A peek at the books: new regulations shed light on Big Labor

National Review, March 27, 2006 by John J. Miller

I'M the newest member of the AFL-CIO. You can join, too: Sign up on the website of Working America, an advocacy organization tied to the union. All it requires is the submission of your name, e-mail address, and zip code. Voila! Welcome to Big Labor.

The AFL-CIO claims to have 1 million "associate members" like me--people who have no voting rights in the union. Some of us associate members would probably like to organize our workplaces, bargain collectively with our employers, and pay the dues that bankroll the AFL-CIO. But the rest almost certainly have no such interest and have done nothing more than I have. The union bosses need us all, however, because if we were purged from the rolls, it would show that under John Sweeney's leadership the union has lost members--and this trend is wholly independent of the four unions, including the Teamsters, that quit the AFL-CIO last year.

This sleight of hand is now public knowledge because the Department of Labor has spent the last five years trying to increase the financial transparency of unions--a project that no previous Labor Department has taken much interest in pursuing. "'For a long time, this wasn't the Department of Labor," says one appointee of the Bush administration. "It was the Department of Labor Unions. We set out to change that."

One of the most important reforms is now well underway: Unions are filing their annual financial statements on newly revised forms that require Far more detailed disclosure about their money and activities. The main beneficiaries of this system will be rank-and-file union members, who will gain unprecedented amounts of information about how their leaders are spending union dues. This in turn may benefit Republicans, because although the overwhelming majority of union political spending goes to Democrats, many individual union members actually support the GOP--exit polls indicate that 38 percent of them voted for President Bush in 2004. In the future, union bosses may feel more pressure from below to spend dues on the traditional activity of representation and less on trying to elect Democrats. "This is what it means to have conservatives running the Department of Labor," says one Labor official.

The roots of these current reforms go back more than 40 years: During the Eisenhower era, Congress held a series of sensational hearings on union corruption and passed the Landrum-Griffin Act, which required unions to report basic financial data to the federal government. Although unions thought the law demanded too much, many conservatives thought it demanded too little. Sen. Barry Goldwater called it a "'sweetheart bill." One of the law's authors, congressman Robert Griffin of Michigan (who was later a senator), admitted that "the effectiveness of the act will surely depend upon the secretary of labor, who bears a great responsibility for its enforcement."

Over the next four decades, however, no labor secretary did much about enforcement. The unions filed their forms--the most important form is the LM-2--but they also made sure that the paperwork revealed only the most rudimentary information. Even this was hard for the public to obtain: It required a visit to the department's headquarters in Washington, D.C., or to one of several branch offices. "When we got here in 2001, we looked at these forms and realized that the quality of the information was terrible," says one top DOL official. "It was classic government: hard to access and of no use to union members."

The first step was to place everything online. Today it's possible to read union reports going back several years. But the real bonanza is just commencing: The updated LM-2 forms are trickling in, complete with detailed information on how unions spend--and sometimes misspend--their money. Because of variations in fiscal-year calendars, only about 20 percent of unions have filed their updated forms (the rest are due by March 30). But from those that have already filed, it's possible to appreciate the scope of the new data. The National Education Association, for example, filed its LM-2 last December. The form exposes what is essentially a slush fund for liberal interests: Recipients of NEA largesse include Amnesty International, the Dick Gephardt Legacy Fund, the Gay and Lesbian Alliance Against Defamation, People for the American Way, Jesse Jackson's Rainbow/PUSH Coalition, the Wellstone Memorial Fund, and so on. This is in addition to the $25 million the NEA says it spent on politics and lobbying.

Kindergarten teachers and high-school algebra instructors--to say nothing of parents and voters--may wonder how any of this advances student achievement. It may even compel some of them to demand back the portion of their union dues that underwrite the NEA's political agenda. The most likely result, however, will be incentives for unions not to waste time and resources on politics and perks. The Labor Department's growing

database is quite simply a treasure trove of information, much of it potentially embarrassing to Big Labor.