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.
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."
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.
Six-figure salaries, questionable consulting fees and lavish getaway vacations aren't exactly unknown in the upper reaches of organized labor. But officials of International Brotherhood of Boilermakers (IBB), have been taking these and other perks to a new level. That's the conclusion of an exhaustive investigative report published in the Kansas City Star on Sunday, May 13. The author, Judy Thomas, spent many months combing through IBB financial reports and tax returns. Family members of Boilermakers President Newton Jones and other officials have been making out especially well. The Kansas City, Kan.-based union defends its spending and hiring practices, arguing that it operates within the bounds of the law and economic necessity. Yet a number of dues-paying members have a different view.
When Department of Labor Solicitor M. Patricia "Trisha" Smith testified at a Senate confirmation hearing more than a year and a half ago, her track record as New York State Commissioner of Labor, and her comments about it, prompted leading Republicans to postpone action for several months. Their fears in hindsight appear well-founded. An article appearing in last Friday's Wall Street Journal reported that DOL staff, under Smith's supervision, a couple months earlier had issued a draft "operating plan" to dramatically step up enforcement against private-sector employers likely to have committed unfair labor practices. The details of the now-adopted plan indicate Smith, like her boss, Labor Secretary Hilda Solis, views the department's relationship with business as necessarily highly adversarial.
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.
Like any cabinet-level agency, the U.S. Department of Labor under the Obama administration has its share of political cronies. And the department has given more than a few indications that it intends to remake DOL into a vehicle for union advocacy. The National Right to Work Legal Defense Foundation (NRTW) for the past year has sought the full story. It's one of the less publicized aspects of the apparent lack of accountability in the current administration. This past December, attorneys for the Springfield, Va.-based foundation filed a lawsuit in U.S. District Court demanding the Labor Department release information in response to a Freedom of Information Act (FOIA) request NRTW had filed last April seeking facts about lobbying and other activities by Labor Secretary Hilda Solis (see photo) and other ranking officials. Raising further the distinct possibility that the DOL has not complied with the law is a recent article in the Washington Times summarizing how the Obama administration has gutted as many union transparency rules as possible.
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.
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.
Experience has shown that America’s labor unions, in absence of mechanisms to enforce accountability, have a penchant for disguising how they derive and spend their money. The Bush administration, led by Labor Secretary Elaine Chao, from the start has been engaged in an ongoing effort to combat union corruption before it happens.The centerpiece of that effort for several years has been an expanded, more detailed version of the “LM-2” annual financial reporting form for decades required of larger unions.The AFL-CIO went to U.S. District Court late in 2003 to block implementation of the new rule, but lost in federal appeals court a year and a half later.But many have wondered since:What effect is the new regime having on the way unions operate?A new report by Hudson Institute scholar Diana Furchtgott-Roth gives more than a few answers.Using extensive charts as well as narratives, she argues that unions have made some progress in improving their public transparency, but that this is primarily the result of government pressure.