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Wednesday, March 3, 2021

Union members have a right to see how their money is spent

The holidays just past were a time, as usual, for celebration, family, and finances. You may engage in charitable giving, receive a year-end bonus, or just balance your checkbook.

If you’re a union member, though, don’t forget that your union leadership is doing the same. This is the season that unions wrap up their end-of-year credit card summaries, which detail every expense they’ve paid out.

You have a right to see that document. This is the best tool you have as an individual member to stop fraud and misappropriation.

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Every year, union workers somewhere in the country receive a belated, sheepish email with a demoralizing announcement: There’s been a financial scandal among their leadership. The U.S. Department of Labor tracks hundreds of these situations, but its yearly report on federal crimes by union officials doesn’t measure the damage these breaches of trust cause among the rank and file.

Nor does the Labor Department track noncriminal actions that still constitute ethical violations. Misuse of funds, because it is not technically embezzlement, can escape the gaze of law enforcement and Labor. Also, each year, crimes settled “in house” through quiet repayments or resignations go unreported to avoid public scrutiny.

The only way to catch these disasters before they implode is to scrutinize your union’s credit card records.

The bigger the scandal, the more power must be exercised to hide it. The biggest frauds and embezzlements occur in the highest ranks of union leadership. When president of the International Association of Fire Fighters Harold Schaitberger was accused of taking millions from firefighters’ pensions this year, I and my fellow IAFF members were frustrated but not surprised. Schaitberger has worked for years to consolidate power, lining up yes men and demonizing detractors and whistleblowers.

Thankfully, the FBI and other agencies cracked down on Schaitberger, but the scandal sent me searching for ways that members in other unions can keep their leaders accountable. I served as a treasurer and then as a local president of a union in a large city. I know firsthand that union leaders seldom favor transparency. Instead, they add layers of bureaucracy to hinder members’ ability to see how their dues are being spent. But members have a right to know, and the credit card end-of-year statement is the right tool to find out.

Most unions’ bylaws give each member the right to access and review the union’s financial documents. Even union locals that don’t specify an individual’s right to transparency still require their treasurers to issue a financial report at each meeting. Members should ensure this report tells the whole truth by moving to post these raw financial records online or to make them somehow accessible for review. Union leaders often deflect members’ concerns by claiming their books were audited, but third-party financial audits are not always as complete or creditable as you would think.

I used to believe that a financial audit was the cure-all to root out impropriety and corruption, but I was wrong. I was recently involved in a lawsuit with the help of the Fairness Center against my statewide union affiliate, and we uncovered, as the judge noted, “questionable expenditures from the state union, including personal travel that may not have been reimbursed, suspicious ‘mistakes’ with PAC fund balances, and the admission of a plainly improper loan that the state union took (and repaid) from its charitable affiliate.” Even after records were audited, irregularities remained, such as suspicious mileage and expense charges, including travel expenses for the union president’s girlfriend to St. Croix, Miami, and Hawaii on the members’ dime, all uncovered in court. There was no direct evidence offered in court that he ever repaid the union.

Audits are not an exact science, and smart accountants can make complex records look presentable to union members, even when they aren’t. But credit card statements are the one type of record that every local, state, or national labor leader hopes you won’t request — and you absolutely should request them every year. This list of expenses on these documents cannot be sugar-coated or covered up. It provides true transparency and allows honest questions to be asked.

In Pennsylvania, transparency advocates have petitioned the Office of Labor-Management Standards to require that unions in the state make these vital accountability documents public. In a public submission, it recommends “improving reporting for indirect disbursement for travel-related expenses made with a union credit card.”

Did your leadership jet around the country on “business meetings,” staying in five-star hotels? Did they host the yearly “labor conference” in Tahiti or send their girlfriends to the Caribbean? Did they regularly rack up thousands of dollars in restaurant and bar tabs? Were member dues used for golf or tickets to Broadway plays, concerts, and sports events?

If so, you’d probably like to know. Misuse of funds may not always be illegal or result in a federal investigation like Schaitberger’s, but every member deserves transparency about expenses like these. Until the Office of Labor-Management Standards requires that they be public, members can still request these credit card records and find out what their leadership is really up to.

Frank Ricci is a labor and membership specialist for Americans for Fair Treatment and a retired battalion chief and union president for New Haven Fire Fighters. He was the lead plaintiff in the 2009 Supreme Court case Ricci v. DeStefano.



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