- The Washington Times - Monday, April 27, 2009

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.

Jim Coppess, associate general counsel for the AFL-CIO, discounted the criticism. He said the Labor Department’s recent moves did nothing to affect the transparency of union financial reports or the ability of federal regulators to monitor expenditures.

“All the department has done is propose the withdrawal of a rule hastily adopted on the very last day of the Bush administration and an examination of the actual costs and benefits of extensive reporting requirements imposed on unions in 2003 as the basis for possible future changes,” he wrote in an e-mail to The Washington Times.

Ms. Greenberg’s new role at Labor has prompted Mr. Mix and his group to file a Freedom of Information Act request seeking details about whether she or any other union leaders played a role in the union’s financial disclosure policies.

Ms. Greenfield declined an interview request, although Labor Department spokeswoman Amy Louviere said she is “complying with the president’s ethical guidelines.”

Last year, Ms. Greenfield and AFL-CIO attorneys sued Labor, saying the new conflict of interest forms would force thousands of unpaid union shop stewards to report detailed information about their finances to the department each year.

“Treating individuals, such as shop stewards, who are not on their union’s payroll as ‘employees of a labor organization’ sweeps tens of thousands of rank and file union members” into the new reporting requirements, Ms. Greenfield and other union attorneys argued in a 51-page court filing.

Under the Bush administration, the department defended the rules in court. In court filings, government attorneys argued that the new rules were needed to “bring to light a wide variety of financial transactions and arrangements - whether proper or improper - that pose conflicts of interest arising from the relationships between unions, their officers and employees, employers and businesses.”

Ms. Greenfield’s job transfer is one of several appointments that suggest organized labor will hold much greater sway in the Obama administration than during the Bush years. Organized labor, which spent tens of millions of dollars helping to elect Barack Obama as president, has other likely allies, including:

• Patrick Gaspard, White House political affairs director, who worked at the Service Employees International Union.

• T. Michael Kerr, who served as assistant to the secretary-treasurer at SEIU in charge of finance and administration before he was picked to serve as assistant secretary for administration and management at Labor.

In her new job, Ms. Greenfield is in charge of the department’s executive secretariat office, which handles incoming correspondence to Ms. Solis, as well as memoranda and other documents from throughout the department.

• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.

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