Obama Rolls Back Union Disclosure; Gives Green Light to Corruption

Solis photoIf transparency is one of the Obama administration’s highest orders of business, it hasn’t made much of an appearance at the Department of Labor (DOL). On January 20, immediately following the inauguration ceremony, President Obama’s chief of staff, Rahm Emanuel, issued a memorandum advising federal agencies to extend by 60 days the effective date of all regulations not yet published in the Federal Register. That gave DOL Secretary Hilda Solis and her top staffers the wiggle room needed to rescind new requirements to the annual financial reporting form for larger unions, LM-2, finalized during the waning days of the Bush administration.

Now the department has made it a twofer. It recently announced its intent to roll back regulations established in 2007 for Form LM-30, which oversees potential conflicts of interest among union officials and certain persons doing business with them. The DOL recently stated “it would not be a good use of resources” to bring enforcement actions under the new form. There’s not much surprise here. The AFL-CIO sued the department last year in a last-ditch effort to block the regulation, claiming that the new form unfairly would bring thousands of union shop stewards, who formally are not employees, under LM-30 coverage. One of the federation’s attorneys in the case was Deborah Greenfield, who was part of the Obama transition team and now runs the department’s executive secretariat office. At least as much as Secretary Solis’ extensive union support during her years as a Southern California congresswoman, Greenfield’s presence in the department speaks volumes about its priorities.

Certain members of Congress have taken notice of possible lax enforcement of union wrongdoing. “Strong financial disclosure requirements are necessary to root out and combat union-related corruption,” wrote Reps. Howard “Buck” McKeon, R-Calif., and John Kline, R-Minn., in a recent letter to the Labor Department. Sen. John Cornyn, R-Tex., sent the department a similar letter signed by more than two dozen other Republican colleagues. A pair of DOL officials, Shelby Hallmark, acting assistant secretary for employment standards, and Andrew Auerbach, deputy director for the Office of Labor-Management Standards (OLMS), issued a statement indicating that the latest LM-2 form, following on the heels of revisions back in 2003, was premature. It’s worth noting, however, that the AFL-CIO ferociously fought the earlier change in federal court as well, eventually losing at the circuit level in May 2005.

Mark Mix, president of the Springfield, Va.-based National Right to Work Legal Defense Foundation, is taking action. He wrote a letter to the DOL stating, “The department’s decision not to protect simple union disclosure protections creates increased vulnerability for American workers and should serve notice to legislators that now is not the time to grant union bosses more unchecked power over workers and our economy.” Mix’s group recently filed a Freedom of Information Act request seeking details about whether Ms. Greenfield or any other union leaders played a role in shaping the department’s financial disclosure rules. She’s not the only Obama official to come over from organized labor. Patrick Gaspard, the White House political affairs director, was an employee at the Service Employees International Union. And T. Michael Kerr, who ran SEIU’s financial operations, is now assistant secretary for administration and management at the Labor Department. The old joke about DOL being the “Department of Organized Labor” has more than a ring of truth these days. (Washington Times, 4/27/09).

In 2003, then-Labor Secretary Elaine Chao increased transparency by requiring unions to publicly disclose how much they spend for specific purposes, including politics, on the LM-2. NLPC played a key role in LM-2 reform. It was the first expansion of disclosure requirements in 40 years.  The move was a follow-up to National Legal and Policy Center in May 2002 filing a petition with DOL requesting a stronger rule. The petition was based on a law review article written prior to the 2000 elections by Michael Nelson, at the time, director of the Organized Labor Accountability Project. Many of Nelson’s recommendations, in fact, made it into the new rule.

Is it only a matter of time before Obama Labor Secretary Hilda Solis (see photo) nixes the 2003 rule?  As the only national clearinghouse on union corruption, it is our experience that the biggest demand for union financial information is from union members. Obama says that he is pro-union, but the biggest losers from decreased disclosure are rank-and-file union members.  Corruption remains endemic to many unions.  As such, President Obama and Secretary Solis, knowingly or not, are giving a green light for more of the same.

photo credit: AP/Wide World