A Report from Co-op Day at the White House


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Dave Karoly of the NoBAWC staff was kind enough to share his report on the recent White House Co-op Day. We are sharing the report and a couple of the pictures in the longer body of this blog entry. The National Cooperative Business Association (NCBA) coordinated the event and was, from all accounts quite a successful day.

Dave's report, unedited other than for format for posting, follows.

Report back from the
White House Community Leader Briefing: Cooperatives, Jobs, and the Economy

May 4, 2012

by Dave Karoly (NoBAWC staff)

Summary of the Event

This event was organized by the National Cooperative Business Association (NCBA), a cross sector cooperative organization located in Washington, DC. NCBA engages in lobbying/public policy on behalf of cooperatives, markets and promotes coops, offers governance/Board training, produces publications and has a large international program called the Cooperative League of the USA or CLUSA. NCBA does work for all types of coops, including agricultural, purchasing, marketing, housing, worker, and consumer. Although worker cooperatives comprise a small fraction of
NBCA’s membership and most of NCBA’s work does not significantly impact the worker coop sector, several NoBAWC member workplaces are or have been members of NCBA.


NCBA invited 150 cooperative representatives from around the United States to the White House to engage in open dialogue with senior Obama Administration and federal agency officials on a range of key issues, including how coops are impacting job creation, food security and energy. The event took place on Friday, May 4th from 9:00 am until noon at the Eisenhower Executive Office Building next to the White House. From 9:00 am to 11:00 am, everyone assembled at the South Court Auditorium for presentations/Q&A from various White House and federal administrators. From 11:00 to noon, there was a breakout session where participants could choose one of four sessions to attend.

The first two hours consisted of presentations by Administration officials with some Q&A from the audience. The program was introduced by Kyle Lierman from the White House Office of Public Engagement. Liz Bailey (Interim President and CEO of NCBA), then made opening remarks. After Liz Bailey, we heard from Greg Nelson (Deputy Director for Private Sector Outreach at the White House Office of Public Engagement). Like all the officials who spoke, Deputy Director Nelson began by talking about the types of cooperatives with which he had experience. For him, it was a credit union and consumer food cooperative when he was a college student. Both were “staples of the community”. Deputy Director Nelson talked about the importance of developing policies that empower people on a local level to get things done and how policy implementation is critical. With regard to cooperatives, he mentioned that policy should lead to job creation and workforce training. Deputy Director Nelson was the only official to mention labor unions when he referred to recent United Steel Workers interest in worker cooperatives.

After Deputy Director Nelson, Judy Canales (Deputy Under Secretary of the United States Department of Agriculture or USDA) spoke. The USDA is the most developed and best funded government entity that has grants/services available to cooperatives. Last year, $58.4 million was distributed among 452 grants for cooperatives. Of course, the USDA has a rural emphasis, so its relevance to worker cooperatives in the Bay Area is very small. However, some 501(c)(3) nonprofits doing work in the worker cooperative sector are eligible for USDA grants. For example, the California Center for Cooperative Development (CCCD) in Davis receives a portion of its funding from USDA grants. NoBAWC member workplaces that have direct relationships with farmers (Rainbow Grocery, Other Avenues Food Store, Mandela Foods) may be eligible to apply for certain grants. Even BioFuel Oasis may be eligible for grants because the USDA has a stated commitment toward developing the biofuel market. The section of the USDA that is most relevant to NoBAWC member workplaces is the Cooperative Services Program which “promote(s) understanding and use of the cooperative form of business as a viable organizational option for marketing and distributing agricultural products.” The grants that may be most relevant include: Value-Added Producer Grants, Rural Business Opportunity Grants, and Small Socially-Disadvantaged Producer Grants. For more information about USDA grants, visit http://www.rurdev.usda.gov/cphome.html. Also, Kim from CCCD is very knowledgeable about USDA grants. Contact CCCD at (530) 297-1032 or email info@cccd.coop.

After Deputy Under Secretary Canales, there was a surprise visit from White House Chief of Staff Jack Lew. Chief of Staff Lew was the highest ranking Administration official to address the Briefing and probably the least knowledgeable about cooperatives. After a couple of partisan comments about how Democrats are the best hope for America’s middle class, he said that broad-based prosperity comes from the bottom up and that cooperatives are doing good work creating jobs and economic opportunity.

After Chief of Staff Lew, Danielle Gray (Deputy Assistant to the President, National Economic Council) and Carlos Monje (Chief of Staff, Domestic Policy Council) spoke together. Both Deputy Assistant Gray and Chief of Staff Monje talked about the important contribution of cooperatives. Deputy Assistant Gray spoke about how her mother worked at a credit union and how this shaped her perspective on the importance of mission and governance stating “socially responsible for profits are important in job creation”. Chief of Staff Monje remarked that “cooperatives are fundamentally American” because people come together to solve problems. Both officials said that the best place to learn about what White House officials are talking about is the White house blog at http://www.whitehouse.gov/blog. At the right hand portion of this page, one can select from a specific list of blogs, such as the Office of Public Engagement blog.

The last Obama Administration speaker was John Carson (Director, White House Office of Public Engagement). The White House Office of Public Engagement is intended to coordinate opportunities for direct dialogue between the Obama Administration and the American public by bringing new voices to the table and ensuring that everyone can participate and inform the work of the President. Although the degree to which this actually happens is debatable, the Office of Public Engagement is the primary contact NCBA has in the Obama Administration. Director Carson grew up in Wisconsin and has had several cooperative experiences (excluding worker coops) and seems genuinely interested in coops. He said he wants to help shine a spotlight on the benefits of cooperatives and our success stories. To build on this event, Director Carson suggested that participants (1) use this event to tell our stories to local media, (2) connect with regional offices of appropriate government departments (e.g. SBA, USDA, HUD, etc.) and make policy suggestions because they will forward suggestions to DC, and (3) work with the NCBA to lobby the White House to issue Executive Orders supporting cooperatives. For more information on the Office of Public Engagement, visit http://www.whitehouse.gov/engage/about-ope.


After the speakers, there was a breakout session from 11:00 am to noon. We had 4 choices: USDA, Domestic Policy Council, Small Business Administration (SBA), or Treasury Department. I chose to attend the SBA session because I thought this would be the most relevant to NoBAWC member workplaces. The SBA session was facilitated by Grady Hedgespeth (Director of Financial Assistance, Office of Capital Access, Small Business Administration). It was my understanding going into this session that worker cooperatives aren’t eligible for SBA loans except under the recently
unveiled Intermediary Lending Pilot Program for worker coops in New England and eastern upstate New York. It was made very clear by Director Hedgespeth that worker cooperatives throughout the U.S. are eligible to receive SBA loans as long as they meet the eligibility requirements that any other small business would have to satisfy. This is significant. If a worker coop is told by an SBA-approved lender that their financial institution cannot make SBA loans to worker cooperatives, the lender is wrong. If the lender needs clarification, they can contact the regional SBA office in San Francisco. If they need further clarification, contact NoBAWC staff and we will contact Director Hedgespeth. So, worker coops are eligible for a variety of SBA loans, including 7(a), 504, community advantage, and microloans. For more information, visit www.sba.gov.

After the breakout session, we left the Eisenhower Executive Office Building and walked to the NCBA office. For the next couple of hours, NCBA hosted a reception where folks who attended the Briefing could talk. Out of the 150 attendees, few were from the worker cooperative sector. In addition to seeing Melissa Hoover (USFWC), I also spoke at length with Tom Pierson (ex-Forward MN, a regional worker coop organization like NoBAWC that used to be in Minneapolis and recent Executive Director of NASCO). I also met several people long involved with worker coops, including Erbin Crowell (Executive Director at Neighboring Food Coop Association and NCBA Board member; ex-Valley Alliance of Worker Cooperatives, a regional worker coop organization like NoBAWC in Vermont and Massachusetts; ex-Cooperative Fund of New England; ex-Equal Exchange), Emily Lippold Cheney (Executive Director at NASCO), Jessie Myszka (Equal Exchange), and Esteban Kelly (NCBA Board member, ex-NASCO, ex-USFWC Board member). Esteban talked about developing a regional cross sector coop organization in Philadelphia where he lives. I said I’d be happy to share NoBAWC materials with him like we have done with several other regional organizations. In terms of NCBA, I spoke with interim President/CEO Liz Bailey, CFO/COO John Gillespie, Briefing organizer R.L. Condra, and Membership Development & Services Director Brianna Gianti. There is also an NCBA staffer, Lisa Stolarski, who I know from my union (Industrial Workers of the World). Lisa was a founding member of Jane Street Housekeeping Cooperative in Pittsburgh and is now the Executive Director at NCBA’s Coops USA Center.


Analysis and Next Steps

I think the Briefing was worthwhile and am glad a representative from NoBAWC was in attendance. To be blunt, I had low expectations prior to the event. I don’t think the Obama Administration or the Democratic Party have any real interest in workplace democracy. Moreover, NCBA has relatively few worker coop members and focuses most of its efforts and resources on other coop sectors. Some of these sectors, like agricultural/producer and marketing “cooperatives”, exclude farmworkers, processing plant workers, and retail employees and some engage in union-busting which, I believe, is a fundamental betrayal of cooperative principles. I also have misgivings about the close relationship between NCBA’s large international program, CLUSA, and multinational corporations & the U.S. Agency for International Development (USAID). With this said, my objectives were to make some connections, see what potential benefits could be applied to the worker coop sector, and use the White House experience to do local organizing/fundraising for NoBAWC and the Bay Area worker cooperative community. I learned about government offices and departments that are relevant to worker coops, obtained government contacts, and have an understanding of how to communicate the interests and stories of NoBAWC member workplaces to government officials. I also
learned that worker coops are eligible for a variety of SBA loans and some NoBAWC workplaces may be eligible for USDA grants. Moreover, I spoke with several people from NCBA and developed contacts for future collaboration. Lastly, I saw some worker coop folks I haven’t seen for a while and met some new ones.

After the Briefing, my opinion of the Obama Administration hasn’t changed. The fact sheet that NCBA provided the Administration includes all types of cooperatives, of which worker coops are a tiny percentage. The fact sheet included statistics like: 1 in 3 Americans are in a cooperative (most members of credit unions), coops generate 2 million American jobs each year, have $652 billion in annual sales, and possess $3 trillion in assets. I think the administration understands these numbers as significant, especially in an election year, and is looking to court voters who are coop members. There were several comments made by multiple Administration speakers criticizing Republicans and stating that Democrats offer the only hope for the survival of the American middle class. I don’t think the Administration understands the participatory democratic implications of cooperative principles or sees the distinction between democratic cooperatives and cartels of business owners/growers using the cooperative name. Regardless, I think worker cooperatives and other democratic coops can use this opening to advocate for their sectors.
I also think there are a probably few individuals within the Administration and government who understand and support worker coops.

My opinion of NCBA after this event is still mixed. Much of their membership and focus is on cooperative sectors and businesses that, to me, shouldn’t even be called cooperatives. I am also uncomfortable with the close relationship between NCBA’s international program CLUSA and multinational corporations/U.S. Agency for International Development (USAID) because of the destructive impact multinational corporations and USAID have had on the developing world. On the other hand, there have been supporters of worker coops within NCBA for many years.
Also, the impact of NCBA’s lobbying has helped worker cooperatives. In addition to this White House Briefing, NCBA, along with the USFWC and others from the worker coop sector have been lobbying the SBA to make worker coops eligible for SBA loans. This lobbying actually changed SBA policy on worker coops. Moreover, NCBA is currently going through an organizational transition and may come out of it more committed to participatory democracy. A few NCBA Board members have worker cooperative experience and there are staff members who are advocates for worker coops. The NCBA staff I met for the first time seem to be interested in worker coops as well. So, I think it is worthwhile for NoBAWC to see where this leads.

If any NoBAWC member is interested in working on issue(s) raised in this report, please email me at dave@nobawc.org. Due to the fact that NoBAWC staff is stretched so thin, the effectiveness of NoBAWC’s work in this area will hinge on NoBAWC volunteers who help with this effort. We will develop a strategy and plan of action to provide benefits to NoBAWC and our member workplaces. This will include:

  1. Develop a media kit and send out a press release to Bay Area media about NoBAWC’s participation in the White House Briefing. Also, NoBAWC needs to compile success stories from our member workplaces to use in press releases and when dealing with local and regional government officials.
     
  2. Establish contacts with regional government offices relevant to worker coops (e.g. SBA, USDA, etc.). I already have a call into the San Francisco regional office of the SBA to get the eligibility of worker coops for SBA loans in writing. Director Hedgespeth passed out an SBA fact sheet, but it doesn’t look official.
     
  3. Maintain contact with NCBA and be involved in any West Coast regional meetings.
     
  4. Contact local politicians about legislation beneficial to worker coops. A couple of national bills relevant to worker coops include SB 2231 and HR 3677. Senate Bill 2231 would raise the percentage of its assets a credit union can commit to small business loans from 12.25% to 27.5%. This would impact the proposed Worker Cooperative Federal Credit Union that members of NoBAWC are working on as well as the ability of the Cooperative Center Federal Credit Union in Berkeley (of which 3 NoBAWC members sit on the Board of Directors) to make loans to Bay Area worker coops. The Cooperative Center Federal Credit Union is also an SBA approved lender. House Bill 3677 (National Cooperative Development Act), cosponsored by East Bay Representative Barbara Lee, would develop a national and local cooperative development centers to distribute federal funds for coop development, including worker coops.
     
  5. Use the White House Briefing and the 17 year track record of NoBAWC’s work to attract public grants through Bay Area cities and private grants so NoBAWC can expand our work.!
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