The Cat Is Now Out of The Bag;
MTA, Public Were Taken for Ride
By $100M+ Gift (Under Press Gag)
Which Legislature Previously Denied

By Henry J. Stern
December 29, 2005

In Brief: Three Questions

Question: Who won the transit strike?    Answer: Roger Toussaint and the TWU.
Question: Who lost the transit strike?    Answer: The public and the MTA.
Question: Who is responsible for the loss?    Answer: Peter Kalikow chairs the MTA.  If he made the decision to pay multi-thousand dollar bonuses as reward money for the strikers, he should resign in shame and devote himself to the management of his family's real estate holdings.  If other people made it for him, they should be identified, held accountable and discharged, unless they are elected officials, in which case they should be subjected to public excoriation.

The Tabloids Report and Opine

The Post and the News say the Transit Workers Union won a smashing victory over the MTA.  The News gave the story its large type page one headline: "$UBWAY $ANTA CLAUSE: New contract gives $110 million pension payout bonanza for transit workers.  The headline on the p5 story is STRIKING GOLD IN A NEW DEAL: Many Transit Workers get 14G.  Four reporters share the byline.  The lead editorial, on p36, is titled, TRANSIT WORKERS RIDE MTA GRAVY TRAIN.  "Roger Toussaint and the Transit Workers Union made out like bandits after all by crippling New York in their lawless strike.  Those many promises by top officials that a walkout would gain the workers nothing have gone up in a $110 million puff of smoke."
The Post devoted its front page to an "exclusive interview" with a cop killer, so the crime of unarmed robbery, in which a gullible and spineless public agency handed over a hundred million dollars to reward illegal strikers was relegated to the top of p2, MTA'S BIG-BUCKS BLUNDER BLASTED.  Carl Campanile's story begins: "Budget watchdogs charged yesterday that the MTA's new contract with the transit workers raids the pension fund to give them a huge one-time bonus payment at a time when it is unaffordable.  'It's simply a belated Christmas gift.  It's just a giveaway', said E.J. McMahon, a budget analyst for the Manhattan Institute."  The accompanying editorial, THE MTA'S PENSION PAYOFF, on p24, begins: "Call it The Great Public Employee Pension Raid of 2005."

Times' Fine Story on Different Page Than Editorial
The Times, predictably, is less visibly outraged than the tabloids.  But it comes to the same conclusion in temperate but inexorable prose.   In a News Analysis, on page A1, starting just above the fold, headlined PULL OF UNION IN TRANSIT PACT: M.T.A. Won on Health, But Workers Won More."  (The Times quaintly uses periods in MTA, not fully accepting the acronym.)  Steven Greenhouse tells the story wisely and well.  It begins:
"He was excoriated on tabloid front pages and by the mayor and governor.  As thousands streamed across the Brooklyn Bridge on a frigid night during last week's transit strike, someone in a car yelled out his name, prefacing it with a curse.
"But now, a day after details of an agreement between the transit workers and the Metropolitan Transportation Authority were spelled out, Roger Toussaint, the union's president, seems to have emerged in a far better position than seemed likely just a few days ago.... [I}f there is a real winner in the walkout that hobbled the city at the height of the holiday season, it is the union members who went out on strike, and the man who led them."
The Times editorial on the pact, on pA26, appears to have no relationship to the p1 news analysis, and was probably written without knowledge of the last-minute nine-figure bonus the MTA pension fund is now committed to pay, with interest.  Although separation of news and editorial decisions is in the public interest, the left hand in commenting should at least be aware of what the right hand is reporting.  Fortunately, the newspaper appears every day, so we can look forward to their comment on the price of peace in our time.

The Secret Payout - How It Came About
The great Toussaint victory came over an issue not previously mentioned in the press.  When the Legislature reduced the retirement age for transit workers to 55, it required the beneficiaries of early retirement to contribute 3% of their salaries toward the new higher pensions.  Years later, under pressure from the union, it reduced the contribution to 2%, and later abolished it entirely.  However, Albany refused union demands to refund the percentage of their salaries that transit workers had paid in for their higher pensions.  It is unusual for Albany to resist a union demand, normally the legislators are supine in the face of pressure from their regular contributors; in fact some consider it unethical to turn down a request from those at whose table they have supped.
Nonetheless, it was the MTA that agreed to the massive payout, as a condition of settling the illegal strike. And it was done in secret, behind closed doors, with the press excluded.   The reason to bar the press is to prevent pandering by the participants, not to allow last-minute deals unknown to anyone but the parties.  This is an extraordinary violation of the principle of open government.  It is three men in a closed room, dispensing hundreds of millions of dollars in public funds.

The Invisible Mediators Ply their Mysterious Trade

We must remember that there were two state mediators involved.  They should be called state accomplices.  They are a major part of the problem, and they deserve a good share of the blame.  The rationale of mediation is: Do whatever you have to do to settle the dispute, and if it can be done at the expense of third parties, who cares.  If one side or the other makes a particular issue a deal-breaker, that's it.  Mediators have no direct concern with fiscal realities, overall public policy, or equities involving other employees. In fact, if they offend anyone too badly they may no longer be chosen as mediators. They are peacemakers, and if peace requires surrender by one side or the other, mediators will give the arrangement their blessing.  The professional giveaway guys appear to display all the moral authority of the United Nations in Africa.  The public is unaware of  how  or even whether the mediators screwed up the situation, but they certainly did not prevent it from happening.  Send them to the State Department of Labor to weigh other opportunities.

We Reach the Core Issue
A more difficult question, however, remains.  If Toussaint could keep his workers out, and continue the strike through the holidays, would not the city's economic loss have been greater than this one-time payout, which the Legislature might have granted next year anyway, or in 2007 under a new governor.  And aren't the workers entitled to some bonanza to offset their $1000 Taylor Law penalties?
The answer to the first question is Yes.  The city, its revenues, its workers and its merchants, would have lost more financially if the strike continued.  And this is a deep blue city in a blue state, with a lot of sympathy for strikers, whatever their demands.  A majority may have disapproved, but they were a silent majority, except for the newspapers.  The second question is rhetorical, but our answer would be No.
Does this mean that if a union, or a hijacker, or a terrorist, is able to carry out a threat, that surrender is the best option?  That is a decision that elected officials have to make.  For all the tough talk by Governor Pataki and Mayor Bloomberg, it is their appointees who constitute the MTA.  If they ratify the agreement, they really should explain to the public the inconsistency between their public positions and the actions of the men and women they put on the board.

A Lesson from History
Calvin Coolidge, then Governor of Massachusetts, said in 1919 "There is no right to strike against the public safety of anybody, anywhere, anytime."  That firmness propelled him into the Republican vice presidential nomination in 1920.  (The Democratic nominee for that office that year was the Assistant Secretary of the Navy, Franklin D. Roosevelt.)  But Governor Coolidge did not follow his words with enormous bonuses for the striking police officers in Boston.

Since he cannot (and probably should not) emulate Ronald Reagan in dealing with the air traffic controllers in 1981, Governor Pataki, a putative and peripatetic candidate for the Republican vice presidential nomination in 2008, (they often  start out by running for President which is what they all want to be under their pillows), he should take a leaf from the Coolidge playbook and see to it that this scandalous agreement is not confirmed or effectuated.  Mayor Bloomberg, presumably free from the burden of future campaigns (not that it's that much of a burden), can provide valuable assistance through his four votes on the MTA board. Perhaps he can even help stiffen the governor's spine.

At Last, We Conclude

We bloggers and reformers frequently trumpet about one kind of abuse or another.  Human imperfections keep us fully occupied.  But this midnight robbery of the pension system, whose deficit will have to be made up by the taxpayers, is an unusual outrage, even with New York State's low standard of public accountability and morality.

What a way to end a year.

#274 12.29.05 1540wds

Henry J. Stern
New York Civic
520 Eighth Avenue
22nd Floor
New York, NY 10018

(212) 564-4441
(212) 564-5588 (fax)