November 2, 2009

November 2, 2009 | Commentary on Jobs, Labor

Union Dues: It's Your Money. Isn't It?

For American workers, it is a telling tale of two cities.

Last month, workers in Wheat Ridge, Colo., won a smashing victory, holding powerful special interests accountable. In Washington though, those special interests fought back, persuading President Obama to change policies to prevent it from happening again. Rhetoric aside, special interests have lost none of their power in Obama's Washington. In Wheat Ridge, Ernest Duran Jr., longtime president of United Food and Commercial Workers Local 7, ran the union as a personal fiefdom. He paid himself $162,000 a year. His son and daughter also enjoyed six-figure union salaries. He charged personal expenses to his union account: top-shelf margaritas, car repairs, tickets to Denver Broncos games.

Union officers and board members who questioned Duran's spending quickly lost their jobs.

Now Duran has lost his. In September, members of Local 7 voted to replace Duran with a former union employee fired for reporting his wrongdoing. Local 7 members also voted out their secretary treasurer and their recording secretary, and elected an almost entirely new board.

Change has come to the labor movement in Colorado.

Credit goes to transparency measures undertaken by former Labor Secretary Elaine Chao. Her Labor Department updated the financial reporting forms that unions file. She required unions to itemize their expenditures and report how much they paid union employees. She modernized union trust and conflict-of-interest reporting requirements.

Further reforms passed in Chao's last days in office require unions to disclose the names of anyone buying or selling union assets.

Because of these reforms, the rank-and-file members of Local 7 finally saw how Duran spent their money and they wanted it stopped.

Financial transparency protects union members from corrupt officers.

Unfortunately, many union bosses would rather keep their members blindfolded. In Washington, organized labor heavily lobbied Obama to gut the financial transparency reforms that Chao implemented. Obama delivered.

His Labor Department announced the repeal of Chao's financial transparency reforms. Rank-and-file workers will now stay in the dark when officers sell union assets in sweetheart deals. Observers expect the administration to also gut the itemized expenses, conflict-of-interest and the union trust reporting reforms.

Why would Obama do this? The new financial transparency has benefited union members.

Isn't that who unions are supposed to serve? The reforms exposed Tyrone Freeman, the disgraced former president of the Service Employees Los Angeles local, who spent hundreds of thousands of union dollars on businesses owned by his family. They revealed that the National Education Association gave $500,000 to ACORN's Brooklyn office. Yes, the same ACORN office that offered free advice on trafficking underage girls into a brothel.

Union members clearly deserve to know how their dues are spent. But union transparency has been axed anyway. Why? Politics.

Unions are a powerful special-interest group. Ernest Duran spent one-third of Local 7's budget on politics and lobbying. Unions as a whole spent more than $1 billion of their members' dues to elect Obama and the current Congress. So when union lobbyists asked Obama to repeal the financial transparency reforms, he asked them how quickly they wanted it done.

This should worry all Americans. It has obviously hurt union members less transparency will facilitate union corruption. But it should also disturb the vast majority of Americans who do not belong to unions.

Gutting financial transparency didn't top the union lobbyists' wish list. Eliminating the secret ballot does. Unions want to end the practice of American workers voting for or against unionizing in the privacy of the voting booth.

Instead, they want to force workers to make their choice about unionizing publicly, in front of union organizers. They want to be able to pressure or threaten reluctant workers to sign on. Obama has promised to do all he can to deliver after health care reform is in the bag.

Without the protection of the secret ballot, unions will pressure millions of reluctant workers into unionizing. You could be one of them.

Thanks to the power of special interests in Washington, you may lose your right to vote on joining a union. Along with it will go the right to see how your union spends your money. Is that "change you can believe in"?

James Sherk is Bradley Fellow in Labor Policy in the Center for Data Analysis at The Heritage Foundation.

About the Author

James Sherk Research Fellow, Labor Economics
Center for Data Analysis

First Appeared in the Hartford Courant