Sec. Chao criticizes House for cutting union oversight funds

Department of Labor Secretary Elaine Chao is criticizing a House vote that cuts funding for an agency that oversees union financial disclosures and is aimed at preventing union corruption.

The House effectively approved cuts to the budget for the Office of Labor-Management Standards (OLMS) late Tuesday night when it rejected an amendment from Rep. John Kline (R-Minn.) that would have restored the budget to its current level. Kline’s amendment was defeated 186-237 on a mostly party-line vote, with eight Democrats breaking ranks.

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The underlying bill is still being debated.

Particularly irksome to Chao was that the House appropriations bill otherwise would increase funding for the Department of Labor by $935 million.

OLMS is the only part of the Department of Labor (DoL) receiving a funding cut. The House bill would reduce its funding to $45.7 million from $47.8 million — significantly lower that the president’s requested budget of $56.9 million.

The Office of Management and Budget Tuesday released a Statement of Administration Policy (SAP) that said President Bush would veto the appropriations bill for DoL Health and Human Services and Education and Related Agencies because it would exceed his budget request by $11 billion.

In an op-ed e-mailed to reporters, Chao criticized Congress for being “all for boosting the Securities and Exchange Commission’s [SEC] budget so it can ride herd on businesses.” In contrast, she said, Congress had singled out the one federal entity charged with protecting union members from corruption for budget cuts.

The House Financial Services appropriations bill, approved on June 28, provided an additional $15.9 million to the SEC’s budget, $3.1 million more than requested by Bush.

After the vote on Kline’s amendment, Chao charged that the House action would “impede effective enforcement of the law that protects union democracy and financial integrity for rank-and-file members.”

The SAP also criticized the OLMS cut, saying it would “seriously weaken the agency’s ability to improve union transparency and strengthen financial integrity.”

Labor unions say the shift in funding simply reflects that Democrats want to rebalance budgetary cuts the administration made to Labor when Republicans ruled the Hill. They say worker enforcement offices within labor were reduced over the past six years even as the administration increased funding for OLMS.

“The department has consistently fought increases in its core enforcement powers while increasing the budget for OLMS,” an associate general counsel to the AFL-CIO, Deborah Greenfield, said.

For example, Greenfield said the administration reduced the budget for Labor’s wage and hour division, which investigates complaints that employers are not paying overtime pay, by 5 percent from 2001 to 2007. She said funding for the Workforce Investment Act, which houses DoL worker-training programs, was cut by 21 percent over that period, while funds for Labor’s employment service, which helps unemployed workers find new jobs, were reduced by 25 percent.

In the view of unions, the restoration of funding provided in the DoL appropriations bill for fiscal 2008 merely restores funding that shouldn’t have been cut by the administration during the previous half-decade.

DoL, however, argues funding for all labor enforcement agencies has increased over the last six years in terms of actual dollars. “Specifically, the wage and hour budget has increased by 12 percent,” a DoL spokesperson said.

DoL officials argue there are convincing reasons to increase the OLMS budget. For example, DoL reports that 15,800 unions have filed disclosure reports on their finances, but only 4.6 percent have been audited because of OLMS’s limited resources. Increased funding could allow more audits, which could lead to more findings of malfeasance.

Since 2001, OLMS investigations have increased by 20 percent, according to DoL, and convictions are up 26 percent. Courts have ordered the restitution of more than $70 million in union member dues that DoL says were stolen by union officials. OLMS also obtained 760 convictions of union officers and employees, according to information from DoL.

Unions take exception to some of the numbers floated by DoL, as well as the effectiveness of OLMS. “The statistics are cooked,” Greenfield said.

She said DoL counts different actions in a single case as separate counts in order to make union corruption appear more rampant than it actually is.

According to a study by the AFL-CIO, less than four-one hundredths of 1 percent of union officials are guilty of crimes against their unions, Greenfield said.

Democrats who voted for the Kline amendment were Reps. Dan Boren (Okla.), Bud Cramer (Ala.), Lincoln Davis (Tenn.), Brad Ellsworth (Ind.), Tim Mahoney (Fla.), Mike McIntyre (N.C.), Harry Mitchell (Ariz.) and Heath Shuler (N.C.)
Sixteen Republicans voted against the Kline amendment, including Reps. Mark Kirk (Ill.), Ray LaHood (Ill.) and Christopher Shays (Conn.).