STUMP » Articles » Deal-Making: New York, Amazon, Chicago, and Corruption » 26 February 2019, 06:46

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Deal-Making: New York, Amazon, Chicago, and Corruption   

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26 February 2019, 06:46

There are some interesting aspects coming out of the Amazon deal meltdown, and one that could get more scrutiny is all the deal-making involved.

It’s still going on… mainly because of the intra-Democrat fighting, which is very interesting to a person sitting outside, looking on.

I’m just throwing in some of the stuff in this post, because I believe more will still be coming.

It’s election day in Chicago (for mayor) and New York (special election for public advocate… for a few months), so I’m stepping on the Taxing Tuesday post (immediately preceding this one). I gotta get this one out before we get election results.

STATEMENT FROM NEW YORK STATE BUDGET DIRECTOR

Open Letter From New York State Budget Director Robert Mujica Regarding Amazon

In my 23 years in the State Capitol, three as Budget Director, Amazon was the single greatest economic development opportunity we have had.
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First, some labor unions attempted to exploit Amazon’s New York entry. The RWDSU Union was interested in organizing the Whole Foods grocery store workers, a subsidiary owned by Amazon, and they deployed several ‘community based organizations’ (which RWDSU funds) to oppose the Amazon transaction as negotiation leverage. It backfired. Initially, Whole Foods grocery stores had nothing to do with this transaction. It is a separate company. While Amazon is not a unionized workforce, Amazon had agreed to union construction and service worker jobs that would have provided 11,000 thousand union positions.

New York State also has the most pro-worker legal protections of any state in the country. Organizing Amazon, or Whole Foods workers, or any company for that matter, is better pursued by allowing them to locate here and then making an effort to unionize the workers, rather than making unionization a bar to entrance. If New York only allows unionized companies to enter, our economy is unsustainable, and if one union becomes the enemy of other unions, the entire union movement – already in decline – is undermined and damaged.

Second, some Queens politicians catered to minor, but vocal local political forces in opposition to the Amazon government incentives as ‘corporate welfare.’ Ironically, much of the visible ‘local’ opposition, which was happy to appear at press conferences and protest at City Council hearings during work hours, were actual organizers paid by one union: RWDSU. (If you are wondering if that is even legal, probably not). Even more ironic is these same elected officials all signed a letter of support for Amazon at the Long Island City location and in support of the application. They were all for it before Twitter convinced them to be against it.

There is a lot more in that letter, but I grabbed the bit I found to be pretty important.

I want to highlight that everybody political involved in this process, at any side, is a Democrat. Heck, in this letter Mujica states that Gov. Cuomo and his entire administration are really progressive. This ain’t Blue Dogs vs. the progs… they’re all progs.

I don’t trust any of these people, and keep in mind that most of my votes as a Republican in the state is just a reminder to all the Democrats that some of us still exist.

UNION STATEMENT

This was what the union stated when Amazon pulled out: President Appelbaum’s Statement on Amazon Deal Developments

“If the amazon deal falls apart, they will have nobody to blame but themselves. A major problem is the way the deal was put together shrouded in secrecy and ignoring what New Yorkers want and need. They arrogantly continue to refuse to meet with key stakeholders to address their concerns, despite requests from New York’s top elected officials to do so. With their long history of abusing workers, partnering with ICE to aid their persecution of immigrant communities, and contributing to gentrification and a major housing crisis in their hometown of Seattle, New Yorkers are right to raise their concerns and opposition to this plan. New Yorkers wont be bullied by Jeff Bezos, and if Amazon is unwilling to respect workers and communities they will never be welcome in New York City,” Stuart Appelbaum, President of the Retail, Wholesale and Department Store Union (RWDSU).

Uh…the bolded sounds kind of odd to me. I’m going to assume it’s primarily Amazon cooperating with federal officials when there are warehouse raids or whatever. Amazon doesn’t have a huge amount of choice on that matter.

More recently, in the coverage of Mujica’s letter by the NY Post: Cuomo blasts labor union over Amazon pullout

RWDSU spokeswoman Chelsea Connor fired back, calling the Mujica letter “deceitful and dishonest.”

“He is trying to justify a failed process, which was shrouded in secrecy and was crafted without the input of the countless people who would be directly affected; instead the administration should have sought to ensure every worker was protected,” she said.

RWDSU opposes “anti-union companies” such as Amazon from receiving public subsidies until they “change their behavior.”

The dispute over the Amazon disaster has caused a rift following a year in which labor unions closed ranks behind Cuomo in his primary battle against Cynthia Nixon.

It was Appelbaum who nominated Cuomo to be the nominee at the state Democratic Party convention. He has long been one of Cuomo’s staunchest labor supporters.

Gotta say, it’s quite enjoyable for me to watch the Democrats in NY fall to squabbling like this. That’s about the only enjoyment I can get out of NY politics.

MORE LEFTIE VIEWS

Here’s something from Jacobin, which is exactly what you think it is.

How the NYC Left Took on Amazon and Won

After all, it was “us” — the combined forces of the New York left, from new kids on the block like Queens Democratic Socialists of America (DSA), to community groups like CAAAV and DRUM (Desis Rising Up and Moving), who have been in Queens for years, to RWDSU (the Retail Wholesale and Department Store Union) and many other people and organizations. This coalition deserves credit for defeating Governor Cuomo’s terrible plan to give a highly profitable, famously tax-evading company billions in tax breaks to enrich developers and make Long Island City even less affordable for the many working-class people who live there.

It’s an astonishing victory for the working-class and the Left. The global elite sees it as a bewildering defeat, far beyond a local story.

…..
What worked for the Left here? “The organizing,” says Abdullah Younus of DSA.

The Left argues — a lot! — about the best approach to fighting capital. Should we focus on electing progressive or socialist-leaning politicians to office? Or should we build a base by talking to people about the issues? Public education or protest? Do we work with labor unions or with immigrant workers outside of such structures? Do we pressure politicians at the city or state level or organize working-class people in the community?

The lesson of the Amazon victory is, yes. All those things.

Okay, if you think that nothing is better than Amazon (and I mean that literally – that empty buildings are preferable to Amazon moving in), then I guess it’s a win.

Activists went door-to-door in Long Island City, talking to residents about why the Amazon scheme was bad for the neighborhood, emphasizing Amazon’s anti-unionism, the planned billions in tax breaks, and gentrification. While many residents initially supported Amazon HQ2, those conversations changed many of their minds. People were encouraged to contact their elected representatives, come to protests and town hall meetings on the issue, and get involved in the anti-Amazon fight. Many did. There were also a number of rallies, as well as disruptive protests of City Council hearings on the deal.

Some unions displayed a disgraceful lack of solidarity, showing little interest in Amazon’s general anti-unionism and the broader interests of the working class, focused only on the crumbs they could wring for their own members from the deal. These bad apples are now rebuking the Left with Chamber of Commerce talking points from the 1980s (looking at you, SEIU 32BJ).

Huh, imagine that some unions would like jobs for their members.

All of this work by the Left created a climate of hostility, where Amazon knew it would face public scrutiny, skeptical officials, and labor organizing. The company began to realize that in New York, a global media capital, it would face a constant public airing of all its worst qualities.

RWDSU, part of the anti-Amazon coalition and a vocal critic of the HQ2 deal, had a meeting with Cuomo and Amazon officials in which Amazon seemed to be make concessions on union organizing rights. Hours later, the company backed out of New York altogether.

So, I understand. Some of these people, whose own jobs aren’t threatened (they think), would prefer no jobs for union members than that some non-union jobs might exist. That would be awful.

BEHIND THE SCENES VIEW

This take was rather interesting, and given the details, one might think reporters can follow up on this:

Just prior to the deal’s collapse, at a meeting in City Hall, some off-the-cuff remarks were made by some local lawmakers, within earshot of anyone in the room. The gist of those remarks is that they thought the process was sufficiently far along, where Amazon would not dare pick up their marbles and leave, thus giving the pols more leverage. The pols were playing a game of ‘Chicken’ and they lost. The unions also had a hand in this, as they were putting pressure on city and state lawmakers (other than the Gov. and Hizzoner) to extract additional concessions or suffer the consequences. (The unions in this town have an outsize influence on elections).

One of the main sticking points, given only cursory media coverage, was a demand that new hires only come from within NYC. Amazon said “are you kidding?” While I suspect it was only an opening bid by those making the demand and they were willing to expand to Long Island and Westchester, as a sizable percentage of the jobs created were going to require folks with advanced STEM degrees, several years of experience, and a proven track record of achievement, Amazon was not willing to limit its hiring pool to a narrow region of NY.

My own reaction:


And I’m not kidding about NYC population churn. I’m part of that churn, of course, and I’ve watched it slosh around over two decades as industries boom and bust.

I came into NYC from NC back in 1996, intending to stay for grad school and then go back to NC. That, obviously, didn’t happen.

By 2000, I could no longer live near NYU: trust fund babies and dot-com boomers were pricing me out of the neighborhood. So I bought a co-op apartment way out in Queens (in Kew Garden Hills). In 2007, I had Stu & 3 kids in a 2 bedroom apartment… so I moved way out into Westchester (almost in Putnam). That’s not an unusual progression: many of my current neighbors used to live in NYC, too.

CHICAGO CONTRAST

Jane the Actuary interviewed Chicago mayoral candidate Paul Vallas:

Then, since he is running as that candidate, above all others, willing to reform city government, I asked him how he would repair Chicago and undo its history of corruption and what he called its “for-profit political system” that drains the city’s finances. After all, at the candidates’ forums I watched via livestream, candidates generally professed their desire to do away with aldermanic privilege, that is, the ability of the alderman to control what can and can’t be built in his/her ward. But how much can a mayor, however reformist, persuade aldermen to vote to undo a system which profits them?

Here was his answer:

First, he was optimistic about the new aldermen coming in, even if simply due to retirements. The new faces will be a boost for ethics reform.

Second, Ald. Ed Burke will be gone.

Third, aldermanic privilege is not, as I had thought, the result of any city ordinance. It’s just an established practice that they approve or reject projects in their wards. A mayor could simply choose to overrule an alderman’s action without needing any sort of enabling legislation and, Vallas said, “banning that will take an important component of pay-to-play out of the equation.”

Fourth, while aldermen’s service as such cannot be restricted by term limits, the duration of their control of committees can be.

Fifth, to prevent conflicts of interest, individuals appointed to the various boards can be prohibited from representing anyone as a client who receives contracts from the city or other agencies.

And finally, there is so much corruption in the system simply because the process to appeal property taxes, zoning, signage, etc., is so onerous that people have to hire a middleman. If these processes were simplified so that people could do this on their own, it would “take the profit out of it.”

These are all reasonable ideas, but I’m a bit skeptical about the ability to get things changed. A lot of people are making out like bandits under this… including Mike Madigan. How can he deal with the state legislative forces that have an interest in keeping the corrupt system of Chicago going?

Interestingly, the local GOP endorsed Vallas:


Vallas is not a Republican. He has been involved in the Democratic Party since 1995, at least.

And he is one of the few reasonable candidates among the 14 running.

But the corruption of Chicago is a long-standing problem. The current mayor is giving the next one a little present: either staffers he won’t want or extra costs he doesn’t need:

Rahm Emanuel’s mayoral reign ends in May, but thanks to contracts he’s extended to many key agency heads, whoever replaces Emanuel will be stuck with them for years to come — or pay handsomely for the privilege of making new appointments.

A clean sweep of the heads of the Chicago Park District, City Colleges of Chicago, Chicago Public Schools and Chicago Housing Authority would cost taxpayers at least $820,000 in golden parachute salaries — and more for benefits — in addition to the salaries for the new appointees.

To be sure, $820K might not seem like much to get rid of poison, if poison they be. One of the examples is clearly the worst:

Michael P. Kelly took the helm of Chicago’s parks in 2011, among the first agency heads Emanuel tapped after he was elected. Yet Kelly didn’t sign his first contract with the Park District until December — and it lasts until at least Dec. 31, 2022.

Kelly’s deal appears to be the most egregious example of Emanuel sticking his successor with a long-term deal. It was done just after Emanuel chose political retirement over a battle for a third term. And Kelly’s contract was approved at the final parks board meeting of Jesse Ruiz, the board president who then left to join Gov. J.B. Pritzker’s administration.

Emanuel has long been the number one cheerleader for the $500 million Obama Presidential Center. But while he won’t be at City Hall to see that controversial project through, Kelly would continue to oversee a controversial golf course merger tied to the Obama center project.

Kelly’s contract could extend into 2025; Ruiz could not recall the last time a Park District superintendent had a written contract. Ruiz said he offered Kelly a written deal like other agency heads to make sure Kelly wasn’t replaced “cavalierly” by a mere “political supporter” of the new mayor.

Mmmm. Sure.

BOOK ON PUBLIC FINANCIAL SHENANIGANS

This leads to a fictional example: Blinded Authority by Chad Boles. Boles was kind enough to send me a copy to review… I was a bit skeptical: a book centered around public finance?

And, on top of that, when I received the book, I noticed there was a glossary in the back, including definitions/explanations for stuff like 403(b) plans.

The novel is set in swampy ole Florida, and opens with three men on a private plane (one is passed out drunk, one is sexing up a flight attendant (private jets have those?), and the third is stressing out over having to complete a deal.)

I’ve just gotten started on it, but I have had to sit down and start making a character list. Note: Charles Dickens books and even Agatha Christie books often have a character list at the very front. Many people find these helpful.

OUTSIDE THE CITIES

Stupid Midwesterners Don’t Understand AOC’s Job-Killing Joy

Amazon was about to deliver thousands of new jobs to New Yorkers, and billions of dollars in tax revenue to the city’s coffers — but don’t you worry, Alexandria Ocasio-Cortez has proudly helped put a stop to all that. In flyover country, we’re a bit confused about why someone might not actually want all those jobs and all those billions for their constituents, and that’s a story Salena Zito has for you today. Her latest is headlined, “The populist sledgehammer kills Amazon jobs that Middle America would love to have.”
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Here’s the thing about the Postmodern Left: They don’t give a damn about jobs, wages, or really even any particular government program or Green New Deal or Five-Year Plan, or whatever it is they’re peddling this week. They’re just cynically cashing in on the system they pretend to disparage and despise. (Actually, the despisement is real.)

AOC is an excellent case in point. She enjoyed a privileged upbringing, was awarded a prestigious credential (I refuse to say she “earned a degree”) by a famous school, enjoyed her mid-20s living the bohemian life, saw her chance to become famous — and leapt at it at once.

Courtesy of the voters of her district, AOC has a good-paying job, one with fewer actual responsibilities than her prior bartending gig. Now that she’s on board the Fame Train, she might never have to provide an honest service or produce a useful product for the rest of her life. Even if she’s squeezed out by redistricting after 2020 (assuming her “worries” are well-founded), Ocasio-Cortez looks set for a comfy life of speaking engagements, book tours, and the occasional tongue bath on The View.

Salena Zito’s piece: The populist sledgehammer kills Amazon jobs that Middle America would love to have

YOUNGSTOWN, Ohio — Tito Brown can’t imagine driving a perfectly good thing out of a town that hasn’t had a perfectly good thing come its way in a very long time.

At least, a perfectly good thing the size and scope of the Amazon headquarters that ideological politics drove out of Long Island City on Thursday, when Democrats including Rep. Alexandria Ocasio-Cortez, D-N.Y., danced on the grave of the deal as Amazon walked away from the New York project.

Brown doesn’t really get that. He governs a city with a declining population, a 40 percent poverty rate, and would welcome the opportunity for a project such as Amazon to have considered locating here.

“Oh, any time I can get regional and/or economic growth in my community, I would absolutely want that here,” he said. “It’s budget time.”

And, what’s interesting, the governor of New York, and the mayor of New York City, both really wanted those Amazon as well.

But a bunch of little loudmouths ruined it for them.

Sledgehammers make great copy on Twitter, but they don’t help legislators govern, or help job creation — just the opposite.

In New York, the populist sledgehammers cost the region well-paid jobs that ran the gamut from working-class to high-tech. The Amazon project actually enjoyed broad support, with a poll showing as recently as last week that 56 percent of New Yorkers support the project over just 36 percent who do not. Support for it was even higher among minority registered voters than white voters.

In Youngstown, Brown has to govern, knowing the possible downfalls that come with large companies locating in communities. But he also knows the upsides. He’d like the upside.

“I think the negatives would be it’s a new industry. People are afraid of the change. They’re afraid of, my life as I knew it before is not the same as what it’s going to be once this happens in my community,” he said.
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“We lost our identity of being a steel mill town. That’s not coming back. The way we knew life back then, it’s not going to happen. There’s not going to even be a small glimmer of that life as we knew it then. My grandfather and my father’s steel mill, they’re not coming back. You talk about the new technology, the new advances that we have coming in the next 10 to 30, 40 years, that’s what is happening,” he said.

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Brown is part of the Democratic Party that is pragmatic on business because he knows business means jobs and jobs mean stability in the community.

“You can’t be shortsighted and look at who’s delivering the product versus who’s actually going to benefit from this product being in your community. It’s not poisoning your community. It’s not harmful to your community. We have a 40 percent poverty rate here in the city of Youngstown. It’s probably 85-95 percent of the community is on free and reduced lunch. That’s a hard sell for me to say I don’t want that to go away. No, I want to reduce that and eliminate that as the mayor of the city of Youngstown,” he said.

Brown said he would be happy to talk to Amazon about locating their headquarters there. With Youngstown’s access to the major interstates, their close proximity to D.C., New York, Cleveland, Chicago, and Pittsburgh, as well as plenty of acreage along the Mahoning River and a solid workforce, he has a solid argument to make.

It would be nice if the Democratic Party could be a national party again.

Well, again, it wold be nice for all sorts of reasons, and maybe it will take an explicit party split to make it happen. It’s been too long without a good party split.

OTHER COVERAGE

Just a link dump of a bunch of related things… I may have something more to write later on a few of these, but I think let’s move on.

I think this one will keep going on, because there are a bunch of pissed-off politicians within a single party who have to deal with each other…because there’s no Big Bad Republicans to oppose. Funny, that. Maybe you should have kept a few of us around.

Oh well.


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