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  • REPORT: Why Public Sector Unions Can Easily Break The Law

    Focusing on Michigan, a report released Monday by The Mackinac Center makes the case that there are not adequate laws to stop public sector unions from engaging in illegal activities.

    In many states, like Michigan, and the federal level, public sector union members can be charged hundreds if not thousands of dollars a year in union dues. Unfortunately, as the report “Bringing Financial Transparency to Michigan’s Public Sector Unions,” argues, public sector unions are not held to the same standard of transparency and accountability their private sector counterparts are.

    “This means that public school employees, state and county workers and all the other unionized public employees in Michigan do not have access to detailed financial information about the union to which they pay dues,” the report noted.

    Holding public sector unions to a different standard makes it far less likely to catch them using their funds for illegal purposes. The main issue, according to the report, is that the Labor-Management Reporting and Disclosure Act (LMRDA) of 1959 only applies, for the most part, to private sector unions. The law is the main mechanism in which union members and the public can learn exactly where union funds are being spent.

    “The financial reporting regulations that implement the LMRDA have provided union members, the government and the public a good level of transparency concerning labor organization finances,” the report detailed. “Public sector employees at the state and local level who are union members, however, usually are not afforded this benefit, because the LMRDA’s coverage does not reach them.”

    There are numerous examples of illegal activities from private sector unions getting exposed because of the disclosure requirements.

    “In 2008, Paul Pringle, a writer for the Los Angeles Times, reviewed the financial reports of a large California local labor union, the United Long Term-Care Workers Union,” the report notes. “His research detailed how the union’s president, Tyrone Freeman, had used the union’s funds as his personal piggy bank.”

    “Judy L. Thomas, a reporter for The Kansas City Star, also uncovered misuse of union funds after reading financial disclosure reports. Thomas found that Newton B. Jones, the president of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, a Kansas City union with 59,000 members, received a salary and reimbursements worth more than $600,000 in one year,” the report continued.

    “James Killingsworth, president of Communications Workers of America Local 84555 in Webberville, together with Billie Jo Killingsworth, the union treasurer, embezzled $19,197 by making unauthorized cash withdrawals from ATMs.” the report also listed. “Their acts were discovered, and, upon pleading guilty, each was sentenced to six months in prison.”

    “Similarly, on Jan. 16, 2015, Ann Marie Shaffer of Livonia was sentenced in the U.S. District Court for the Eastern District of Michigan for embezzling union assets,” the report said. “Along with her sentence of 12 months plus one day, she was also ordered to pay restitution of $340,267.28.”

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