Since most members of the Outlook CCC were assigned to manager positions, many of the technician jobs were performed by non-members in the local community.
Freitag was advocating a new approach for the Humboldt County CCC, defining a workers' cooperative as an ongoing business that is then purchased and controlled by its workers--on the model of the Mondragon model. Only employees, he asserted, can be members of the co-op; there would be no outsiders making decisions about the running of the business. There would be no outside shareholders reaping the profits. Otherwise, all other capitalist structures remained in place: huge wages for managers and profits to accrue to the managers exclusively. Practically any small business, Freitag claimed, could be run as a worker co-operative.
Elbridge, Joan White, Fred Collins, and the Overseers from Sonoma and San Diego Counties--Janice Tyrell and Phyllis Davis--travelled to the Humboldt County CCC as an investigating committee appointed by the State Council to see what could be done. They found that Freitag had convinced the two women managers as well as four other members to allow the visitors to observe during their meeting, but not to speak or in any other way participate. When that was put to a vote, several Humboldt County members disagreed, but Freitag, who was running the meeting with an iron fist, said that it was passed by majority consent. Freitag had changed the rules of the meeting so that instead of consensus, a simple majority could decide.
Over the next week, Elbridge and the other members of the Council committee spoke to individual members of the Humboldt County CCC, informing them that the State Council had rescinded the Humboldt County CCC
charter, that Freitag and his junta had been expelled from CCC membership, and that any person who remained in the outlaw cooperative would be similarly expelled within ten days.
Within several days, nine of the sixteen Humboldt CCC members indicated to the Council committee that they were withdrawing from the breakaway faction. Joan assisted them in filing a suit against the Freitag junta for a return of their individual $25,000 membership fees; fortunately, the group had not yet gone through the process of divesting their net holdings to the cooperative. The Freitag junta claimed that anyone leaving what they now called the Humboldt Socialist Workers Coalition would automatically forfeit any fees they had paid in.
Joan had set up all the county CCC enterprises so that the property was owned by all members of the cooperatives in joint tenancy. She filed a suit for the Humboldt members to take ownership of the Humboldt County CCC assets. In the next week, three of the junta members--two women and one man--broke with Freitag and joined the nine other members in their suit.
Freitag was in cahoots with a small mafia ring in the community that included a shyster lawyer who was able to coerce a crooked judge to rule that the assets of the community were the property of the junta; the twelve dissenting members would not get back the $25,000 fee they had paid in. Fortunately, Joan won the appeal suit in the State Supreme Court and each of the twelve received not only their $25,000 fee but damages in the amount of $5,000 each, which the junta members were forced to pay. | ||||||||||||||||||||||||||||||||||||||
Two of the Humboldt County CCC managers now informed Elbridge that Freitag was acting against the best interests of the members. They reported that he had recently moved out of the community housing compound and purchased his own home, where he was living with two of the female CCC managers. And, they related, Freitag was trying to convince the community to purchase a lumber mill and take over its operation as a cooperative.
The committee had to look on as Freitag and his seven-member junta pushed through an entirely new set of principles, setting up the Humboldt County CCC as a venture to purchase ongoing businesses and make them worker cooperatives. He claimed that their cooperative could quickly take over many businesses and train workers already in place to become owner-managers.