Obama: Labor Friendly, or Worker Friendly?

Combing through government disclosure documents that unions are required to file, the Los Angeles Times discovered last year that one of California’s most powerful labor groups and a charity related to it had made hundreds of thousands of dollars in payments to companies controlled by relatives of the union’s president. The union, the United Long-Term Care Workers, also spent tens of thousands of dollars of members’ money at fashionable establishments like the Grand Havana Room, a cigar lounge known for its celebrity clientele.

The outcry over the Times pieces forced an investigation by the local union’s national parent, the Service Employees International Union, which eventually removed the local president from office. The whole affair represented an embarrassment to SEIU because the local’s members, who typically earn about $9 an hour, weren’t happy to learn how union leaders were spending their dues.

In its investigations, the Times relied partially on government disclosure documents that the Bush Department of Labor had introduced a few years earlier, which require labor organizations to give more detail about how they spend members’ money. The new forms require all unions with annual receipts larger than $250,000 to offer their members details on everything from fundraising expenditures to political campaign outlays to donations to what it costs to run the union’s annual convention.

While most of the revelations weren’t as explosive as those uncovered by the Times, the disclosure forms filed by other big labor groups provided grist for controversy. The National Education Association’s initial disclosure forms, for instance, showed that it made a whopping $65 million in gifts and donations to groups, including many to organizations whose mission has little to do with K-through-12 education, such as the Human Rights Campaign, which lobbies for "lesbian, gay, bisexual and transgender equal rights." Among those education groups that did get funding, many had a decidedly narrow political mission, such as Protect Our Public Schools, a Washington-state based group that was opposing the school choice movement with help from a $500,000 grant from the NEA.

Unions heavily supported Barack Obama in his presidential bid, and much of their support hinged on his backing of labor-friendly initiatives, most especially the controversial Employee Free Choice Act, which would eliminate secret ballots for union elections. When she went before Congress for confirmation hearings, Obama’s choice to head the Department of Labor, California Congresswoman Hilda Solis, was grilled about her position on EFCA and other laws of interest to the labor movement.

But significant changes in White House policy can occur administratively as well as legislatively. Our cabinet-level departments, in particular, wield important administrative powers, and often what is done, or undone, by a new cabinet officer without the slightest legislative initiative is as significant as what gets debated and passed in Congress.

The new disclosure rules fall into that category. Since organized labor spent about $100 million of members’ dues helping to elect Obama and supporting Democrats in Congress, the AFL-CIO and other unions have provided Obama with a lengthy list of things they would like done for them in Washington. And high on that list is undoing some of the disclosure requirements put in place during the Bush years. Without any debate in Congress, an Obama Labor Department could rescind them. Of it could simply not enforce them. As any investigative reporter will tell you, businesses and nonprofit groups often fail to file their required documents without being held accountable.

How the Obama administration treats the disclosure requirements will say a lot about what kind of Labor Department it will run. The Bush administration liked to accuse the DOL of becoming the Department of Organized Labor during the Clinton years because of its pro-union rulings. Union groups, by contrast, accused the Bush DOL of acting like a tool of big business.

Left out of this debate were the interests of ordinary workers. One could argue about whether the EFCA or minimum wage legislation serves the ordinary worker or not. But it’s difficult to question the importance of the Department of Labor’s transparency regulations in allowing ordinary union members to see more clearly how their money is being spent, without in any way affecting the balance of power between unions and businesses.

How the Obama administration handles the transparency regulations will tell us more about its government philosophy than any legislation it puts before Congress. Will Obama run a Department of Labor for the benefit of all workers, or a Department of Organized Labor that curries favor with those who run unions, even if it’s at the expense of their rank and file members? We will know shortly.