Should Prospective Members See Union Finances?

by | Apr 7, 2011 | Labor Relations Ink

According to Congressional testimony last week by union defender John Logan, Director of Labor and Employment Studies at San Francisco State, the answer is no. In testimony before the House Subcommittee on Health, Employment, Labor and Pensions in a hearing on union accountability and transparency Logan called only upon his experience running a labor study center in San Francisco to conclude that all American union members want to know about their union’s finances can be found in the barebones pre-Bush LM-2. Logan then went on to cite LRI’s use of the new more detailed LM-2  in union campaigns as one compelling reason to revoke the new standards.  Logan writes, “One of the largest union avoidance firms in the nation, Labor Relations Institute, Inc. (LRI), tells employers that, ‘Facts drawn from these documents (LM-2s)… will help convince your employees to vote No on election day’…These union avoidance firms, and their clients who are determined to operate union free, have benefitted more from the detailed and readily available financial information contained in the revised LM-2s than have ordinary union members.” One can only conclude then that Prof. Logan sees no need for prospective members to fully examine a union’s finances before voting and he finds something sinister or perhaps damaging in offering them detailed information on a union’s spending habits. The Obama DOL has rescinded Bush Administration T-1 reporting on union trusts and weakened the reporting requirements on LM-2 forms.  The DOL has also significantly decreased the number of union audits.  Diana Furchtgott-Roth, Senior Fellow at the Hudson Institute, testified on labor’s successful evasion of substantive financial disclosure since the LMRDA was passed in 1959. She also laid out the importance of the new reporting requirements now under attack including more narrow expenditure categories, the cost of individual officer and staff benefit plans and disclosure of payments made directly to vendors.  She also defended T-1 forms that require disclosure on union controlled trusts such as strike funds, pension plans and building funds. Such trusts typically hide the bulk of a union’s assets and have historically served as hotbeds of fiscal improprieties. Unions claim the new detailed disclosing requirements are onerous and dues dollars are wasted on the staff hours needed to meet them. The Bush DOL estimated that the average union needs fifteen staff hours per year to prepare the filings, while the AFL-CIO claims many unions need a new dedicated fulltime paid position to meet them. One can only assume that any labor entity that needs a fulltime position to manage its filing requirements can certainly well afford to indulge in some much needed job creation.    

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