Labor Department Plans Increasing Scrutiny of Union Finances

The Bush administration has been rapidly expanding its audits of labor unions.  Union officials are crying foul, claiming the administration is retaliating against their overwhelming support for Senator John Kerry in last year’s presidential election.  But the primary legacy of the recent ramping up of investigations may be a thorough housecleaning of union of their criminal element.


The Department of Labor has released figures showing that during 1991-2000 the number of its audits of national and local unions fell from 1,080 to 206.  By contrast, in 2004 the department performed more than 500 audits.  And it expects to conduct even more this year, in large measure because of the planned addition of 48 full-time workers to its union-auditing unit this year.  That represents a 14 percent increase in the face of personnel cuts in other areas.


Lary F. Yud, deputy director of the DOL office that handles union investigations, sees the department’s increased scrutiny of organized labor as necessary and overdue.  “I think you need a minimum level of enforcement, which is something I don’t think this agency was able to do for a while,” he noted.  “I think we need to do a certain level of audits in order to create an effective deterrent.” 


Labor officials don’t see it that way.  “It is obvious that the Department of Labor’s assignment of 48 new staff to audit unions, starting with the AFL-CIO, is pure political payback for the labor movement’s opposition to the president’s anti-worker policies,” said John J. Sweeney, the federation’s president.  He and other organized labor leaders are critical of the Labor Department’s recently revised LM-2 form, which requires unions to spell out expenditures of $5,000 or more in substantially greater detail.  “We’ve spent untold hours on it, hundreds, thousands of hours more,” said Edward P. Wendel, general counsel of the United Food and Commercial Workers.


But there’s a good reason why union reporting requirements, virtually unchanged since first mandated by the 1959 Landrum-Griffin Act, have gotten more stringent.  Many unions have been a den of thieves, often working in cahoots with underworld mobsters.  Lax reporting requirements enabled union officials for decades to get away with enormous levels of fraud, bribery, extortion and embezzlement at the expense of rank-and-file dues-paying members.  The last several years, for example, have witnessed scandals in two major teachers’ unions (the Washington, D.C. and Miami-Dade County affiliates of the American Federation of Teachers) and a union-run insurance company (ULLICO).  Various locals of prominent unions, including the Teamsters, the Laborers and the International Longshoremen’s Association, also have been embroiled in scandal. 


The Department of Labor wants to put these and other crooks away.  Since 2001 more than 500 union officials have been indicted on a variety of charges.  And there is far more investigating to be done.   “I would think that union members will have much better information available through the reporting forms about how union resources are allocated and where their dues money is going,” said DOL’s Yud.  “Our job is to prevent corruption, and that’s what we’ll continue to try to do.”  [New York Times, 4/17/05]