Secretary Elaine Chao


Union Dues and Don'ts

FOR THE FIRST TIME EVER, the Department of Labor is seriously enforcing its financial reporting requirements of unions and disclosing the results online. As a result, union members—and the public at large—now have the means to examine union finances in extraordinary detail and to learn about the outside activities and potential conflicts of interest of union officials. The purpose of this newfound transparency is to promote fiscal integrity and union democracy.

Previously, the department’s record of enforcing its reporting requirements was dismal. As recently as 2002, 43 percent of unions were either tardy in submitting their LM-2 forms or never turned them in at all, even though some sort of reporting had been required since 1959. By contrast, the IRS nonfiling rate was a mere 1.5 percent, and after the Federal Elections Commission introduced civil financial penalties for noncompliance (also in 2002), compliance improved from 82 percent to 85 percent.

Labor long suffered from what a senior department official called a “classic big government problem”: Union financial disclosure involved a good deal of paperwork, most of it providing information so vague it was useless—which left little incentive to go after nonfilers. In an effort to encourage greater union transparency, Congress during the Clinton administration mandated that the completed LM-2 forms be available online. It was left to George W. Bush’s secretary of Labor, Elaine Chao, however, to actually enforce this—and to require more detail into the bargain. The new, more elaborate reports are now available and searchable online as soon as a union files electronically.

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