Thursday, August 6, 2020
Fiat Chrysler bribed UAW with tens of millions, new GM court filing alleges
https://www.wsws.org/en/articles/2020/08/05/auto-a05.html
By Tom Hall
5 August 2020
Fiat Chrysler gave United Auto Workers officials tens of millions of dollars in previously unreported bribes, funneled through offshore bank accounts, to secure the union’s involvement in a bid to force a merger with General Motors, according to court filings submitted by lawyers for GM on Monday. The new accusations are part of GM’s bid to reopen its lawsuit against FCA alleging that its Italian-based rival used bribes to convert the union into an “FCA-controlled enterprise.” The lawsuit was dismissed by a federal judge last month, who noted “the direct victims of defendants’ alleged bribery scheme are FCA’s workers,” not GM.
The new court filings contain by far the largest-scale accusations against the UAW, either in GM’s civil suit or in the parallel criminal probe by the FBI, which has already brought down 14 FCA management and UAW officials. The “hush money,” according to GM, ran into the tens of millions, “exponentially higher” than what had been revealed so far in criminal charges against union officials and FCA executives.
While in its original complaint GM was at pains to insist that it was targeting only FCA and not the UAW, the new filing takes a far more aggressive stance against the auto union. Former UAW President Dennis Williams is now officially named as a defendant in the case. GM lawyers claim that Williams maneuvered former UAW Vice President Joe Ashton, who has already pleaded guilty to separate money laundering and wire fraud charges, onto GM’s Board of Directors in order to function as a “mole” for FCA.
The filing also contains the first public allegations against Ron Gettelfinger, UAW president from 2002 to 2010, who led the UAW during the restructuring of the auto industry under President Obama. It was under the terms of this deal, which slashed wages for new hires in half and destroyed tens of thousands of jobs, that the UAW gained billions of dollars in GM stock and a seat on the company’s board. According to the filing, Gettelfinger maintained overseas accounts in Switzerland and Panama, given to him by FCA, under a family member’s name.
The allegations mean that four of the five most recent presidents of the United Auto Workers have now been implicated in the massive corruption scandal. Gary Jones, who was president from 2018 until forced to step down late last year, has already pleaded guilty to charges that he had conspired with other top officials to embezzle over $1 million in workers’ dues money. Jones’ predecessor Williams is an unnamed co-conspirator in the Jones indictment, and his successor Rory Gamble, who replaced him on an interim basis, is reportedly himself the target of federal investigators.
The elaborate and wide-ranging scheme, dubbed “Kickback City,” involved offshore bank accounts in Italy, Switzerland, Panama, Singapore, Lichtenstein and the Cayman Islands. It was authorized by the late FCA chief executive Sergio Marchionne and other top executives, according to the filing. In addition to Williams and Ashton it also involved UAW Vice President for Fiat Chrysler General Holiefield, who only escaped prosecution because of his death in 2015. The aim of the scheme, GM’s lawyers allege, was to provide FCA with “confidential details about GM’s labor strategy,” aimed at imposing labor costs onto General Motors less favorable than those at Fiat Chrysler and to pressure the GM into a merger.
According to GM, former FCA executive Alphons Iacobelli, who pleaded guilty in 2018 to his role in bribing top UAW officials to obtain concessions in the 2009 and 2015 contracts, “curtailed his criminal plea to ensure that the true scope of the conspiracy was not revealed.” Iacobelli continued to cover up for other FCA executives and UAW officials even after his guilty plea, GM alleges.
While there is no reason to doubt the factual basis of the filing, it has the character of a desperate move by GM, one which suggests an increasingly fractious and embittered climate within corporate boardrooms as companies battle for survival in an economic situation fraught with dire perils.
While automakers had already been preparing for a long downturn even before the coronavirus pandemic, all three Detroit automakers posted huge losses in the second quarter due to a collapse in sales and a two-month cessation of production that was forced by a series of wildcat strikes. GM burned through nearly $8 billion in cash and posted a $806 million loss as sales dropped by roughly one-third. At Ford, where shareholders have long been demanding deeper cuts, CEO Jim Hackett announced his retirement only days after the company posted a $1.9 billion loss.
Prior to Monday’s filing, there were growing signs that the government was preparing to wind down the exposures of UAW corruption out of fear that continuing to air the union’s dirty laundry would serve to further encourage rebellion by autoworkers. But GM’s new filing, which was based on extensive work by private investigators conducted after the original suit was dismissed last month, threatens to utterly discredit the UAW and put paid to any claims the union can be reformed.
Paul Borman, the federal judge in the GM-FCA lawsuit, issued an extraordinary and nervous order in June demanding the two companies meet to settle their dispute out of court. “If this case goes forward, there will be years of contentious litigation,” Borman said, while the coronavirus pandemic “requires our attention here and now!” When lawyers for GM balked, Judge Borman dismissed the lawsuit on July 8.
At the same time, federal prosecutors began a series of meetings with UAW President Gamble to hammer out an agreement that would close the federal probe and keep the union out of federal receivership.
It is not clear whether the court will accept GM’s arguments and if the suit will be reopened. However, if there is any truth to the company’s allegations, it should serve as the final nail in the coffin for any lingering doubts as to whether the UAW remains, in spite of rampant and universal corruption, a “workers’ organization.” The filing’s description of a murky underworld of offshore bank accounts and corporate espionage depict an organization which is completely integrated within the orbit of the financial elite, and correctly seen by the auto companies themselves not as an adversary but as a tool of corporate policymaking. It is the outcome of decades of betrayals by the UAW, which have destroyed hundreds of thousands of jobs while the incomes of top union officials have soared along with the rising stock market.
For autoworkers, had the alleged FCA-UAW scheme to force a merger with GM succeeded, it would have produced even greater disasters than that which have already been inflicted through union-brokered concessions. The ultimate purpose of such a merger would have been to close down countless facilities and lay off tens of thousands of workers as “redundant,” a goal that the late Marchionne frequently declared in public. But for the UAW, the tens of millions in bribes would have been only a down payment for the billions in stock and other financial incentives that it could have expected to reap as a reward for brokering such a deal.
Such filthy dealings demonstrate the urgency of the call by the World Socialist Web Site and the Socialist Equality Party for the building of new organizations by workers, entirely independent of the UAW gangsters. Absolutely nothing associated with this organization can be trusted.
The latest revelations show, once again, that autoworkers must break with the UAW and take the initiative into their own hands. The World Socialist Web Site Autoworker Newsletter is helping workers accomplish this by forming rank-and-file safety committees at workplaces throughout the country. For help forming a committee at your plant, contact us at autoworkers@wsws.org.
House Speaker Pelosi signals readiness to cut unemployment benefits
https://www.wsws.org/en/articles/2020/08/05/unem-a05.html
By Jacob Crosse
5 August 2020
Speaker of the House Nancy Pelosi in an interview on PBS’ “NewsHour” program Tuesday signaled the Democratic Party’s willingness to reduce benefits for the nearly 30 million US jobless workers who had been receiving $600 a week in enhanced federal unemployment pay. The jobless benefit, part of the CARES Act, which allocated trillions for the corporations and banks, expired this past week.
The federal benefit, along with a moratorium on rental evictions from properties with federally backed mortgages, was allowed to lapse at the end of July, leaving millions in the lurch.
Shortly before the expiration of the federal unemployment benefit, the House of Representatives, in a near party-line vote, passed a $694.6 billion defense appropriations bill for 2021. The bill, overwhelmingly supported by the Democratic Party, included funding for 91 F-35 fighter jets ($9.3 billion) and nine new Navy ships ($22.3 billion). Added together, the cost of these 100 pieces of military hardware could provide supplemental jobless benefits for 30 million people for nearly two weeks.
While both parties worked around-the-clock for the financial oligarchy and their cratering stock portfolios by passing the CARES Act in late March, now that Wall Street has been rescued, the two big business parties are taking their time in working out the terms for imposing the full brunt on the economic crisis triggered by the pandemic on the backs of the working class.
Throughout the PBS interview, Pelosi, with an estimated net worth of $120 million, portrayed herself and the Democratic Party as champions of working people. However, when gently pressed by the news anchor, Judy Woodruff, the House speaker signaled the corporate-financial elite that the Democrats were prepared to cut the already inadequate $600-a-week benefit, saying, “Let’s find out what we can afford.” She added, “We will find our common ground.”
Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows have been meeting daily behind closed doors with Senate Minority Leader Charles Schumer and Pelosi. While the Democratic negotiators have claimed “progress” in the talks, the White House representatives, who had proposed cutting the unemployment supplement to $200, have said the two sides remain far apart.
All parties are seeking to pass a new bill that would provide reduced benefits, using the prospect of hunger and homelessness to blackmail workers into returning to virus-infected work sites or take other work at lower pay when their previous jobs have been eliminated.
At the end of the interview, Pelosi made clear that the goal of the Democrats was the same as the Republicans: “reopening” the economy (i.e., resuming at full blast the flow of corporate profit) by forcing teachers and students back to school so as to allow “our parents to go to work.”
For his part, President Donald Trump in a Tuesday press conference threatened to issue an executive order to suspend the payroll tax, the primary source of funding for Social Security, Medicare and Medicaid. He also took the opportunity to lash out against China, claiming that the looming wave of evictions in the US was “China’s fault.”
The World Socialist Web Site spoke to unemployed workers about the consequences of a cutoff or reduction in the federal unemployment supplement.
April, a cook from rural northern Illinois, said: “The $600 dollar added bonus really did help. We could not have survived without it. It made me realize that everyone needs to be making a basic amount to live and thrive.
“I was actually getting slightly more with the added money than I was with my paycheck before being unemployed, only because my pay was so low. Now that the benefit is gone, I am still unemployed and my partner now makes way less than he did previously.
“I went from working one job. Now I can’t find full-time work. I’ll have to work two or three jobs just to get by. And then my partner started a new job and was denied Medicaid because he makes $3 too much. He makes $11 an hour.
“We have a little saved up. I hope to stay in my apartment and be able to take care of the necessities, but if I don’t find work before then, I am not sure what we will do once September arrives. I am constantly oscillating between being angry and scared. Everything is so unequal. You have millionaires and billionaires and then you have the rest of us just trying to get by.”
A cashier from Virginia who was forced to return to work after the state failed to process her unemployment claim told the WSWS: “I was a cashier, now I am a personal shopper. I applied for unemployment benefits back in April. The benefits never were approved.
“I had panic attacks fearing for my safety. Luckily for me, my family and girlfriend, who was able to get the expanded benefits, were able to help me with rent throughout the last few months. If it wasn’t for them, I’d have been working throughout this entire pandemic.
“Two weeks ago, the last bit of money I received from the $1,200 check Trump sent ran out and I was forced to return to work. I’m not sure if I have a compromised immune system, but I had open heart surgery, so I’m worried if I catch this disease. My parents are elderly. I see people in my state socializing and not wearing masks. I’m definitely scared.
“The fact that I didn’t get any benefits throughout the entire pandemic has really hurt me
financially. My girlfriend and I had plans to move into a house together, but that isn’t going to happen now for a long time.
“This order to get back to work is really tough on people. We’re being forced to take high risks with our health in the middle of a health care crisis. If someone in the US government had actually done something to help people before this pandemic happened, we wouldn’t be in this situation now.”
Widespread protests in Bolivia oppose postponement of elections
https://www.wsws.org/en/articles/2020/08/05/boli-a05.html
By Tomas Castanheira
5 August 2020
Since Monday, a movement of strikes and blockades of main roads by workers and peasants has been spreading in Bolivia. Protesters are opposing a decree that further postpones general elections, threatening to maintain the de facto government of Jeanine Áñez indefinitely in power.
This week’s actions are a continuation of massive demonstrations that took place last week, on July 28, shortly after the Supreme Electoral Court (TSE) announced the cancellation of the elections scheduled for September. Amidst a protest in El Alto, a traditionally militant working class section of the capital city of La Paz, the Bolivian Workers’ Central (COB) called a general strike and blockades on August 3 if the court did not back down.
According to the COB, blockades were erected at 75 locations in the country on Monday, including strategic points in the Santa Cruz, La Paz, Cochabamba, Potosí, Oruro and Sucre regions. Marches by miners, peasants, indigenous people and poor urban workers took place.
In Potosí and El Alto, police forces clashed with demonstrators, throwing gas bombs and arresting people. In La Paz, a number of young people who were on hunger strike in front of the TSE were arrested and taken into custody by two police buses.
The anger of Bolivian workers and peasants against the coup regime has grown substantially in the course of the COVID-19 pandemic. The devastation of the virus is intersecting with the substantial increase in poverty in the country.
Unemployment has exploded in Bolivia, rising from 4.8 percent at the end of 2019 to 8.1 percent in May in urban areas. The Economic Commission for Latin America and the Caribbean (Cepal) predicts that by the end of the year some 500,000 Bolivians will be driven into extreme poverty and 36 percent of the population will be poor.
Under these conditions, the government has used the prospect of infection by the coronavirus to implement police state measures and postpone the date of the elections three times, while proving absolutely incapable of containing the spread of disease and hunger among Bolivians.
Over the past month, the number of COVID-19 infections has more than doubled, having already exceeded 80,000 confirmed cases. The number of deaths has risen even more sharply. With a record 89 deaths in a single day recorded on Sunday, the total number of deaths tripled in July to over 3,000.
These figures are a gross underestimate of the real situation, as the country has one of the lowest testing rates in the world. The recent explosion in the number of cases is directly associated with the anarchic resumption of economic activity, promoted by the government since June in the interests of the bourgeoisie.
Its most terrible results have been demonstrated in the collapse of the precarious Bolivian health care system. Most hospitals have already been forced to close their doors temporarily after the widespread contamination of their staff. The latest case occurred at the 9 April clinic in La Paz, which declared a state of emergency on Monday after 70 percent of nurses and 60 percent of doctors were found to be possibly ill with COVID-19.
The collapse of the funeral system, which is simultaneously occurring, was graphically expressed in the recent implementation of “portable” crematoria fixed on the back of vehicles that circulate on the streets of Bolivian cities.
In Bolivian prisons, which hold 18,000 people, most of them on a pre-trial basis, the government has already counted more than 150 cases and 40 deaths. Last week, a rebellion broke out simultaneously in four jails in Cochabamba, demanding medical assistance and measures to prevent the transmission of the virus.
Doctors and health professionals have protested against the general lack of personal protective equipment, which is resulting in the extremely high illness and death tolls of these workers. Groups of these professionals have been seen participating in this week’s demonstrations.
The coup regime is terrified that the growing demonstrations will get out of control and threaten to overthrow its power. Its desperate response is to promote an escalation of violence.
Making clear the government’s preparation for military intervention against the protests, the Government Minister Arturo Murillo’s threatened the protesters this Tuesday: “Lift the blockades, or we will lift them ourselves.”
Murillo has been one of the main officials responsible for the government’s fascistic tirades. In recent months, he has attacked the blockades of residents already taking place in the poor district of Cochabamba, K’ara K’ara, as being orchestrated by the “narco-terrorist” Evo Morales.
The conspiratorial accusations of all the opposition as “terrorists,” which justifies the permanent maintenance of Áñez and her allies in power, are growing in direct proportion to the social opposition.
Last week, Defense Minister Fernando López appeared on a television program accusing the massive protests growing in the outskirts of La Paz of being in fact a biological terrorist attack by peasants, supposedly contaminated with COVID-19, against the cities. “It’s not a protest… it is the people of Chapare who have come to El Alto to hack down, they are coming to infect the people of El Alto and La Paz,” he said.
The threat of a brutal repression of the Bolivian masses on the streets cannot be overestimated. The government is preparing even greater violence than that employed by the military in the aftermath of the coup, when at least 23 demonstrators were killed and more than 230 wounded.
In the same way that he abandoned those who were fighting against the coup in the streets last year, Morales is negotiating a deal between the COB and the Movement Towards Socialism (MAS) and the bourgeoisie.
“The meetings between TSE Bolivia and COB should not be just a greeting; dialogue is important to reach consensus on a unilateral decision by the electoral authority with dramatic consequences on the population such as postponing elections again and again,” declared Morales on Twitter at Monday.
The agreement being prepared by Morales with the same forces that promoted the coup will only pave the way for the crushing of the working class and peasant forces.
In order to fight against the fascist threats, against the miserable conditions and the coronavirus that plagues the population, Bolivian workers need to advance an independent political perspective towards socialism, unified with their brothers and sisters in Latin America and globally.
US teachers defy threats to cut funding for schools that delay in-person learning
https://www.wsws.org/en/articles/2020/08/05/uste-a05.html
By Phyllis Steele
5 August 2020
Facing popular outrage over the reckless rush to reopen schools, several large districts, including Los Angeles, Philadelphia, Houston and Miami-Dade, Florida, have been forced to start the school year with online learning only. As of July 29, Education Week reported, 20 of the 29 school districts with more than 100,000 students will reopen with remote learning only.
Four of the largest districts, however, including New York City (1.1 million students), Chicago (360,000 students), Hawaii (181,000 students) and Duval County, Florida (130,000 students), will require teachers and students to attend school for at least part of the week under a so-called “hybrid/partial” model, which also includes some remote learning.
Five large districts, Education Week reported, will hold a full in-person reopening available for all students. These include three in Florida—Hillsborough County (220,000), Polk County (101,000), Pinellas County (101,000)—and two in Texas—Dallas (155,000) and Cypress-Fairbanks (116,500).
Millions of students are being sent back to school in medium and smaller districts across the US, even though the numbers of COVID-19 cases are higher in many states across the country than they were when schools were forced to close in mid-March. While politicians from both parties profess concern about the academic and psychological impact of keeping schools closed, their chief concern is getting children out of their homes so their parents can be forced back into factories, warehouses and other workplaces to resume making profits.
Over the next week, several districts in Tennessee, Arizona, California, Florida, Nebraska, Mississippi and Utah will open with full in-person learning. At least nine cases have already been confirmed in Indiana’s schools, which opened last week, and in Gwinnett County Public Schools, the largest district in Georgia, 260 school workers have been quarantined after testing positive or being exposed to someone who had.
Protests against the unsafe openings continue to spread across the country. On Tuesday, teachers in Granite School District in Salt Lake City, Utah protested. Around 67,000 students are scheduled to return on August 24 for full in-school learning. About 100 teachers and parents in Columbia, Missouri also protested outside of the school board meeting Tuesday night in an event promoted on Facebook called “Not until it’s safe.”
Summing up the opposition by teachers, Mike, a high school teacher in central Michigan told WSWS, “The reason why they are giving each district their individual choice when and how to reopen is that if they mandated that all schools across country go back, it would ignite a huge general strike. They are trying to preempt a strike by placing onus on districts. This whole thing is from [Education Secretary] Betsy Devos’ playbook. She is the personification of all that’s wrong with education. DeVos and her husband are looking at this as a crisis to be exploited, to advance their campaign for school privatization,” he said.
As opposition continues to grow, the Trump administration, Congressional Republicans and various Republican-controlled state legislatures are threatening to reduce or cut funding to schools that do not reopen for in-person instruction.
The Senate version of the new stimulus package, dubbed the HEALS Act (Health, Economic Assistance, Liability Protection and Schools Act), commits two-thirds of the proposed $70 billion in federal school funding only to those schools that reopen for in-person instruction for at least half of their students for half of the week. Schools, along with universities, hospitals and other corporations, would also be granted a five-year waiver that prevents them from being sued for any illness or death related to COVID-19.
In Florida, Education Commissioner Richard Corcoran issued an order that says by August 24 all 67 districts Òmust open brick and mortar schools at least five days a week for all students. Schools that do not receive state approval for their reopening plans will not be fully funded, the order threatens.
In Texas, another hotspot for the virus, local health departments can close schools if there is an outbreak. However, Texas Attorney General Ken Paxton ruled that closing schools as a preventive measure—as they were in March—would be against the law.
Texas Education Commissioner Mike Morath warned that district superintendents must offer a semester of in-person learning for high school students after no more than eight weeks of online learning, otherwise districts would forfeit their state funding. At the same time, the superintendents were mandated to implement in-person learning for elementary and middle school students, not hybrid options, or face funding cuts.
Several other states, including Arizona, Indiana, South Carolina and Michigan, are threatening to use the financial stick to force cash-strapped schools to reopen. In Michigan, the Republican-controlled state legislature is trying to blackmail teachers to return to the classrooms otherwise their jobs will be given to private interests, including “pods,” where parents who can afford them hire teachers to provide private education to small groups of children, along with online charters, private and parochial schools.
Michigan House Bills 5910 and 5913—called the “Return to Learn” bills—would outsource the jobs of teachers and other instructional staff to non-certified instructors and for-profit companies to replace experienced educators. They would also create a voucher-style system that funnels public school money to parents who send their children to several e-learning providers during the day. The bills would also require benchmark testing three times over the next school year, which will be used to further punish public school districts grappling with already inadequate funding and the public health crisis.
In Detroit, the state’s largest school district, Superintendent Nikolai Vitti threatened in a town hall meeting last month that if the district does not offer face-to-face instruction in the fall, it risks losing students to charter schools or suburban districts that do. Vitti also boasted that the school district had received a sharp increase in applications for new teaching positions, an explicit threat to older, higher-paid teachers, many of whom fear returning to the classroom out of health concerns.
The Democrats have postured as opponents of Republican efforts to use the pandemic and the resulting economic crisis to accelerate school privatization. But the Congressional Democrats’ federal legislation, dubbed the Heroes Act, would also leave school districts underfunded, forcing them to slash jobs and programs. Under the eight years of the Obama-Biden administration, the economic fallout of the 2008-09 financial crisis was used by the White House to vastly expand charter schools and slash teachers’ jobs and pay.
The back-to-school campaign is being enthusiastically supported by Democratic governors like New York’s Andrew Cuomo, California’s Gavin Newsom and Michigan’s Gretchen Whitmer. As opposed to the Republicans, however, the Democrats have more closely coordinated the campaign to reopen the schools with the teacher unions, the National Education Association (NEA) and the American Federation of Teachers (AFT).
The NEA and AFT have spent the last two years desperately trying to prevent the wave of teacher strikes demanding improved school funding, wages and working conditions, from coalescing into a nation-wide strike against both corporate-controlled parties. Once again, the unions are seeking to divide educators by state and district and prevent a general strike against the homicidal plan to open the schools.
That is why teachers, school employees, parents and students must take the initiative in their own hands, through the formation of rank-and-file committees, independent of the unions, in every school and neighborhood. These committees should prepare for a nationwide strike of educators and fight for the broadest support from every section of the working class.
“I support a nationwide strike if there is a massive endangering of students’ and teachers’ lives,” said Mike, the Michigan teacher, who said there was no safe way to reopen schools during the pandemic. “Say we go from 30 to 15 students and social distance? What about air circulation? No one’s talking about air flow and filtration in schools. But science says this is best for keeping spread of COVID down. Filtration systems are going to cost billions of dollars.
“I am in the middle of a high school that sits on cinder blocks. The structure of most school buildings is not conducive to having good air flow. I know my high school students and they are social creatures by nature. Social distancing will not be happening all of the time. Also, who is enforcing it? Not me, how will I teach? Then what is going to happen when they say, ‘Hey! We’ve run out of money!’ It’s about money, as long as it’s coming, things will be fine. When money runs out that is when people will stop playing nice.”
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