If sunshine is the best antidote to corruption, then Senator John Thune, R-S.D. (in photo), must be opening a lot of windows. Last Wednesday, July 30, Sen. Thune unveiled the Union Transparency and Accountability Act (S. 2688), a measure that would require greater transparency in the information labor organizations report to the Department of Labor. The bill would improve detection of misuse of funds, especially by union officials and benefit fund trustees. Thune explained his discontent over President Obama's approach: "I hope my colleagues join me in supporting my bill to put an end to the administration's political favoritism and restore transparency to union finances. Union members deserve to know how their dues are being spent." The legislation effectively would restore three finalized rules shelved by the DOL in 2009.
Workers represented by Cement Masons Local 600 have helped put up a good many buildings in Southern California. But right now its members have a more immediate project on their hands: making sure they receive all promised benefits. And the U.S. Department of Labor wants to make that happen. Last Wednesday, the DOL filed a civil suit against various officers of the local trust funds to seek the reinstatement of a recently-fired union auditor and remove certain board members who administer the funds. Assistant Labor Secretary Phyllis Borzi explained the motive behind the action: "Workers must be free to participate in Department of Labor inquiries without fear of retaliation. By law, they have a right to report suspected violations to the department and must be allowed to cooperate with investigators."
Is paying someone an annual salary, as opposed to an hourly wage, a form of exploitation even if the work is identical? President Obama thinks it can be. On March 13, Obama issued an Executive Order directing the Department of Labor to draft a regulation to expand the eligibility of salaried workers on federal contracts to receive overtime pay. The threshold would rise from the current $455 a week to an estimated $970 a week; employees making less effectively would be converted to hourly status and paid at an overtime rate for work done beyond 40 hours in a given week. The president insists the issue is fairness. "Overtime is a pretty simple idea," he said at the White House ceremony. "If you have to work more, you should get paid more." Yet the issue isn't so simple.
Former Secretary of Labor Hilda Solis readily admits it: She's a union woman. But her affinity with organized labor is more than just a matter of shared views. On February 10, the Cerritos, Calif.-based Hews Media Group revealed that Solis, now campaigning for a seat on the Los Angeles County Board of Supervisors, had accepted thousands of dollars worth of free private jet travel more than five years ago, while still serving in Congress, from International Union of Operating Engineers Local 12, but without disclosing these trips, as required by federal law. This finding is cited as a material fact in a federal civil racketeering suit filed in January by four members of the Pasadena-based local against some two dozen people.
Thomas Perez is the nation's newest Secretary of Labor. And given his track record of political radicalism, this ought to be more than a little troubling. Perez insists he will be even-handed in his enforcement of the law. That commitment is getting an early test. On July 23, the day of Perez's swearing-in ceremony, two key House Republicans, John Kline (Minn.) and Phil Roe (Tenn.), wrote Perez a letter asking him to clarify the legal status of nonprofit 'worker centers' that are proliferating throughout the country. Because these nonunion organizations mimic the behavior of unions, the letter stated, they ought to be subject to laws that govern unions, especially with respect to financial disclosure.
Thomas Perez embodies ethnic identity radicalism. Whether the U.S. Senate has the courage to challenge him is yet unknown. President Obama today nominated Perez for Secretary of Labor. As the Department of Justice's assistant attorney general for civil rights since October 2009, Perez has promoted a hard-charging egalitarianism that goes even beyond that of first-term Obama Labor Secretary Hilda Solis, who resigned in January. His "Third World First, America Last" worldview comes with hefty baggage. He's persuaded the Justice Department to dismiss its case against Black Panther members accused of menacing white voters and poll watchers in Philadelphia on Election Day 2008.
A presidential re-election typically triggers a cabinet reshuffling. The U.S. Department of Labor now can be considered part of the process. Yesterday afternoon, January 9, Labor Secretary Hilda Solis announced her resignation. Solis, previously a four-term Democratic congresswoman from California, had won the job on the strength of her aggressive championing of union interests. In a statement issued shortly thereafter, President Obama lauded Solis as "a tireless champion for working families," adding that "her efforts have helped train workers for the jobs of the future, protect workers' health and safety and put millions of Americans back to work."
Political spending can be seen as consisting of the kind that goes recognized and the kind that doesn't. And when the money comes from unions, the gap between the two can be enormous in favor of the latter. On July 10, the Wall Street Journal published an article by reporters Tom McGinty and Brody Mullins, "Political Spending by Unions Far Exceeds Direct Donations," concluding that organized labor during 2005-11 spent $4.4 billion on federal election campaigns and lobbying. Only $1.1 billion of that represented sums reported to the Federal Election Commission (FEC) and Congress.
Labor leaders don't like it when they have to open their books to public inspection. Those in Canada apparently aren't much different from the ones in this country. Canadian lawmakers currently are considering private legislation, Public Financial Disclosure for Labour Organizations, to include unions as among the organizations required to furnish financial data. Sponsors say the measure, alternately known as C-377, is needed to combat corruption and foster transparency. Union leaders insist that compliance would be unjustifiably costly and time-consuming. If this sounds familiar, it should.
It has the raw material for a movie. The plot, so far, is incomplete. Over the last few months the Screen Actors Guild (SAG) has been rocked by public allegations by a former benefits executive that top officials of SAG-sponsored benefit plans, including CEO Bruce Dow, looted between $5 million and $10 million. The whistleblower, Craig Simmons, who had been fired a half-year before, this September filed a complaint with the U.S. Department of Labor requesting that DOL conduct criminal and civil probes. Simmons also alleges that Dow instructed him to deceive trustees and authorities about the losses. The Labor Department has yet to comment on whether it has begun an investigation. Lawyers for the SAG, which controls about $2.5 billion in plan assets, are denying all charges. Yet significantly, the union hired an investigator to conduct a review, which since has been completed.