- The Washington Times - Thursday, August 1, 2002

We have all heard of the corporate misdeeds at Enron, Global Crossing, Arthur Anderson and Citigroup. It's hard to miss. Screaming headlines in daily papers and breathless coverage by network and cable news programs have made sure everyone knows about these unethical and potentially criminal acts.

To paraphrase Martha Stewart, that's a good thing. The media have a duty to ensure that Americans, particularly stockholders, understand the issues involved in the revelations about these accounting scandals and fishy loans.

But the media are fundamentally failing the public on another breeding ground for corruption; the widespread financial fraud and shady accounting practices of labor union bosses.

This is an egregious oversight. Evidence abounds that embezzlement, corruption and crooked bookkeeping is more widespread in union halls than in corporate boardrooms.

In fact, records from the Department of Labor's Office of Labor Management Standards, show that various labor union officials have been indicted for corruption, fraud and financial misdeeds at a rate of 12 new indictments and 11 convictions every month for the past four years.

This issue is rarely, if ever, covered by major media outlets.

This lack of media interest in corrupt labor bosses, combined with the Democratic leadership's fealty to Big Labor, ensures that millions of rank-and-file union members have no clue about how the tens of millions of dollars in dues they are forced to pay every year are being misspent by union bosses.

Given the widespread corruption among union bosses, union members clearly need the same protections Congress has recently provided to corporate shareholders.

One senator has a plan to protect these hard-working Americans. During the Senate debate over the recently passed corporate fraud bill, Sen. Mitch McConnell, Kentucky Republican, led an effort to hold union bosses accountable for the union dues they oversee.

While this effort failed in the Senate on a mostly party line vote, the issue deserves reassessment and a full public hearing.

Mr. McConnell's amendment has three basic points. First, it would require independent audits of union funds. This would ensure the average longshoreman or steelworker that his union hadn't recklessly overinvested in a fly-by-night dot-com or telecom stock and that no one in the leadership of the union was stealing their hard-earned money.

Second, Mr. McConnell's amendment would create civil and financial penalties for violating the auditing requirements. Finally, it would require the president and the secretary of the union to certify the accuracy of the audit.

As Mr. McConnell noted when he introduced the measure, the reason the government requires corporations to file independently audited financial statements was to ensure that shareholders know how their money is being spent.

America's union members deserve the same protections.

Senate Democrats argued the measure was pointless because the Labor Department can conduct enforcement audits. Indeed, DOL does have that power. Unfortunately, the ability of DOL to conduct audits has been severely limited in the past few years. DOL audits of labor union finances dropped from 1,583 in 1984 to a meager 238 last year. Democrat appropriators clearly do not intend to see the number of audits rise.

To make matters worse, Sen. Tom Harkin, Iowa Democrat, is leading an effort to halt the DOL from making any changes to the current union financial filing forms. Labor Secretary Elaine Chao's office is seeking these changes because it would make it easier for investigators to identify fiscal practices worthy of further investigation.

The message Senate Democrats are sending to America's workers is clear; union bosses are too politically important to be held accountable when they embezzle money from their own workers.

America does not need more embezzlement and further misuse of worker's hard-earned money. In the words of Mr. McConnell, "we can extend to American workers the same financial protection offered to corporate shareholders, or we can extend to unions the ability to continue to pilfer and profit off the worker's money."

Democratic senators unfortunately chose the latter option.

When he ran for president, Al Gore repeatedly claimed he stood for "the people, not the powerful." There is no doubt that corporate CEOs are powerful and that they should be punished if they engage in fraudulent bookkeeping. It's too bad the party of Al Gore, Tom Daschle and Richard Gephardt only stands for the people over the powerful when it is politically convenient. America's workers deserve better.

Peter Cleary is deputy director of the American Conservative Union.

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