Pension issue pits billionaire vs. socialist newspaper

[Charles Brown <cbrown@xxxxxxxxxxxxxxxxx>]

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.