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July 17, 2013

Richard Berman: Working Hard and Playing by the Rules Shouldn’t Keep You Out of Poverty

By CREW Staff

Richard BermanLast week, the Washington, D.C. City Council passed living wage legislation requiring very large retailers to pay employees in the District $12.50 an hour. The bill has yet to be signed or vetoed by D.C. Mayor Vincent Gray and is widely believed to be aimed at Wal-Mart, which is threatening to cancel three of six stores it has proposed to build in the city if the law is enacted.

On Tuesday morning, Politico published an article examining the national implications of D.C.’s living wage battle with the mega retailer. The piece strove for balance, quoting the views of multiple supporters and opponents of Wal-Mart’s efforts to move into the District. Politico, though, missed something important about Wal-Mart’s supporters in the article’s initial presentation:

But Wal-Mart supporters portrayed the situation in D.C. as one of a kind and said it was unlikely to be cloned by cities around the country.

“The showdown makes for an interesting news hook,” said Michael Saltsman, research director at the business-funded Employment Policies Institute. “I think this situation is unique because this legislation is being targeted at one specific employer and the employer has pushed back.”

[…]

Justin Wilson of the business-funded Center for Union Facts said he believes no national movement will come from the D.C. battle. “I don’t foresee (a national movement) happening,” Wilson said.

It is true that both the Employment Policies Institute and the Center for Union Facts are “business-funded,” but the more important fact about them is that they are both front groups set-up by corporate front man Richard Berman and run by his for-profit firm, Berman and Company. 

It’s important to note, however, that the ties between the two groups run deeper. Mr. Berman is also the president and executive director of both groups. Over the years, the two supposedly independent organizations have reported to the IRS that they have worked together on projects, and between 2006 and 2010, the Employment Policies Institute reported transferring $2.6 million to the Center for Union Facts to support “program services” and research on labor unions. Such inter-Berman group payments were flagged last year in an IRS complaint written by the Humane Society of the United States as allowing Berman’s business-funded groups to “create the illusion of public support” required for their tax-exempt status.

It is unfortunate that Mr. Berman’s operation – known for “hurling accusations, true or not, that are intended to destroy an influential target’s credibility” – was given extra space to weigh in on a debate about a living wage, especially considering Mr. Berman’s outright hostility to those who believe if they work hard and play by the rules they ought to be able to avoid poverty.

Years ago, Mr. Berman gave an interview to journalist David Cohen for his book, Chasing The Red, White, And Blue, in which he said that whenever efforts to increase the minimum wage came up, it was his “job to jump all over it.” At the time, Mr. Berman was particularly concerned with proposed living wage ordinances, which he said were “spreading like a virus” and believed were fundamentally illegitimate:

Usually, these ordinances require businesses that have contracts with the city council to pay their workers a living wage which, depending on the part of the country, tends to be in the $7- to $10-an hour range. Until now, it has only affected a limited group of businesses, but a few cities are keen to expand the concept so that all businesses within a defined geographical boundary would be expected to pay these rates. This development has Berman hopping mad.

“This is not how America works,” he says hotly. “We don’t pay people based on need. Maybe the Soviet Union. It’s become a mantra: If you work hard and play by the rules, you shouldn’t be living in poverty. Well—“ he leans forward, wagging his finger – “you know what’s also one of the rules? … You also have to be able to read English.  All these illiterate people … Someone should tell them – there’s no free lunch here.” [David Cohen, Chasing the Red, White, and Blue: A Journey in Tocqueville’s Footsteps Through Contemporary America. New York: Picador, 2003, pp.280–282.]

It’s also not surprising that Mr. Berman’s employees are sticking up for Wal-Mart. Beyond the anti-worker ideological affinity between Mr. Berman’s company and the retail giant, Bloomberg has reported that evidence in court filings and documents have linked Wal-Mart to Mr. Berman’s groups.

To their credit, after CREW contacted Politico yesterday to point out the essential ties between the two groups, Politico updated the article with a sentence explicitly noting their relationship: “Both the Center for Union Facts and the Employment Policies Institute were founded by corporate lobbyist and lawyer Richard Berman.”

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