A protester is arrested during a 1988 Justice for Janitors action. / Photo courtesy of Stephen Lerner

Whistle-blowers, Hedge Clippers, and Strikers

A conversation with Stephen Lerner

A protester is arrested during a 1988 Justice for Janitors action. / Photo courtesy of Stephen Lerner
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We are pleased to share a new, syndicated series of interviews by Sarah Jaffe. INTERVIEWS FOR RESISTANCE will introduce you to some of the key figures in the growing movement(s) against our reactionary new federal government. We hope you will find comfort in knowing the crucial work of fighting back has already begun in many (sometimes unexpected) places, and find tools in these conversations for your own part in the struggle.

Sarah Jaffe with Stephen Lerner:

 

Welcome to Interviews for Resistance. Since election night 2016, the streets of the United States have rung with resistance. People all over the country have woken up with the conviction that they must do something to fight inequality in all its forms. But many are wondering what it is they can do. In this series, we’ll be talking with experienced organizers, troublemakers, and thinkers who have been doing the hard work of fighting for a long time. They’ll be sharing their insights on what works, what doesn’t, what has changed, and what is still the same.

Stephen Lerner: My name is Stephen Lerner. I am a fellow at Georgetown’s Kalmanovitz Initiative for Labor and the Working Poor. I work on the Hedge Clippers and bank workers and a number of different campaigns that are all focused on looking up the money tree at who is really running the politics and the economy of the country.

Sarah Jaffe: Let’s start with the bank workers, because the bank workers just kicked off a union drive.

SL: The bank workers campaign is really interesting, because what most people don’t realize is that banks in most countries in the world are significantly unionized. We have a three-pronged campaign. One has been broadly building worker committees in banks in the United States. Some of the first real victories of that is the bank workers campaign, the Committee for Better Banks, the Communications Workers of America (CWA), and a whole series of community groups, which we will come back to, were the whistle-blowers on the Wells Fargo scandal, where they were opening fake accounts.

There is an ongoing, growing campaign with workers in all the major U.S. banks, but what we are focusing on now is a bank called Santander, which a Spanish owned bank which is, again, union in most countries in the world and heavily unionized in Brazil and Argentina. In the United States they are primarily a northeastern bank, but they are also a big national subprime auto lender. There is now a global demand on the bank that they agree not to fight the union and [to stay] neutral, [to do] the same in the United States as they do in other countries. What was really exciting in the kick-off, and sort of unheard of, is that—in addition to the traditional solidarity actions, letters and pickets—in Argentina and Brazil, workers actually walked off the job and did shutdowns of bank branches and other centers, demanding the bank not interfere with workers’ rights to organize unions in the United States.

What has been fascinating about the campaign, both here in the United States and among bank workers in other [countries], [is that] there has always been a dual demand: the traditional demand about how workers should be paid and treated decently, and simultaneously [the demand] that workers should not be forced to sell predatory products or cheat people as a condition of employment. What we have argued is that bank workers—in the same way that in a hospital a nurse is a front line on quality care—that bank workers can be the front line on making sure that banks aren’t cheating and robbing people.

That is why the work with Wells Fargo has been so exciting, because literally tens of thousands of workers have signed petitions saying these outrageous sales goals could only be met if they cheated customers. One part is workers as whistle-blowers, workers as a frontline in saying, “What the bank is doing is bad.” Then, “As workers, we don’t want to participate in a scheme where the bank makes money by cheating people.”

SJ: One of the things that is interesting about this is the connection with these international unions that represent bank workers. When we talk about globalization, jobs moving around the world, and progressive solutions to Trump’s nationalism, international campaigns like this are a really interesting starting point.

SL: As someone who has done a lot of organizing where we ask unions in other countries to support workers in the United States who organize in global companies, what is unique about the bank workers organizing is that the Brazilian bank workers, which I think are the biggest bank workers union in the world and one of the most progressive, have aggressively and wonderfully called on the American labor movement to organize bank workers. It is not just out of solidarity. They cannot maintain the standards they have won in Brazil and around the world if the largest country with the biggest finance industry is non-union.

It is almost hallucinogenic to have workers in so-called developing countries say that their wages and benefits are threatened by the level of non-union staff in the United States. There is this fantastic group led by the Brazilian bank workers and UNI, the global bank worker federation, that is working both to support the campaign and pressure the company, but also, around the globe has lifted up this call which I think is really unusual for unions about workers not being pressured to cheat people as a condition of employment.

There have been meetings all over the world on this and a real commitment to doing concrete stuff to pressure the bank. We are going to be going to the Santander shareholder meeting in Spain. We have done a series of reports that have been exposing Santander’s bad practices, ranging from their role in both the Puerto Rican debt crisis, their role in subprime auto. They just failed their Community Reinvestment Act test and we did a report on that. Again, we are building a campaign not just about what is good for workers, but about workers who will make the company healthier in terms of how it engages with customers and consumers.

Essentially, the Community Reinvestment Act requires, in simplest terms, banks to provide resources to the communities that they are in, to invest in. We did a report first that showed that their lending practices ignored or skipped over poor communities and communities of color. There is a test that is done under the CRA Act to see if you have given enough money or loaned enough money. The bank failed it. The bank also failed the stress test. We think there is a relationship between mistreatment of workers and the underpinnings of the bank being threatened because they are engaged in all sorts of risky practices that may make them a little bit of money in the short run, but then blow up on their face in the long run.

SJ: One of the things that connects a lot of the work you do is mapping where the power and the money comes from for bad policies and bad politicians. Those are policies that are bi-partisan, we should say. In the age of Trump, in particular, talk about the importance of this kind of work and why it is important to know who is funding your politicians.

In Argentina and Brazil, workers actually walked off the job and did shutdowns of bank branches and other centers, demanding the bank not interfere with workers’ rights to organize unions in the United States.

SL: The Hedge Clippers campaign looks at hedge funds and private equity, thus hedge clippers clipping their power. It basically says, “These are the finance capitalists that are driving political and economic inequality.” What we have done is both deep dive reports, exposes, lots of direct action to directly confront them. Our little joke is that we have either been incredibly prescient or Trump picked his entire cabinet by looking at who we have been fighting. Pre-Trump winning, we were saying whether it is Goldman Sachs or Steven Schwarzman from Blackstone, these are the people who are really running the government. Lots of folks are laughing saying we are a conspiracy cult or something. Then, when Trump got elected, he put all of these people directly in charge. It is sort of an irony that Trump’s election was probably the best testimony to the idea that whether Dems or Republicans that a player is really who is running the show.

We are doing a lot of work on mapping the different Trump worlds. There are the people, like Mnuchin and the Goldman Sachs folks that are directly in the administration and we map all the benefits that their companies will reap from that. Then, there are the Steve Schwarzmans and the Carl Icahns and this other set of players that run committees for him. So, they can essentially create government policies that will further enrich their companies. Then, there is a third set of people like John Paulson, who made all his money in the housing crisis, who may not be directly working for Trump, but who supported him and is now going to reap the benefits. For example, he is heavily invested in Puerto Rico.

What we have been looking at is, how do you identify the corporate collaborators with Trump, and then look at ways to start putting pressure on them so that they pay a price for the fact that they are in bed with Trump?

One thing is that many of these folks who are in bed with Trump have significant investments from public employee pension plans and college endowments. We have been ongoing running the campaign saying that pension funds and endowments basically are getting lousy deals from these guys, meaning they pay a lot of money to invest in them and they get lousy returns. We are going to escalate that, but we are also going to look at some of the hedge funds that have really atrocious policies and raise the issue that colleges and pension plans shouldn’t invest in racist companies. For example, this guy Robert Mercer whose family owns part of Breitbart. They are Cambridge Analytica, the secret polling apparatus for Trump. I think it is the city of Providence in Rhode Island has invested in one of his funds.

We want to start raising the issue for a bunch of these people that we should cut off their capital. Basically, public dollars or the dollars of progressive institutions shouldn’t be invested in them. Another thing we are doing is we have been introducing legislation on a state-by-state basis to tax the carried interest exemption. This is a loophole that lets them take the regular income that most people pay 30-35 percent on and they get to take 15 percent. I won’t bore you with the details of how they do it, except it is an $18 billion a year tax loophole.

Taxing it on a state level, on the one hand in New York it would produce $3.7 billion in revenue, but the other thing it does is it cuts off their capital. One of the reasons they can give so much money politically is because they have a special tax loophole that gives them $18 billion in cash to play with. One of the ways we can hurt them is cutting off tax breaks and cutting off investment. I think there is a sweet irony of their greed in getting in bed with Trump may make them much more susceptible to cutting off their capital.

Another thing was really illustrated on the CWA Momentive Strike which was a long strike in upstate New York. When people realized that Blackstone’s Steve Schwarzman had been involved in investing in the company and focused on him, it changed the nature of the strike. Instead of it being an isolated battle, it was Trump’s job czar is actually involved in cutting wages, benefits, and outsourcing work. This is one of the pieces that I think is the most critical, which is showing that the people that Trump has put in charge, like Wilbur Ross, are actually job destroyers. We want to completely change the story by putting the spotlight on them by saying, “These are actually the people that got rich destroying good jobs. It is not evil foreigners or immigrants. It is these guys.” That lets you raise a whole set of issues in terms of showing who they are and then, all the different ways that they gamed the system to enrich themselves at the expense of workers.

SJ: This goes back to work that you were doing before the financial crisis within SEIU, right?

SL: Yes. Going back to SEIU in 2007, we looked at the private equity industry and realized that if you look at the companies they own, which are called portfolio companies, that six of the ten largest employers in the United States are private equity companies. Most people don’t know that there is this giant monstrosity at the top that actually owns it. What gets really interesting is if you look at a company like Blackstone, they own a hotel, they own manufacturing, they are the biggest apartment owner in the country now. It lets you look at how you might campaign on them on multiple levels. You can campaign by organizing their non-union workers. This is what you get for being in the Trump Amen Chorus, everybody looks more deeply at your companies. They own retail outlets, they own apartments, they are tax avoiders.

There is an incredible opportunity, to use the word of the day, “intersectionally,” to say to a whole set of different groups, “Why not focus all of our energy on a couple of these characters as a way to both build a broader movement, but also tell the story about how they use their wealth to game the system and the more they game the system, the richer they get.” I think Schwarzman is worth $11 billion and just had his 70th birthday party where they spent tens of millions. It also lets you tell the story of the grotesqueness of these people. It was so fascinating to find workers, some of whom voted for Trump, are sort of stunned when they find out that the guys destroying their jobs are who Trump has put in charge.

SJ: This campaigning has been going on around the Dakota Access Pipeline with people and cities, in fact, divesting from Wells Fargo and other banks that are invested in that pipeline.

SL: Wells Fargo workers exposed how they were cheating consumers, but there is now a campaign called Forego Wells. . . . What it is saying is, “Let’s look at the totality of Wells Fargo.” They treat their workers terribly. They rob consumers. They are a funder of the Dakota Access Pipeline. They fund private prisons. They fund, in some way, payday lending. Again, the idea here is saying, “There are an unlimited number of bad guys out there, but whatever your issue is, let’s pile on a couple of the most dominant players.” And remember that Elaine Chao, who now is Head of Transportation, was on the board of Wells Fargo during all of the scandals. Again, what you basically have is one of the board members of Wells Fargo now in the Trump cabinet and this company captures almost everything that is wrong with what is going on in this country. Wells Fargo is a wonderful example of the corruption and debasement of the system. They have binding arbitration. If you have an account with them, you automatically give up the right to sue them. When they illegally opened up accounts for people, when people attempted to sue about that illegally opened account, the bank said, “Well, your illegally opened account has a binding arbitration procedure. Therefore, you can’t sue us on the illegally opened account.” You can’t make this stuff up.

A big part of our work is basically saying, “Trump has surrounded himself with these set of players. That is who they really are. Let’s look at all of the way they screw people that are the opposite of Trump.” The way I think about it is, we have to make Trump guilty of every evil and sin they commit. If Trump picked Elaine Chao, then he is supporting fake accounts. He is supporting all these things. On the other hand, anybody who associates with Trump has to be guilty of all of his sins. So, Jamie Dimon from JPMorgan and Lloyd Blankfein from Goldman Sachs like to pretend they are at least social progressives. Gary Cohn who is a Goldman Sachs guy who went over to the administration stood behind Trump when he signed the Muslim ban. We need to hold Goldman Sachs accountable. Goldman Sachs and their people are behind anti-immigrant and Muslim bashing. I think there is a fantastic opportunity to force these contradictions, drive some wedges in the ruling class, and really tell the story about what used to be secret. These are the guys that are running both the economy and the government.

SJ: Some people who are reading or listening to this are familiar with what went on in Greece and other countries that got the short end of the austerity agenda. Puerto Rico is a little bit closer to home, it is our government who is doing this to Puerto Rico with the help of all of these same people that we have just been talking about.

SL: Before I get into the detail of Puerto Rico, I think the way to think about this is globally–first, with the IMF. They took developing countries and basically used the Shock Doctrine to devastate the economies of those countries and enforce austerity. Then, they have experimented in Greece and other countries on how you enforce austerity and overrule democratic control and now the United States, we are experimenting with the same thing, which is how you purposely make a place broke. Then, when it is broke you say, “We need to put an emergency control board and get rid of democratic rule.” Then, once you get rid of democratic rule, you can basically turn it into a paradise for the rich.

The story they would tell is that Puerto Rico borrowed $70 billion, is hopelessly in debt, and now they need, like the Greeks, to pay the piper, to pay the money back. The first thing is that Puerto Rico didn’t borrow $70 billion dollars. Puerto Rico, with the help of Santander Bank and Goldman Sachs, did a series of loans that are essentially the equivalent of a payday loan for a country. One of the loans that they did, they borrowed $3.5 or $4 billion. This is all on the Refund America site. But, the payback is $33 billion. It was essentially how a loan was created that could be hidden off the books because you don’t pay the money for years. You borrow $4 billion, you owe $33 billion. The banks and hedge funds knowingly created loans that created huge profits for them that Puerto Rico couldn’t pay back.

These are the guys that are running both the economy and the government.

Again, the best way to think about them is as a payday loan. One of the best examples of this is Santander Bank, who we talked about earlier, was the underwriter for many, many of these loans. They made huge profits on it. What the federal government has done is set up a control board to basically enforce austerity in Puerto Rico. The two head principal guys of the control board are from Santander Bank. These guys that basically created the debt and the loans and got rich on it now are adjudicating that the only way to fix the economy is cuts that are actually greater than Greece. They are the ones who are deciding who gets paid and doesn’t get paid. Essentially, the issue in Puerto Rico, like almost everywhere is, “Why should banks and hedge funds and others get paid mega returns when the result of that is a devastation of the island?”

They have also adopted a thing where basically if a millionaire lives there part-time, they don’t have to pay any tax. They are creating an economy where the rich pay almost no tax. Where the taxes for everybody else goes up dramatically and now they are moving in on lowering the minimum wage. Their real goal is to turn Puerto Rico into a playground for the super-rich.

SJ: This was all under the Obama administration. What can we expect from Trump on this front?

SL: I think it has finally happened that the Puerto Rican government has actually hired . . . Corey Lewandowski to try to open doors on the hill. John Paulson, who I brought up earlier, who is a Trump supporter and who made his $15 billion on the housing crisis, is buying up hotels and property all over Puerto Rico at a discount. I think the first thing to realize is a bunch of people that are in the Trump world either are buying property there or have investments in hedge funds there.

In the bill that created a control board, there were certain things that were supposed to protect pensions and other things, I think you could imagine all of that getting much worse, whether it is just in climate or in actually changing the law. I think under Trump, it will just be worse because at least in the old administration, there was the rhetoric of “We have to create a sustainable economy.” In this case, there is no illusion. The island is just increasingly going to be depopulated as people flee to the United States in search of work.

SJ: At least people coming from Puerto Rico are US citizens…

SL: I don’t know if you saw that in Chicago, there was a Puerto Rican citizen of the United States that was held for three days by ICE because they didn’t believe he was a citizen.

SJ: It is worth noting that the Puerto Rico situation is particular, but that many of the people who are coming to this country to find jobs are doing it because we, more or less, did something similar to their countries at some point.

SL: There are two things I have heard that are interesting. One, at the turn of the last century, people talked about how it was big sugar and agriculture and all that that basically sucked all the money out of Puerto Rico and now it is finance. The key thing about Puerto Rico is this is an experiment happening in a colony or a territory of the United States that they want to export, which is you make lots of money driving a place into bankruptcy and you seize control of it through control boards. This is Flint. This is Detroit. Then, once you are in control, you not only suck more money out from austerity, but then you create a system that puts corporations completely in control. You privatize everything. Part of the law in Puerto Rico not only says you can pay under the U.S. minimum wage, it also says that you don’t have to do environmental impact statements. You can just build stuff more quickly. I think the reason that people should care about Puerto Rico is, one, because it is horrific as a humanitarian and economic crisis, but this is the beginning of what they would like to do in Chicago, what they would like to do in all sorts of places here, which is significantly in communities of color, finding ways to gain complete control of the economy and the politics.

SJ: People want to talk about Germany and Italy and Fascism and Nazism and certainly we have people like Richard Spencer walking around and Steve Bannon at the White House, it is important to know global history, but also we need to know our own history, and some of the lessons for understanding [the current moment] come from things that happened in our past. I wanted to ask you to talk a little bit more about what the lessons that we are missing right here at home are.

SL: The starting point that I think you really hit on is there is a little bit of this rhetoric and shock at how could this happen in America? How could we have an immigrant ban? How could we have this out-of-control racism? In some ways, it is kind of bizarre because we don’t need to look to Germany and Italy. We just need to look to our own past. In many ways, this is American as apple pie. If you think back a hundred years to both the pre- and post-World War I period, you had a very fascinating set of things happening. One, you had the growing industrialization that totally changed labor-management relationships. You had growing giant factories, you had huge immigration, you had growing left movements. When you look at the reaction to that, it was vilifying immigrants and communists and socialists and anarchists. There was a huge strike out west where they literally put everybody in boxcars and deported them.

What is fascinating about that period is one, how the state used its apparatus to attack the left and immigrants and create the fear–then, it wasn’t Islam. It was evil foreigners and communists and all of that. But the level of repression was extraordinary. The other part of it is the level of resistance. The giant steel strikes and the L.A. Times was blown up by the McNamara Brothers. That is a famous case because Clarence Darrow was the attorney and it was the iron workers union and everybody said it was a frame and then they basically they said, “Yes, we did do it.” But, to capture the intensity of struggle. People didn’t say, “Oh, the state apparatus is really bad” or “People might get deported,” there were huge strikes. This was actually when the ACLU was founded under a different name in that period. There was incredible class conflict. There is a book that Joseph McCartin from Georgetown wrote that I am just reading, so I can’t fully say what he says, but I think looking at that both gives us a window into the kind of repression that we will face, but also what people did in response.

What Joe McCartin argues in his book is even though many of the big strikes and things were lost in that period, he refers to it as the dress rehearsal for the CIO, that those battles and the relationships people made and what people learned in those fights created the consciousness and the relationships and an understanding of the system that made it possible for people then to engage, even during the Depression and post-Depression, in mass struggle.

I think that is an area that we need to look at both as guidance to what they would do and then guidance about the importance of directly confronting and fighting it. In the south, if you actually think about the 1940s and 1950s and Jim Crow, it was an apartheid state where the so-called rule of law was irrelevant. The struggle of both black workers and union campaigns, again, I think shows that we don’t need to think of Germany or Italy, whether it is lynchings or shootings or jailings. If people hadn’t stood up to that at tremendous risk in their darkest of times–that created the conditions that allowed the Civil Rights Movement to grow later. People forget that the Civil Rights Movement wasn’t just . . . Rosa Parks sat on the bus and everything happened. That there were years of deep organizing and struggles. I think looking at those two periods is helpful in understanding what has happened in America in the past and then also how fighting it sets the stage for victories later.

SJ: How can people keep up with you and the different organizations that you have mentioned?

SL: One, there is a group called littlesis.org which, as they say, they are the opposite of Big Brother. They are doing fantastic work on mapping relationships with Trump. The other is hedgeclippers.org has now forty-five reports on the evil doers and also are sponsoring all sorts of direct action and other campaigns around divestment. There is also the Refund America Project, which is refundamerica.org that Saqib Bhatti and Maurice Weeks run, which is really looking at Puerto Rico and municipal debt. Then, there is bargainingforthecommongood.org, which is a campaign where unions and community groups are going to the bargaining table together and saying that in addition to decent wages and benefits, we want to bargain about the political and economic issues in our communities. Then, my name is Stephen Lerner. You can follow me on Twitter.

The moment that we are in, I think, is: How do we pick out a couple of corporations that are tied to Trump and are simultaneously intersecting with different movements? How do we pick a set of companies and people within those companies and really focus in on what they are doing and look at ways not just to embarrass them, but to cut off their capital and really impact their businesses and say, “On the one hand, you may in the short-run get rich off of the dealings of Trump, but in the long-run you are planting the seeds of your own destruction.”

Interviews for Resistance is a project of Sarah Jaffe, with assistance from Laura Feuillebois and support from the Nation Institute. It is also available as a podcast. Not to be reprinted without permission.

Sarah Jaffe is a reporting fellow at the Nation Institute. Her book, Necessary Trouble, is out from Nation Books.

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