The Building Tradesman Newspaper

Wednesday, April 06, 2016

After failed prevailing wage petition, ABC sues to get their money back

By Marty Mulcahy, Editor

ABC's use of anti-union group blows up in their face

LANSING - The irony is delicious.

A sales motto used by Silver Bullet LLC says that "successful initiative petitions are very expensive... except compared to the unsuccessful ones. Those are a lot more costly."

Well, one of those "unsuccessful ones" undertaken by Silver Bullet did prove to be very expensive. The petition drive that Silver Bullet was hired to manage last year in an effort to overturn Michigan's Prevailing Wage Act of 1965 failed miserably, and cost the Associated Builders and Contractors of Michigan and their billionaire donors from the Devos family, and elsewhere, more than $1.8 million. Now, a March 24 filing of a lawsuit in Ingham County Circuit Court says they want $1.35 million of that money back from Silver Bullet.

ABC Michigan, through its front group, Protect Michigan Taxpayers (PMT), said in its court filing that it wants reimbursement "as a result of Silver Bullet's negligence, misconduct or material breach of the agreement." Why? "Because Silver Bullet conducted the worse petition drive in the history of the State of Michigan," PMT said.

We have described the petition back-story a number of times, but the legal finding sheds a little light on what went on behind the scenes between the anti-union ABC-Michigan and Silver Bullet. Michigan's Constitution allows groups to gather petition signatures in an effort to initiate or repeal state law; in this case, the ABC wanted to repeal the Michigan Prevailing Wage Act. A likely veto by Gov. Rick Snyder in the state Legislature prompted the effort to initiate the petition drive last year.

Under the state Constitution, if a sufficient percentage of validated voters sign the petition (last year that percentage translated into 252,523 signatures), then the matter could be brought to the Legislature for a vote. In such a case the governor does not have a veto. If the Legislature doesn't adopt the petition language into law, then the matter goes onto a ballot in a statewide vote.

The court filing indicates that Silver Bullet started collecting petition signatures under the contract in June 2015.

Silver Bullet's proposal said it would gather the necessary signatures for a guaranteed price of $2.82 "per gross signature." PMT also paid Silver bullet 35 cents per signature "for validation of signatures," the court document says, adding that it believes a subcontractor of Silver Bullet provided "validation services" for the signatures, but Protect Michigan Taxpayers said it never saw the validation reports prior to the submission of the documents to the Michigan Secretary of State.

On Sept. 14, 2015, PMT acted on Silver Bullet's recommendation and submitted 390,861 prevailing wage repeal signatures to the state, with 10,007 being "black-striped" or lined-out because they were found invalid.

That still should have been more than enough signatures: Silver Bullet guaranteed an accuracy rate of 70 percent. Turns out it was a worthless guarantee: only 59.1 percent of the signatures were valid, according to the state Board of Canvassers, with 20 percent of the sampled signatures made by people who were ineligible to vote, and at least 15 percent of the sample names being duplicates. That left the petition drive 22,894 signatures short of its goal.

Michigan Elections Director  Christopher Thomas called the results "disturbing." Thomas said the petition gathering company "clearly failed to put circulators in the field who complied" with statutory duties. Several circulators themselves signed the petition more than once.

Following are a few additional kernels of information gleaned from the lawsuit:

*In addition to the $1.35 million paid to Silver Bullet, Protect Michigan Taxpayers said "at least an additional $500,000 was spent in connection with the campaign," and a "substantial portion of this investment in legal fees, printing costs, administrative costs and other out-of-pocket expenses will have to be duplicated as part of a new petition drive." Reimbursement for that $500,000 isn't being sought in this lawsuit.

*The ABC/Protect Michigan Taxpayers may have concerns about getting their money back, with a heading on their legal brief reading "Issues surrounding the purported existence of Silver Bullet LLC." Supposedly based in Nevada, the legal brief says there is no such legal entity in that state. Although, there is a SilverBullet Group, Inc., listed, and it was shown to be in default with a business license that expired June 30, 2015. A related company, Silverbullet Communications LLC, was dissolved on Nov. 30, 2015.

And none of the Silver Bullet entities are qualified to do business in Michigan as required by Michigan law. Silver Bullet defendants named in the ABC-Protect Michigan Taxpayers lawsuit were Timothy Mooney and Chuck Warren, doing business as Silver Bullet, which said it had been in business more than a decade.

*Although the backers of the petition use "Protect Michigan Taxpayers" as their front name, the legal brief included correspondence from Mooney directed to Chris Fisher, president of the ABC of Michigan, sent during the hiring process. In the memo, Mooney helpfully tells Fisher that their petition drives have experience working against organized labor, under a bold-faced heading, "Our anti-union work includes." One of the victories he bragged about was winning right-to-work at the ballot box in Oklahoma in 2001.

*Mooney also suggests targeting specific legislative districts for acquiring petition signatures, which would "allow the ABC lobbyists to have specific counts on how many of their constituents have signed the petition to date. As with the governor, we can gather post cards directed at wayward or undecided legislators." It's unknown the extent to which the ABC took Silver Bullet's advice.

*In its January 2015 memo to the ABC's Fisher, Silver Bullet suggested it would have five to seven offices in Michigan during the flopped petition drive, up to five regional coordinators and between 25 and 100 people gathering signatures.

*Under the heading "Strategic Thoughts," Silver Bullet's Mooney, in his memo to the ABC's Fisher, acknowledged that Gov. Snyder "may currently be the impediment to legislative enactment" of prevailing wage repeal. As a result, Silver Bullet suggested seeking signatures from Snyder's 1,214 itemized contributors on his post-election campaign finance report. "If we were to gather the first, say 500 signatures from Snyder donors, this might have an impact on the Governor's position," Mooney wrote. "While gathering these signatures, we could additionally gather signatures on a post card to the Governor, urging his active support of repealing prevailing wage.

In his summary to Fisher, summary, Silver Bullets' Mooney writes: "We've done battle time and again against Big Labor in states across the country. We want to help ABC of Michigan win on prevailing wage, because we philosophically agree with the issue."