Unions balk at new fed controls

Published 12:00 am Thursday, August 14, 2003

By Jack Faris

The year 1959 doesn’t stand out in the annuls of American history as particularly interesting, but a handful of occurrences back then left their mark.

Alaska became the 49th state. Fidel Castro seized power in Cuba, and Congress created a law designed to end union corruption.

Back when Ike was president and cars had fins, there was agreement on Capitol Hill that something had to be done to thwart illegal union activity.

Lawmakers, both Democrats and Republicans, approved the Labor-Management Reporting and Disclosure Act, which included form LM-2, requiring unions to report expenses.

But according to recent testimony by the National Legal and Policy Center, the forms aren’t very helpful in shedding light on union spending.

Georgia Rep. Charlie Norwood, in a statement before the House Subcommittee on Workforce Protections, said the reporting and disclosure provisions of the act are failures because the nearly half-century old LM-2 form only requires that expenses be listed in broad categories, thereby allowing for illegal or questionable disbursements.

But U.S. Secretary of Labor Elaine Chao has decided to turn up the heat and add some light for the little guys.

Recently, she launched a formal effort to revise the LM-2 form so that, for the first time, union members will be able to examine financial transactions of joint trusts and subsidies managed by their unions.

Secretary Chao’s proposed update would not only give union members more detailed information about the financial activities of their unions, but do it in an easily understood format that would be made on the Labor Department website.

And, in a move that must certainly frighten union bosses, she’s offering to give them, free of charge, new reporting software.

You can imagine their initial reaction. Chill out, they said. All that reporting and disclosure stuff would create an undue burden on unions, what with having to actually fess up to cash outlays.

It’s enough to make a small-business owner chuckle.

These regulatory changes would be a walk in the park compared to the heavy load of paperwork and massive red tape faced by Main Street businesses.

When did disclosing the way you spend your members’ dues money become an undue burden? When you’re afraid they might learn that you’re spending it in ways they oppose.

Not only will this improved disclosure process help union members exercise their democratic rights, but it will aid them in detecting financial misconduct by their bosses – something Secretary Chao’s agency knows about.

Investigations of union financial fraud bring an average of 11 criminal convictions a month – more than 640 convictions during the past five years.

Congress should add a little fuel to this fire, too. Labor unions can’t remain frozen in time.

The message to union bosses should be clear: 1959 is history and so are those who laugh at the laws of the land.

JACK FARIS is president of the National Federation of Independent Business, the nation’s largest small-business advocacy group.