COPE News

The “Reverse Morris Trust” is a tax-avoidance technique that, thanks to Wall Street’s financial wizards, is increasingly deployed by corporations seeking to sell off unwanted assets without paying taxes on their gains. 

Under a Reverse Morris Trust, a parent corporation can spin-off a subsidiary into an unrelated company, tax free, if the shareholders of the parent end up controlling more than 50% of the voting rights and economic value of the resulting merged company.  As graphically described below, the basic elements of this process are:  A divesting corporation spins off a subsidiary which then merges into an unrelated acquisition corporation.  To qualify for tax-free treatment, the shareholders of the divesting corporation must own a controlling interest in the post-transaction acquisition corporation.

Typically, the parent loads up its “spinco” with as much debt as it can support, while causing this subsidiary to “dividend-out” or otherwise pay the proceeds of the new debt to the parent or one of its affiliates immediately prior to the spin-off and merger.

         Two recent examples of Reverse Morris Trust-driven transactions were the $2.7 billion spin-off of Verizon Communications’ Northern New England wireline operations into FairPoint Communications and the $2.4 billion spin-off of the Walt Disney Company’s ABC Radio business into Citadel Broadcasting Corporation.  Verizon received $1.7 billion in cash and securities - from new debt incurred by Spinco immediately prior to the transaction being consummated - while Verizon shareholders ended up owning 60% of the post-merger FairPoint.  Disney retained $1.35 billion in cash from the proceeds of new debt acquired by ABC Radio prior to the spin-off while its shareholders became owners of 57.5% of Citadel.  Unfortunately, FairPoint and Citadel are now in deep financial distress, with both having recently announced that they risk violating the financial covenants associated with the massive debt they acquired as part of the Reverse Morris Trust transactions.

            In the proposed Frontier deal, Verizon will receive $3.3 billion tax-free money as a result of this tax loophole, while Verizon shareholders will end up as involuntary owners of about 68% of the increasingly debt-laden Frontier.  

Reference:

2010 Florida AFL-CIO United Labor Lobby

Summary Report

To best describe what the United Labor Lobbying effort is; and what they do I will provide this excerpt from the Florida AFL-CIO’s own description:

         “The United Labor Lobby provides a way for unions to work together during the legislative session. The Florida AFL-CIO and its union affiliates form the core of the coalition. Others with similar interests sometimes join in the combined efforts.

         Each year lobbyists who are sponsored by industrial, building trades, service and public employee unions work on legislation that relates specifically to their unions’ interest, as well as general labor legislation. Through the United Labor Lobby, the union lobbyists share information, take specific lobbying assignments and coordinate committee testimony.”

As your co-workers and volunteer activist-- the members of your Committee on Political Education were excited and happy to join-in for a few days to storm the hill in Tallahassee with all of our brothers and sisters from around the state!

Pictures of our work and comments on issues can be found on Face Book. If you are not already a friend, please search us and feel free to request access. You can search groups by typing in “IBEW 824 COPE group”. Via this interactive social networking site you can get up to date information about what we are working on; and participate in discussions with others in the group. This is a closed group created for 824 Members only; information shared is not made public.

I would like to remind everyone that our monthly committee meetings are open to all IBEW 824 members. If you would like to join some of your co-workers who are active and engaged in local politics; than we would be happy to see you at our next regular meeting at 6:30pm at the Union hall on the same night as our general meeting.

 If you would like to add your support but don’t have the time, please consider filling out a COPE contribution card and making a small monthly donation. Donation cards can be downloaded from your IBEW 824 website under the “COPE—sign up” tabs. You can contribute any amount you wish.

Your COPE members would like to thank our leadership and our membership for supporting our efforts.

In Solidarity

Jason Smith

Chair of the COPE group

In order to facilitate Organized Labor as a cohesive, unified voice in Tampa Bay, dates for the 2010 political screenings/endorsements are noted below.  Please mark your calendars NOW to ensure your participation and no scheduling conflicts:

            Saturday, February 27, 2010              Screening for Congressional 12                                                                      UFCW 1625 (Lakeland)

            Tuesday, March 2, 2010                     Council approval of screening recommendations from February 27^th *

Saturday, April 3, 2010                       Screenings for Congressional 5, 9 & 13

            Tuesday, April 6, 2010                        Council approval of screening recommendations from April 3^rd  *

            Saturday, May 1, 2010                        Screenings for Florida House & Senate

            Tuesday, May 4, 2010                         Council approval of screening recommendations from May 1^st *

* Recommended endorsements to be considered and acted upon by the Florida AFL-CIO

            May 21-23, 2010                                 Florida AFL-CIO COPE Endorsing Convention                                                 Crowne Plaza, Jacksonville

            Saturday, June 5, 2010                        Screenings for local, municipal elections

            Tuesday, June 8, 2010                         Council approval of screening recommendations from June 5^th

            Saturday, June 26, 2010                      COPE Dinner/Dance                                                                                       Crowne Plaza, Sabal Park

Screenings will be held specific to the legislative area and locations will be announced as soon as confirmed.  As always, our screenings are open to all union members and we encourage active participation on the part of all unions.

Providing this opportunity means that we can all work together to not only choose the best candidate to represent working families but also be unified in our financial support of endorsed candidates.  It is customary for candidate contributions to be distributed at our June 26^thDinner/Dance (still timely for the candidate to have a good showing on their 2^ndquarter fundraising reports) when the presence of many unions and their contributions showcase the power, strength and value of a labor endorsement.

Please join us in solidarity as we work to elect the best candidates to represent us locally, in Tallahassee and in Washington!

Cheryl Schroeder, Executive Director

West Central Florida Federation of Labor

(813) 740-2233 - Phone

(813) 368-7124 - Cell

www.wcffofl.com

Dear Neighbor,  

Once again the Florida Legislature will debate on whether or not to allow oil drilling 3-10 miles off the Florida coast. I would like to give you some information to think about with regard to offshore drilling, and why I am opposing it at this time.  

My first concern is the potential environmental impact. According to the Office of Response and Restoration under NOAA, the Gulf of Mexico has the most oil spills in the world. In fact, we have more spills in our Gulf, than the #2 and #3 sites combined (Northeast US and the Mediterranean Sea).  

Environmentally, even a minor oil spill would be devastating to our pristine coastline and wildlife preserves, refuge to numerous endangered species. An oil spill would also be devastating to our economy, both locally and state-wide. In 2009, an oil spill near Port Arthur, Texas caused the shorelines to be closed for more than 5 days. Here in Pinellas County, shutting down our beaches could result in a $10M loss to local businesses. Stretched out over 5 days, this could amount to almost $50 million dollars in revenue lost. We simply cannot afford to risk harming our shores, environmentally or economically.  

Those who favor oil drilling, claim it will bring jobs to Florida. But there is no guarantee that Floridians will be obtaining these jobs, or even what kind of economic boost these jobs will provide. This is not a good tradeoff for the jobs that could potentially be lost if a spill were to occur, not to mention the jobs potentially lost should our horizons become filled with oil rigs.  

Florida, and Pinellas County specifically, relies on the dollars that our beautiful beaches and wildlife bring in. It is time we stop gambling with our shorelines. 

Charlie Justice  

** Charlie Justice is currently a State Senator, representing District 16.  Charlie is a candidate for the US Congress in the 10th Congressional District.  Fpr more information on Charlie, visit www.charliejustice.com. ***

This is a web link to the Florida AFL-CIO political page that shows
Legislative updates.

http://www.flaflcio.org/main/page/tlu

IBEW 824 Members may wish to periodically check in and see what
legislative issues are being worked on. We should remind folks that the
Florida Legislative session runs from March to May.

Labor Unions from around the state send their union members to Tallahassee
to share our points of view with them in their offices in the state
Capital while they are all working on legislation.

In Solidarity
Jason Smith

DOL Posts New COBRA Subsidy Information

The Labor Department Jan. 11 announced the posting of new information on its website concerning the premium subsidy program for continued health care benefits under the Consolidated Omnibus Budget Reconciliation Act. COBRA continuation assistance was extended with enactment of the 2010 Defense Appropriations Act signed into law Dec. 19, 2009. The program was created under the American Recovery and Reinvestment Act to assist involuntarily terminated workers in securing health coverage under their former employers' plans. The department's Employee Benefits Security Administration oversees the program, under which eligible individuals pay 35 percent of their COBRA premiums. The remaining 65 percent is reimbursed to the coverage provider through a tax credit. The department posted an updated premium reduction fact sheet and frequently asked questions for employees on its web page at http://www.dol.gov/ebsa/cobra.html.

824 Political Activist,

   This weekend's AFL-CIO conference was one of the most productive and informative that I have been to. I can't wait to share some of the info I was given with you and start implementing some of the tools and strategies that were shared with us. Holding a political planning & training seminar in January proved to me that the Florida AFL-CIO is serious about getting the job done this year!

   I knew the seminar was going to be good when our first speaker on Saturday morning was Congressman Alan Grayson. He gave a fantastic speech. At one point he talked about Dancing with the one that brought you; and he reminded us that he has not forgotten that labor brought him to congress. Alan Grayson is a true friend to working families and is one of those rare politicians who are dedicated to our causes. 

   I was impressed with Florida AFL-CIO president Mike Williams and Secretary-Treasurer Brian Dempsey for doing such a great job in running their first conference since being elected 3 months ago, if this weekend was any indicator of the way future conferences will be managed then we have a lot to look forward to. I'm more confident than ever in our new leadership team in Tallahassee and I'm excited and ready to work hard this year to elect as many pro-labor candidates as possible in this 2010 Mid-term election battle.

   This year will be a busy one for our activist group, we will be working to identify candidates worthy of our help throughout West Central Florida and working on their campaign when we find them. We will also be working on the Elections themselves and signing up to work the polls on election day in our respective precincts and working to make sure every Union member is registered to vote, in addition we will be keeping up with the ever changing legislation that has the potential to effect our membership both in Tallahassee and Washington. In March and October we will be lobbying the Hills. There is more than enough to keep us busy this year so buckle your seat belts and get ready for a fast paced election year.
 
   Of course this year will not just be about phone banking and lobbying or going door-to-door, we are going to have lots of planned time to celebrate our hard work and accomplishments as well, I'm looking forward to working this 2010 election year with all of my Union brothers and sisters who share a passion for social justice and workers rights.
 
In Solidarity
Jason Smith
Chairperson IBEW 824 Political Activist Group