Under the Trump administration, the Department of Labor added additional transparency requirements for unions in an effort to weed out corruption. A final rule — which created the form T-1 — mandated any union with at least $250,000 in annual receipts to disclose information about their credit unions, strike funds, apprenticeship programs, and any additional trust information.
Under President Biden, the Department of Labor put a hold on this rule back in March 2021. Now, the Biden-appointed director of the Office of Labor Management Standards (OLMS) Jeffrey Freund has decided to nix the rule altogether. Freud has already indicated that he plans to act as a PR agency for unions he feels are misjudged. This latest decision only confirms that position.
Labor unions are undoubtedly applauding Freud’s decision to let them skip the extra paperwork. But workers who care about how their dues are spent have a lot less to celebrate.
The rule was put into place soon after the United Auto Workers (UAW) leadership was caught in a nasty fraud and embezzlement scheme that resulted in multiple union officials being sent to federal prison. The UAW has since been placed under six years of federal monitorship. Much of the illicit spending was buried in generic “credit card chargebacks” that failed to raise any red flags on the union’s financial filings.
Needless to say, many are confused as to why the Biden administration is taking steps to rescind this rule given the recent corruption at UAW, not to mention the labor movement’s long history of corruption, coercion, and other crooked behavior.
Republican Leader of the Education and Labor Committee Virginia Foxx issued the following statement:
“Secretary Walsh is in bed with Big Labor. Rescinding this rule is a slap in the face to hard-working union members. Workers deserve to know how union bosses are spending their union dues, which come directly out of member paychecks. The recent United Auto Worker embezzlement scandal involving the convictions of 15 union officials, including multiple former union presidents, is proof that we must demand more transparency and accountability from union bosses, especially when President Biden is demanding Congress send him the PRO Act, a bill that would hand them an additional $9.3 billion out of taxpayers’ pockets.”
We agree. As the Center for Union Facts recently told Bloomberg, “It is not the role of the taxpayer-funded OLMS to be the PR department for labor union leadership—it’s to provide transparency and accountability for union members and the public at large…If anything, OLMS needs to go further in requiring additional scrutiny for union spending of compulsory dues.”
Before the rule is officially nixed, the issue must be left open for public comment for 60 days.