In a statement today on the resignation of Labor Secretary Hilda Solis the White House called her a “tireless champion for working families … (and) a critical member of my economic team as we have worked to recover from the worst economic downturn since the Great Depression and strengthen the economy for the middle class.”
Left out of the statement was one of the secretary’s other great accomplishments: rolling back public disclosure laws put in place by her predecessor, Republican Elaine Chao. Solis undid changes to the Labor-Management Reporting and Disclosure Act that forced Big Labor to be more accountable to individual union members. Chao’s rules required that union officers disclose their potential conflicts of interest and report on payments from union trusts. Those rules helped the Office of Labor Management Standards uncover fraud, resulting in 929 convictions, and recovering more than $93 million on behalf of union members. (Comparable figures for investigations under Solis were not readily available; I will follow up once I find them.)
In true Orwellian fashion, the administration characterized the rollback of those rules thusly, arguing that it increased transparency by not burdening unions with all of that unnecessary reporting:
The new rule promotes transparency by requiring union officials to disclose payments and interests that involve actual or likely conflicts between the official’s personal financial interests and his or her duties to the union. The department intends to engage in compliance assistance and enforcement efforts to ensure proper reporting by union officials.
The new rule avoids unnecessary intrusions into labor-management relations by removing requirements to report transactions that create no actual or likely conflicts of interest. The rule announced today reverses one published in 2007 that expanded the length and complexity of the LM-30, but did not lead to additional useful information being reported by union officials.
Umm, how exactly do you promote transparency by “removing requirements to report transactions”?
Why did the administration roll the rule back? Well, the official announcement of the change in the Federal Register was a little clearer on the purpose:
This rule … reflects a proper balancing of transparency with the need to maintain union autonomy and to avoid overburdening unions and their officials with unnecessary reporting requirements.
In other words it was a gift to union leaders. Solis wasn’t exactly subtle about her pro-Big Labor slant either. When she spoke at the 2009 AFL-CIO convention in Pittsburgh, she told them: “I am proud and humbled to be your humble servant as Labor Secretary” (see the 7:15 mark in the above video clip). She also called then-AFL-CIO President John Sweeney her “good friend and colleague” before also calling him “our president.”
UFCW member Chris Mosquera wrote in the Washington Examiner in 2011 about how the rollback impacted him and why he filed a lawsuit to try to stop it (Unfortunately the link is no longer available on our website but the column also ran in the San Francisco Examiner):
As a member of the United Food and Commercial Workers, I’m more knowledgeable than most about the ins and outs of union finance.
In fact, I’ve learned interesting things about my own chapter’s spending habits — the $2 million office condo it bought in Gaithersburg, Md., or the fact that the president makes more than $200,000 a year, plus other undocumented benefits.
My union’s questionable spending habit isn’t an isolated problem. In 2008, a Los Angeles Times investigation revealed that Tyrone Freeman, then the president of the Service Employees International Union’s 160,000-member California affiliate, embezzled more than $1 million from unwitting members.
Another Chicago Sun-Times investigation found that $25 million from five union pension funds were diverted to political organizations, strip clubs and Las Vegas getaways.
These stories are shocking, but the occasional newspaper headline is no substitute for real transparency. Without stringent disclosure requirements, union members and nonmembers alike are left at the mercy of union officials, who have the power to collect dues without being held accountable for how that money is spent.