12.13.2010 2

Labor Union Employees Find Favor With the Obama Administration

By Rebekah Rast –

“Let me say it as simply as I can: Transparency and the rule of law will be the touchstones of this presidency.”—Barack Obama, during his remarks when welcoming senior staff and cabinet secretaries, Jan. 21, 2009.

Obviously Department of Labor Secretary Hilda Solis chose to ignore this part of her boss’s speech.

The Department of Labor has made no effort towards making labor unions more transparent. In fact, it has made them less transparent while holding up transparency laws for private businesses and corporations that choose not to unionize.

Just last week the Department of Labor made another move confirming its labor union favoritism. The department rescinded the T-1 form requiring labor unions to disclose information about their trusts to their members and the general public.

A summary of the Department’s action stated, “the trust reporting required under the rule is overly broad and is not necessary to prevent the circumvention and evasion of the Title II reporting requirements.”

This gives labor unions another way to hide behind their collected member’s money.

“Union employees don’t want their members to know how much they’re making even though the members are the ones paying their salary,” says Don Todd, former Department of Labor official and current research director at Americans for Limited Government (ALG).

While Todd served at the Department of Labor under Secretary Elaine Chao during the Bush Administration, the LM-2 form, which disclose the salaries of union officers and employees, underwent some changes to make them more transparent.

“As it was, union officers had to list their gross incomes, but didn’t have to list any other benefits,” Todd says. “The benefits were listed on the very bottom of a form, but nowhere connected to the union employee’s name.”

The new LM-2 form created under the Bush Administration changed all that and forced employees of labor unions to list all benefits and salaries next to their name. Benefits include such items as disbursements for life insurance, health insurance and pensions. “We ran into one union guy whose benefits contributed more to his salary than his actual gross income amount, but since he only had to list his gross income, union members would have no idea of how much he was making,” Todd says.

The new LM-2 disclosure form was approved and scheduled to go into effect the next fiscal year, which would have been 2009. Obama then took office and delayed the start date of the form and later rescinded it altogether.

This is no hidden pattern by the Obama Administration. It clearly favors unions — not union members — but the employees and officers. Currently the Administration is revisiting conflict of interest reports. “One more step to rolling back transparency forms,” says Nathan Mehrens, former special assistant to the Deputy Assistant Secretary for Labor-Management Programs and current ALG counsel.

As labor union dues become more mysterious leaving union members and the America people wondering where the money is going, the true irony of it all resides on the union AFL-CIO’s Web page.

Executive PayWatch, found on the AFL-CIO website, highlights various corporations and their top executive’s salaries. A visitor to the site can search by state, company name, industry, or even see a list of the top 100 highest-paid CEOs. The irony is, while private industries have to retain a high level of transparency, which the AFL-CIO is quick to point out, the union itself gets to hide its top earners and benefits packages from everyone—even those paying their salaries.

Because labor unions have the Obama Administration on their side, Mehrens says misrepresentation of salaries will continue to occur. He remembers seeing the paperwork from one “labor organization that reported on its Form LM-2 total disbursements of $461,971, $460,203, and $244,780 to certain individual officers. This disclosure did not take into account that these same officers and employees also received $181,297, $184,397, and $161,240 respectively as contributions to their employee benefit plans. These benefits payments were disclosed to the IRS but do not appear itemized by officers and employees on the Form LM-2.”

As far as leading by the rule of the law and transparency, it seems Obama spoke too quickly and Secretary Solis somehow knew to not take his comment seriously.

Maybe he should have been more specific and made known to the American people that the transparency laws didn’t apply to his friends.

Rebekah Rast is a contributing editor to the Americans for Limited Government (ALG) News Bureau.

Copyright © 2008-2017 Americans for Limited Government