The Nation's Pulse

Living Off the Fat of the Union

New union disclosure rules expose lavish spending.

By 6.7.06

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What does Tiger Woods have in common with union officials? Answer: they both play a lot of golf. The only difference is union officials get to play on their members' dime. A lot of dimes, actually. Organized labor spent $1.3 million on golf in 2005.

This and other enlightening facts about union spending are now public because of new disclosure regulations championed by U.S. Secretary of Labor Elaine Chao. Unions with annual receipts of $250,000 or more are required to file detailed financial reports disclosing union salaries, benefits, income and expenditures. As a result, union members now have unprecedented insight into how their unions spend their dues.

In 28 states around the country, workers can be required to pay for union representation as a condition of employment. Their mandatory payments have underwritten lavish spending that often has nothing to do with workplace representation. The Center for Union Facts uncovered many of these expenditures by compiling the Department of Labor's reports into a searchable database available at unionfacts.com.

For example, in 2005 labor unions spent $7.3 million on plush resorts, nearly $1.3 million for amusement park events, $148,000 for liquor, and $641,000 for sporting events. Ironworkers Local 40 in New York spent $52,879 on a new Cadillac for a retiring president. SEIU Local 660 in Los Angeles spent $153,000 on movie tickets.

The rank-and-file not only pays for these exorbitant amusements; they also fund generous salaries and benefits for union employees. While the nation's teachers perennially protest low salaries, National Education Association (NEA) president Reg Weaver makes $272,170, with another $98,258 for benefits and expenses. Nearly half of the NEA's 650 employees make over $100,000 a year. The AFL-CIO has an official chauffeur and he makes $70,951.

Additionally, unions seem far more interested in amassing political power than representing employees. The AFL-CIO reported spending $49 million on politics and lobbying in its 2005 fiscal year -- $20 million more than it spent on workplace representation.

Although 50 percent of NEA teachers self-identify as conservative, the union gave money to numerous liberal groups last year, including Jesse Jackson's Rainbow PUSH Coalition, the Gay and Lesbian Alliance Against Defamation, Amnesty International, AIDS Walk Washington, the Human Rights Campaign, and the Fund to Protect Social Security. These outlays prompted the Wall Street Journal editorial board to call the NEA a "honey pot for left-wing political causes that have nothing to do with teachers, much less students."

These revelations show that financial transparency is essential to good stewardship. As a matter of public policy, we require candidates and campaign committees to disclose campaign finance reports to voters. Shareholders of corporations receive regular financial reports. Similarly, requiring unions to disclose financial details to members improves accountability and reduces the potential for corruption.

Unions are rapidly becoming our nation's fourth branch of government. In 2005 the nation added 163,000 new government jobs, and unions captured 40 percent of this growth. American unionized industries may go bankrupt or move jobs overseas, but the government is here to stay. Meanwhile unions, of course, will act in their own interest to grow the size and cost of government.

The U.S. Department of Labor's new reporting requirements only apply to labor unions that represent private sector members. Public sector unions that exclusively represent state and municipal employees have no such obligation. As a result, social workers, teachers, firefighters and other public employees are required to pay dues as a condition of employment, yet are given little information about how dues are spent.

It is up to state legislatures to secure full financial accountability for public sector unions. The American Legislative Exchange Council has model legislation that mandates disclosure similar to the federal reporting requirements.

Then employees can decide whether their hard-earned money should be used to improve the golf handicaps of union officials.

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About the Author
Michael J. Reitz is the executive vice president of the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Michigan.