Beware Billionaires Bearing Gifts

Leo W. Gerard

Leo W. Gerard USW International President

There’s a new Koch organization in town. Instead of trying to buy politicians to do the bidding of billionaires, as Charles and David Koch have historically done, this foundation will support community groups trying to cure the miseries of eons – everything from poverty to addiction.

And they’ve got some street cred, having successfully worked with renowned liberal Van Jones to secure legislation to reduce mass incarceration. Billionaire Charles Koch says the mission is this: “We must stand together to help every person rise.”

That is some good stuff, right there. It’s what labor unions have always preached – workers must stand together to gain the collective power essential to pull every one of them up. It works, too. In the middle of the last century, collective bargaining created the great American middle class.

There’s an important difference, though, between the work of labor unions and billionaire-funded organizations. Labor unions are created and controlled by workers. Billionaire-funded organizations are beholden to billionaires.

What could be so bad, though, about accepting gifts from billionaires? Just last week, billionaire Robert F. Smith promised to pay off the student loans of 396 graduates of Morehouse College. That means these young people get to launch their careers without the burden of debt. Smith granted the loan forgiveness with no stipulations other than urging every member of the class of 2019 to do what they could to pay it forward – that is, help others achieve as well.

This gift is part of Smith’s effort to fulfill his giving pledge. He signed a formal promise in 2017 to donate half of his fortune, estimated at $5 billion. The giving pledge is a project of billionaires Warren Buffett and Bill and Melinda Gates, who are bequeathing at least half of their money and urging other billionaires to do the same

In 2016, Smith, who graduated from Cornell University and worked as a chemical engineer before he became an investor, committed to donating $50 million to Cornell’s chemical and biomolecular engineering school. A significant portion of the endowment will be dedicated to scholarships and fellowships for African-American and female students who are traditionally underrepresented in engineering and technology. Cornell then named the department the Robert Frederick Smith School of Chemical and Biomolecular Engineering.

Not all billionaire gifts are benign, however. Just ask the students at George Mason and Florida State universities. Grants from the Kochs to the schools came with significant strings attached.

In the case of the millions the Kochs gave to Florida State for its economics department, the Kochs demanded the right to approve who was hired, to annually review their work and to withdraw funding if dissatisfied. Outrage erupted when students and the public learned of this infringement on academic freedom.

The Kochs donated approximately $150 million to 300 colleges and universities between 2005 and 2015, gifts they frequently specified must support economics and law schools fostering unfettered free-market capitalism. Of that, at least $50 million went to George Mason, where, like at Florida State, the Kochs got control over faculty and course selections. The libertarian brothers’ money helped convert the college into a center for libertarian study.

Three years ago, George Mason renamed its law school after the late, extreme right-wing Supreme Court Justice Antonin Scalia. This occurred after George Mason received a $10 million donation from the Kochs and a $20 million gift arranged by the Federalist Society, a Koch-funded institution that has for decades cultivated conservative and libertarian attorneys and promoted them as jurists, including current Justices Neil Gorsuch and Brett Kavanaugh. George Mason gave the Federalist Society and donors like the Kochs a say in faculty selection.

The Koch intrusion into George Mason academics was revealed by a campus group, Transparent GMU, which sued for release of the information. It is an affiliate of the group UnKoch My Campus, which seeks to preserve academic independence, freedom and integrity, as well as faculty governance rather than donor governance.

It’s one thing to name an engineering school after a guy who sponsored scholarships for women and minority students. That promotes diversity among learners and achievers and new perspectives for scientific inquiry. It’s another thing to name a law school after a reactionary Supreme Court Justice at the bidding of libertarian donors bent on converting the school into a right-wing training camp for future conservative judges. That covertly promotes a specific viewpoint, not free and wide-ranging academic instruction and research.

Billionaires don’t necessarily have students’ or workers’ best interests in mind when they hand out cash. Libertarian and right-wing judges, like the libertarian and right-wing political candidates that the Koch network has propped up with hundreds of millions in donations, push policies that are great for private-jet-owning billionaires, not work-a-day thousandaires.

The 2017 tax cut is a good example. By 2027, millionaires will reap 82 percent of its benefits. The law definitely lined the pockets of the Koch brothers, among the richest people in the world, worth more than $53 billion each. And the Kochs showed their appreciation with a gift. Thirteen days after the U.S. House, under the leadership of former GOP Speaker Paul Ryan, passed the tax break for millionaires, Charles and Elizabeth Koch each gave $247,000 to Ryan’s fundraising campaign, Team Ryan – a total of nearly half a million.

When the U.S. Senate approved the tax cut, which is projected to increase the federal deficit by $1 trillion over a decade, Ryan announced that he would attempt in 2018 to close that massive hole by slashing Medicare and Medicaid. Those are the health insurance programs for the elderly and poor that are beloved and depended on by working people – the very people who got precious little out of the tax cut for the rich that exacerbated the federal deficit.

Here’s the thing: Maybe it’s nice that some billionaires are willing to give. But billionaires’ “gifts” too often bear self-dealing strings. And handouts make many workers queasy anyway. They’d rather earn their own money and make their own decisions.

For Americans to achieve real freedom and self-governance, some of the billions that flow into the pockets of the already rich must go instead into the paychecks of the workers whose sweat creates profits. Political bribes, like the $500,000 the Kochs gave Ryan, must be outlawed. And the rich must be properly taxed so that the nation can afford to pave its roads, send its youngsters to affordable, properly government-supported technical schools and colleges, and restore its once-great middle class. American workers want autonomy, not charity, to help every person rise.

Leo W. Gerard also is a member of the AFL-CIO Executive Committee and chairs the labor federation’s Public Policy Committee. President Barack Obama appointed him to the President’s Advisory Committee on Trade Policy and Negotiation and the President's Advanced Manufacturing Partnership Steering Committee 2.0. He serves as co-chairman of the BlueGreen Alliance and on the boards of Campaign for America’s Future and the Economic Policy Institute.  He is a member of the executive committee for IndustriALL Global Labor federation and was instrumental in creating Workers Uniting, the first global union. Follow @USWBlogger

Posted In: From the USW International President

Union Matters

PRO Act Would Put Power Back in Workers’ Hands

By Kathleen Mackey
USW Intern

Between 1935 and 1965, union membership rose precipitously in the United States. Wages increased in tandem with productivity, benefits improved, the middle class blossomed and income inequality dwindled.

Those good times are over, however. After 1965, the rate of unionization steadily fell from the high of about 30 percent to 10.5 percent now. Wages stagnated after 1970, even as productivity increased. Income inequality rose to Gilded Age rates.

This was no accident. It was a result of a calculated campaign launched by the U.S. Chamber of Commerce and financially fed by corporations and right wing billionaires. They secured appointment of conservative, anti-union judges who ruled against unions. They bankrolled right-wing political candidates who passed anti-union legislation. And they subsidized anti-union organizations that taught corporations how to skirt the law and twist workers’ arms to defeat union organization efforts at workplaces.

Now, however, Democrats in the U.S. House and U.S. Senate have introduced legislation intended to reverse the union slide by restoring workers’ rights. 

The Protecting the Right to Work (PRO) Act, introduced on May 2, would make it easier for workers to form unions and would more effectively punish employers that violate the rights of workers trying to organize.

The proposed law would facilitate unionization, which Democrats believe would raise workers’ wages and reduce income inequality. Union workers earn about 13 percent more than nonunion workers and receive better benefits and pensions.

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The Richest Fantasy