The Obama administration has delivered a strong message to
crooked union bosses everywhere: happy days are here again.
On Thursday President Obama, who has pledged to usher in a new
era of fiscal responsibility, touted $17 billion in proposed cuts
to his $3.4 trillion budget. The media
noted that about half of the reductions came out of the
defense budget, but lost in most reports is the fact that the
administration also slashed funding for the only entity in
government tasked with policing unions.
Under the leadership of Secretary Elaine Chao from 2001 through
this January, the Labor Department beefed up the Office of
Labor-Management Standards. During this time, the division’s
actions led
to 929 convictions of corrupt union officials and to the
recovery of more than $93 million on behalf of union members. Yet
the Obama administration has proposed slashing
the unit’s budget by more than 9 percent, from $45 million in
2009 to $41 million in 2010.
Funding for the agency, which was created in 1959 as part of
legislation to root out union corruption, represents a tiny
fraction of the projected $13.3
billion 2010 Labor Department budget.
It would be one thing if the reduction were part of a broader
belt-tightening throughout the Department of Labor, but the
administration boosted funding for the Wage and Hour Division,
Office of Federal Contract Compliance Programs, and the
Occupational Safety and Health Administration - all of which
regulate businesses.
“The administration is cutting the budget of the only agency in
government that monitors labor union activity, while at the same
time ratcheting up the budget of all other enforcement agencies
against employers,” Chao told TAS in reaction to the
news.
The OLMS budget cuts come on the heels of a recent decision by
the Labor Department to
loosen union financial disclosure rules, a blow to
transparency that will make it more difficult for union members
to examine the finances of the organizations to which they are
paying dues, as well as the conflicts of interest of labor
leaders.
The Obama administration’s hands-off policy toward big labor
should not come as much of a surprise. Unions played a key role
in Obama’s election by helping him with fundraising and
organizing, and his choice for Labor Secretary, Hilda Solis, has
a cozy
relationship with unions.
Solis was first elected to Congress in 2000 as a union candidate,
and as a member of the House of Representatives from 2001 until
this year, she racked up perfect or near perfect vote ratings
from every major union. She also served as treasurer of American
Rights at Work, a pro-labor group that maintained the “Shame on
Elaine” attack website aimed at her predecessor, Chao.
In its justification for the OLMS cut, the Obama administration
asserted that, “Since 2001, OLMS’ budget has increased by almost
50 percent, without commensurate increases in workload.”
But Don Todd, deputy assistant secretary at OLMS from 2001
through this January, dismissed the Obama administration’s claim.
“They’re just talking through their hats,” Todd said “They’re
trying to justify the unjustifiable, and that is they don’t want
oversight of unions.”
During the Clinton administration, the staff of the division
dwindled by more than a quarter and the number of audits
performed on unions dropped 70 percent.
“From 1992 to 2000, the Office of Labor-Management Standards was
significantly weakened to the point where it couldn’t carry out
its legislative function - to protect the rights of rank and file
members,” Chao said.
During Chao’s time at the Department of Labor, the number of
audits that the agency performed on unions went up roughly
fourfold from where they were by the end of the Clinton
administration.
On Thursday, Solis was asked about the OLMS cuts during a
web chat
about the 2010 budget.
“OLMS’ staffing levels will be returned to essentially the same
levels it maintained in fiscal years 2001, 2002, and 2003,” she
said. “During this period, OLMS maintained vigorous and effective
enforcement of the law.”
But in reality, in 2003, the number of audits performed by OLMS
was just a third of the number being performed by 2007.
Despite the budget increases during this decade, the office
hasn’t even returned to its pre-Clinton era staffing levels. By
the end of the Bush years, the staff had increased to about 350,
but was in charge of overseeing roughly 20,000 labor
organizations. Now the agency will have to return to getting by
with even fewer employees.
Nathan Mehrens, who served at the OLMS under Chao, said that when
the budget is cut at OLMS, audits will the first activity to be
affected, because there are many mandatory functions that the
division has to perform. Auditing, he said, is seen as a task to
be conducted as time permits.
“While [audits] do uncover embezzlements, [they] are more
powerful as a tool to deter these crimes before they happen,”
Todd explained. “With the cuts they are putting in effect there
will be no cop on the beat. Union officers and employees will
know that. It would be like a big budget cut at the [Securities
and Exchange Commission]. Those who might otherwise resist
temptation are given the impression that the chance of discovery
is slight.”
On May 20, 2008, Thomas Wallace, a former treasurer of the
Amalgamated Transit Union, plead guilty and agreed to repay more
than $450,000 he embezzled from the union by forging checks to
himself. The case represented just one of 103 convictions OLMS
achieved last year.
Aspiring union crooks who concoct similar schemes to steal money
from workers can rest a lot easier now that Washington has a new
sheriff in town.
