The problem with many of these actions, however, is that they actually hurt the union pension beneficiaries, who get lower returns on their investments because the union is pushing policies that lower profits and stock price. Pension fund managers have a moral -- and legal -- duty to invest retirees' money wisely. Their fiduciary responsibility is to act prudently on behalf of those whose funds they manage. They are supposed to invest funds to ensure a good return, not to promote the political or organizational goals of the unions. When a union pension fund coerces a company to adopt policies that make it less profitable, union retirees lose money. The only thing fiduciaries are supposed to consider is the return to the pension fund on the investment made -- certainly not the unions' desire to sink a key element of the president's domestic agenda.
AFL-CIO-affiliated unions have assigned 36 full-time staffers to work in 21 states to oppose Social Security reform, according to the New York Times, and union delegations have personally met with nearly 100 members of Congress to lobby against the president's plan. All of this activity is paid for by union dues, without the express consent of union members who might rather have their dues go to better representation at the bargaining table. But it's the threat to use pension funds as a weapon in this high-stakes battle that has finally pushed the Bush administration to its limits. The Department of Labor oversees union pension funds, which have historically been one of the chief sources of union corruption and racketeering. Corrupt union pension fund trustees have bilked hard-working union members out of millions of dollars while enriching themselves. As of 2002, 44 percent of the Justice Department's 357 pending racketeering investigations involved union pension and welfare funds.
The AFL-CIO's anti-Social Security reform campaign doesn't represent the nadir of unions' misuse of pension funds, but it may be the most widespread.
Linda Chavez is president of Stop Union Political Abuse.