Hilda Solis was confirmed as Secretary of Labor this week. After a bumpy confirmation process in which her nomination was held up by questions about her role as a lobbyist for the Free Choice Act while also serving in Congress, she was approved overwhelmingly by the Senate.
Unions are happy with Solis, who served on the Board of American Rights at Work, a non-profit, union-funded lobbying organization whose purpose is to garner for the Free Choice Act. Businesses are wary for the same reason. I’m sure she is anxious to get to work. She has big shoes to fill.
The Department of Labor under Elaine Chao did an excellent job, especially on the union democracy and transparency front. Among the highlights:
- More than 1,000 convictions and over $100 million in restitution for union members whose hard-earned dues payments were misappropriated by union officials.
- A complete overhaul of the LM-2 reporting requirements to make the information more useful to union members (I testified twice in Congress about these reforms and can tell you first-hand they did a very thorough and professional job with the regulations).
- They put LM-2 forms (along with many other DOL documents) up on the website so that union members can quickly, easily and cheaply (like for free) review the financial health of their union.
- They added reporting for union trust funds for the first time since the LMRDA was passed in 1959. These funds are vitally important to members and, unfortunately, are often targeted by corrupt union officials.
Unions, of course, didn’t like these changes at all. They tried to gut the funding of the Office of Labor Management Standards (basically the SEC for unions). After all, they know that the rules don’t matter if there is nobody there to enforce them. They railed against the financial reporting changes, claiming that it would cost unions “more than $1 billion” to comply with the new requirements. The AFL-CIO said it would spend $1 million to comply with the new rules (actual cost: $54,150).
Unions have billions in assets. Most of their members have no choice about whether to pay these funds or not – they are forced to do so under “union security” agreements (which are illegal in Right to Work states). Unions have a fiduciary duty to spend these funds wisely and for the purpose of representing members. They are required to report how these funds are spent each year.
But a substantial number of unions fail or refuse to comply with these requirements. And the OLMS – already wildly understaffed and underfunded – is likely to receive even less support under Solis. When pressed about funding for OLMS during her confirmation process, Ms. Solis was non-committal. And that’s a shame.
Union democracy and transparency is not “anti-union” as many unions claim. On the contrary, it is vital to the continued viability of the labor movement. When corrupt union leaders – even though it is a small number of bad apples – get away with stealing from union members it destroys trust in the movement.
Unions have a real PR problem. Many working people think about organized crime when they think of unions. The Teamsters remain under federal trusteeship because of their ties with organized crime. Openness and democratic process is not really high on their priority list (after all, they are trying to get rid of the right to vote in organizing drives with the card-check bill).
Whatever actions unions can take to reassure members that their dues money is well-spent can only increase confidence. But unions don’t see it that way. They treat their financial disclosures like it is a huge, unnecessary burden and a burden that they would like lifted. Unfortunately it appears that they have a sympathetic ear with the new Secretary of Labor. I sincerely hope that is not the case.
