Sen. Cornyn: Administration Makes It Easier For Union Bosses To Take Advantage Of Rank And File Members

U.S. Sen. John Cornyn, R-Texas, today led an effort to send a letter to Department of Labor Secretary Hilda Solis requesting the administration not rescind a rule requiring increased transparency in labor organization annual financial reports, which is intended to help root out corruption and fraud. It has been reported that there have been many accounts of unions abusing the funds of its rank and file members, and the new rule called for more information from union leaders. Twenty-nine Senate Republicans joined Sen. Cornyn in urging the Administration to keep the important law in place.

“It is troubling that the Administration would decide that now, of all times, is a good time to eliminate investigations of financial corruption. I would hope that the American people can trust that their government would aggressively pursue financial fraud and corruption without regard to political constituency. It is my hope that the Administration will see the error of their ways and reconsider their decision to rescind such important regulations. If they do not, union bosses will be free to run roughshod over rank and file members who have no way of knowing how their hard-earned dues are being spent,” Sen. Cornyn said.

The letter was signed by the following Senators: Alexander, Barrasso, Bennett, Bond, Brownback, Burr, Coburn, Cochran, Collins, Corker, Cornyn, Crapo, DeMint, Ensign, Enzi, Graham, Grassley, Hatch, Isakson, Kyl, Lugar, McCain, McConnell, Murkowski, Risch, Shelby, Snowe, Thune, Vitter and Wicker.

--The full text of Sen. Cornyn’s letter is below--

The Honorable Hilda Solis
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, D.C. 20210

Dear Secretary Solis:

We are deeply troubled by the Department’s recent Notice of Proposed Rulemaking to withdraw the final rule (74 FR 5899) concerning labor organization annual financial reports required by law. Given recent media accounts of unions abusing the funds of rank and file union members, we believe it is essential that meaningful reforms intended to make unions more accountable to their members not be undone.

Your decision to withdraw the rule is alarming, particularly in light of the successful efforts of the Department’s Office of Labor-Management Standards (OLMS) investigations of corrupt behavior. Since 2001, OLMS investigations have yielded a total of 972 indictments with 905 convictions and returned more than $88 million in restitution to rank-and-file union members. During FY 2008, OLMS secured 131 indictments and 103 convictions against union officials and related parties for crimes, such as fraud and embezzlement. Nevertheless, on average, over a third of all unions fail to comply with existing requirements to file annual financial disclosure reports on time. Without these reports, union organizations have no accountability and rank and file members are left with no information about how their hard-earned dues have been spent.

Moreover, by offering your agency greater flexibility in ensuring that labor unions provide adequate disclosure of their financial transactions, the final rule would empower rank and file members, giving them the necessary tools for exercising union democracy. The final rule would also ensure that large labor organizations, the thousands of unions that have reported annual receipts of over $250,000, remain accountable to their membership. Specifically, the rule would require disclosure of the total compensation package for union officers and employees.

Finally, we are concerned that the abbreviated comment period violates the spirit of the Administrative Procedures Act and stands in sharp contrast to the lengthy, multi-year process the Department followed when it completed promulgating these regulations earlier this year. At a time when the President and Congress have called for greater transparency in corporate financial disclosures, it seems inconsistent and imprudent to discount the unions’ fiduciary responsibilities to their members as well as their civic responsibilities. Given the public’s concern over private sector executive compensation, we are stunned that the Administration would appear so tone deaf to the hypocrisy of making it easier for union organizations to conceal the total compensation paid to their leadership.

We strongly urge you to reconsider your decision to rescind these regulations.



Sen. Cornyn serves on the Finance, Judiciary and Budget Committees. He serves as the top Republican on the Judiciary Committee’s Immigration, Refugees and Border Security subcommittee. He served previously as Texas Attorney General, Texas Supreme Court Justice, and Bexar County District Judge.