The dark images of Enron and disturbing headlines of other dirty dealings by the unethical chieftains of some big businesses in recent years set America on a course of holding corporate executives accountable for the money they control. But what about the chieftains of Big Labor?
Consider: John Sweeney, president of the AFL-CIO, has said, "transparency, accountability and full and accurate disclosure should be central goals of financial regulation." Of business. But try to apply those reasonable standards to Sweeney's own organization, and he sings a different tune.
Secretary of Labor Elaine Chao knows all about this. She incurred the enmity of Sweeney and other labor leaders in December 2002, when she proposed new rules to strengthen the accounting requirements for labor organizations. Secretary Chao had the temerity to suggest that union members had a right to know where and how their mandatory dues are being used, just as stockholders now can know where their money goes.
Does the money workers contribute to their unions go to represent them and others at the bargaining table or to provide pension plans and other benefits? Or are union honchos wasting it on lavish personal dining and entertainment expenses? Workers have a right to know the truth.
Most reporting requirements for unions date back to 1959, when the organizations were smaller and simpler in structure. The rules allow dangerous amounts of wiggle room. Major expenses can be reported in lump sums under vague categories such as "education and publicity expenses" and "professional fees." Unions can go in with each other to establish subsidiaries such as credit unions or joint strike funds, and they need not be disclosed unless they are wholly owned by one union.
Secretary Chao called for detailed disclosure of major receipts and disbursements and full disclosure of subsidiaries and trusts, such as credit unions. Opponents called the rules onerous, costly and burdensome, particularly to small unions, even though Secretary Chao's proposed standards were to apply only to unions with more than $250,000 in annual receipts ? or about the largest one-fifth in the country.
Union bosses went to work on Congress, but common sense prevailed, and we should see the first of the new disclosure reports next July.