DOL Unveils Plan to Reduce Financial Reporting Delinquencies

The Internet may be one of the best things ever to happen to public transparency.  That’s why the Department of Labor now requires unions to file their annual financial reports online.  Presumably, union members and the general public benefit.  But the Internet can’t create records out of thin air – or ensure their timely filing.  And so far it hasn’t.  The DOL thinks it’s found a way to cut high filing delinquency rates.  On June 13, department officials unveiled a get-tough plan with slackers.  The department would send warning letters to all unions currently delinquent.  If after 30 days a union still has not filed, its name will be posted on the website of department’s Office of Labor-Management Standards (OLMS),  At that point, the department would pursue more aggressive enforcement, including referrals to local U.S. attorneys for civil or criminal action.


The Department of Labor, pursuant to the Landrum-Griffin Act of 1959, requires every labor organization in the U.S. partially or fully comprised of private-sector employees to file a standard financial reporting form within 90 days following the close of its fiscal year.  Larger unions file an “LM-2” form; smaller ones file either an LM-3 or LM-4.  Under current secretary Elaine Chao, the department in 2003 revamped its LM-2 form so as to require more detailed information.  Evidence, much of it compiled by Union Corruption Update, showed that union officials, often advised by lawyers or accountants, took the vagueness of certain revenue and expenditure categories to mean a license to steal.  The AFL-CIO, not unexpectedly, fought the new regulation tooth and nail until finally losing in federal appeals court in May 2005.  But on-time compliance remains a problem.  Around 30 to 40 percent of unions fail to meet their filing deadlines.  Some 1,275 of their reports have been past due for more than a year; about 150 of them are those having to file an LM-2 form. 


Though the department finds current delinquency levels unacceptable, it stands ready to help unions with any questions regarding what information to include and how to file it.  No organization likes doing extra paperwork, least of all unions, but the new compliance burden was decades in the making, the end result of often massive corruption.  In the end, the new online requirements will enable the general public and particularly honest union members to monitor the performance of labor organizations.  “Online reporting for organized labor unions…has been a blessing to union members across the nation who can see first-hand from a desktop how their funds are being spent,” said Don Todd, a DOL deputy assistant secretary.  (U.S. Department of Labor, 6/13/07).