As the Department of Labor's top cop, Paul Tiao would have been uncomfortably close to the unions he would investigate. That's why he didn't get the job. Last Monday on May 9 President Obama withdrew Tiao's name from consideration as DOL Inspector General (IG) rather than subject him to a Senate Judiciary Committee grilling or install him via one-year recess appointment.
Secretary of Labor Hilda Solis has taken her gloves off in the ongoing war within the states. And her supporters are aching for more. In a speech before a partisan audience at the Marriott Wardman Park Hotel in Washington, D.C. last Saturday, Solis proclaimed solidarity with Wisconsin public-sector unions and their supporters who have all but shut down the state legislature in protest of Republican Gov. Scott Walker's proposals to curb public spending.
Readers of Union Corruption Update may have noticed something recently: a shortage of references to criminal investigations by the Labor Department's Office of Labor-Management Standards (OLMS). That's not a figment of the imagination. The main source of these references - the OLMS website - hasn't been updated in at least three months; the most recent posting concerned a guilty plea entered on March 8. This may well be part of a larger strategy to restrict the flow of information to NLPC and other organizations dedicated to promoting union accountability. Organized labor, after all, is a key source of support for President Obama. And given that knowledge is power, it follows that the less the public knows about labor corruption, the more likely it will flourish. The current administration doesn't want to be on the wrong side of union power.
The Department of Labor under President Obama appears to be doing everything it can to accommodate union interests, especially when it comes to investigating corruption. But a few members of Congress are openly objecting. Among them is Senator Orrin Hatch, R-Utah. Hatch on April 22 issued a rebuke to a decision by the department the previous day to roll back new rules designed to make union officials more accountable to the workers they represent. "It is extremely disappointing that the Obama administration is choosing a time of financial crisis to cut investigations into financial corruption solely because it may reside in its own politically constituency," he said.
Even before assuming power, the Obama administration had given signs of wanting to undo certain Department of Labor regulations written during the Bush years.But that didn’t stop the old regime under Labor Secretary Elaine Chao from getting in a few last blows for union transparency.On January 16, the department’s Office of Labor-Management Standards announced that it would publish a final rule in the January 21 Federal Register updating Form LM-2 for larger unions and restricting the circumstances under which smaller unions could file the simpler Form LM-3.The regulation, developed pursuant to the Labor-Management Reporting and Disclosure Act of 1959 (i.e., the Landrum-Griffin Act), subsequently appeared on the latter date, the day after President Obama’s inauguration.
The year 2008 will be remembered most of all for the $7 trillion in stock market assets that evaporated.The losses were a consequence of the widespread attitude among Wall Street money managers that debt-fueled growth has no limits or negative consequences.The equivalent view among union leaders is that institutional growth must come at any cost, whether to the unions themselves, employers or the country as a whole.Only 7.5 percent of the nation’s private-sector work force now belongs to a union.Labor officials are convinced that with the right laws and programs in place, that figure could double, even triple. Everyone supposedly would win, save for certain "greedy" employers and ideologues hostile to the interests of working families.
It was a regulation five years in the making, with organized labor filing two successful court challenges along the way.But the U.S. Department of Labor (DOL) has issued its final rule regarding union trust funds.On September 30, the department posted a rule on its Web site (www.olms.dol.gov) requiring more disclosure for union-sponsored pension plans, credit unions, training funds and other trusts.The Federal Register subsequently published it on October 2. The rule had been finalized in July 2007. Led by Labor Secretary Elaine Chao, the department in October 2003 created a new form, “T-1,” in hopes of discouraging embezzlement and other mismanagement.The final rule, here, as with previous attempts, is in accordance with objectives set forth by the Labor-Management Reporting and Disclosure Act (LMRDA) of 1959, also known as the Landrum-Griffin Act.
Union officials have made little secret of their desire to use member benefit plans as leverage to achieve a higher social good.Such a goal, however, may conflict with another, overriding goal inscribed in federal law: prudent and sound asset management.The Employee Retirement Income Security Act of 1974, or ERISA, requires fiduciaries of most private-sector benefit plans to base investment decisions solely on the welfare of their participants and beneficiaries.Advancement of broader social objectives, however desirable they might be, is not a criterion.The U.S. Chamber of Commerce, in recent years a target of union shareholder activists, recently wrote a letter to the U.S. Department of Labor asking for a clarification of the permissibility of a planned AFL-CIO shareholder campaign.In its response, dated June 27, 2008, the DOL wrote back that it was not.Employers thus won – that is, until the next round.
The Department of Labor’s financial reporting forms are a work in progress.And officials there have proposed some fine tuning they believe will make labor unions more accountable to their members and the public at large.On May 12, the department’s Office of Labor-Management Standards (OLMS) released new “LM-2 Form and Regulations,” part of a larger effort to expand its authority under the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA).The rules, whose comment period closes on June 26, are designed to close loopholes not addressed during the previous round of reforms a half-decade ago.
Specifically, the new LM-2 form would clarify several corruption-prone areas.Unions would have to: