DOL Planning Stepped-up Audits of Union Finances

The U.S. Dept. of Labor aims to toughen its regulation of Big Labor greater scrutiny of spending and hiring practices, and will continue to increase sharply the number of financial audits of individual unions, reports Dan Roberts of the London Financial Times.  DOL officials say the measures are necessary to make unions more accountable to their members and to root out any corruption or mismanagement.


Despite declining membership, unions continue to be a thorn in the side of big business, orchestrating campaigns against companies such as Wal-Mart and using their influence over pension funds to press for corporate governance reform.


Now the Bush administration is turning the tables on these critics.  New proposals under discussion would enforce long-neglected rules requiring unions to disclose conflicts of interest, such as business dealings with family members.  And starting in June, unions will also have to file much more detailed financial statements, including a requirement to itemize all expenditures over $5,000.


“It’s pretty obviously political,” claimed James Coppess, associate general counsel at the AFL-CIO. But DOL officials deny any political motive, arguing they are simply modernizing disclosure rules that have been virtually unchanged for 40 years.  “In this era of accountability and transparency, updating the financial reporting requirements empowers and protects workers who trust their unions to represent their interests, said Lary Yud, deputy director of the Office of Labor Management Standards.  “These reforms will give union members better, more understandable information for them to judge the financial health and integrity of their unions.”

Privately, one senior figure in the administration said it was concerned about the power of unions, arguing that some campaigns against big business were not always in the interests of members.  There is also concern about moves to scrap secret ballots for some union votes, which the administration fears would further entrench the power of union leaders. [Financial Times, 4/4/05]