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Union Transparency Rules Relaxed



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When it comes to cleaning up government, liberals and conservatives agree that sunlight is the best disinfectant. So why did President Obama just roll back an important tool for expanding transparency: the conflict-of-interest reporting requirements for labor unions?

Power often tempts people to misuse their authority. Financial transparency laws keep those temptations in check. The government requires businesses, pension funds, and non-profits to file financial transparency forms to keep them honest.

These laws also cover unions. Congress passed the Labor-Management Reporting and Disclosure Act (LMRDA) in 1959 after investigations exposed massive corruption within the Teamsters and Longshoremen unions. Congress believed that allowing union members to see how their union spent their money would discourage self-dealing.

One section of the LMRDA required union officers to disclose payments that could pose a conflict of interest. Perhaps there is a good reason for a union officer to receive money from an employer. However, union members ought to know about it.

Under President Bush, the Labor Department significantly strengthened union transparency. Unions often negotiate contracts allowing union representatives to do union work while on company time. This leave can be used to reward union supporters with no-show jobs. Unions might trade off benefits for workers in exchange for more paid leave. So Elaine Chao, the former secretary of labor, required unions to disclose how much leave they received.

Chao also extended conflict-of-interest reporting to union stewards and required union officers to disclose payments they receive from union trusts. If a workers training fund is making large payments to union officers, Chao reasoned, the workers might want to know about it.

The Obama administration disagrees. The Department of Labor just issued regulations rolling back these transparency measures. Now union officers do not have to report how much union leave they receive, or how much money they get from a trust. Union stewards will not have to disclose potential conflicts of interest at all.

Sunlight might disinfect, but Obama has decided to keep workers in the dark.

— James Sherk is senior policy analyst in labor economics in the Heritage Foundation Center for Data Analysis.



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