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Union Head Convicted, Showing Need for Union Transparency

Posted By James Sherk On February 6, 2013 @ 3:56 pm In Economics | Comments Disabled

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Photo credit: MICHAEL KLEINFELD/UPI/Newscom

Last week, the government convicted Tyrone Freeman, president of SEIU Local 6434 in Los Angeles, of 14 counts of illegally diverting union dues into his own pockets.

His conviction illustrates the need for union financial transparency. However, the Obama Administration has steadily rolled back union transparency requirements.

Freeman’s former local was made up of homecare workers making an average of $9 per hour. From their dues, Freeman paid himself over $200,000 a year [2]. Apparently that was not enough. According to the FBI [3], Freeman

stole money from Local 6434 by routing funds through another entity closely aligned with the union—the Long Term Care Housing Corporation (LTCHC), which was a not-for-profit corporation organized in 2004 for the purpose of developing affordable housing for members of Locals 6434 and Local 434-B. The indictment alleges that Freeman took nearly $17,000 from Local 6434 in June 2008 by requesting the Local 6434 Executive Board to make payments to LTCHC without disclosing to the Executive Board that Freeman would then divert those funds to himself.

The jury found Freeman guilty of those charges and others, which included putting an $8,000 personal vacation in Hawaii on his union credit card, collecting an extra $30,000 a year in compensation without his local’s knowledge, and repeated tax fraud. He now faces a maximum of 180 years in prison at his sentencing hearing.

Freeman’s duplicity came to light when an investigative reporter found incongruities in financial disclosure forms his union filed with the Department of Labor’s Office of Labor–Management Standards (OLMS). That scoop led to an FBI investigation, which led to Freeman’s conviction. Congress requires union financial transparency precisely to root out such corruption.

However, as Heritage has reported previously, President Obama’s Department of Labor has rolled back many of OLMS’s union transparency requirements [4]. For example, the Administration watered down conflict-of-interest reporting requirements, exempting union shop stewards and removing disclosure of many non-cash forms of compensation. The Administration also rolled back requirements that union trust funds disclose how they spend union members’ money [5]. Obama’s OLMS further decided that most local chapters of government unions do not need to file transparency reports.

These changes make unions less transparent and union bosses less accountable to their members. They make it harder to expose corrupt officers such as Tyrone Freeman. If sunlight is the best disinfectant, the Obama Administration should not keep union members in the dark.

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 [6].


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2013/02/06/union-head-convicted-showing-need-for-union-transparency/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/TyroneFreeman_130206.jpg

[2] over $200,000 a year: http://www.latimes.com/news/local/la-me-tyrone-freeman-20130129,0,3528628.story

[3] FBI: http://www.fbi.gov/losangeles/press-releases/2013/former-president-of-seiu-local-found-guilty-of-stealing-tens-of-thousands-of-dollars-from-union-and-failing-to-report-income

[4] rolled back many of OLMS’s union transparency requirements: http://blog.heritage.org../2011/10/31/labor-department-rolls-back-transparency-for-unions/

[5] how they spend union members’ money: http://www.heritage.org/research/reports/2010/12/congress-should-block-union-transparency-rollback

[6] http://www.heritage.org/about/departments/ylp.cfm: http://www.heritage.org/about/departments/ylp.cfm

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