Icahn likens casino union to mobsters
Ratcheting up his war of words with Atlantic City's main casino union, billionaire investor Carl Icahn on Thursday likened the group to mobsters demanding protection from merchants in return for not getting bricks through their windows.
In a letter to members of Local 54 of the Unite-HERE union, the soon-to-be owner of the Trump Taj Mahal casino calls union leadership "abhorrent" and likens a union-run health care plan to a protection racket extorting money from casinos. It was his fourth missive to, or about, union members since November.
Icahn is battling the union over cost-saving measures at the money-losing Taj Mahal, which is trying to emerge from bankruptcy. The court ended employees' health insurance and Icahn wants to switch the workers to government-run coverage under the Affordable Care Act, with subsidies to help them pay for it.
"Over the last five years, while the Taj Mahal has gone bankrupt not just once, but twice, your Unite-HERE health plan has made $140 million in net income," Icahn wrote. "Yet even against the backdrop of your employer entering bankruptcy for the second time in five years, your union leadership continues to demand that the Taj make exorbitant contributions to the profitable Unite-HERE health plan, or else suffer labor unrest.
"It all reminds me of that bygone era when organized crime would demand grocers pay for protection, or suffer bricks being thrown through their store windows," Icahn wrote. "The only real difference here is that instead of throwing bricks through the Taj Mahal's windows, your union instead organizes strikes, picketing, boycotts and other attacks to deter customers from patronizing the Taj Mahal."
The union picketed outside the Taj Mahal last Friday, its fifth public protest against the benefit cuts since last fall.
Local 54 rejected his criticism, and is fighting to reinstate the insurance. Union officials promised a more detailed response later Thursday.
Icahn last week received permission from a bankruptcy judge to assume ownership of the Taj Mahal's parent company, Trump Entertainment Resorts, by swapping $286 million worth of its debt that he owns in return for ownership of the company once it exits bankruptcy.
A judge in October approved the company's move to end health insurance and pension coverage. The union is appealing that ruling, and Icahn has said he will close the casino if the ruling goes against him, saying the current level of benefits are unaffordable in Atlantic City's dwindling casino market.
Four of the city's 12 casinos shut down last year and the Taj Mahal barely avoided becoming the fifth when Icahn committed $20 million to keep it afloat over the winter. He has pledged an additional $80 million "so that it can be great hotel once again, not so that it can enrich these union leaders."