For the first time, federal disclosure rules are shining sunlight upon union spending priorities, and many rank-and-file members won't like what they reveal. Fortunately, they can do something about it.
Among other pursuits, unions such as the AFL-CIO and National Education Association (NEA) spent 60% or more of their discretionary dollars on partisan political activities in 2004 - 2005, compared to 40% or less on actual work-related representation activities.
The sources of this sunlight are new federal LM-2 forms, which unions have traditionally kept extremely vague in order to camouflage their political activities. Under the new rules, however, they were finally forced to come clean.
Unions originally formed for the legitimate purpose of collective bargaining on behalf of member employees for the terms and conditions of employment, including wages, hours, grievances and working conditions. In the words of AFL-CIO President John J. Sweeny, for instance, the union was "created to represent workers on the job."
The new disclosure rules, however, confirm that unions often pursue a very different agenda today. Consequently, dues-paying members can be forgiven for scratching their heads and wondering why more of their hard-earned wages are flowing to liberal political candidates and causes with which they disagree than to actual workplace issues.
By way of historical background, federal law has required unions to file annual financial reports with the U.S. Department of Labor since 1959. These reports, known as LM-2 forms, aimed to provide union members with information on how their dues were being spent. Amidst widespread corruption and criminal corrosion within unions, Congress that year passed the Landrum-Griffin Act (written largely by Senator John F. Kennedy). President Eisenhower signed the Act, believing that forcing unions to disclose their financial activities would allow members to hold them accountable and ensure that they were responsible stewards of members' hard-earned contributions.
Unfortunately, unions were able to circumvent the intent of this law by disclosing only the bare minimum of financial information. For instance, the AFL-CIO grouped large expenditures under such labels as "Educational and Publicity Expenses" as late as 2004. Consequently, even those unions that complied with the law could prevent members and the public from ascertaining how they really disbursed their money. (To see a vivid illustration of this problem, go to the Department of Labor's website at Department of Labor's website and compare the level of detail in the Service Employees International Union's ("SEIU") 2005 LM-2 to its 2004 LM-2.)
Given this poor record of financial disclosure, U.S. Labor Secretary Elaine Chao, a Bush appointee, in 2004 issued a rule requiring greater disclosure by unions. The new rule aimed to achieve the underlying intent of the Landrum-Griffin Act by improving the degree of detail and transparency in reporting.
Naturally, big unions frantically protested the new disclosure rules, arguing that their record was "pretty good," and that compliance costs would be oppressive. They also deflected attention from their poor disclosure record by questioning the political motivations behind the changes. Predictably, when unions failed at the electoral level, they resorted to lawsuits.
Never mind, of course, that these same unions applauded Sarbanes-Oxley and other stringent corporate disclosure mandates. As late as March 2006, for example, the AFL-CIO implored the Securities Exchange Commission, "the AFL-CIO strongly opposes weakening Sarbanes-Oxley's crucial safeguards for the companies most likely to have internal control problems and be engaged in defrauding investors."
Apparently, what's good for the goose isn't so good for the gander in the AFL-CIO's worldview. Keep in mind that investors can freely dissociate from shady corporations, whereas many union workers face compulsory membership and dues.
Now, the rules have changed.
Even a cursory review of the AFL-CIO's new LM-2 reveals almost $3 million spent on "Production of Mail Piece on Guns and Jobs" and "Flyers/Labor Walks Support Kerry/Oppose Bush." Hunters, gun owners and even Bush voters within union ranks will be thrilled to learn that millions of their mandatory dues were spent in such a manner.
A glimpse into the Service Employees International Union's ("SEIU") LM-2s exposes literally $0 spent under the category entitled "Representational Activities," but some $27 million spent under the category entitled "Political Activities and Lobbying." The SEIU also granted $19,200 to the far-left group ACORN. That's the "workers' rights" organization that hilariously begged the Labor Department to exempt it from minimum wage laws, because compliance reduced the number of field workers it could hire.
We're not making this up.
Thanks to the new disclosure rules, workers are now much more capable of doing something about this long-festering problem. Ten years ago, the U.S. Supreme Court ruled in Communication Workers of America v. Beck that unions cannot force workers to pay for activities unrelated to collective bargaining or contract negotiations. Thus, dues-paying members need not subsidize union bureaucrats' left-wing partisan lobbying or political campaigns with which they disagree. Now, workers can determine the refund to which they're entitled, and pursue their rights accordingly.
Let's hope they do so.September 21, 2006