Did SEIU’s Andy Stern Violate Federal Conflict of Interest Reporting Laws, the Same Regs that the Obama Labor Department is Repealing?

The Labor-Management Disclosure and Reporting Act (LMRDA) requires labor union officials to report potential or certain conflict-of-interests they might encounter if they receive gifts or cash payments from employers. Service Employees International Union (SEIU) President Andrew Stern may be in violation of that requirement since he has not filed a report disclosing $140,000 in advance payments from publisher and service industry employer Simon & Schuster.

In addition to this, documents made public during an intra-union California lawsuit and obtained by a “BigGovernment researcher” (posted on NRTWC.org's Scribd, seen below) reveal that SEIU Treasurer Anna Burger recommended that the union use general treasury money, much collected from employees as a condition of employment, to promote Stern’s book, A Country that Works.

It’s not as if Stern has never filed a conflict-of-interest disclosure report; in fact, he has filed two in 2004 and one in 2005. But, why has he not filed any reports related to his special book deal?

SEIU President Andy Stern's Book Advance and Past Conflict of Interest Reports (LM-30s)

Unfortunately for rank and file workers forced to pay dues or fees to the SEIU, rather than spending its resources investigating potential LMRDA violations, the Obama Labor Department (DOL) is busy rescinding conflict-of-interest and other union financial reporting requirements.



When President John F. Kennedy, then a U.S. Senator, introduced the bill that would become the LMRDA, Kennedy said:
The committee-reported bill is based on the legislation approved by the Senate last year and thus it too implements the remaining recommendations of the McClellan committee. In brief, the bill, S. 1555, would accomplish the following: (1) Full reporting and public disclosure of union internal processes; (2) Full reporting and public disclosure of union financial operations;... (4) Criminal penalties for failure to make such reports or for filing false reports; (5) Criminal penalties for false entries in and destruction of union records; (6) Full reporting and public disclosure of financial transactions and holdings, if any, by union officials which might give rise to conflicts of interest...

The Congress should check the abuses in order to foster the national labor policy. The Government which vests in labor unions the power to act as exclusive bargaining representative must make sure that the power is used for the benefit of workers and not for personal profit.

The committee bill attacks the problem by requiring union officers and employees to file reports with the Secretary of Labor disclosing to union members and the general public any investments or transactions in which their personal financial interests may conflict with their duties to the members. ... The bill is drawn broadly enough, however, to require disclosure of any personal gain which an officer or employee may be securing at the expense of their union members.

The LMRDA specifically requires labor bosses like Stern to disclose “any payment of money or other thing of value (including reimbursed expenses) which he or his spouse or minor child received directly or indirectly from any employer.” The exceptions under the LMRDA do not apply to Stern’s payments from Simon & Schuster.

President Obama and his Secretary of Labor Hilda Solis are busy undermining the intent of the LMRDA. For example, Obama’s Labor Department rescinded disclosure of union bosses’ perks in mid-October. And, the Labor Department publicly states that it intends to rescind conflict-of-interest disclosure and eliminate teacher union financial disclosure.

Kennedy’s introduction continued:
The financial conduct of labor unions and their officers is a proper concern of the Federal Government. This is so because the funds that pass through union treasuries and for which unions and their officers are responsible are very large, and the uses to which these funds are put have a substantial impact on the Nation's economy.

Furthermore, if unions are to enjoy [forced union monopolistic] rights such as are guaranteed to them by the National Labor Relations Act and the Railway Labor Act, they ought also to be held responsible for abuses that have accompanied the exercise of these rights by some union leaders...

If any person who is required to make a report under this title fails to file or files a report which the Secretary of Labor believes is incomplete or false, the Secretary is directed to institute a full investigation armed with the power of subpoena...

Furthermore, if any union officer is convicted under these sections~ the labor organization is required by section 305(b) to remove him. If the union fails, it is subject. to criminal prosecution under section 305(c). The committee bill also forbids payment of fines or defense costs by a labor organization or employer for a person indicted or convicted of a violation of the act...

RACKETEERING, CORRUPTION, AND CONFLICTS OF INTEREST Widespread public concern over internal conditions in labor unions has resulted from sensational stories about the activities of criminal elements who forced their way into the labor movement and exploited the workers whom they pretended to serve...

Racketeering, crime, and corruption must be stamped out in the labor and management field as elsewhere. The committee bill carries strong measures for driving criminals from labor unions. Its provisions will also bring to light possible conflicts of interest and similar shadowy transactions through which unscrupulous union officials and employers sacrifice the welfare of employees to personal advantage.

Until the power to force workers, against their will, to pay dues to a labor union in order to keep or get a job is abolished, Big Labor Bosses should be held to the standards of the LMRDA. Will the DOL uphold these rules? The Obama Administration’s rescissions of union financial disclosure make it easier for union bosses to conceal their perks and insider deals. If DOL will not enforce the rules should we expect union bosses to follow them?

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