Bloomberg is reporting that the the AFL-CIO – the largest union in America – utilized “creative accounting” to hide its deteriorating finances last year.
According to Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, the AFL-CIO “obscured its financial difficulties heading into last year’s presidential election campaign.” The union’s net assets declined to a negative $2.3 million as of June 30, 2008, compared to a $66 million surplus in 2000.
It’s not clear what “creative accounting” tricks were used to mask the union’s finances, but the AFL-CIO certainly has not been forthcoming. A spokeswoman for the union declined to comment or provide any details on the report.
Chalk this up as another example of hypocrisy.
It’s particularly ironic given how much labor howled over the “creative accounting” scandals in the early 2000s (remember Enron?). In fact, the AFL-CIO’s own John Sweeney led a rally in 2002 at the New York Stock Exchange to denounce “corporate pirates” and demand for better accounting standards and transparency.
It’s doubtful the AFL-CIO will disclose what accounting gimmicks it employed. But we’re sure it’ll make the accountants at the former company with the crooked “E” as a logo green with envy.