Serving two masters at DWP

Causes and effects of a manipulated and degraded merit system

A steadily growing number of employees are speaking up about the management of the Department of Water and Power (DWP). If this growing employee concern does not seem particularly strange to you, you should consider the following.

DWP is a municipal utility operating in a monopoly outside the rigors of competitive market forces that require at minimum customer-focused and cost-effective performance to survive. DWP is in an industry rife with scandal, bankruptcy, and lost employee pensions (ENRON, SCE, PG&E). DWP is at the center of a City environment stained with allegations of corruption (James K. Hahn administration). DWP employees and management are subject to a working and political atmosphere controlled by a union commonly referred to as one of the most powerful and top organizational political donors. Many senior employees perceive DWP management as IBEW cronies exercising a bureaucratic patronage system, manipulating behind-the-scenes loopholes, political payoffs, and the using economic and physical intimidation against employees to gain power and influence and expand control over the entire organization.

Concerned citizens and civil servants should pull their heads out of the sand and demand a full accounting. What the hell is going on at the DWP? DWP contributes to the underlying cost of every single home and business in Los Angeles. Why aren’t politicians and citizens paying more attention to the DWP?

Notwithstanding the efforts of a few journalists, we can expect the Los Angeles Times to demonstrate its historical bias, understate advances, and allow short-term union gains to outweigh responsibility for prudent responsible personnel and infrastructure management contributing to a healthy environment and a cost-competitive infrastructure which can support long-term city prosperity.

Consider the mistakes citizens have made in the not-too-distant past. We stood by while politicians permitted the ripping out of Los Angeles’ transportation system – the historical red cars (street cars) – creating the modern noxious bus fumes and gridlock we have today. Think how much further ahead we would be if we had been more active and aware. Or perhaps, consider the political turmoil, graft, and corruption which led to the movie Chinatown. The saying, “history repeats itself,” is no less true today. Consider those civil servants who have been drawn under by personal greed, mob mentality, or group think and have lost track of their internal ethical compass and their obligation to the public. Consider those who tacitly supported the degradation of position requirements, supported questionable objectives, undermined the merit and personnel management systems, and ruined the careers of employees who properly executed their obligation to act in the public’s best interest and reported managerial malfeasance. It is just a matter of time, injustice, and neglect that is contributing to the systemic meltdown at DWP. Silence is probably the worst course of action to stem the demise of this 100 year old institution.

There is no question that it is every union’s objective to control the terms and conditions of labor. However, it should be with consent of the membership. The union’s rapid advancement into personnel and contract management through its influence over management ranks ensures conflicts of interest and opens the door to the lucrative but destructive business practice of corporate, municipal, and employee skimming. The practice is sometimes referred to as “public fraud,” “controlled extortion.” The potential for these crimes should be especially troubling to the citizens and to most of the workers at DWP in this environment. Unlike corporate officials who are bound to serve in the best interest of the public and (supposedly) held accountable to public scrutiny and recourse, unions do not have fiduciary obligations to the same extent. Unions are only accountable to their membership. Union membership input is subjugated to the will of union management. Employees should be highly concerned when their representatives institute new cascading monopolies that replace or overshadow existing institutional services such as administering medical insurance, dismantling corporate safety and training to establish their own union centers, directing employee pension plans, promoting disability rather than worker’s compensation, or using management influence to replace the 20 year employee assistance center with a union sponsored provider. These activities are dilutive and inherently in conflict with membership and employee interests.

If legal action is required to secure the third party services provided through the union, how do you go about suing your representative? The Union as an administrator of those services has considerable influence on service providers, you might think. But, in reality, the administrator is usually more interested in maintaining and maximizing the residual cash flows derived from the arrangement. Consider these two scenarios: If the union fails to deliver on its promises to you, you can’t go after the employer to defend your union-provided interests, can you? When, and if, you make it to court, you can be assured your union will not be providing for your legal fees. However, if you were suing your employer and your representative did not have a conflicting interest in the outcome, you could reasonably expect the union would act in accordance with its responsibility to represent you or provide for legal representation.

You should also consider the matter of prevailing cultural and societal bias in matters of juris prudence. When your union administers these programs the jury does not maintain the same bias toward you that it would have if it was your employer who failed to properly administer or provide the service. Effectively, by putting all your eggs in one basket, you are in a substantially less desirable position and have increased your level risk for relatively the same benefit. The same argument applies to union-controlled employee retirements, corporate contract awards and administration, rewriting of job qualifications and specifications, and the selection of incumbents through union third party ambassadors. The ideal situation is to separate providers, payers, administrators, and benefactors, ensuring against the almost unavoidable conflict of interest and monopoly situation.

In any case, management and employee apparent lack of concern, both at a corporate and personal level, is especially troubling. How do employees hold their representatives accountable in this circuitous and unscrupulous culture?

Essentially DWP is suffering from a failed deregulation. DWP missed the market forces that would have ensured cost-effective performance and purging of incompetent unresponsive leadership. Consequently, within the environment described in the second paragraph of this expose, Mayoral appointments to the Board and DWP management do not reflect a concern for market-driven performance. They provide inferior corporate leadership because they reflect the Mayor’s need to support his union affiliation. And these appointments have in turn led to the expansion of new high-level positions, job titles, job descriptions, with reduced qualifications and the appointment of 2nd and 3rd rate managers, further degrading the utility. Over the course of the Mayor’s term, management has not been held to account. Over a very short period of time, employees and management have become subject to the whims of the union representatives who have found it more lucrative to secure positions in management by manipulating meritocracy. And for those employees who have expectations of promotional opportunities based on an equal opportunity, good faith, and fair evaluation of individual qualifications, performance, and merit, it is the ultimate morale buster and conflict of interest because it undermines the individual, the organization, the core tenets of the merit system, as well as the institution and its value to society.