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767pilot 07-20-2009 03:35 PM

Political group does a 180 on FDX for UPS
Exclusive: Conservative group offers support for $2M
By: Mike Allen
July 17, 2009 05:07 AM EST

The American Conservative Union asked FedEx for a check for $2 million to $3 million in return for the group’s support in a bitter legislative dispute, then the group’s chairman flipped and sided with UPS after FedEx refused to pay.

For the $2 million plus, ACU offered a range of services that included: “Producing op-eds and articles written by ACU’s Chairman David Keene and/or other members of the ACU’s board of directors. (Note that Mr. Keene writes a weekly column that appears in The Hill.)”

The conservative group’s remarkable demand — black-and-white proof of the longtime Washington practice known as “pay for play” — was contained in a private letter to FedEx , which was provided to POLITICO.

The letter exposes the practice by some political interest groups of taking stands not for reasons of pure principle, as their members and supporters might assume, but also in part because a sponsor is paying big money.

In the three-page letter asking for money on June 30, the conservative group backed FedEx. After FedEx says it rejected the offer, Keene signed onto a two-page July 15 letter backing UPS. Keene did not return a message left on his cell phone.

Maury Lane, FedEx’s director of corporate communications, said: “Clearly, the ACU shopped their beliefs and UPS bought.”

ACU's executive vice president, Dennis Whitfield, said that neither the group nor David Keene, the chairman, took any money from UPS. Whitfield said the group has never received a response to its original proposal to FedEx. He said Keene endorsed the second letter as an individual, even though the letter bore the logo of ACU.

"Our position hasn't changed," said Whitfield, who was a deputy secretary of labor in the Reagan administration. "It won't change. I am fundamentally, philosophically opposed to doing what the Obama administration wants to do [to FedEx], and so is our organization."

FedEx and UPS, fierce competitors in the package delivery business, are at war over a provision under consideration in Congress that would expand union power at FedEx.

FedEx currently has one U.S. union contract for its entire express business. Under a change passed by the House and awaiting action in the Senate, FedEx — like UPS — would have to negotiate union contracts for individual locations, which FedEx claims would make it much more difficult to promise worldwide regularity for deliveries.

The American Conservative Union, which calls itself “the nation's oldest and largest grass-roots conservative lobbying organization,” took UPS’s side on Wednesday as part of a conservative consortium that accused FedEx of “misleading the public and legislators.” ACU's logo is at the top of the letter, along with those of six other conservative groups.

Just two weeks earlier, ACU had offered its endorsement to FedEx, saying in a letter to the company: “We stand with FedEx in opposition to this legislation.”

But there was a catch — an expensive one. ACU asked FedEx to pay as much as $3.4 million for e-mail and other services for “an aggressive grass-roots campaign to stop the legislation in the Senate.”

“For the activist contact portion of the plan, we will contact over 150,000 people per state multiple times at a cost of $1.39 per name or $2,147,550 to implement the entire program,” the letter says. “If we incorporate the targeted, senator-personalized radio effort into the plan, you can figure an additional $125,000 on average, per state” for an estimated 10 states. The total would be $3,397,550.”

The letter shows one reason why activists get so much junk mail, both on paper and electronically: Some groups that send it charge handsomely for the service.

Under the grass-roots program ACU proposed, “Each person will be contacted a total of seven times totaling nearly 11 million contacts total in the 10 targeted states.” “Within 72 hours of an agreement on the whole plan, we can have the data sets delivered and the first round of e-mail ready for delivery,” the offer states. “Within seven days, the mail can be in the USPS system and the phone call delivered.”

Lane, the FedEx official, said the offer was refused. "The proposal didn’t fit with our strategy of taking a straightforward approach to discussing the issue,” he said.

After the rebuff, American Conservative Union changed sides. ACU Chairman David A. Keene was one of eight conservative leaders who signed a letter to FedEx Chairman Frederick W. Smith, a champion of capitalism who in the past has been a favorite of conservatives.

The letter accuses FedEx of “falsely and disingenuously” labeling the rules change a “bailout” for UPS, since FedEx would become subject to the same arduous union structure.

The letter is also signed by Grover Norquist, president of Americans for Tax Reform, who is also on ACU’s board. FedEx is pushing its case with a website called Brown Bailout.

The letter signed by the conservative leaders concludes: “To paraphrase the words of Ronald Reagan, ‘Mr. Smith, tear down this website.’”

Among the services ACU had offered to provide for the $2 million-plus price tag:

—Acquiring data of known conservatives in the targeted states (to be determined by FedEx), matching that data to an e-mail database and then incorporating those e-mail addresses with the current ACU e-mail database to create one targeted database of all potential activists.

—Sending a piece of targeted direct mail to these potential activists to ensure that they are well-educated prior to their contact with their senators.

—E-mailing the identified voter activists, in five rounds, in order to educate them on the issue(s) and to urge them to call their senators based on key dates. The ACU would include the phone number of their personal senators directly in the correspondence.

—Conducting targeted phone call campaign that will contact all voter activists to urge them to make a personal call to their senators. Each state would have a specialized message just for that state.

—Encouraging activists who live within 30 miles of a senator’s district office to consider making a personal visit to register their concerns at the office. ACU has proved that we can turn out well-informed, quality voters who present a good image to represent our concerns.

—As the vote for the legislation nears, distributing ACTION ALERT e-mails, and after the vote has taken place, distributing MegaVote e-mails to ACU’s members letting them know how their senators vote.

767pilot 07-20-2009 03:37 PM

That explains this from a few days earlier...

A number of conservative groups are blasting FedEx for taking a cheap shot at UPS, charging that FedEx is falsely accusing its rival of seeking a federal bailout.

The clash revolves around legislation that would clear the way for FedEx drivers to organize with the Brotherhood of Teamsters, just as UPS’s drivers are. FedEx opposed the measure, which was supported by both UPS and the Teamsters, and set up a website titled “” that accuses UPS of “quietly seeking a congressional bailout designed to limit competition for overnight deliveries, leaving Americans with a less reliable next-day delivery network for critical goods like medicines and essential inventory.”

“Why is megacorporation UPS trying to use its political clout to get a bailout from the U.S. Congress, leaving you to pay the tab?” the FedEx website asks.

But a letter signed by former Sen. Malcolm Wallop (R-Wyo.) and the leaders of Americans for Tax Reform, Frontiers for Freedom, the American Conservative Union, 60 Plus, Citizen Outreach, the Small Business & Entrepreneurship Council and the National Taxpayers Union alleges that FedEx is mischaracterizing the situation and unfairly trying to tap into public resentment against federal bailouts to attack its competition.

“FedEx’s campaign called ‘Brown Bailout’ is designed to capitalize on public sentiment that is angry that hundreds of billions of dollars have been wasted in the name of bailouts,” the letter reads. “But since UPS is not seeking even one dime of taxpayer money, the campaign is essentially a disinformation campaign and should be stopped.”

“If FedEx wants to oppose the regulatory reform being sought by UPS, that is fine,” the letter continues. “But FedEx should use honest arguments and refrain from disingenuous and dishonest labels.”

Read more: Conservatives deliver FedEx smackdown - Andy Barr -

Gunter 07-20-2009 05:32 PM

So why is UPS looking for a bailout?

What you aren't hearing about is the big bucks UPS is paying out like FedEx was supposed to do. It's definitely much easier for UPS since they are much bigger and make more profit than FedEx. FedEx may lose this pay to play political warfare.

UPS wanted to be under the same rules as FedEx when they didn't look much like FedEx at all. They fought to do so but were denied. In the meantime, UPS kept changing the way they did business to match FedEx. Isn't it just sour grapes that they now want FedEx under the same rules? Why did UPS change if they felt the rules wouldn't let them compete? Is UPS really being hurt? They make more money and have better margins than FedEx.

Are we really supposed to buy the argument UPS needs a more level playing field? They are the 800lb. gorilla, I mean Brown bear.

Deuce130 07-20-2009 06:22 PM

From the ACU website:

July 20, 2009



ALEXANDRIA, VA - Last Friday Politico carried a story alleging that I had on behalf of ACU made a “pay for play” proposal seeking funding from Federal Express as the “price” of ACU support in a legislative battle raging in Congress.

The allegation is totally false. ACU continues to oppose a Congressional action that would extend NLRA jurisdiction to Federal Express and deliver the company and its employees into the hands of the Teamsters.

ACU’s opposition to doing this predated a funding proposal sent to Federal Express by ACU staff.

Neither ACU nor I have heard from Federal Express on the status of that proposal and we have neither asked for nor received any funds from UPS.

My position and ACU’s on the NLRA issue has not and will not change. Our opposition to what amounts to forced unionization is based on principle not personal, professional or financial considerations.

ACU’s positions on issues affecting this country have never been for sale and never will be.

David A. Keene


American Conservative Union

# # #

The American Conservative Union (ACU) is the nation's largest conservative organization. ACU is the recognized authority on rating conservative votes in Congress and the American Conservative Union Foundation (ACUF) is the host of the annual CPAC meeting. ACU is on the web at: The American Conservative Union

Captain Cook 07-20-2009 06:53 PM

More whining to follow soon from Fred Smith, I'm sure.

Wah waah.

SPDBOILER 07-20-2009 07:27 PM

Seems odd that unionized pilots from Fed Ex would post negative on this forum when what is being debated is their fellow driver employees right to unionize. Guess brotherhood only extends to their fellow pilots.

BOYCAPTAIN 07-20-2009 07:40 PM

and don't forget UPS has tried numerous times to get under the RLA!

"In 1936, airlines were brought under the RLA. FedEx, which began as an air freight company and created the modern express business, is precisely the sort of integrated system for which the RLA was written. This matters: 53 percent of all U.S. exports by value travel by air, and virtually all priority and express U.S. mail is carried by FedEx.
In 1981, UPS began air services, and in the 1990s it tried, legislatively and judicially, to be put under the RLA. In 1993 UPS said all of its operations, “including ground operations,” are properly subject to the RLA “because the ground operations are part of the air service.” FedEx supported UPS’s efforts, even though the vast majority of UPS parcels never go on an airplane, whereas FedEx’s trucking operations exist to feed its air fleet and distribute what it carries.
FedEx characterizes itself as the “world’s most effective airline” and UPS as “a 100-year-old trucking company.” FedEx, Smith insists, is not anti-union; its pilots are unionized. He says that the pay and benefits for its drivers are, on average, higher than those of UPS drivers and that new FedEx drivers must wait only three months to be eligible for benefits whereas UPS drivers must wait a year. Nevertheless, today’s Democratic majority in Congress, with UPS now aligned with the Teamsters, wants to put FedEx’s ground pickup and delivery operations under the NLRA, thereby making FedEx’s entire integrated system susceptible to disruption by local disputes." :rolleyes:

Deuce130 07-20-2009 07:40 PM


Originally Posted by SPDBOILER (Post 647994)
Seems odd that unionized pilots from Fed Ex would post negative on this forum when what is being debated is their fellow driver employees right to unionize. Guess brotherhood only extends to their fellow pilots.

I think you'll find that most FDX pilots are pretty loyal to FDX ALPA. As for anyone else, probably not so much. The language in this bill stands to hurt our company, perhaps significantly. I can only speak for myself, but I'd rather FDX be a successful company for the next 30 years or so. If that means opposing the political machinations of the Teamsters, so be it. Now, if ALL FDX drivers and mechanics across the country want to organize into a single union, I'd support it. But, individual locals? No way.

gderek 07-20-2009 07:40 PM


Originally Posted by SPDBOILER (Post 647994)
Seems odd that unionized pilots from Fed Ex would post negative on this forum when what is being debated is their fellow driver employees right to unionize. Guess brotherhood only extends to their fellow pilots.

Here we go again. This is not about whether they can's about how they can unionize. FedEx Express is an Airline not a trucking company like you boys at UPS. These guys have every right to unionize as one employee group across the company, not as individual shops.

I'm really tired of UPS guys throwing stones....If you guys don't like your job maybe you should go find another one rather than attacking ours.

fdx727pilot 07-20-2009 07:46 PM


Originally Posted by SPDBOILER (Post 647994)
Seems odd that unionized pilots from Fed Ex would post negative on this forum when what is being debated is their fellow driver employees right to unionize. Guess brotherhood only extends to their fellow pilots.

Yeah, it's such a shame that employees are not allowed to unionize under the RLA. But wait! Funny how almost every company under the RLA has unions. How is this preventing Fedex employees from unionizing, in the same manner as pilots, flt attendants, mechanics, baggage handlers, ticket agents, customer service agents, and any other employees at all the other RLA companies do?

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