------------------------- Via Workers World News Service Reprinted from the July 24, 2003 issue of Workers World newspaper -------------------------
BIG BUSINESS COUP: BANKS SEIZE BUFFALOk By Beverly Hiestand Buffalo, N.Y. In a sweeping takeover, big business has seized the economic and political reins of the economy of this Great Lakes city. In July, Gov. George Pataki and the New York State legislature approved a Buffalo Fiscal Stability Authority, which will have the most sweeping financial oversight powers in state history. The institution of this board followed an announcement on June 18 that the city of Buffalo's credit rating sank to just one level above junk bond status. The city has been in dire straits, bordering on bankruptcy and unable to guarantee from week to week that it can pay its employees and meet other financial obligations. The 270,000 city dwellers are economically devastated. The city has lost half its population over the past 50 years. Most large industries, including the huge Bethlehem Steel mills, closed long ago. The local job market, in its third year of decline, is still weakening. The unemployment rate in Buffalo is 9.6 percent. Teen agers face the worst summer job market in nearly 40 years. About 38 percent of Buffalo is officially poor; 39 percent of children here are living in poverty--the sixth-highest rate among U.S. cities with a population above 100,000. (Children's Defense Fund) Nearly 57 percent of Latino children here are growing up poor--double the overall U.S. rate and the highest among the country's 244 largest cities. (Buffalo News, June 28) The Buffalo financial crisis is not an isolated phenomenon. It's part of the widening capitalist crisis. State and municipal budget crises are deepening in the wake of huge tax giveaways to the wealthy, passed by both the Republican and Democratic parties. The states are pushing the cuts and costs down to the cities and towns Buffalo is a microcosm of this larger economic problem and of the capitalist "solution" to this crisis. The economic hard times are not the fault of workers and oppressed communities. But that is who will be burdened with the heavy consequences of what the financial board will bring: service cuts, layoffs and wage freezes. Slated to hold its first meeting in mid-July, the financial control board will begin making recommendations to balance the budget on the backs of those who can least afford it, in order to close what authorities have projected could be a $10-15 million deficit this year. The board will have the authority to borrow money and order spending cuts, and the power to override or approve union contracts, freeze payrolls and intervene in binding arbitration proceedings. At least for now, this capitalist clique may rely on what are known as "salami tactics," slicing away at hard-won wage and benefit packages rather than chopping up entire contracts. But it could awaken militant resistance from the labor movement. Health care benefits won by municipal workers in their union contract are in jeopardy. Pensions for retirees are also endangered. This financial board brings an intensification of racism, capitalist exploitation and the class dictatorship of bankers and business kingpins over the working and oppressed of Buffalo. And the word dictatorship is no exaggeration. 'OMINOUS AND THREATENING' Normally, the wealthy owning class rules through the two-party system. But this millionaire cabal has taken a hands-on approach, superceding the powers of elected officials. And Democrats and Republicans alike--from the State Capitol to City Hall- -allowed this "coup" in order to get out of the firing line for the economic crisis. The people of Buffalo have been disenfranchised. Elections will be a charade as long as the control board has such powers. Those who manage the economy will have the power to manage politics. The board will be able to impose its own financial plan if it rejects the city's proposal and city officials fail to make acceptable revisions. The June 25 Buffalo News reported that some politicians were stunned to learn that the board will also have the clout to remove from office any city official who refuses to comply with the financial plan. Offenders could even be charged with misdemeanor crimes. The board will profit and make money from its power, all off the backs of the workers and their communities. Buffalo had been, in reality, in default and therefore could not borrow money. But the board will be able to get short-term loans from the bankers, who are assured that their debt payments will be squeezed out of the workers and oppressed communities. And since short-term loans guarantee higher interest rates, the banks are assured a nice piece of change in return. Former State Comptroller H. Carl McCall, an African American, held six separate meetings with more than 20 community leaders and representatives from nine city unions, in which some labor leaders reportedly voiced growing fears that the powers of the board are too broad. Their fears were confirmed when the administration of Buffalo Mayor Anthony Masiello announced that the control board should focus on three problems--a declining property tax levy, "out-of-control" health insurance costs and rising costs for employee pensions. (Buffalo News, July 9) Council President James W. Pitts, also African American, described the control board's broad powers as "ominous and threatening" and added, "They are playing with fire." Pitts said he believes unions across the state will mount court challenges to overturn the legislation. MEET THE CONTROL BOARD Nine members have been appointed to the board by Gov. Pataki. Thomas Baker, the appointed chairperson, was with the Wall Street accounting firm of Price Waterhouse for 33 years. Baker is director of the Oishei Found-ation, established by the founder of the Trico Products Corp. to supposedly improve quality of life through cultural, social, civic and other charitable contributions. However, quality of life for thousands of Trico workers and their families greatly deteriorated more than a decade ago when the company moved its plants to Mexico to maximize profits by paying workers very low wages. Robert Wilmers, president and chief executive officer of M&T Bank, rakes in more than $1 million a year in salary and bonuses. With 988,000 stock options he has accumulated over the years, however, he was sitting on more than $56 million in profits at the end of last year. And those options could be worth another $10 million this year. (Buffalo News, June 15) Alair Townsend, the only woman on the board, will serve as vice chair. She is the former New York City budget director and deputy mayor in the Koch administration during the years of control board oversight there. She is the current publisher of the weekly newspaper Crain's New York Business and is known as a "fiscal conservative" who champions business causes. She advocates smaller state budgets and corporate tax breaks. She's an enemy of municipal unions and has also condemned teachers' unions for trying to stop attacks on public education and teacher tenure protection. (Buffalo News, July 14) Erie County Executive Joel Giambra is a controversial appointee to many in this city. He has been working with business to implement a merger of city and county services, called "regionalization." Many here, especially in the African American community, which constitutes 50 percent of the population, are concerned that this really means disenfranchisement. For years Buffalo has been suffering from white flight to the suburbs. According to the July 7 Buffalo News, Giambra and his business allies wielded significant influence in guiding Pataki's appointments. Completing the panel are Ronald Pirtle, president of Delphi Harrison Thermal System in Lockport; former New York State Comptroller H. Carl McCall; John Faso, former State Assembly minority leader and also known to be a fiscal conservative; Buffalo Mayor Anthony Masi ello, and one member yet to be appointed by the State Senate majority leader, State Assembly leader and Assembly speaker. While it has been suggested that this seat be filled by a union representative, so far no labor leader has reportedly been willing to sit on this board. The selection of the board was influenced by area business figures, who directly lobbied the governor's office and legislators. Wilmers appeared to direct many of the talks with top lawmakers, according to legislators, and helped negotiate the final legislation. Also involved in the talks were Mark Hamister, current Buffalo Niagara Partnership head--who gained his wealth by building a nursing home empire--and Partnership President Andrew Rudnick. (Buffalo News, July 3) RESIST! How do the people of Buffalo feel about who should run this board? A poll conducted for the Buffalo News found that only 24 percent favored business leaders; just 15 percent supported the idea of elected officials. But 41 percent of those polled thought the control board should be dominated by ordinary individuals and grassroots community action groups. (Buffalo News, July 3) African American syndicated columnist Ron Watson wrote on July 10: "My worry is that this control board consists of people who'll never need the services that inevitably will be cut. This is the panel that will decide how many firefighters the city should have. But how many live in tinderbox wood-frame houses so close together they can ignite one another? This is a panel that recognizes the importance of Shea's Performing Arts Center and the Buffalo Philharmonic Orchestra. But how many are regulars at the Langston Hughes Institute or the African- American Cultural Center, or have kids who rely on programs at a center like that?" The intent of a big-business-controlled board was already beginning to be publicly questioned in June at a series of town meetings. More than 1,500 Buffalonians turned out to argue and debate the wisdom of a control board. Myra Holiday, an African American union activist, asked politicians and potential board members, "What are you going to do to help working families?" Referring to shifts in population from the city to the suburbs, Elizabeth Berry, founder of Save Our Libraries, argued, "I've heard enough about money, money, money, fiscal this, fiscal that. If you take care of our neighborhoods, they will come. If you cut services, they will go." Joseph Foley, president of the Buffalo Professional Firefighters Local 282--a union that has been in negotiations with the city for the last four months--stated, "Are you telling me a guy making almost $10 million a year really knows what I do for a living?" What is needed is an independent coalition of labor/community forces to begin to prepare to resist this attack on the quality of life of people in this city. A legal challenge being initiated by an alliance of unions is a good start. Philip Rumore, president of the Buffalo Teachers Federation, said that his union will be willing to take whatever legal or other actions are required to oppose any further actions detrimental to teachers. The Buffalo Board of Education has just cut 679 jobs, including 413 teaching positions. The BTF vowed to file a federal lawsuit within a month arguing that any effort by the board to modify contracts would violate the U.S. Constitution. Concerns about the control board reportedly dominated discussions during a four-day statewide convention of fire fighters in Buffalo. "It would seem to be the easy way out for every municipality falling on hard times," said Charles Morello, president of the New York State Fire Fighters Association, largest in the country. "Turn it over to a group of executives, do away with services, and send us all back to the Stone Age. It seems to me like these guys should be concentrating on finding people work, not micromanaging city finances." Weeks before the board was formally created, the International Action Center in Buffalo widely distributing a leaflet that warned the board will attempt a huge transfer of money to the banks at the expense of the working class and oppressed. "These are the same billionaires who have just gotten richer with Bush's huge tax cuts and the bounty of post-war contracts in Afghanistan and Iraq," it read. The leaflet stressed that no unions or union workers should face economic threat and that no decent-paying jobs should be destroyed. It concluded that the wealth created by working people must be put into city schools and social services, not given to the banks for debt service. The IAC presented these demands at public hearings held in Buffalo and called for a moratorium on the city's debt. This immediate demand was well received by those who packed the hearings. - END - (Copyright Workers World Service: Everyone is permitted to copy and distribute verbatim copies of this document, but changing it is not allowed. For more information contact Workers World, 55 W. 17 St., NY, NY 10011; via e-mail: [EMAIL PROTECTED] Subscribe wwnews- [EMAIL PROTECTED] Unsubscribe [EMAIL PROTECTED] Support the voice of resistance http://www.workers.org/orders/donate.php) ------------------ This message is sent to you by Workers World News Service. 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