Bush’s union transparency rules retracted under Obama

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The Labor Department requires the officials and employees to file the LM-30 statements if they receive any income or economic benefit from any entity that does business with the union or with an employer of union members.

Until Mrs. Chao cracked down in 2005, records show, few union leaders or employees bothered to file the form, although the filing requirement has been on the books for decades.

“There was no compliance and no enforcement,” Mrs. Chao said of the LM-30 filings.

In 2005, she said the department would start enforcing the rule with the 2004 reports and offered amnesty to first-time filers. As a result, filings were submitted by 13,326 union officials or employees, compared with 96 the previous year. Mrs Chao then updated the rule and expanded the form, which had been the same for 40 years, requiring more people to file and increasing the detail that had to be disclosed.

The new reports, covering 2008, were due in 2009.

But in 2009, the Labor Department backed off the new LM-30 filing requirement, saying the union leaders and employees could file the older, less-detailed version because of pending litigation and unanswered questions over the new reporting requirements.

The department said, “It would not be a good use of resources to bring enforcement actions” based on failing to file one version of the form over another. For now, union officials and employees can file either version of the form.

Mrs. Solis said at the February subcommittee hearing that the department was reviewing the expanded LM-30 form as proposed by the Bush administration. The Labor Department is expected to modify the rule.

T-1 filings

In February, the Obama administration also proposed rescinding a Bush plan to get annual financial disclosures from union trusts - organizations set up primarily to provide member benefits such as training and apprenticeship programs, building funds and strike funds.

Some of the trusts originally were known as “nickel funds” because employers would contribute 5 cents for every hour a union member worked. A number of the funds have grown to be multimillion-dollar enterprises as the amount of the contributions from employers has increased as part of collective bargaining agreements.

In December 2002, the Bush administration proposed a rule making the trusts file annual reports known as the T-1, similar to union reports detailing how much money they had and itemizing how they spent it. The AFL-CIO twice challenged the proposed rule in court, forcing the Labor Department to make changes and delay its implementation.

The first T-1 reports, covering 2009, were due at the end of March until the Obama Labor Department moved to rescind the rule.

“Basically, labor organizations file no financial reports on how these funds are spent,” said Mrs. Chao. “There is no accountability.”

The trusts have not been subject to any significant disclosure requirements other than having to file and make public their 990 federal income tax returns as nonprofits. Such tax returns often take years to become public and do not require details on how the money was spent.

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