WSJ Reveals Huge Hidden Union Political Spending

CashPolitical spending can be seen as consisting of the kind that goes recognized and the kind that doesn’t. And when the money comes from unions, the gap between the two can be enormous in favor of the latter. On July 10, the Wall Street Journal published an article by reporters Tom McGinty and Brody Mullins, “Political Spending by Unions Far Exceeds Direct Donations,” concluding that organized labor during 2005-11 spent $4.4 billion on federal election campaigns and lobbying. Only $1.1 billion of that represented sums reported to the Federal Election Commission (FEC) and Congress. The “hidden” $3.3 billion, culled from union reports submitted to the U.S. Department of Labor, included indirect expenses such as volunteer labor, gratuities and internal communications. As a result, unions may well be the deciding factor in the current presidential race.

It is an intuitive though often uncomfortable observation: Elections, especially presidential elections, are won or lost on the swing vote. Political persuasion, like all mass persuasion, is geared toward reaching the undecided, a category that includes those tepidly leaning one way or the other. No candidate or party wants to waste limited time and money swaying people whose minds already are firmly made up. In addition, there are many other voters who, while not True Believers, are party loyalists who normally don’t stray. As a general rule, roughly 40 percent of the U.S. electorate vote Democratic and roughly 40 percent vote Republican. In effect, politicians, parties and pollsters are engaged in a ceaseless battle to identify and cajole the remaining 20 percent. And for practical purposes, that’s on the high side because it’s the swing vote in swing states that really matter. Swing voters in Connecticut, Oregon and Wisconsin (solidly Democratic) and in Alabama, Kansas and Utah (solidly Republican) don’t loom nearly as large as those in competitive states such as Colorado, Florida, Missouri, Nevada, North Carolina, Ohio and Virginia. Florida, with 29 electoral votes, may emerge as every bit the political war zone as it was in 2000, when it accounted for 25 electoral votes.

Labor leaders and their political consultants realize this as much as anyone. They are seasoned operators. They know that reaching undecided voters is crucial to winning and that the process takes serious money. Union dues only can go so far in providing it, especially given that membership in most unions is either stagnant or declining. Unions have responded by getting creative. Some fundraising tactics are geared toward reaching large donors, who loom especially large in the wake of the U.S. Supreme Court’s Citizens United v. Federal Election Commission decision of January 2010, which by a 5-4 margin overturned corporate spending limits as a violation of freedom of speech – though the decision didn’t formally address labor unions, its reasoning applies to them anyway. The AFL-CIO hasn’t been sitting on the sidelines. It’s put together its own “Super PAC” called Workers’ Voice, which, like any corporate Super PAC, and unlike all types of standard political action committees, faces no limits on individual donations. Other tactics are geared toward smaller donors. It’s the latter category that forms the focus of the July 10 article in the Wall Street Journal. The Journal explains: “(L)abor could be a stronger counterweight than commonly realized to ‘super PACs’ that today raise millions from wealthy donors, in many cases to support Republican candidates and causes. The hours spent by union employees working on political matters were equivalent in 2010 to a shadow army much larger than President Obama’s current re-election staff…”

Organized labor’s ranks, in relative terms, have been shrinking for decades. In the last few years, only about 12 percent of the U.S. labor force has belonged to a union. In the private sector, the figure is only 7 percent, a steep drop from the nearly one-third of the Fifties and early 60s. By contrast, public-sector union membership steadily has risen to the point where it recently surpassed private-sector membership in numerical terms. Yet even government employee unions are discovering there are limits to growth. The American Federation of State, County and Municipal Employees (AFSCME), an affiliate of the AFL-CIO, lost 77,000 or about 5 percent of its membership during 2010-11, a drop explainable in large measure by emergency austerity measures taken by cash-strapped state and local governments. And membership of all AFL-CIO affiliates during 2005-11 fell from 13.7 million to 11.6 million.

Union spending on political campaigns and lobbying seemingly hasn’t been affected by such trends. During the 2005-06 election cycle, such spending by the AFL-CIO and affiliates was $452 million. The figure rose to $608 million during 2009-10. In 2011, a nonelection year, it was $316 million, much of it attributable to the launch of a full-scale, and ultimately unsuccessful, recall campaign of Wisconsin Republican Governor Scott Walker. So if membership in a given union either has hit a plateau or is in decline, how does one explain this surge in union political money? Even loyal rank and file resent being hit up for a dues hike with each new campaign season.

The Wall Street Journal concludes that a lot of union money – most, in fact – is going for activities falling outside the jurisdiction of the Federal Election Commission. They include internal communications among rank and file; volunteer canvassings, mailings, phone banks, carpools and other get-out-the-vote operations; fees paid to union-friendly pollsters; and noncash gratuities. And this portion of the total picture is triple that of the combined figure of PAC contributions and union lobbying. Relying on figures from the nonpartisan Washington, D.C.-based Center for Responsive Politics, the Journal’s McGinty and Mullins concluded that during 2005-11, official spending (i.e., reportable to the FEC) totaled only $1.1 billion. By contrast, the unofficial total, calculated from U.S. Labor Department filings, was $3.3 billion. “We have always known that much of [unions’] influence comes from their political mobilization, but we have never been able to put a number on it,” notes Bob Biersack, senior fellow with the Center for Responsive Politics and former longtime FEC chief statistician. “They are a human force in the political process, but a lot of that falls outside the kind of spending that needs to be disclosed to the FEC.”

Union spokesmen reject the idea that these figures imply a lack of accountability. The Labor Department reports, says AFL-CIO counsel Laurence Gold, if anything, reveal “unions by law are the most transparent institutions about their electoral spending.” That raises the question: Compared to what other institutions? If the point of reference is corporations, there are problems in making comparisons. First, some corporate direct political spending doesn’t have to be reported. Second, spending that must be disclosed isn’t accessible in one or two databases, as is the case with unions. Third, corporations devote a far higher share of political budgets than do unions toward lobbying, unions being more predisposed toward express political advocacy. Fourth, corporations tend to give evenly to Democrats and Republicans, whereas unions give overwhelmingly to Democrats. According to the Center for Responsive Politics, 55 percent of the $2 billion in corporate PAC and employee money went to Democrats in 2008, whereas 92 percent of the $75 million in equivalent union spending that year went to Democrats.

This isn’t the first time someone has tried to estimate indirect union political spending. The Springfield, Va.-based National Institute for Labor Relations Research, for example, in a 1996 issue brief, stated: “The true cost of Big Labor’s nationwide campaign of mailings, phone banks and voter turnout drives adds up to $400 million each election cycle.” On March 21, of the year during testimony before the House Oversight Committee, Rutgers University labor economist Leo Troy remarked that organized labor’s indirect expenses “could reasonably be a multiple of three to five times” the total expenses of union PACs. The Wall Street Journal represents the most comprehensive attempt yet at quantifying such expenditures.

Getting such spending out in the open is more necessary than ever, given the rise of Super PACs, which place no limits on individual donations and offer donors various means to avoid divulging their identities. And that trend was given a boost on June 25 when the U.S. Supreme Court reversed a Montana Supreme Court ruling in January that had upheld a century-old state law banning independent political spending by corporations. The High Court thus effectively affirmed Citizens United. Harvard law professor Lawrence Lessig, author of the recent book, “Republic Lost: How Money Corrupts Politics – and a Plan to Stop It,” estimates 0.00063 percent of all Americans – fewer than 200 – have contributed more than 80 percent of all Super PAC revenues during the current presidential campaign. Lessig believes that even the most thorough disclosure requirements can’t offset the overwhelming effects of money in politics.

Because indirect spending occurs outside the context of Super PACs, it has the capacity to blunt their impact. Yet it, too, offers opportunities for corruption, especially if employers or union bosses “encourage” employees to donate spare time toward supporting preferred political candidates. Unionized workers members as much as nonunion employees have a right to find out how much of their organizational budgets are devoted to supporting candidates whose views may or may not mirror their own. A good reality check would be to replicate this study in future election cycles. As capturing swing votes is becoming an ever more exact science, it’s becoming an ever more expensive one as well. It’s ultimately not the job of dissenting workers to foot the bills.


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