During his presidential campaign, Barack Obama promised accountability and transparency. Last Tuesday, his administration broke that promise to yet another group. Department of Labor Secretary Hilda Solis betrayed rank and file union members by repealing vital reporting regulations that allowed members to see how union bosses were spending their hard-earned dues money.
Former Bush Administration DOL Secretary Elaine Chao, who for eight years fought for transparency in labor reporting, created the website unionreports.gov. Rank and file union members as well as the general public can still use the site to monitor how labor organizations spend their funds.
Solis's repeal weakens one of the chief reporting tools used by the website to collect union financial data, the Form LM-2. The form requires labor organizations whose annual receipts are greater than $250,000 to identify and report all expense above $5,000. This tool allowed the DOL's Office of Labor and Management Standards to obtain $91.5 million dollars in restitution of dues and resulted in over 900 convictions from 2001 to 2008.
Repealing this requirement limits union members' access to needed information about how their dues are being used. Chao's changes gave members more data to examine investments and transactions by their union and ensure they were made at arm's length and without self dealing. The repeal also limits a member's ability to monitor union officer and union employee compensation.
Before the repeal, labor organizations were required to identify all of their officers' compensation including salary, benefits, deferred compensation, and even travel expenses. Access to this information is critical to guard how members' money is being spent and help prevent abuse.
In most states workers are forced to join a union if they want to work in a certain job, meaning that the union imposes dues for the simple privilege of working. The union member cannot decide to not pay his dues and has little recourse to change his union. If he disagrees with the way his dues are being spent he can attempt, although this is difficult, to vote the union officers out of office. Or if there is corruption, he can report the officers to OLMS which will probably not be nearly as aggressive in rooting out corruption in the current Obama regime.
The only way the member can know if his dues are being wasted is by accessing information on forms like the LM-2. Weakening the disclosure requirements allows union officers to abuse their trust and hinders a member's effort to make sure his dues are being spent wisely.
Wyoming Sen. Mike Enzi, ranking Republican on the Senate Health, Education, and Labor Committee, warned the repeal is putting union members at risk. "We should be giving the department more tools and resources to root out fraud and abuse, not taking tools away from them," Enzi said.
The Obama administration claims that the recent changes were too burdensome and would result in unnecessary expenses to unions. This is the same specious argument that was used and proved incorrect the last time the Form LM-2 was changed.
In 2003, union leaders claimed labor organizations would be substantially harmed if they were required to report receipts and disbursements of $5,000 or more. Before the 2003 LM-2 changes unions could lump millions of dollars into single line items with no detail. AFL-CIO President John Sweeney claimed in 2003 the cost of the reporting changes would be over $1 million dollars for the average international union.
The final total for the AFL-CIO, one of the largest international unions, was only $68,000 the year the 2003 changes took effect. The justification given by the administration for the repeal of reporting requirements on the LM-2 is old and probably less then accurate.
The reality of the repeal is that union members will not have the ability to effectively oversee those in charge of their organizations. They will not be able to learn the total cost of benefits to their union officers. They will not be able to check the investments and transactions of the union to ensure their dues are being used efficiently and without a conflict of interest.
Now, because of the Obama administration's actions, the ability of members to watch how their dues are being used is in jeopardy.