David A. Keene

Transparency hypocrisy
The Hill
July 24, 2007

“ Transparency” is a key watchword among those seeking to unearth and fight corruption among politicians, lobbyists and businessmen. Laws, regulations, disclosure and reporting requirements are all often based on the need for greater “transparency” in government and business, because it is widely and correctly believed that the more one knows about what one’s elected officials and those they do business with are up to, the better off we’ll all be.

One would think, given this almost religious belief in transparency, that reformers would be building statues honoring Labor Secretary Elaine Chao. She has fought to apply the same transparency standards to organized labor that the Securities and Exchange Commission (SEC) and other regulators have imposed on business interests with astounding results. But now Democrats in the new Congress, responding to pressure from union officials who are for the first time actually being required to comply with reporting requirements they have ignored for decades, have decided that what’s good for others isn’t so good for their political benefactors.

Department of Labor officials say that 93 percent of the nation’s unions comply with all reporting requirements and, when audited, come up clean. The problems in the other 7 percent, however, are serious. In recent years, the Department’s reporting requirements and the information they contain have resulted, directly or indirectly, in more than 750 convictions of union officials for everything from perjury to cooking the books, stuffing ballot boxes and outright theft. Since 2001, in fact, the courts have also ordered corrupt officials to return some $70 million in stolen funds to union treasuries and pension plans.

To accomplish this, Chao’s Department has revised reporting forms for unions, union officials and those with whom they do business; provided unions with free software to make compliance far easier than in the past; and opened a website union members and others can visit to find out just about everything they might want to know, including the salaries of their leaders, whom their union is doing business with and giving money to and whether any of their elected leaders are in trouble or have failed to comply with federal reporting requirements.

To say that this transparency irks labor officials is an understatement. They’ve complained about compliance costs from day one, for example with the AFL-CIO protesting that it would cost $1 million just to comply when it turned out it cost about $54,000. These, one must note, are the same people who demand more and more reporting from business interests regardless of the costs involved.

If you’ve got the votes in Congress, of course, the way to get at those who police you is to cut off their funds. Labor has the votes and has, therefore, asked a compliant Democratic majority in the House to do just that. As a result, though Speaker Nancy Pelosi’s (Calif.) majority voted last week to increase the overall Labor Department budget by nearly $1 billion, it decided to cut the budget of the Department’s Office of Labor-Management Standards, which oversees reporting, transparency and compliance. OLMS isn’t a big office; the president had asked Congress to increase its budget from about $48 million to $57 million a year. The Democratic leadership’s response was to cut it to less than $46 million.

Republicans and a few Blue Dog Democrats resisted this by supporting an amendment sponsored by Minnesota Republican John Kline to at least leave the office’s funding at its current level. The amendment failed.

The action moves now to the Senate, which will take up the matter in September when a Senate Appropriations subcommittee chaired by Iowa Democrat Tom Harkin will take up the fiscal 2008 Labor-HHS-Education mark. No one knows what the committee will do, but eight Republican senators have asked Harkin and ranking Republican Arlen Specter (Pa.) to support the president’s request.

In their letter, they point out that “Rank and file union members have a right to know how their dues are spent and whether union officials may have a conflict of interest” and that it is OLMS that is charged with making sure they can get at this information.

Criminals, businessmen and taxpayers might dream of the day when no one will look over their shoulder, but it seems that only union officials are in a position to get Congress to make their dream a reality.