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Obama’s labor initiative gives union leaders a blank check to commit fraud

Obama Deregulation Promotes Union Corruption



Obama’s labor initiative gives union leaders a blank check to commit fraud and engage in corruption by removing mandatory fiscal record keeping and reporting.

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The Obama administration is embarking on a progressive deregulation of enforcement on the relationship of union leaders and their members. Although Barack Obama promised to bring accountability and transparency to government, his intent in terms of the union members and their leadership is just the opposite. The Department of Labor is revising the standard for disclosure that up to now had made mandatory reporting of potential conflicts of interest and itemized spending reports on expenses a necessary part of union practice. Some union leaders have been quoted as saying that such detailed reporting is not necessary because there is very little corruption. Statistics from the Labor Department unfortunately still show that labor fraud and corruption remains rampant. From 2001-2008 there were 1,000 fraud-related indictments and 929 convictions. Between 2001 to 2005 there was a dramatic increase in the amount of ordered restitutions from $42.5 million to almost $200 million. Former Secretary of Labor, Elaine Chao, points out these figures represent significant evidence that ongoing and tight regulation is needed especially when one considers that union workers make up less than 8% of the total workforce and the enforcement resources of the government have been slashed since the Clinton years to very few investigators and prosecutors. The law regulating unions is called the Labor Management Reporting and Disclosure Act , also known as the Landrum-Griffin Act, was enacted in 1959 after severe corruption was publicized in many prominent unions including the International Brotherhood of Teamsters, International Longshoremen’s Association, and the United Mine Workers. Unions were subsequently required to hold secret elections regularly, maintain records available for review by members and the government, to develop fixed rules for membership, grievance, election and how they generally conducted their affairs. The Service Employees International Union (SEIU) strongly supported the Obama campaign financially and organizationally . Many on the political scene say that without their money, influence, and “volunteers” Obama would not have won the Democratic nomination. The President recently named SEIU lawyer, Craig Becker, to the National Labor Relations Board. With over 2 million members from the health care services, government employees, and property services fields the union is now the most powerful political force of organized labor. During the 1990’s SEIU leadership began to wrestle control of the union movement from the traditional leaders of the AFL-CIO whom they criticized for being too interested in politics and not enough in building membership. Since 2005, SEIU has been the lead voice for unions when they created the Change to Win Federation which essentially replaced the role of the older and now weaker AFL-CIO. While the President and liberal Democrats are wanting to strengthen the power of the National Labor Relations Board and labor in general with the Employee Free Choice Act it seems strange that they would want to deregulate government oversight of unions to protect union members. Several recent leaders of the SEIU were discovered to have been involved in corruption leading to their resignations. Tyrone Freeman, President of the Los Angeles local chapter was caught spending hundreds of thousands of dollars for personal use. Annelle Gradjeda, the former Executive Vice-President for the SEIU was “gifting” her boyfriend who was the former leader of another union tens of thousands of dollars. Finally when Rickman Jackson, the President of the Michigan SEIU, decided to get married in Hawaii he used union funds in addition to already using them to pay for his house. The discovery in his case also revealed he was receiving $200,000 a year for a fake job. Critics of cutbacks in the budget of the Federal agency in charge of union oversight and prosecution of fraud say that relaxing reporting requirements will prevent future exposures of union leader malfeasance. The Center for Union Facts cites a 2004 Zogby poll that said 71% of union members want the government to do more to protect union members from corruption and supported detailed reporting. The Republican Party Platform of 2008 affirmed the right of individuals to voluntarily participate in labor organization but also called for the protection of workers and conscientious enforcement of financial reporting and transparency by labor unions. Union corruption and fraud played a significant role in the decline of the labor movement of the United States. One would think that labor leaders would welcome more transparency and accountability on the part of labor leaders to assure union members and entice potential members that union membership will truly benefit the worker. Unions can potentially be advocates for the lowly educated but hard working workforce of America’s working class against manipulation. But without regulation and oversight this same group can just as easily be abused by their labor bosses as their job bosses. This proposal is a glaring inconsistency of the Democratic party which usually calls for special protections for special classes of persons who are vulnerable. Without a doubt deregulation of union leadership will put the leaderships interests ahead of the membership. The Bush administration was commonly criticized by the liberal left for failing to enforce laws or regulations that have been passed by the Congress. This balance of powers argument that the executive branch does not have to right to engage in selective enforcement now ironically, seems to have been adopted by the Obama administration. It is telling that they would rather try to accomplish this new agenda by a selective enforcement strategy rather than new legislation which could bring potentially embarrassing hearings presenting evidence of fraud and corruption. Conservatives should be on the side of the worker in supporting his ability to rightfully organize but we should also vigorous defend that same worker’s ability to hold union leaders accountable for the expenditure of the hard earned donations they receive from workers. Conservatives must loudly protest Obama’s strategy to remove accountability and transparency from union leadership because we know that without this regulation fraud and corruption will surely flourish.


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Dr. Tony Magana -- Bio and Archives

Dr. Tony Magana was raised in McAllen Texas, attended Texas A&M;University, and holds a doctorate from Harvard University. He has served in the United States Army Reserve. He is a member of the National Association of Hispanic Journalists.


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