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  • Time for More Accountability for Unions—and the Department of Labor

    Labor Secretary Hilda Solis resigned on January 22. It would be beneficial if President Obama’s next Labor Secretary would do more to protect workers from union corruption. An Office of Inspector General (OIG) audit released last year finds that the Office of Labor Management Standards (OLMS) is missing most violations of union financial disclosure requirements.

    Then-Senator John F. Kennedy (D–MA) helped write the Labor-Management Reporting and Disclosure Act (LMRDA) in the wake of major union corruption scandals. The bill requires unions to disclose in detail how they spend their members’ dues, which deters embezzlement (and mob influence). OLMS conducts a compliance audit program (CAP) to ensure that unions actually follow the law.

    However, according to the OIG’s report:

    OLMS designed CAP to verify LMRDA compliance and provide compliance assistance to help unions meet statutory requirements. The current performance measure, however, only relates to potential criminal LMRDA violations. It does not measure any impact of OLMS’ non-criminal activities in CAP.

    In other words, OLMS does not track non-criminal reporting violations of the LMRDA. Thus the OIG found that 76 percent of the reviewed CAP audits missed non-criminal violations of the law. These violations include failing to file and failing to maintain records.

    The audits did track criminal violations of the LMRDA. A good thing, too: 16 percent of unions audited—one in six—committed criminal violations of the LMRDA. In all, 92 percent of the unions that were audited violated regulations. The OLMS failed to report 76 percent of those violations because of their flawed reporting standards.

    Equally problematic, OLMS has dramatically cut back on its audits. Despite frequently finding criminal violations, the Obama Administration cut the number OLMS audits by almost 40 percent between 2009 and 2011. Union officers abusing their positions are substantially less likely to be audited now than before Solis took office.

    Many unions do not want their members to know how their dues are spent. The Department of Labor should. Obama’s next Labor Secretary can and should do more to protect workers from union corruption and follow JFK’s law.

    Rudy Takala is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit http://www.heritage.org/about/departments/ylp.cfm.

    Posted in Economics [slideshow_deploy]

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