June 2004

"WORKER CAPITALISM" OR CLASS COLLABORATION?

REVELATIONS OF PARTICIPATION by key trade union leaders in one of the biggest private housing developers in western Canada have sent shock waves through the labour movement.
Researcher Will Offley, a member of the BC Nurses Union and an activist in progressive movements in Vancouver, has published a detailed analysis of the role of union leaders such as CLC President Ken Georgetti, one of twelve trade unionists among the seventeen directors of Concert Properties Between 1989 and 1999, Concert built 80% of the rental housing constructed in Vancouver, reaching an asset base of $450 million in 2000. As Offley writes, "Concert, and its companion enterprise Concert Real Estate Inc., constitute one of the more visible examples of `worker capitalism,' a phenomenon that had its inception in the 1980's and is now flourishing across Canada."
Concert Properties was largely the creation of Bill Clark, then?president of the Telecommunication Workers' Union, who urged twenty union pension plans to pool $30 million of their funds to provide the initial capitalization to get the company up and running.
Offley asks "two very uncomfortable questions: Why is Concert Properties a member of Canada's largest and most powerful P3 lobby groups, the Canadian Council for Public?Private Partnerships? Why did Concert Properties donate more than $16,000 to the Liberal Party of British Columbia last year?"
The Canadian Council on Public-Private Partnerships includes most major corporations engaged in privatization. Politicians who have addressed the Council's annual conferences range from federal cabinet ministers (David Dingwall, Donald MacDonald, Doug Young, David Collenette, Lucienne Robillard) to premiers like Gordon Campbell, Ralph Klein, Brian Tobin, Frank McKenna, Roy Romanow, Bob Rae, and many provincial cabinet ministers.
Concert Properties pays $600 in annual fees to be a corporate member of CCPPP, joining privatizers such as Aramark, Sodexho and the Compass Group, all engaged in contracting out the jobs of HEU members at half their former wage rates. The Council's executive includes Bombardier and SNC Lavalin, involved in the recent attempt to build the RAV line in Vancouver as a P3 operation.
According to Concert Properties President David Podmore, the company joined the Council in 2001, "at a time when the company was exploring the possibility of an involvement in public?private partnerships being discussed by various governments." After exploring the "possibilities of involvement in select P3 projects," the directors later decided to drop that idea, "with the possible exception of P3 projects that are essentially pure real estate development opportunities at an acceptable scale and provided that these projects do not result in job displacement, privatization of services currently provided by government and/or union employees."
But Concert Properties was a member of a consortium that submitted an Expression Of Interest in 2002 to build RAV line stations. Its decision to change direction, says Offley, seems to have taken place after its elimination from the bidding process.
Then there's the matter of Concert's ties to the Liberal Party. Director Dave Haggard was just appointed Liberal candidate for New Westminster?Coquitlam by Paul Martin. Another director, Tony Tennessy, formerly of the Operating Engineers Union, was a leadership campaign supporter of Sheila Copps, who appointed him a director of the 2010 Olympic Organizing Committee.
More astonishing is the company's $16,665 donation to Gordon Campbell, far more than the $833 donation that Langley IWA local president Sonny Ghag gave to the Liberals.
Jack Poole, the Chairman of the Board of Concert Properties, is a longtime Liberal with a long history of links to Gordon Campbell.
According to journalist Russ Francis, in 1989, Campbell (then mayor of
Vancouver) helped set up Vancouver Land Corporation (VLC) Properties Ltd., headed by Poole. In exchange for access to $48 million worth of public land, VLC promised to build up to 2,000 units of "affordable housing" each year, but only ever built 1,143 units, none of which was "affordable". In a report to shareholders, VLC said the rent for all of the units was higher than that in nearby buildings. VLC Properties later changed its name to Greystone Properties and eventually to Concert Properties.
Georgetti was a key player in VLC as president of the BC Federation of Labour, since much of the funding for VLC came from union pension funds, and because of his close ties with the NDP provincial government.
Georgetti later went on to join the Board of the Molson Indy, which was also founded by Poole.
Poole, Podmore, Georgetti and Tennessy were all members of the Vancouver/Whistler 2010 Olympic Bid Committee. In November 2003, delivering the keynote speech to the annual conference of the Canadian Council on Public-Private Partnerships, Gordon Campbell said, "I couldn't leave today without telling you how proud we are that British Columbia is home to probably the largest single public-private partnership initiative going in Canada right now: the 2010 Olympic Games. We sometimes forget when we talk about the Olympics that that is an enormous public-private partnership."
Offley raises other concerns, such as the record of Working Opportunity Fund, the largest venture capital corporation in Western Canada, whose
15 directors include eight prominent trade unionists, plus business luminaries such as Peter Armstrong, the President of Great Canadian Railtour, and a director of the BC Ferry Authority board during its unsuccessful attempt to break the ferry workers' strike last December.
The Chair of the Ferry Authority during the strike, David Emerson, was a member of the Working Opportunity Fund Investment Advisory Committee in the late 1990's, while Georgetti was chair of WOF's board of directors.
Emerson has since left the Ferry Authority to become another federal Liberal candidate.
Offley characterizes these and other examples of "workers' capitalism"
as a system which "may have started with the best of intentions: the preservation of union members' pension funds," but which has come to look like a specific form of capitalism in which "a group of trade union leaders have parlayed these savings into a complex and huge corporate empire, run on the same rules, and with the same goal ? the accumulation of profit."
Given the tendency of many British Columbia trade union leaders to put the brakes on progress towards a militant, united fightback against the Campbell Liberals, it's a statement that workers must take very seriously.

© 2004 Communist Party of Canada