The Labor Department heeded union complaints against greater transparency by moving to rescind financial disclosure rules. This was at the top of the AFL-CIO’s “To Do List” for the Obama Administration.
Union officials complain about financial disclosure and transparency requirements. But they have few qualms with imposing those same requirements upon others.
In a January 2009 appearance at the World Economic Forum in Davos, Switzerland, SEIU President Andy Stern called for greater responsibility, transparency, and accountability – for corporations, of course. Stern even participated in a workshop on restoring trust in corporations while in Davos. He followed up in The Washington Post‘s online forum (ironically, the topic of discussion was leadership) where he criticized executives for not taking “responsibility.” Yet, Stern remains deafeningly silent on demanding the same accountability and transparency for unions.
Union Hypocrisy on Disclosure
The Laborers’ International Union of North America argues that stronger disclosure rules “in no way warrant the violence they will do to the careful balance Congress struck in the LMRDA between the right of union members to have the information necessary to govern the affairs of their unions and the legitimate interest unions have in preventing their confidential information from being readily available to management and its agents.”
It is the same “violence” that unions utilize to criticize corporations. They love to make hay out of executive compensation. Unions would not be able to make their case without the financial disclosure data that is required by law and made available to the public. That information is available at the Securities and Exchange Commission’s website. If sifting through 10-K’s is unappealing, try Yahoo! Finance.
Sure would be nice to have the same for union officials, right? According to union officials, it’s necessary for corporations to report their financial practices, but it’s not acceptable for unions to have to disclose financial (mis)management.
Union Hypocrisy on Compliance
Unions also argued that complying with the transparency requirements is difficult and time consuming. It reminds me of watching OJ try to put on the gloves (He just couldn’t do it!).
UNITE HERE used the excuse that disclosing critical financial details “created a serious administrative burden” and imposed a “steep financial cost to our members.”
AFSCME complained that it spends $120,000 to comply with LM-2 disclosure rules, despite the fact that AFSCME reported over $193 million in total receipts in its 2008 LM-2 disclosure. That’s just .06 percent of their annual budget.
This feigned outrage pales in comparison to the billions spent every year by corporations. An AMR Research survey showed that companies spent over $32 billion in 2008 on corporate governance, risk management, and compliance. Spending on Sarbanes-Oxley alone totaled $6.2 billion.
Another survey found that the average annual cost for companies with market capitalization over $75 million to comply with Sarbanes-Oxley was $1.7 million. A different survey found that the average cost of compliance with Sarbanes-Oxley for companies under $1 billion in annual revenue increased by 171 percent to $2.8 million per year between 2001 and 2006.
Incidentally, unions supported Sarbanes-Oxley, which increased and established new accounting and financial reporting standards for corporations. AFL-CIO leader John Sweeney actually led a union rally near the New York Stock Exchange to denounce “corporate pirates” and call for greater responsibility and transparency to the American public. Both are admirable attributes for corporations, but apparently not good enough for unions to practice.
If billions in costs and mountains of paperwork are good enough for corporate America, is it too much to ask for a modicum of accountablity and transparency from unions?
Some Complaints Are Too Good To Be True
If you only listened to the unions, you too might conclude that proper disclosure and accountability were Sisyphean tasks. And maybe that’s not a surprise with the excuses we’ve come across in union-submitted comments to the Federal Register advocating for less transparency.
The United Union of Roofers, Waterproofers, and Allied Workers take home the trophy for best excuse against transparency and disclosure. The union actually suggested that providing additional detailed information “may be too much for the union member to comprehend and may result in misunderstanding.” Their conclusion: union members should hear this information in a meeting with officials. They also assert that it’s merely a “theory of the Department [of Labor]” that stronger disclosure and transparency requirements will discourage embezzlement and financial mismanagement.
See below the fold for the rest.