WASHINGTON, D.C. | March 31, 2011 -
Good morning everyone. Welcome to our witnesses; thank you for joining us today. We appreciate your views and expertise on how we can best ensure union transparency and accountability.
It has been almost two years since the recession that struck our economy in late 2007 officially ended. However, as we are reminded with the release of virtually every set of updated economic data, many Americans continue to struggle. More than 13 million workers are unemployed, and food and energy prices continue to rise. Budgets are stretched thin as families try to make ends meet.
On pay day, at the grocery store, and at the gas pump, Americans recognize the value of every hour worked and every dollar earned. Whether it is their tax dollars or union dues, workers deserve to know how their hard-earned money is being spent.
Joining a union is a right reserved by law for American workers. Today, 6.9 percent of private-sector workers have decided to obtain union representation. Congress has a long-standing responsibility to shine a bright light on how the dues of union workers’ are being spent. In 2009, unions reported collecting more than $8 billion in workers’ dues. This figure alone highlights the importance of union transparency.
In an effort to improve transparency, the Labor-Management Reporting and Disclosure Act was enacted in 1959. The act guarantees basic standards of democracy and fiscal responsibility in unions representing private sector workers. Among its protections, the act sets out standards for union officer election and administrative practices and requires the disclosure of certain financial transactions and the balance of union funds and assets.
The Office of Labor-Management Standards, located within the Department of Labor, is charged with enforcing the law. In recent years, important progress has been made in strengthening the law’s protections. Starting in 2003, OLMS reformed the enforcement process to better reflect the needs of a 21st century workforce. More than 40 years after the law’s enactment, transparency and accountability were finally enhanced on behalf of union workers.
Unfortunately, this progress is now under assault by a culture of union favoritism that dominates the workforce policies of the current administration. Under President Obama's watch, the Department of Labor has rolled back many of these enhanced protections to benefit union bosses at the expense of workers.
One clear example of this trend can been seen in the administration’s most recent decision to rescind the form T-1 reporting requirements. After years of work and legal review, the Department of Labor finalized the T-1 form to provide greater transparency of the finances of trusts controlled by union officials. For the first time, workers would have had access to detailed information about receipts, disbursements, and officer compensation for thousands of trusts that receive union dues, such as strike funds and job targeting funds.
Yet before a single report could be filed, the administration revoked the T-1 requirement. The administration’s position is this information is valuable to workers only if the trust is wholly owned by a single union. However, workers whose dues are deposited in a trust controlled by more than one entity are not allowed the same degree of transparency. Greater protections for some and not for others do a disservice to all workers.
The administration has also weakened reporting requirements on the form LM-2 and proposed weakening the form LM-30, reporting requirements that once provided unprecedented information to union workers. Enhanced reporting of the LM-2 would have amounted to just 15 hours of additional administrative work for union officials annually. The administration has also significantly reduced the number of union audits, undermining a once robust audit program that identified numerous violations of the law.
For more than seven million private sector union members, the majority of whom are forced to pay union dues in non-right-to-work states, these reporting requirements are the only way to see how their union dues are spent and judge the actions of their union officials.
Workers should be empowered with the knowledge of how their hard-earned dollars are being spent, during times of both economic turmoil and prosperity. Today’s hearing will help determine whether workers have the tools they need to do just that.