Union behind billionaire tax acted like the mob in felony racketeering ‘shakedown’ scheme: suit

Dave Regan and SEIU-United Healthcare Workers West, the California union behind a proposed billionaire tax, are facing allegations of mob-like “shakedown” tactics in an explosive lawsuit that claims the union used a ballot measure in order to “extort” small heath care organizations.

The 67-page civil lawsuit, filed Sept. 18 in the U.S. District Court for the Eastern District of California, accuses the union and its boss of “unlawful and extortionist practices” in spending millions in union dues on divisive ballot measures in order to extract concessions from community health centers and others across the state.

The suit cites Prop. 44 as a primary example of the union’s alleged corrupt tactics.

The prop, pushed by the union after a similar legislative effort failed last year, would require clinics to spend 90% of their revenues on patient care, allowing the state to fine clinics that don’t comply.

The malicious prop, according to lead plaintiff California Primary Care Association, which represents nonprofit health clinics, could drive safety-net clinics serving rural farm workers and other vulnerable residents out of business.

“We filed this lawsuit to put an end to this pervasive bullying once and for all,” said Joey Cachuela, General Counsel of the California Primary Care Association.

Other plaintiffs include Mountain Valleys Health Centers, Centro de Salud de la Comunidad de San Ysidro, Inc., and McCloud Healthcare Clinic, Inc.

The lawsuit alleges the union offered to drop Prop. 44 in exchange for a union election agreement that would provide SEIU-UHW with 25,000 new union members.

Plaintiffs claim the behavior amounts to violations of the Racketeer Influenced and Corrupt Organizations Act, known as RICO — a “sustained racketeering scheme,” they said.

RICO, enacted in the 1970s to target organized crime syndicates, was famously used to nail New York City’s “Teflon Don” John Gotti, the late head of the Gambino crime family.

The SEIU-UHW’s motives were to collect more dues by boosting its membership, which had been declining for years, the lawsuit claimed.

The organization spent most of its revenue on a combination of political lobbying and staff compensation — including a $420,000 salary for Regan — while using a meager 4% of its revenues on negotiating new labor contracts in 2024, according to the suit.

The union has spent $216 million on dozens of ballot measure, most of which were withdrawn or failed, according to an analysis provided by the plaintiffs.

The group’s tactics fit a longstanding pattern of using costly ballot measures as leverage to obtain “to obtain money, property, access rights, confidential information, and control over core business functions and labor-relations policies” per the complaint.

“It’s inexcusable that Dave Regan and UHW have orchestrated a multi-year campaign of threats and bullying that would inflict crippling damage on health centers like ours and the patients we treat,” said Brandon Thornock, CEO of plaintiff Shasta Community Health Center, in a statement.

Jo Cambell, CEO of Hill Country Community Clinic, called the union’s actions a “repulsive act of politics.”

“In rural Northern California, community health centers are the only source of care for hundreds of miles. Prop 44 would have devastating effects for patients across our region,” she said.

The SEIU-UHW called the allegations “categorically false.”

“This is the second time the [California Primary Care Association] has attempted to use legal filings to bully SEIU-UHW members into backing down from holding clinics and their CEOs accountable to the patients and communities they are supposed to serve,” a spokesperson said in a statement.

“CPCA’s first lawsuit attempting to keep Prop 44 off the ballot was dismissed, with the judge chastising the CPCA for attempting to prevent SEIU-UHW members from using the democratic process by filing ballot measures, saying: ‘Isn’t that what democracy allows them to do? You want to take that power away from the people — that is what you are asking me to do?’” the statement continued.

The union defended Prop. 44, saying it will “increase transparency, reduce wasteful executive spending, and ensure clinic healthcare dollars go where they belong: caring for Californians in need.” 

The new lawsuit isn’t the first time Regan has been accused of threatening or inappropriate behavior.

Complaints about Regan’s bareknuckle tactics date back to at least 2009, when he assumed leadership of the healthcare union in a messy schism with its former boss, Sal Rosselli. In a lawsuit filed two years later, Regan was accused of ordering deputies to threaten to sic ICE on Hispanic workers if they didn’t vote to join SEIU. (The union has denied the intimidation claims.)

Former SEIU executive Courtni Pugh, now a political consultant leading the effort to stop the billionaire tax, accused Regan of “jacking” her against a wall and calling her a “dumbass” in 2009.

That allegation emerged as part of a law firm’s investigation into Regan’s behavior, which was spurred by complaints lodged this year about intimidation and bullying by the labor leader. The firm’s report found that he intimidated women who served on the SEIU’s state council to strong-arm them into supporting the billionaire tax.

Regan’s representatives dismissed the bullying allegations, claiming they are motivated by political disagreements.

“At the center is a trumped-up claim from 17 years ago that comes less than two months before the billionaire tax goes to the voters — a claim from someone whose firm is being paid handsomely to work against the billionaire tax,” SEIU-UHW officials previously said, referring to the allegation from Pugh.

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