Rennert suing WW
Pension issue pits billionaire vs. socialist newspaper
By
Deirdre Griswold
Published May 23, 2006 11:24 PM
The Renco Group, owned by multi-billionaire
Ira Rennert, is moving ahead with a defamation lawsuit filed in New York State
Supreme Court against Workers World newspaper and Workers World Party.
The
legal action is based on an article about the plight of workers at a steel plant
in Warren, Ohio (“WCI Steel bankruptcy robs workers’
pensions”), which appeared in WW’s print edition dated Feb. 23,
2006, and also on the Internet at www.workers.org.
At the time the article
was written, Renco owned WCI Steel but had filed for Chapter 11 bankruptcy. The
bankruptcy court still had to rule on a reorganization plan Renco had submitted
earlier. Renco was also trying to fight off a takeover bid by a group of
noteholders who had loaned hundreds of millions of dollars to the steel company.
According to the Pension Benefit Guarantee Corp., a quasi-governmental
agency tasked with protecting workers’ pensions, the pension fund under
Renco’s control was $117 million short of what was needed to fulfill the
company’s obligations to the workers.
A release from the PBGC Public
Affairs department, dated March 30, explained that “Under the proposed
plan of reorganization filed in federal bankruptcy court, the pension plan would
have been left behind by the reorganizing steelmaker.”
Ira Rennert
had made news headlines early in February when the PBGC went to court asking
that it be appointed as the pension plan’s trustee and be authorized to
terminate the plan. According to a New York Times article (“Pension Battle
May Entangle Mogul’s Home,” Feb. 3) the PBGC appeared “poised
to lay claim to Mr. Rennert’s 29-bedroom oceanfront estate, along with
other assets, to make sure he delivers on hundreds of millions of dollars in
pensions promised to a group of steelworkers in
Ohio.”
Rennert’s Long Island mansion alone, described by
Wikipedia as the largest home in the U.S., was worth more than the fund’s
shortfall. With 29 bedrooms, 39 bathrooms and a 200-car parking garage, it was
valued at $185 million.
Just to rent a house for the summer in the
exclusive Hamptons area where Rennert built his mansion can cost more than
$600,000. (Bloomberg.com, May 10)
Talk about a David versus Goliath
struggle! This modern-day robber baron has hired a powerful Wall Street law
firm, Arnold & Porter, to haul into court a socialist newspaper that depends
on volunteer labor and many small contributions to reach its audience, primarily
in the progressive and working class movements.
They are basing their
argument on a very narrow definition of the article’s use of the word
“rob.” They define robbery as “forcible stealing”
accompanied by the use of or imminent threat of physical force. This is the
legal basis for Rennert’s charge that the article was “malicious,
false and defamatory.”
The Workers World article did not state that
Renco had committed any criminal act, let alone conjure up the ludicrous image
of a multi-billionaire, armed with a pistol or a knife, waylaying workers in
order to relieve them of their wallets. It put the loss of pensions facing the
WCI Steel workers in the context of the broad anti-labor assault by big business
in the recent period.
Declaring bankruptcy has become a tactic of choice
by the super-rich and their executives. Bankruptcy laws allow them to rip up
union contracts and shed contractual obligations they agreed to long ago. This
trend threatens millions of workers with severe poverty and/or lack of adequate
health care in their old age, even after a lifetime of hard and often dangerous
work.
Workers in many industries are holding their breath these days. As
the WW article pointed out, “This is an episode in a bigger story about
the widespread campaign of corporations like United Air Lines, Delphi Automotive
Systems and Bethlehem Steel to use bankruptcy to steal workers’
pensions.”
Evidently, the WW article came at a very crucial moment
for the steel workers.
At the end of March, the struggle over control of
WCI Steel was resolved in an agreement between the noteholders and Renco, in
which Renco relinquished its ownership of the company and—faced with the
PBGC lawsuit—committed to adding the money necessary to secure the
existing pension fund. The PBGC claims credit for this deal, arrived at in
bankruptcy court, and has withdrawn its suit against Renco. It said in its press
release of March 30, “Because the PBGC acted ... Renco remained
responsible for WCI’s pension obligations.”
This was not just
altruism on the part of the PBGC, which itself is overextended by billions of
dollars. If Renco’s original reorganization plan had been confirmed by the
court, the PBGC under law would have had to come up with most of the $117
million missing from WCI Steel’s pension fund.
The workers involved,
who are organized into the United Steel Workers, have now voted for a contract,
although considerable opposition was expressed to cuts in workforce and benefits
demanded by the new owners.
Is this the end of the matter? Will the
retirees really get the pensions owed to them? We shall see.
In the
meantime, Renco’s suit against this newspaper is proceeding.
He has
taken legal action against progressives before.
In 1998, he initiated a
lawsuit for trespassing and secured a restraining order against filmmaker
Michael Moore, who had gone to Rennert’s home and office to present him
with a “Man of the Year” award for being a top toxic polluter. It
was later reported that “The EPA ranks the group of companies controlled
by Renco as the nation’s 10th-largest polluter.” (Business Week,
Feb. 17, 2003) The lawsuit was eventually dropped and the restraint lifted.
Rennert also is the major owner of AM General Corp., which makes the
gas-guzzling, polluting Hummer for General Motors.
Billionaires like
Rennert may not always win in court, but they know that forcing their opponents
to mount a defense in a defamation case can cost them a great deal of money,
regardless of the outcome. Fortunately, Workers World will be defended pro bono
by attorneys—from the respected firm of Davis Wright Tremaine—who
specialize in media and First Amendment law. While this relieves WW of having to
pay lawyers’ fees, the newspaper and party will still be responsible for
court costs, which can add up.
More importantly, WW intends to carry out
a vigorous political offensive around the issues in this case, both in court and
in the media, continuing to speak out on the monumental rip-off of
workers’ pensions that began with corporate restructuring and continues
unabated. Contributions to Workers World/Pension Defense Project, care of this
newspaper, are welcomed and will put even greater muscle into this
campaign.
Stay tuned.
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