Out of Control Policy Blog

Union Disclosure and Transparency

Secretary of Labor Elaine Chao penned an oped on union transparency, disclosure, and accountability. Here it is in its entirity.

At the Department of Labor, we've made a point of doing more, better and with less. Among the standout performers is the Office of Labor-Management Standards (OLMS). Established in 1959 to protect union members from union corruption, OLMS was hamstrung from the get-go, saddled with inadequate regulatory power and woefully insufficient manpower. It has been nearly 50 years since OLMS was created, but it is only recently that the agency has had the backing it needs to even begin to fulfill its mission of protecting union members from union corruption. Now that effort is threatened as Congress singles out this anti-corruption agency for budget cuts.

After severe cutbacks in the 1990s, OLMS began rebuilding in 2001. Although still significantly below 1980s staffing levels, in the past six years OLMS investigators and auditors have referred cases to U.S. Attorneys resulting in 775 convictions and over $70 million in restitution for union members.

In 2003, the union financial disclosure form (LM-2) was revised for the first time since 1959. For the first time in history, unions were required to make meaningful disclosures of their finances. For instance, America's teachers – who make, on average, $47,800 annually – now can know that the President of the leading teacher union (National Education Association) makes five times as much they do ($272,000). He certainly has not been left behind. Union members are also discovering the extent to which their dues money is funding lavish trips for union officials to luxury resorts and other expensive perks, political activities and items unrelated to collective bargaining.

Many union officials vociferously opposed this increased disclosure of union finances. Compliance cost estimates were wildly exaggerated to argue against the new requirements. The AFL-CIO claimed that it would cost unions "more than $1 billion" and the AFL-CIO alone would spend $1 million to comply. In fact, filling out the new disclosure form cost the AFL-CIO $54,150.

Unions had $22 billion in assets in 2005 – riches built on the dues deducted from the paychecks of union members. Union members are entitled to know where their money is going. Congress is all for boosting the Securities and Exchange Commission's budget so it can ride herd on businesses. But OLMS -- the unions' equivalent of the SEC -- is on the chopping block. Every other Department of Labor enforcement agency – all targeted at businesses – is getting a budget increase. Less than one-tenth of one percent of the department's budget goes to OLMS, the one federal entity charged with protecting union members from union corruption, and it is the one singled out for budget cuts.

Anyone who is wondering what they may soon be missing should go to www.unionreports.gov.


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