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Labor union might be behind Obama-Schwarzenegger funding fight

May 11, 2009 |  7:53 am

 Officials in the governor's office say a politically powerful union may have had inappropriate influence over the Obama administration's decision to withhold billions of dollars in federal stimulus money from California if the state does not reverse a scheduled wage cut for the labor group's workers. 

The officials say they are particularly troubled that the Service Employees International Union, which lobbied the federal government to step in, was included in a conference call in which state and federal officials reviewed the wage cut and the terms of the stimulus package. 

California Secretary of Health and Human Services Kim Belshe said she could not recall another instance in which the federal government invited a significant stakeholder group into such government-to-government negotiations.

"The involvement of a stakeholder in this kind of state-federal deliberative process is unusual at best," she said. "This was really atypical and outside any norm I am familiar with."



--Evan Halper
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