The Obama administration, which has boasted about its efforts to make government more transparent, is rolling back rules requiring labor unions and their leaders to report information about their finances and compensation.
The Labor Department noted in a recent disclosure that “it would not be a good use of resources” to bring enforcement actions against union officials who do not comply with conflict of interest reporting rules passed in 2007. Instead, union officials will now be allowed to file older, less detailed conflict reports.
The regulation, known as the LM-30 rule, was at the heart of a lawsuit that the AFL-CIO filed against the department last year. One of the union attorneys in the case, Deborah Greenfield, is now a high-ranking deputy at Labor, who also worked on the Obama transition team on labor issues.
Labor officials declined to say whether she played a role in the new policy, noting that Ms. Greenfield is abiding by all government ethics rules. In court filings, she and other union attorneys called the 2007 rules “onerous.”
The Labor Department also is rescinding another key labor financial disclosure regulation. The expansion of the so-called LM-2 rule, approved during the last days of the Bush administration, requires unions to report more information about finances and labor leaders’ compensation on annual reports.
Critics worry that the rollback of union reporting requirements will keep hidden potentially corrupt financial arrangements aimed at rooting out corruption, but unions say the Bush administration reporting rules were unfair and burdensome.
“Strong financial disclosure requirements are necessary to root out and combat union-related corruption,” Rep. Howard P. “Buck” McKeon, California Republican, and Rep. John Kline, Minnesota Republican, wrote in a recent letter to the department.
Sen. John Cornyn of Texas sent the department a similar letter signed by more than two dozen other Republicans.
But Labor Department spokeswoman Gloria Della said Secretary Hilda L. Solis “is committed to strong, fair and balanced enforcement of labor-management reporting laws.” She said the department’s move to rescind the expanded LM-2 financial reporting requirements gives the department “the opportunity to evaluate whether we are taking the best actions toward that goal.”
The department declined to comment on the potential for more changes in the financial reporting rules for unions. But officials referred to a lengthy statement the department recently published in the Federal Register.
The statement, by Shelby Hallmark, acting assistant secretary for employment standards, and Andrew D. Auerbach, deputy director for the Office of Labor-Management Standards, deemed it “a mistake” for the Bush administration to propose further changes to LM-2 disclosure regulations. The officials said not enough time had passed since previous reporting rule changes were passed in 2003.
“The department agrees with the contention that financial transparency is necessary to protect against union fraud and corruption and to enhance accountability among union officials, and that it is necessary for members to effectively engage in union-self governance,” the labor regulators wrote.
However, Mark Mix, president of the pro-business National Right to Work Legal Defense Foundation, which provides legal services to workers who say unions have violated their rights, called the rollback of union financial disclosures troubling.
“The department’s decision not to protect simple union disclosure protections creates increased vulnerability for American workers and should serve notice to legislators that now is not the time to grant union bosses more unchecked power over workers and our economy,” he wrote in a recent letter to the department.
He said the AFL-CIO would “benefit greatly” from the delay or rollback of expanded reporting rules. “It immediately allows the AFL-CIO to avoid financial disclosure that is beneficial and necessary to rank-and-file workers who are forced to pay union dues and fees to keep a job,” he said.