Dec. 16, 2009 -- When the members of the Service Employees International Union decided to pick a fight with Goldman Sachs earlier this month, it wasn't as a major shareholder in the controversial Wall Street investment bank.
The union, whose members include janitors and security guards, has no specific grievance on behalf of any Goldman employee.
Rather, the SEIU, part of a coalition, Americans for Financial Reform, which is set to demonstrate in front of Goldman's headquarters today, says it is merely standing up for millions of working class people.
"We are specifically targeting Goldman Sachs because, frankly, no single firm has benefited more from taxpayer bailouts than them," said SEIU president Andy Stern.
Stern insists that if the much maligned bank set aside even a modest slice of the estimated $22 billion in 2009 bonuses it is expected to hand out to employees next month, hundreds of thousands of ordinary citizens – taxpayers – could measurably benefit.
"Around $10 billion, or half of what Goldman will dole out to its bankers, could fund an increase to Head Start that would create 330,000 new jobs and help children," Stern said.
In addition to participating in today's protest, the Washington, D.C.-based union has launched an e-mail campaign aimed at Goldman's board members, and at Goldman CEO Lloyd Blankfein.
Meanwhile, former Goldman employees and Wall Street insiders who feel Goldman is being unfairly targeted seem to have had their fill of tar and feathers (call it a backlash to the backlash). They point to the hundreds of millions of dollars in taxes that will be taken out of this year's bonus pie and the taxes paid in years past, as well as charitable initiatives, such as the $500 million the firm earmarked to help small business, as evidence of Goldman's unappreciated good will.
Goldman supporters also stress that the firm repaid the TARP funds and repurchased the government's warrants, giving taxpayers a 23 percent return on their investment. Though not bound by new compensation rules put in place by Obama special pay master Kenneth Feinberg, Goldman says they have on its own reformed how it pays top executives, moving to all-stock compensation for all 30 members of its management committee.
But to Goldman's critics, it just isn't enough.
A Myriad of Grievances
"When I think about Goldman's apathy over this past year, its tone deafness, honestly, I'm stunned," said Anna Burger, the SEIU's secretary treasurer. "Goldman simply isn't going to do the right thing. We all have to keep the pressure on them."
Among the various things on which the SEIU is calling Goldman out:
*With a 10.3 percent stake in the private shares of Burger King, Goldman is the largest owner of the fast food company, according to the SEIU. Yet Burger King's workers are among the lowest paid in the country, earning a median wage of $6.93 an hour, with no or limited health insurance. In 2007, in the state of Ohio alone, low-wage Burger King employees cost the state $13 million in the form of Medicaid, food stamps and other assistance, the SEIU said.
"That translates into some $273 million the public shells out to support low-wage Burger King employees, which if you think about it goes right to Goldman's bottom line," Stern says, urging Goldman to step up and do more for those workers.
(A Goldman spokesman had no comment on the SEIU's beef over Burger King's lack of benefits).
*Goldman is also a major investor in Lance Inc. which acquired the Stella D'Ora cookie company and then subsequently closed a 70-year-old factory earlier this year. "So here you saw 150 good paying jobs with healthcare eliminated overnight," Stern says. "There's Goldman, at it again doing God's work."
Goldman has strongly objected the SEIU's stance on the Stella D'Oro situation, posting on its Web site a retort that among other things stressed that the bank: has never controlled Stella D'Oro; had no involvement in the decision to close operations in the Bronx; only holds only about 2 percent of the outstanding shares of Stella D'Oro's parent company. Substantially all of those shares are held on behalf of clients.
SEIU also has a major problem with Goldman's ownership of loan servicing company, Litton Loan Servicing. Litton, in turn, is among the many loan companies coming under fire for not doing enough to help homeowners behind on mortgage payments and who might require a modification.
According to Goldman, its home loan collection subsidiary has increased its customer care staff by approximately 20 percent while increasing its loss mitigation staff by approximately 25 percent since March 2009.
Sending E-Mails to Goldman
Stern posed the question this way: "What if Goldman set aside even $1 million, how many people could they hire at Litton specifically to help people stay in their homes?"
While the clout of labor unions in America is not what it was a generation ago – indeed, unreasonable union demands are often cited by critics as a reason for General Motors stalling out – the SEIU believes that unions have to lead the charge to harness the anger aimed at Wall Street. This outrage has become so widespread, explained SEIU's Burger, that even symbolic efforts, such as a march, or e-mail writing campaign, can catch fire.
The SEIU is encouraging its working class members to send e-mails to Blankfein and Goldman board members objecting to the bank's pay practices.