InsideSources

A union practice that involves collecting federal subsidies intended for personal caregivers is facing growing backlash from critics who see it as a scam.

Medicaid funds can be provided to personal caregivers who care for an elderly and disabled individual. The caregiver in most cases is related to their client. It’s a system that allows for personalized treatment and oftentimes it allows families to care for loved ones. But it’s also a system that has enriched unions.

Labor unions in a handful of states have been able to take a portion of those funds by organizing all the personal caregivers as one bargaining unit. Lawmakers in those states have allowed the practice by implementing policies that classify the caregivers as public employees – but only for the purpose of collective bargaining.

Those opposed to the union practice are ramping up their fight against what they see as a scam – calling it “dues skimming.” Republican Rep. Cathy McMorris Rodgers recently announced that she plans on introducing legislation intended to stop the practice. The congresswoman met with worker advocates and caregivers Wednesday to discuss the issue on Capitol Hill.

The State Policy Network (SPN) has been closely following the union practice while working with caregivers who have been forced into the system. SPN has found in its research that unions take $200 million annually from Medicaid funds through personal caregivers.

Critics argue the caregivers are often tricked or pressured into becoming dues-paying members. Minnesota unions were even accused of wide-spread fraud and potential collusion with the state when it successfully organized 27,000 care providers – in what is potentially one of the largest bargaining units in American history.

The union practice exists in states like California, Washington, Oregon, Massachusetts, Minnesota, Vermont, and Connecticut. Minnesota lawmakers, for instance, allowed a state union to organize Personal Care Providers (PCA) as a single bargaining unit by passing a law dictating they are state employees simply because they collect Medicaid funds. Democratic Gov. Mark Dayton tried to do the same in 2011 through an executive order, but it failed in the courts.

The union practice has already been facing pressure on the local level. Minnesota PCAs was launched in recent years to help disfranchised care providers in that state. The Center of the American Experiment, the Center for Independent Employees, and the Center for Worker Freedom have worked alongside a group of PCAs in that effort.

The Freedom Foundation, a Washington state based free-market think tank, has been calling attention to the issue in recent years. Freedom Foundation labor policy director Maxford Nelsen points to the Service Employees International Union (SEIU) and the American Federation of State, County and Municipal Employees (AFSCME) as being the main unions behind the practice.

“Medicaid will pay for homecare services for the elderly and disabled,” Nelsen told InsideSources. “The SEIU and AFSCME, back in the late 90s, when union membership was generally declining saw these workers, and this pool of Medicaid dollars, as a potential organizing opportunity.”

The U.S. Supreme Court addressed the issue to an extent during the 2014 case, Harris v. Quinn. The justices ruled that Illinois home care providers couldn’t be forced to pay dues because they weren’t technically state employees. Nelsen argues that unions and state leaders have found ways around those restrictions.

“The states and unions have worked hand and glove to design a series of workarounds to the Harris v. Quinn decision, and to keep people paying dues whether they want to or not,” Nelsen said “There are literally hundreds and thousands of these care providers around the country paying union dues to the SEIU and AFSCME against their will.”

Nelsen adds that in some states the caregivers are pressured into signing a membership card, which then makes it very difficult to leave the union. California only allows members to leave during a 10-day period each year. Many states have captive audience meeting with union organizers where they pressure the caregivers into joining – or, according to Nelsen, don’t let them know they have a choice.

Nelsen notes that in his own state of Washington, caregivers have funds automatically withdrawn unless they explicitly state in writing that they want to opt-out of being a dues-paying member. Those caregivers don’t even have to sign a card or make contact with the union before Medicaid funds are withdrawn by the state on behalf of the union.

The SEIU and AFSCME did not respond to a request for comment by InsideSources.

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The call for a tech-savvy government is spreading from the White House to the halls of Congress, according to House Republican Conference Chair Cathy McMorris Rodgers, who addressed a tech conference in New York this weekend to call on government to function more like a Silicon Valley startup than a bureaucratic agency.

“Innovations in technology have the potential to revolutionize the way citizens interact,” McMorris Rodgers told the crowd at the Personal Democracy Forum Friday. “Technology can solve problems and improve lives by changing government’s approach to public policy.”

During McMorris Rodgers’ “Imagining the Congress of the Future” speech at the conference, which discussed the way technology and the Internet can influence democracy, the House Republican chair said interacting with Congress “is more similar to the DMV than it is to Uber.”

“The same creative thinking that launched Uber and Lyft should be used to spur tax reform,” McMorris Rodgers said. “The same innovation that leads to new diabetes and cancer drugs should be adopted when Congress envisions a 21st Century health care system.”

The House GOP chair said that Congress’ history of functioning reactively instead of with vision won’t suffice in the age of the Internet, with government already failing to keep pace with overseeing and integrating technological innovation.

“So what we’re seeing is a 19th Century institution often using 20th Century technology to respond to 21st Century problems,” McMorris Rodgers said. “In order to more effectively engage people in the political process, we needed to make it personal. We needed to bring the same innovative approach to Capitol Hill that we’ve seen in tech startups and companies across America.”

The Washington state Republican added she was committed to leading the charge in bringing Congress “up to speed.”

“I want to be a positive disruptor on Capitol Hill,” McMorris Rodgers said. “I want to bring the innovative mentality of the Pacific Northwest and Silicon Valley to Washington and use it to change how government views outreach and problem solving.”

The sentiments echo those of recently announced 2016 Republican presidential contender Carly Fiorina, the former Hewlett-Packard CEO who has managed to take her Silicon Valley experience and vision for a serious tech update to government to gain a favored underdog spotlight.

“It’s important to have someone in the White House who has a fundamental understanding of technology, a fundamental vision for how technology can be used,” Fiorina told the crowd at another tech conference in New York last month. “Technology is a disruptive force; maybe we should use it to disrupt the status quo.”

For Fiorina, part of that disruption includes shaking up the 2016 presidential field, and not just on her side of the aisle.

“I’ve taken hundreds of questions — whether about hot dogs or my personal finances — and I think it’s all fair game,” Fiorina said in a statement last week about her recently disclosed finances, which revealed a net worth of $59 million for the GOP candidate and her husband.

“I think leadership of any kind requires trust and transparency and voters should demand no less from their political leadership in government,” Fiorina said.

The comment was a not-so-subtle swipe at Democratic frontrunner Hillary Clinton, who routinely withholds from taking questions from the press, and has made misleading statements about her wealth, while the Clinton family’s foundation has been slow to make financial disclosures about its worth and donors.

Required by law to run for public office, the financial disclosure only mandates candidates reveal their assets and income within a range, but Fiorina went a step further, disclosing an exact figure for her net worth and two tax returns from 2012 and 2013.

Fiorina and her husband Frank, a retired AT&T executive, paid a federal tax rate of 20 percent in 2012 and 2013 and an overall rate of 30 percent. According to the Fiorina campaign, the couple gave an average of 14 percent of their income, which was $2 million in 2013 and $1.3 in 2012, to charity and non-profit 501 c(3) organizations.

Fiorina has made $786,000 for public speaking events since 2014. The company has filed an extension for the tax year, but said in a note attached to the disclosure Fiorina plans to donate her fee for two upcoming speeches — each worth $48,000 — to charity.

The bulk of the couple’s wealth is in their stock portfolio and real estate. The Clintons, meanwhile, have taken in $30 million, mostly from public speaking, since the start of 2014 alone, according to a financial disclosure from the Clinton campaign last month.

A campaign representative said the Clintons paid an estimated more-than 30 percent tax rate in 2014, and the couple’s total asset disclosures have ranged from $11.3 million to $52.7 million since 2014.

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