Accountability for All…Except Big Labor
Posted on August 31, 2007 at 1:22 pm by Chuck Muth
For all the Democrats’ professed shock at Republican spending abuses during the last Congress, frugality remains rare on Capitol Hill. Outlays are mostly going up, with a curious exception — the budget of the small Labor Department agency that oversees labor unions’ public disclosure and financial integrity.
Enforcing public transparency is the job of the Office of Labor Management Standards (OLMS). An asterisk by Washington, D.C. standards, its 2007 budget is $47.7 million. The administration proposed upping that number to $57 million, but House Democrats are proposing to reduce it by $2 million.
Savings are possible everywhere in government, of course, and maybe the Democrats are simply determined to get good value for taxpayer resources. Maybe, but not likely.
The same bill, notes Diana Furchtgott-Roth of the Hudson Institute, “would increase spending for all other oversight offices in the Labor Department — including those monitoring mines, occupational safety, wages and overtime, and employee pensions.” Overall, the Labor Department’s budget would run almost $1 billion more than proposed by the Bush administration.
Democrats seem to believe disclosure is good — except when applied to an interest group that contributed roughly $104 million directly, and much more indirectly, to Democratic candidates in the last election cycle.
Under law, unions must file annual financial reports. OLMS conducts audits and initiates investigations, which require resources, competence and energy. Just as there is crime in the corporate world (think Enron), there is crime in organized labor, so the OLMS has been quite busy.
Last year OLMS handled 2,617 cases of delinquent or deficient reports, conducted 133 election investigations and supervised 33 elections. The agency processed 339 criminal cases involving financial integrity, won 118 indictments and 129 convictions, and conducted 741 compliance audits and seven follow-up audits.
Since 2003, OLMS has won 760 convictions in union corruption cases. Annual investigations are up 20 percent and convictions are up 26 percent.
Some union officials may dislike having to operate in the sunlight, but their doing so benefits union members enormously. OLMS does not control or limit labor spending in any way. It simply requires unions to let their members, and the rest of us, know how they are spending their members’ dues.
People want to know: Between May 2006 and May 2007 the OLMS Web site got nearly 768,000 visits, around 2,100 daily. When polled on the issue, union members back federal public disclosure to help deter wrongdoing by union officials.
The individual spending items always prove interesting. For instance, John J. Miller of National Review highlights the purchase by an Ironworkers local of a $52,879 Cadillac as a “retirement gift.” Furchtgott-Roth cites high salaries, costly board meetings at golf resorts and a Lear jet as dubious expenditures. She writes: “Perhaps there’s nothing wrong with spending union dues on golf or on high salaries for union bosses. Perhaps the rank-and-file don’t disapprove — if they know.”
OLMS’s job is to make sure that they do know.
Even more important are prosecutions for embezzlement, theft, and other financial abuses. To date, organized labor has appeared either unable or unwilling to police its own. The OLMS cases involve behavior that is criminal in any context. If not this office, then who is going to protect rank-and-file union members?
There is abundant union corruption and misbehavior to investigate and punish. There are significant union abuses to publicize. OLMS has been active and productive in doing so. And that is why labor bosses are complaining.
Union officials contend that the disclosure requirements are too costly. But costs to individual unions have proven to be quite modest, a fraction of the salary paid to their top officials.
Another contention is that other forms of federal oversight — of mining, for instance — are more important. But the OLMS budget has no impact on the government’s other oversight activities; spending a few million dollars more on OLMS would have no impact on funding levels of other bureaus. Anyway, if the Democrats really are worried about money, they could kill a few earmarks to generate enough cash for OLMS.
It’s not like the agency is overfunded. Last year OLMS conducted compliance audits of fewer than 4.6 percent of unions.
Enforcing disclosure rules and prosecuting financial crimes would seem to be among Uncle Sam’s most important roles. No government agency, even one with as laudable a mission as OLMS, should be exempt from scrutiny by Congress. But that review should be non-partisan and objective, not conducted on behalf of a well-funded and self-interested political lobby.
Doug Bandow, a former special assistant to President Ronald Reagan, is the Bastiat scholar in free enterprise at the Competitive Enterprise Institute and vice president of policy for Citizen Outreach.
