical Workers union has openly declared for years that its California Advanced Lighting Controls Training Program (CALCTP) should have a monopoly on training and certifying workers who test lighting controls for commercial buildings. As far back as November 3, 2011, the State Association of Electrical Workers/International Brotherhood of Electrical Workers submitted a letter to the California Energy Commission insisting on this monopoly:

On behalf of the State Association of Electrical Workers/International Brotherhood of Electrical Workers, I write to urge the commission to require all advanced lighting controls related acceptance testing and documentation to be performed by California certified general electricians who are also certified by the California Advanced Lighting Controls Training Program (CALCTP), and who are performing the work while employed by a California contractor who holds a CALCTP contractor certification, and that these acceptance testing and documentation forms be modified by providing a space for the electrician and the contractor to each write his/her name, and to each attach a copy of their appropriate CALCTP certification documentation.

Providing studies and comments as academic cover for the CALCTP quest for a monopoly on lighting controls testing certification is the Donald Vial Center on Employment in the Green Economy, a project of the Institute for Research on Labor and Employment at the University of California, Berkeley, affiliated with the University of California Center for Labor Research and Education, and part of the University of California Miguel Contreras Labor Program. This state university labor institute is a descendent of a “union think tank” established in 2000 by the California legislature and Governor Gray Davis at the behest of the California Labor Federation.

Headquarters of the National Lighting Contractors Association of America is in Signal Hill, California.

Headquarters of the National Lighting Contractors Association of America is in Signal Hill, California.

Now the IBEW has competition. A Merit Shop organization not affiliated with a union called the National Lighting Contractors Association of America (NLCAA) submitted an application to the California Energy Commission to become a Lighting Controls Acceptance Test Technician Certification Provider.

Even more shocking for the unions, the California Energy Commission placed approval of the NLCAA program on its July 22, 2014 meeting agenda – with a memorandum from the Executive Director recommending approval – while the IBEW program was still tangled up in the application process.

This echoed the outcome of previous efforts of union officials to push for regulations meant to give them control of the workforce. For example, the IBEW began a multi-year push in 1999 to impose electrician certification in California that would allow them to gain control of the trade, but it found itself outsmarted and outmaneuvered by the more nimble, more innovative Merit Shop. And while the IBEW and other unions argued for years over jurisdiction for apprenticeship training in solar photovoltaic system installation, a Merit Shop contractor circumvented the system and simply applied for and won approval from the state to operate its own solar photovoltaic installation apprenticeship program.

There Ought to Be Lawyers. Quick, Send in the Lawyers

Now the Merit Shop was outwitting the unions again. The IBEW had to suppress the competition, quickly and decisively. They turned to the law firm of Adams Broadwell Joseph & Cardozo – the law firm of choice nowadays for construction unions that use the California Environmental Quality Act (CEQA) to delay projects as a way to pressure the owner to sign a Project Labor Agreement or agree to other economic concessions that benefit the unions.

To stop approval of the NLCAA program, the IBEW and its lawyers simply adopted the same basic strategies they use to delay projects through CEQA. They exploited the statutory provisions for public review and comment by claiming insufficient time for review. Then they submitted an extensive set of objections right at the deadline so that the agency didn’t have enough time to review them. And just like what they do with environmental review documents, they nitpicked the NLCAA application to identify and cite every possible weakness that a judge might recognize as a meritorious basis for a time-consuming, expensive lawsuit.

The saga began on July 11, 2014, when the California Energy Commission publicly posted its agenda for its July 22 meeting. It included this seemingly routine item:

11. APPROVAL OF NATIONAL LIGHTING CONTRACTORS ASSOCIATION OF AMERICA TO BECOME AN ACCEPTANCE TEST TECHNICIAN CERTIFICATION PROVIDER. Possible approval of the National Lighting Contractors Association of America (NLCAA) as a Lighting Acceptance Test Technician Certification Provider (ATTCP). This will allow NLCAA to train and certify field technicians and employers on the Building Energy Efficiency Standards lighting control acceptance tests.

On July 17, an official with the California Energy Commission contacted the Vice President of Training for the National Lighting Contractors Association of America with some bad news:

To follow up on our conversation the Standards Section 10-103-A(f)2 requires the Commission to give all interested persons a copy of the evaluation report used in your application to become a ATTCP.  This Section also requires the Commission to give these interested persons reasonable time to review the evaluation.

The Business Meeting Agenda was posted on Friday July 11th in the late afternoon.  The Commission received notice Friday evening from a interested person that they wanted a copy of the evaluation report.

After lengthy discussions with management, legal, and our commissioners it was determined that a reasonable amount of time could not be given to the interested persons before the July 22 Business Meeting.

For this reason your item is being taken off the July 22 Business Meeting to afford adequate time for the interested party to review NLCAA’s evaluation report.

I am sorry for any inconvenience that has caused you, your business and contractors anticipating NLCAA’s approval.

A training executive with Associated Builders and Contractors sent an email to the California Energy Commission expressing concern about this mysterious development:

NLCAA has followed and met all of the application requirements and been approved to go forward to the final requirement of the application process.  Any delays in their approval will result in major negative financial impacts on our over 100 electrical contractor members, their employees and numerous other nonunion electrical contractors who need to have this certification in order to complete their current and future construction projects and meet the new state Lighting Certification requirements.

If the NLCAA’s application is removed from the Commission’s agenda, what is to stop another “interested party” from making another request to review NLCAA’s application the next time it is on the agenda, which would cause it to be removed and what would prevent this cycle from starting all over again and again and again.  Anyone can review the NLCAA’s application, but these third party reviews are not an official part of the application process and should have no impact on Commission’s approval process.

As the attached documents show, Director’s Ashuckian, Oglesby and others, after a very in depth and detailed review by their respective staffs, have previously endorsed the NLCAA as meeting the state’s requirements for an ATTCP and that their application should be accepted.

It took a week for the NLCAA to be informed by the California Energy Commission of what party derailed its scheduled approval by taking advantage of regulatory provisions regarding public review. Of course, the inquiry was from the law firm of Adams Broadwell Joseph & Cardozo, which represents the California Advanced Lighting Controls Training Program (CALCTP) affiliated with the IBEW union. CALCTP scrambled to get its application posted by the California Energy Commission for public review, which happened on August 1, 2014. This began three months of antics as CALCTP lawyers and lobbyists tried to get the California Energy Commission to approve its program while rejecting the NLCAA program.

On August 19, 2014, the law firm of Adams Broadwell Joseph & Cardozo provided the California Energy Commission with several pages of petty objections to the approval of the NLCAA competing program. Obviously the IBEW was setting the stage for a lawsuit against the California Energy Commission if it approved the NLCAA program. Meanwhile, the NLCAA identified numerous petty deficiencies in the CALCTP application but chose not to stoop to the tactics of its competition by commenting on them.

Items to approve of both programs were placed on the August 27, 2014 meeting agenda of the California Energy Commission but then removed on August 26. They were not even addressed on the September 10 agenda. Then both items were placed on the October 7 agenda.

Late on the afternoon of October 6, the IBEW/NECA California State Labor Management Cooperation Committee emailed ten pages of objections to approval of the NLCAA program. In response, California Energy Commission staff advised the commissioners at the October 7 meeting to delay considering approval of the NLCAA program so they could analyze the last-minute submission of union objections to the Merit Shop program.

Commissioners chose to table approval of the NLCAA program, but to their credit they also tabled approval of the CALCTP program. Public testimony at the meeting from professional lobbyists and union officials revealed the true nature of the dispute: the IBEW believes it should control who and how many people become certified as lighting control field technicians.

Public Implications of This Obscure Battle Over the Authority to Certify Lighting Controls Testers

An ordinary California resident might ask how the people of California benefit from this union-provoked controversy about who gets to train and certify workers who test lighting control systems. Unless the programs are deficient under the state’s regulations, what is the public interest in delaying approval? Workers want to be trained, commercial building owners need to comply with the law, and climate change activists seek to reduce electricity use.

What is particularly confounding is how the state’s public utilities are connected to all of this. The CALCTP is operated by the California State Labor Management Cooperation Committee for the International Brotherhood of Electrical Workers and the National Electrical Contractors Association (LMCC/IBEW-NECA), but various entities are alleged to work in “collaboration” with it. These collaborators include Southern California Edison (SCE), Pacific Gas and Electric (PG&E), San Diego Gas and Electric (SDG&E), the Sacramento Municipal Utility District (SMUD), and the Los Angeles Department of Water and Power (LADWP).

In effect, California public utilities are working with the IBEW to cut competition, restrict choice in training, and make testing of lighting controls for commercial building developers more difficult and more expensive.

Sources

The Exploited Regulation: 2013 California Building Energy Efficiency Standards 10-103-A – NONRESIDENTIAL LIGHTING CONTROLS ACCEPTANCE TEST TRAINING AND CERTIFICATION

2013 California Building Energy Efficiency Standards

California Building Standards Code – California Code of Regulations, Title 24

National Lighting Contractors Association of America (NLCAA)

California Advanced Lighting Controls Training Program (CALCTP)

Public Utilities in “Collaboration” with CALCTP

California Energy Commission Staff Evaluation Reports on Applications for Lighting Controls Acceptance Test Technician Certification Providers, and Public Comments on the Applications

November 3, 2011 Letter from State Association of Electrical Workers/International Brotherhood of Electrical Workers Seeking a Monopoly on Lighting Controls Test Technician Certification

Donald Vial Center on Employment in the Green Economy – Union-Oriented Studies and Comments on Certification of Acceptance Testing Field Technicians for Lighting Controls 


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

 

Now in California: Nation's Most Prominent Union-Oriented Prevailing Wage Scholar

A leading intellectual advocate for government policies that favor and benefit construction trade unions is on sabbatical from his home university and spending several months in proximity to one of California’s union-oriented labor institutes, the Institute for Labor and Employment (an affiliate of the Miguel Contreras Labor Program) based at the University of California, Berkeley.

IMG_5333Over the past 20 years, University of Utah economics professor Peter Philips has become the nation’s preeminent academic in support of government-mandated construction wage rates (so-called “prevailing wage”). Construction union leaders appreciate his studies that purport to show that prevailing wage did not increase the cost of school construction in Ohio, Michigan, Kentucky, and other states in the 1990s. In addition, they appreciate his testimony before state legislative committees and local governments throughout the country. His article about prevailing wage in British Columbia was published this month, and his article about prevailing wage (“common wage”) in Indiana is supposed to be published in January 2015.

Some of his recent work has argued that California’s charter cities do not benefit from using their constitutional authority to enact municipal prevailing wage policies that deviate from state prevailing wage law. His study entitled The Effect of Prevailing Wage Regulations on Contractor Bid Participation and Behavior: A Comparison of Palo Alto, California with Four Nearby Prevailing Wage Municipalities was published in Industrial Relations: A Journal of Economy and Society, described as “the Institute for Research on Labor and Employment’s top-ranked academic journal.”

(For a response to this article, see the www.UnionWatch.org article Journal Article on Prevailing Wage Debunked, But Only Outside Academia and my analysis entitled University of Utah Study on Government-Mandated Construction Wage Rate (“Prevailing Wage”) Policies in Five California Cities: Not a Reliable Tool for Policymakers. Also, see Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions? – 4th Edition.)

Professor Philips has also written studies on other construction labor issues. For example, he released The Economic and Environmental Impact of the California Environmental Quality Act (CEQA) in March 2013, when the State Building and Construction Trades Council of California was opposing proposed changes to environmental laws that would hinder their ability to exploit these laws to obtain Project Labor Agreements from developers. This study was reported in www.UnionWatch.org in the article Opponents of CEQA Reform Cite New Study with Union Connections(For examples of this practice of environment permit extortion, or “greenmail,” see the www.UnionWatch.org article Revised List of Union Actions in 2013 Under the California Environmental Quality Act (CEQA).)

Professor Philips reports that his study on the employment impact of solar power plant construction in California will be released in November 2014, in conjunction with a press conference in Oakland featuring the Sierra Club, Obama Administration officials, and construction union leaders. Most solar developers in California have signed Project Labor Agreements with construction unions to avoid delays caused by union objections to the projects under the California Environmental Quality Act. (See the www.UnionWatch.org articles Unions Extensively Interfere with California Solar Photovoltaic Power Plant Permitting and Did Unions Hasten Demise of California’s Solar Thermal Power Plants?)

On October 13, 2014, Professor Philips was the lecturer for a colloquium at the Institute for Research on Labor and Employment at the University of California, Berkeley entitled Prevailing Wage Laws in Construction: Wage Mandates as a Means of Promoting Collective Bargaining. Attendees appeared to be predominately graduate students and labor institute personnel, although a researcher of the union-affiliated organization Smart Cities Prevail was also there.

I reserved a spot in advance for myself, as instructed in the announcement for the colloquium, and no one hassled me about being there. In fact, Professor Philips asked me a question at the end of the colloquium. I was able to make a few remarks at a forum where different views about the fundamental roles of government and unions are probably quite uncommon.

Here are some of my observations from the hour-long presentation on prevailing wage by Professor Philips.

    Labor Institute director Michael Reich introduces Professor Peter Philips.

    Labor Institute director Michael Reich introduces Professor Peter Philips.

  • Professor Philips was introduced by Michael Reich, Professor of Economics and Director of the Institute for Research on Labor and Employment. They met in the 1970s in the very room where this colloquium was held 40 years later. Older generations seem to dominate the fading academic field of what was once called “industrial relations.”
  • Professor Philips genuinely believes in the “virtues” of collective bargaining and supports the concept of government intervention to encourage collective bargaining in the construction industry. He frequently refers to the development and support of “human capital” in a “turbulent” industry and believes unions fulfill that role by providing sustained employee benefits and training. One of his slides appeared to show a “Non-Union” maid throwing bathwater out the window with “human capital” in it. (A slide showing a union official throwing bathwater out the window with “taxpayer money” in it was not included in the presentation.)
  • He emphasized to the PhD students at the colloquium that “being effective” requires speaking and crossing three arenas: economic, legal, and political. This conforms to the contemporary idea of university labor institutes as not merely research operations, but activist programs meant to pursue advancement of society through a progressive political agenda. (Your tax money in action.)
  • He asserted that groups such as Associated Builders and Contractors (my former employer) and conservative think tanks claim to oppose government-mandated prevailing wages because of concern for fiscal responsibility, but in reality are motivated by a desire to eliminate government policies that allow unions and unionized contractors to be competitive. At the same time, he claims prevailing wage does not increase costs of construction. A few students asked about this apparent contradiction: why does government need to impose a prevailing wage to help unions if prevailing wage does not increase costs? In response, Professor Philips hedged his bets and suggested that prevailing wage raises the cost of construction about 5%. Then he claimed that prevailing wage opponents cite higher percentages of savings because 5% does not inspire elected officials to eliminate the policy.
  • He contended that “Merit Shop” was a much better “descriptor” for non-union construction than “non-union,” because in this system workers are paid “variegated” wages based on merit, rather than a common wage based on collective bargaining. (Obviously he does not regard this particular recognition of “merit” as beneficial to human capital.) He briefly discussed the rise of the Associated Builders and Contractors construction trade association from its founding in 1950 through its dramatic expansion in the 1970s as it worked with the Business Roundtable to curb inflation.
  • He contended that class lines were blurred in construction: someone who starts in the industry as an apprentice can become a company owner. This is a challenging statement for union activists and academic advocates of unionism who believe class consciousness is essential to establishing “workplace democracy” through collectivism. It reminded me of claims I’ve heard over 20 years from both union and non-union officials that the ultimate ambition of a union apprentice is to become a union business agent, while the ultimate ambition of a non-union apprentice is to become a company owner.
  • Professor Philips is critical of what he sees as non-union efforts to infect construction with “Taylorism,” that is, breaking the work process down into small distinct responsibilities within a mass production system. He sees “human capital” developed through comprehensive union-sponsored apprenticeship training as a contrast to Taylorism. He also describes the non-union business model as “myopic bidding,” which I took to mean narrow consideration for a specific project without consideration of long-term costs.

It seems that Professor Philips is spending some of his time in California working on a project to describe how the Merit Shop operates, with the intent of contrasting it to the alleged virtues of a collective workforce. Here’s how Professor Philips seems to perceive Merit Shop construction:

  • A large Merit Shop company has a core workforce of very-well-paid, exceptionally talented and motivated long-term employees who travel regionally to work on significant construction projects. Some of these workers participated in or graduated from union apprenticeship programs but ultimately become disgruntled with their unions for ideological reasons or personal grievances. They tend to be zealous backers of the Merit Shop movement.
  • Below these core workers are two systems: (1) workers hired through a traditional process of submitting resumes in order to perform single jobs and then casually released at the end of the project without health insurance or other benefits; and (2) an extensive “highly articulated” network of small non-union subcontractors, either self-employed or with a small number of loyal, closely-tied employees.
  • For training, Professor Philips claims that the Merit Shop wants government to provide subsidies to train workers in vocational programs, as opposed to choosing to fund worker training themselves through employer payments to formal apprenticeship programs.

While Professor Philips is in California, he would like to talk with some Merit Shop contractors about their business practices. Keeping in mind that Professor Philips has some presuppositions about labor relations (as all people have), you may contact me as an intermediary if you are interested in talking to him about your business.


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

 

Journal Article on Prevailing Wage Debunked, But Only Outside Academia

A survey of academic journal articles in the fields of labor relations, labor economics, and labor history reveals scholarly consensus: union-backed public policies are good for the economy!

No one ever rebuts these journal articles, so they must be true. And why would anyone assume otherwise? As a union official said about one of these studies at a city council meeting in the San Francisco Bay Area many years ago, “It’s from a college. Written by a doctor!”

Public deference to college professors can be a powerful political weapon. For example, union lobbyists and elected officials across the country frequently cite a recent article published in an academic journal when arguing for policies that impose or expand “prevailing wage” laws on public works construction projects. It was written by a University of Utah economics professor and two other researchers and appeared in October 2012 in Industrial Relations: A Journal of Economy and Society.

This journal is published under the auspices of the Regents of the University of California by the Institute for Research on Labor and Employment, an affiliate of the University of California Miguel Contreras Labor Program. This is one of the numerous taxpayer-funded labor institutes at state universities that produce studies meant to advance the union political agenda.

Slapping the university logo on such studies provides instant credibility that cannot be attained from the logo of an openly union-affiliated organization such as “The California Labor Federation Institute for Policy Research.” After all, the California Labor Federation does not have the scholarly cachet attained from faux-Gothic buildings, cap-and-gown graduations, or sports teams playing in bowl games or “March Madness®.”

Coasting on the reputation of the University of California, this highly-cited journal article “The Effect of Prevailing Wage Regulations on Contractor Bid Participation and Behavior: A Comparison of Palo Alto, California with Four Nearby Prevailing Wage Municipalities” claims to prove that government-mandated wage rates on construction contracts have not negatively impacted bidding for public works projects in the San Francisco Bay Area.

It sounds like the economics is settled on government-mandated prevailing wage rates. Or is it?

You will not find many college professors who specialize in investigating and debunking the claims of university-based labor institutes. And the concept of “peer review” seems tenuous in an intellectual field where every expert necessarily holds the same enlightened ideology.

I don’t have any graduate degrees hanging on the wall or the honor of being called “Professor” by my community, but I pretend expertise on government-mandated prevailing wage laws in California. For example, I have written four editions of an influential but detested report on the issue, entitled “Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions?

With this feeble credential, I decided to take a closer look at what people with doctorates say about prevailing wage policies in California. In my first scan of the article, I saw numerous statements worthy of rebuttal, or at least quibbling. But one item caught my attention.

The study claims that the five cities used for comparison purposes – Palo Alto, San Jose, Sunnyvale, Mountain View, and San Carlos – are in Santa Clara County. But San Carlos is actually in San Mateo County.

Why does this matter? The California Department of Industrial Relations determines prevailing wage rates by obtaining the applicable union Master Labor Agreements for each construction trade or construction professional service occupation. It adds up all of the employer payments indicated in the union agreement, and the total of those payments becomes the prevailing wage.

This means prevailing wage rates are based on the geographical jurisdictions of each local union. While some construction trade unions have large geographical jurisdictions (some as large as the entire State of California), other unions have jurisdictions as small as one county. As a result, prevailing wage rates will differ for some trades even when job sites are only a mile apart, simply because they are in different counties.

Apparently the Utah-based authors of the study actually believed the union rhetoric that claims California determines prevailing wage rates by region based on surveys of employers. Actually, the state has not conducted surveys of employers to ascertain dollar amounts of prevailing wage rates in at least 25 years, if ever. (A few surveys have been conducted to determine which construction trade union has jurisdiction of a disputed job classification, such as installation of metal roofs or off-site hauling to-and-from a job site.)

This geographic error ended up as one of many identified mistakes. In the end, I outlined 17 problems with the journal article. Even the raw data set for the key city of Palo Alto appeared to be inaccurate and incomplete. If someone had the time and money to replicate the entire study, the whole thing would probably be exposed as false.

My report, entitled University of Utah Study on Government-Mandated Construction Wage Rate (“Prevailing Wage”) Policies in Five California Cities: Not a Reliable Tool for Policymakers,” should create appropriate concerns about the study as policy guidance for state and local governments.

Will I seek to have the editors of Industrial Relations: A Journal of Economy and Society retract the faulty article? Of course not!

Even if I possessed academic credibility with a PhD and a professorship at a well-known secular liberal arts college, professors and administrators associated with university labor institutes are in cahoots with the union movement, sometimes explicitly through boards of directors, advisory committees, and funding sources. In academic circles nowadays the definition of truth is malleable, especially when progressive principles of social justice are at stake.

They’ll keep publishing, and maybe once in a while a layman will expose a flawed study or two.


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

Opponents of CEQA Reform Cite New Study with Union Connections

A broad coalition opposing any changes to the California Environmental Quality Act (CEQA) held a press conference today (March 12, 2013) that included the findings of a newly-released study, The Economic and Environmental Impact of the California Environmental  Quality Act.

The study was written by a University of Utah professor with a long history of academic work biased toward the construction union agenda. It was funded by the union-affiliated California Construction Industry Labor-Management Cooperation Trust. Study results were summarized at the press conference by Bob Balgenorth, chairman of the California Construction Industry Labor Management Cooperation Trust and the former head of the State Building and Construction Trades Council of California.

This March 11, 2013 Associated Press article Coalition Forms to Defend California Environmental Law reports on what happened:

Common Ground, the new coalition group opposing reforms, commissioned a report as part of its effort to emphasize the importance of the law.

The study by Peter Philips, a University of Utah economics professor, points to the state’s record in building alternative-energy projects and maintaining construction jobs as evidence that the law is working.

“Has CEQA actually hindered construction? Far from it,” said Bob Balgenorth, chairman of the California Construction Industry Labor Management Cooperation Trust. “If anything, it’s facilitated greater construction, a cleaner environment and a better quality of life for Californians.”

Brown and the Legislature’s Democratic leaders are negotiating changes after an attempt to pass a bill failed last year.

The governor’s office had no comment on the report, but Brown has advocated for more consistent standards in reviewing development projects.

It’s unlikely that Governor Brown is ever going to comment on the report. And the business coalition in support of CEQA reform appears to be strategical avoiding any references to unions and their abuse of CEQA to obtain labor agreements and other economic concessions. So far I haven’t seen any news reports taking a critical look at this study or its origins.

So here’s the scoop about this study, courtesy of www.UnionWatch.org:

The Author of the New CEQA Study

The Economic and Environmental Impact of the California Environmental  Quality Act was written by Peter Philips, Professor of Economics at the University of Utah. Professor Philips has specialized in research on construction labor issues, with particular attention to California.

For example, in 2012 Professor Philips had his paper The Effect of Prevailing Wage Regulations on Contractor Bid Participation and Behavior: A Comparison of Palo Alto, California with Four Nearby Prevailing Wage Municipalities published in Industrial Relations: A Journal of Economy and Society. This journal is published by the Institute for Research on Labor and Employment at the University of California, an affiliate of the University of California Miguel Contreras Labor Program. It is hosted on the web site of the union-backed California Construction Academy, a project of the UCLA Labor Center established within the Institute for Research on Labor and Employment, which (as stated earlier) is an affiliate of the University of California Miguel Contreras Labor Program. If this tangle of programs at the University of California confuses you, that’s probably the intent.

This paper is part of an ongoing lobbying campaign of the Santa Clara-San Benito Building and Construction Trades Council and a union-affiliated organization called www.SmartCitiesPrevail.org to convince the Palo Alto City Council to repeal its own policy concerning government-mandated construction wage rates (so-called prevailing wages) on purely municipal construction projects. This is a right granted under Article XI of the California Constitution to Palo Alto and 120 other California cities that operate under their own charters. For more information on this home-rule right, see Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions?

As shown in his curriculum vitae, Professor Philips was the keynote speaker at the California International Brotherhood of Electrical Workers (IBEW) conference in 2012. He has spoken repeatedly at conferences about Project Labor Agreements, including the State Building and Construction Trades Council of California annual conference in 2008.

While this background doesn’t necessarily mean that Professor Philips has inaccuracies in his research and reports, one should be aware that he holds certain presuppositions and biases about economics and labor relations that may be reflected in his work.

The Sponsor of the New CEQA Study

Page 2 of The Economic and Environmental Impact of the California Environmental  Quality Act indicates that “This study was sponsored by a grant from the California Construction Industry Labor Management Cooperation Trust.” This mysterious group was described last year in www.UnionWatch.org (see Mysterious Union Slush Fund Spends $100,000 Against Costa Mesa Charter).

This is an arcane type of union-affiliated trust authorized by the obscure Labor-Management Cooperation Act of 1978, a law signed by President Jimmy Carter and implemented by the Federal Mediation and Conciliation Service. Inspired by the decline of unionized manufacturing in the Northeast, this federal law was meant to help industrial management and union officials build better personal relationships and cooperate against the threat of outside competition. There are no federal or state regulations specifically addressed toward these trusts, and these trusts do not have any reporting requirements to the U.S. Department of Labor’s Office of Labor-Management Standards. This is an ambiguous and forgotten law that’s ripe for abuse.

Here are some of the recent top recipients of funding from the California Construction Industry Labor Management Cooperation Trust:

  1. $1,095,000 – Taxpayers to Preserve Community Jobs, No on Measure A, sponsored by labor and management organizations (June 5, 2012 election in City of San Diego)
  2. $770,000 – UCLA Labor Center (aka UCLA Center for Labor Research and Education), part of the University of California Miguel Contreras Labor Program
  3. $250,000 – No 98/Yes 99 – A Committee of City and County Associations, Taxpayers and Environmental Groups, League of California Cities, Californians for Neighborhood Protection, Coalition of Conservationists
  4. $164,550 – “Other” (?)
  5. $100,000 – Committee for Costa Mesa’s Future – No on V, sponsored by labor and management organizations (November 6, 2012 election in City of Costa Mesa)
  6. $100,000 – Apollo Alliance
  7. $100,000 – Paxton-Patterson Construction Lab/Shop in San Joaquin County
  8. $50,000 – Taxpayers to Preserve Community Jobs, No On Measure G, sponsored by labor and management organizations (June 8, 2010 election in City of Chula Vista)

But what’s more interesting is the source of at least some of this money, if not all of it.

It’s Not Union Members that Give the Money to the California Construction Industry Labor-Management Cooperative Trust: It’s Utility Ratepayers and Contractors Working for Extorted Power Plant Owners

Since the 1990s, whenever an energy company or public utility submits an application to the California Energy Commission seeking approval of a new power plant, an organization called California Unions for Reliable Energy (CURE) often “intervenes” in the licensing process. Represented by the South San Francisco law firm Adams Broadwell Joseph & Cardozo, CURE submits massive data requests and environmental objections to the California Energy Commission. The applicant by law is required to answer CURE’s submissions, at significant cost and delay. The chairman of California Unions for Reliable Energy (CURE) was Bob Balgenorth (see above).

If the power plant owner agrees to require its construction contractors to sign a Project Labor Agreement with the State Building and Construction Trades Council of California or its regional affiliates, CURE’s objections fade away and the power plant proceeds unhindered through the licensing process. If the company or utility does not surrender to CURE’s demand, then CURE’s interference and lawsuits continue.

This racket – sometimes called “greenmail” because it’s the use of the California Environmental Quality Act (CEQA) and federal environmental laws to pressure developers to sign Project Labor Agreements – is well-known to the energy industry in California and has been extensively reported in the news media over the past dozen years. (For example, see Labor Coalition’s Tactics on Renewable Energy Projects Are Criticized – Los Angeles Times – February 5, 2011 and A Move to Put the Union Label on Solar Power Plants – New York Times – June 18, 2009.) It is also documented in www.PhonyUnionTreeHuggers.com.

For cases in which the power plant applicant succumbs to CURE’s harassment, the Project Labor Agreement that the power plant owner signs usually contains a provision requiring the owner or its contractors to make a lump-sum payment or series of payments to the California Construction Industry Labor-Management Cooperative Trust.

For example, the Project Labor Agreement signed by the Northern California Power Agency (a conglomerate of publicly-owned utilities) for the construction of the Lodi Energy Center required the agency to shell out $90,000 to the California Construction Industry Labor-Management Cooperative Trust. That amount was dutifully mailed to Bob Balgenorth on August 17, 2010. (For more on this payment, see High Energy: Lodi Center Designed to be a Powerhouse for Chunk of State – Stockton Record – October 4, 2011; also, the union rebuttal on the California Building Trades Council web site – ABC Falsehoods Refuted in Letter to Stockton Record.)

And Section 13.1 of the Project Labor Agreement signed by the Southern California Public Power Authority (another conglomerate of publicly-owned utilities) for the construction of the City of Anaheim’s Canyon Power Plant required the agency to shell out $65,000 to the California Construction Industry Labor-Management Cooperative Trust.

The California Construction Industry Labor-Management Cooperative Trust reports these payments as “membership dues” to the Internal Revenue Service. Which brings up a question: are the local elected officials who serve as commissioners for the Northern California Power Agency and the Southern California Public Power Authority exercising their responsibilities as “members” to approve its expenditures?

It’s a tangled conspiracy. Especially intriguing is that one union official was the head of the State Building and Construction Trades Council of California, the California Construction Industry Labor-Management Cooperative Trust, and California Unions for Reliable Energy. For more information, see the investigative report of the Coalition for Fair Employment in Construction at this September 23, 2011 post at www.TheTruthaboutPLAs.comA Genuine California Union Conspiracy: Senate Bill 790 and the California Building Trades Council’s Ratepayer Funded Political Slush Fund

Confused about the Conspiracy? Here’s a Chart.

A public utility or private energy company applies to the California Energy Commission for approval to build a power plant.

California Unions for Reliable Energy (CURE) uses its “intervenor” status at the California Energy Commission to submit massive data requests and environmental complaints about the proposed power plant, as a result gumming up the licensing process and causing costly and lengthy delays for the applicant.

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Applicant for prospective power plant surrenders and agrees to sign a Project Labor Agreement with the State Building and Construction Trades Council of California or its regional affiliates. California Unions for Reliable Energy releases its grip of legal paperwork and the project moves forward unimpeded and acclaimed as environmentally sound.

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The Project Labor Agreement contains a required payment or payments to the California Construction Industry Labor-Management Cooperative TrustCalifornia Public Utilities Code Section 3260 – enacted by Senate Bill 790 in 2011 – allows public utilities to pass costs through to ratepayers.

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The California Construction Industry Labor-Management Cooperative Trust reports those payments to the IRS as “Membership Dues,” creating questions about the rights inherent for dues-paying members.

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The California Construction Industry Labor-Management Cooperative Trust makes contributions to political campaigns and studies, including The Economic and Environmental Impact of the California Environmental Quality Act.

Solutions

Is there any way this racket can be stopped? Yes. The U.S. Department of Labor’s Office of Labor Management Standards could promulgate regulations that establish restrictions and reporting guidelines for committees authorized by the Labor-Management Cooperation Act of 1978. Even better, Congress could pass legislation amending or repealing the law, and the President could sign it. Neither solution is viable for the next four years.

Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.