RECORD-KEEPING UNDER THE

LABOR-MANAGEMENT REPORTING AND DISCLOSURE 

ACT (LMRDA): 

 DO DOL REPORTING SYSTEMS BENEFIT THE RANK 

AND FILE?

JOINT HEARING 

BEFORE THE 

SUBCOMMITTEE ON WORKFORCE PROTECTIONS 

AND THE 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS 

OF THE 

COMMITTEE ON EDUCATION AND 

THE WORKFORCE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

HEARING HELD IN WASHINGTON, DC, APRIL 10, 2002 AND JUNE 27, 2002 

Serial No. 107-55 

Printed for the use of the Committee on Education 

and the Workforce 

U.S. GOVERNMENT PRINTING OFFICE 

WASHINGTON : 2002 

81-194 pdf 

For sale by the Superintendent of Documents, U.S. Government Printing Office 

Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 

 Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 
ii

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN A. BOEHNER, Ohio, Chairman 

THOMAS E. PETRI, Wisconsin GEORGE MILLER, California 

MARGE ROUKEMA, New Jersey DALE E. KILDEE, Michigan 

CASS BALLENGER, North Carolina MAJOR R. OWENS, New York 

PETER HOEKSTRA, Michigan DONALD M. PAYNE, New Jersey 

HOWARD P. “BUCK” McKEON, California PATSY MINK, Hawaii 

MICHAEL N. CASTLE, Delaware ROBERT E. ANDREWS, New Jersey 

SAM JOHNSON, Texas TIM ROEMER, Indiana 

JAMES C. GREENWOOD, Pennsylvania ROBERT C. “BOBBY” SCOTT, Virginia 

LINDSEY O. GRAHAM, South Carolina LYNN C. WOOLSEY, California 

MARK E. SOUDER, Indiana LYNN N. RIVERS, Michigan 

CHARLIE W. NORWOOD, JR., Georgia RUBEN HINOJOSA, Texas 

BOB SCHAFFER, Colorado CAROLYN McCARTHY, New York 

FRED UPTON, Michigan JOHN F. TIERNEY, Massachusetts 

VAN HILLEARY, Tennessee RON KIND, Wisconsin 

VERNON J. EHLERS, Michigan LORETTA SANCHEZ, California 

THOMAS G. TANCREDO, Colorado HAROLD E. FORD, JR., Tennessee 

JIM DeMINT, South Carolina DENNIS KUCINICH, Ohio 

JOHNNY ISAKSON, Georgia DAVID WU, Oregon 

BOB GOODLATTE, Virginia RUSH D. HOLT, New Jersey 

JUDY BIGGERT, Illinois HILDA L. SOLIS, California 

TODD RUSSELL PLATTS, Pennsylvania SUSAN DAVIS, California 

PATRICK J. TIBERI, Ohio BETTY McCOLLUM, Minnesota 

 RIC KELLER, Florida 

 TOM OSBORNE, Nebraska 

 JOHN ABNEY CULBERSON, Texas 

VACANCY

Paula Nowakowski, Chief of Staff 

 John Lawrence, Minority Staff Director

SUBCOMMITTEE ON WORKFORCE PROTECTIONS 

CHARLIE NORWOOD, Georgia, Chairman

JUDY BIGGERT, Illinois, Vice Chairman MAJOR R. OWENS, New York

CASS BALLENGER, North Carolina DENNIS KUCINICH, Ohio 

LINDSEY O. GRAHAM, South Carolina PATSY T. MINK, Hawaii 

JOHNNY ISAKSON, Georgia LYNN C. WOOLSEY, California 

BOB GOODLATTE, Virginia LORETTA SANCHEZ, California 

RIC KELLER, Florida HILDA L. SOLIS, California 

JOHN ABNEY CULBERSON, Texas 

 SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS 

 SAM JOHNSON, Texas, Chairman

JOHN BOEHNER, Ohio ROBERT E. ANDREWS, New Jersey

MARGE ROUKEMA, New Jersey DONALD M. PAYNE, New Jersey 

CASS BALLENGER, North Carolina DALE E. KILDEE, Michigan 

PETER HOEKSTRA, Michigan LYNN N. RIVERS, Michigan 

HOWARD P. “BUCK” McKEON, California CAROLYN McCARTHY, New York 

THOMAS G. TANCREDO, Colorado JOHN F. TIERNEY, Massachusetts 

JIM DeMINT, South Carolina HAROLD E. FORD, Jr., Tennessee 

PATRICK J. TIBERI, Ohio 

VACANCY
iii

Table of Contents 

OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, SUBCOMMITTEE ON 

EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON EDUCATION AND THE 

WORKFORCE ............................................................................................................................... 2

OPENING STATEMENT OF RANKING MEMBER ROBERT ANDREWS, 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON 

EDUCATION AND THE WORKFORCE..................................................................................... 3

OPENING STATEMENT OF CHAIRMAN CHARLIE NORWOOD, SUBCOMMITTEE ON 

WORKFORCE PROTECTIONS, COMMITTEE ON EDUCATION AND THE WORKFORCE

........................................................................................................................................................ 5

OPENING STATEMENT OF RANKING MEMBER MAJOR OWENS, SUBCOMMITTEE 

ON WORKFORCE PROTECTIONS, COMMITTEE ON EDUCATION AND THE 

WORKFORCE ............................................................................................................................... 7

STATEMENT OF D. CAMERON FINDLAY, DEPUTY SECRETARY OF LABOR, U.S. 

DEPARTMENT OF LABOR, WASHINGTON, D.C. .................................................................. 9

STATEMENT OF ROBERT FITCH, FREELANCE REPORTER, NEW YORK, NY ............. 32

STATEMENT OF JAMES B. COPPESS, ASSOCIATE GENERAL COUNSEL, AFL-CIO, 

WASHINGTON, D.C................................................................................................................... 34

STATEMENT OF PHILLIP WILSON, VICE PRESIDENT AND GENERAL COUNSEL, LRI 

MANAGEMENT SERVICES, INC., TULSA, OK ..................................................................... 36

APPENDIX A - WRITTEN OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON 

EDUCATION AND THE WORKFORCE................................................................................... 47

APPENDIX B - WRITTEN OPENING STATEMENT OF CHAIRMAN CHARLIE 

NORWOOD, SUBCOMMITTEE ON WORKFORCE PROTECTIONS, COMMITTEE ON 

EDUCATION AND THE WORKFORCE................................................................................... 51

APPENDIX C - WRITTEN STATEMENT OF D. CAMERON FINDLAY, DEPUTY 

SECRETARY OF LABOR, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C. .......... 57

APPENDIX D - WRITTEN STATEMENT OF ROBERT FITCH, FREELANCE REPORTER, 

NEW YORK, NY ......................................................................................................................... 65
iv

APPENDIX E - WRITTEN STATEMENT OF JAMES B. COPPESS, ASSOCIATE GENERAL 

COUNSEL, AFL-CIO, WASHINGTON, D.C............................................................................. 71

APPENDIX F - WRITTEN STATEMENT OF PHILLIP WILSON, VICE PRESIDENT AND 

GENERAL COUNSEL, LRI MANAGEMENT SERVICES, INC., TULSA, OK...................... 79

APPENDIX G – SUBMITTED FOR THE RECORD, LETTER FROM D. CAMERON 

FINDLAY, DEPUTY SECRETARY OF LABOR, U.S. DEPARTMENT OF LABOR, TO 

CHAIRMAN SAM JOHNSON, SUBCOMMITTEE ON EMPLOYER-EMPLOYEE 

RELATIONS, AND (DUPLICATE) CHAIRMAN CHARLIE NORWOOD, SUBCOMMITTEE 

ON WORKFORCE PROTECTIONS, COMMITTEE ON EDUCATION AND THE 

WORKFORCE, MAY 17, 2002................................................................................................. 113

APPENDIX H – SUBMITTED FOR THE RECORD, LETTER FROM JOHN BOEHNER, 

CHAIRMAN, COMMITTEE ON EDUCATION AND THE WORKFORCE, CHAIRMAN 

CHARLIE NORWOOD, SUBCOMMITTEE ON WORKFORCE PROTECTIONS AND 

CHAIRMAN SAM JOHNSON, SUBCOMMITTEE ON EMPLOYER-EMPLOYEE 

RELATIONS, TO THE HONORABLE ELAINE CHAO, SECRETARY OF LABOR, JULY 10, 

2001, AND RESPONSE FROM DON TODD, DEPUTY ASSISTANT SECRETARY OF 

LABOR, EMPLOYMENT STANDARDS ADMINISTRATION, OFFICE OF LABORMANAGEMENT STANDARDS, U.S. DEPARTMENT OF LABOR, AUGUST 15, 2001.... 121

APPENDIX I – SUBMITTED FOR THE RECORD, UNITED STATES GENERAL 

ACCOUNTING OFFICE, REPORT TO THE CHAIRMAN, SUBCOMMITTEE ON 

EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON EDUCATION AND THE 

WORKFORCE, DEPARTMENT OF LABOR, ADMINISTERING THE LABORMANAGEMENT REPORTING AND DISCLOSURE ACT, JUNE 2000, GAO/HEHS-00-116

.................................................................................................................................................... 151

APPENDIX J – SUBMITTED FOR THE RECORD, U.S. DEPARTMENT OF LABOR, 

EMPLOYMENT STANDARDS ADMINISTRATION, OFFICE OF LABOR-MANAGEMENT 

STANDARDS, PUBLIC DISCLOSURE UNDER THE LMRDA, www.dol.gov/esa, 4/4/2002

.................................................................................................................................................... 231

APPENDIX K – SUBMITTED FOR THE RECORD, U.S. DEPARTMENT OF LABOR, 

EMPLOYMENT STANDARDS ADMINISTRATION, OFFICE OF LABOR-MANAGEMENT 

STANDARDS, COMPLIANCE TIP, DISCLAIMER, RETENTION OF UNION RECORDS, 

www.dol.gov/esa, 4/4/2002 ........................................................................................................ 237

APPENDIX L – SUBMITTED FOR THE RECORD, U.S. DEPARTMENT OF LABOR, 

EMPLOYMENT STANDARDS ADMINISTRATION, OFFICE OF LABOR-MANAGEMENT 

STANDARDS, LMRDA COMPLIANCE, A GUIDE FOR NEW UNION OFFICERS, 

www.dol.gov/esa, 4/4/2002 ........................................................................................................ 241
v

APPENDIX M – SUBMITTED FOR THE RECORD, U.S. DEPARTMENT OF LABOR, 

EMPLOYMENT STANDARDS ADMINISTRATION, OFFICE OF LABOR-MANAGEMENT 

STANDARDS, REPORTS REQUIRED UNDER THE LMRDA AND THE CSRA, 

www.dol.gov/esa, 4/4/2002 ........................................................................................................ 249

Table of Indexes.......................................................................................................................... 269

Table of Contents for June 27, 2002 Hearing......................................................... 272 

Table of Indexes for June 27, 2002 Hearing............................................................406 
vi
1

JOINT HEARING ON RECORD-KEEPING UNDER 

 THE LABOR- MANAGEMENT REPORTING AND DISCLOSURE ACT (LMRDA): 

DO DOL REPORTING SYSTEMS BENEFIT THE RANK AND FILE?

____________________

Wednesday, April 10, 2002 

Subcommittee on Employer-Employee Relations 

Subcommittee on Workforce Protections 

Committee on Education and the Workforce 

U.S. House of Representatives 

Washington, D.C. 

 The Subcommittees met, pursuant to notice, at 10:30 a.m., in Room 2175, Rayburn House 

Office Building, Hon. Sam Johnson, Chairman of the Subcommittee on Employer-Employee 

Relations, presiding. 

 Present: Representatives Johnson, Norwood, Hoekstra, Ballenger, Isakson, Andrews, 

Rivers, Tierney, Owens, and Solis. 

 Staff present: Stephen Settle, Professional Staff Member; Greg Maurer, Professional Staff 

Member; Travis McCoy, Legislative Assistant; Dave Thomas, Legislative Assistant; Ed Gilroy, 

Director of Workforce Policy; Jo-Marie St. Martin, General Counsel; Molly Salmi, Professional 

Staff Member; Kevin Smith, Senior Communications Counselor; Heather Valentine, Press 
2

Secretary; Patrick Lyden, Professional Staff Member; Deborah L. Samantar, Committee 

Clerk/Intern Coordinator. 

Camille Donald, Minority Counsel, Employer-Employee Relations; Peter Rutledge, Minority 

Senior Legislative Associate/Labor; Mariah Cuprill, Minority Legislative Assistant/Labor; Dan 

Rawlins, Minority Staff Assistant/Labor; Ann Owens, Minority Clerk

Chairman Johnson. We are glad you are able to join us today, Mr. Secretary. Thank you. 

 It is not unusual for the workforce Subcommittees of this Committee to meet together. 

Today, we do so to hear testimony in exercise of our capacity to conduct government program 

oversight inquiries. Since the Subcommittee on Employer/Employee Relations has sole jurisdiction 

over labor-management relations issues in general, and the Subcommittee on Workforce 

Protections has oversight jurisdiction for compulsory union dues, I have asked Chairman Norwood 

and the Members of his Subcommittee to join us in this hearing today. They have agreed, because 

of the oversight nature of the hearing, and because of a possible overlap in our jurisdiction. 

 Having said this, so that we can get to our witnesses, we have agreed to limit all opening 

statements to the Chairmen and Ranking Minority Members of each Subcommittee. All of the other 

Members will be able to put their statements in the record as usual. Following my opening 

statement, I will ask Mr. Andrews if he cares to make an opening statement, and then ask the same 

of Chairman Norwood and Mr. Owens. With that, I ask unanimous consent that the record remain 

open 14 days to allow Members to insert extraneous materials into the official hearing record. 

Without objection, so ordered. 

OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS, 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

 The cornerstone of union member rights in America is the Labor-Management Reporting 

and Disclosure Act, commonly referred to LMRDA, or also as the Landrum-Griffin Act. Written 

by then Senator John F. Kennedy and enacted in 1959, the Act was intended to ensure that rank and 

file union members have a full, equal, and democratic voice in union affairs. It allows for 

democratic participation by members and requires that union financial matters be publicly 

disclosed. It also protects workers' rights to free speech and assembly, to nominate candidates and 

vote in union elections, and to impose certain obligations upon union officers, particularly in the 

use of union funds. Simply put, it ensures freedom and justice for all. 

 Since 1959, the American workforce has modernized and changed; however, LMRDA has 

not. With the passage of time, we have seen some aspects of union democracy thrown to the side 

and often ignored. The erosion of union democracy is not an issue that should be taken lightly. A 

union, after all, belongs to its members, and the bottom line for any labor organization should be 

the will of its membership. Union leaders should respect the law, and the U.S. Department of 
3

Labor, which is responsible for putting teeth into LMRDA, should aggressively enforce it. 

Unfortunately, neither has been the case. That brings us to why we are here today.

 In July of last year, Chairmen Boehner, Norwood, and I sent a letter to the Department of 

Labor concerning union financial disclosure forms and the Department's enforcement of these 

regulations under LMRDA. What the Department reported back was less than impressive. In the 

Department's letter dated August the 15th, 2001 the Department told the Committee that in fiscal 

year 2000, there were over 30,300 active labor organizations that were subject to the financial 

disclosure forms under the purview of the Department of Labor. Of this number, 10,500 did not 

file on time, and I am appalled to say that 4,000 didn't file at all. Now it doesn't take a rocket 

scientist to see that there is a problem when a third of the unions are breaking the law. 

 What do you think the IRS would do if a third of Americans didn't file their income tax 

forms? You and I would both be in jail. I believe we would be remiss if we did not examine the 

lack of compliance and the transparency of labor organizations, and the lack of information for 

thousands of rank and file members. 

 To be clear, I am not suggesting we should go after the majority of the law-abiding unions. 

Today's hearing is not about creating burdensome regulation and reforms for all unions, but to 

shore up loopholes for the third of those union members who are not getting what they are entitled 

to; fair, accurate, and full disclosure of the facts as required by law. 

 It is my hope that we can look at creating a more efficient and effective financial disclosure 

recording system. I am pleased to have both panels here today including Deputy Secretary Findlay 

from the Department of Labor. I look forward to his testimony later. 

WRITTEN OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, SUBCOMMITTEE ON 

EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON EDUCATION AND THE 

WORKFORCE – SEE APPENDIX A 

Chairman Johnson. Chairman Norwood will have the honor of chairing the second panel in this 

hearing.

And now I yield to the Ranking Minority Member, Subcommittee on Employer-Employee 

Relations, Mr. Andrews, for whatever statement you would like to make, sir. 

OPENING STATEMENT OF RANKING MEMBER ROBERT ANDREWS, 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS, 

COMMITTEE ON EDUCATION AND THE WORKFORCE

Thank you, Mr. Chairman. Good morning. I look forward to hearing the testimony of the 

witnesses and welcome each of you to the Subcommittee, and welcome our colleagues from the 
4

other Subcommittee as well. 

 It goes without saying that I have great respect and affection for the Chairman of the 

Subcommittee, and his fellow Chairman, and the Full Committee Chairman. And it also goes 

without saying that we have a responsibility as a Committee to look into the enforcement of the 

laws that fall under our jurisdiction. My concern about this morning's hearing, however, is its 

rather odd focus on what I would view as a fairly obscure issue confronting working people of 

America. While at the same time, the Committee spends virtually no time on issues of much greater 

importance. 

 The unemployment rate in this country went up to 5.7 percent, according to the most recent 

statistics. We belatedly extended unemployment benefits inadequately in my judgment a few 

weeks ago. And I know of no hearings the Committee has scheduled on plans to increase 

employment in the country. 

 There are 44 million Americans who have no health insurance, a number that has grown in 

the years when the economy grew. I know of no plans for the Committee to have hearings on 

dealing with the problem of extending health benefits to the uninsured. 

 On the labor laws side, certainly, the Committee should take a look at underreporting or 

failure to report under this law. It is a legitimate and serious inquiry, which we will approach 

today. I would ask when are we going to have a hearing on OSHA violation claims that have gone 

uninspected? How many of them are there, and why is that the case? 

 I would ask when are we going to have a hearing on why the Department of Labor stepped 

in to take over the Enron pension plan only after there was a public cataclysm with respect to that 

pension plan? Why weren’t the early warning signals heeded more quickly? 

When we are going to have a hearing on the hundreds of findings by the National Labor 

Relations Board, and its regional arms around the country, of violations of labor laws by 

employers, and by unions in some cases that have gone unenforced because of a lack of adequate 

remedies in that statute for people who are trying to organize? 

 We have a legitimate topic in front of us today. And it is our duty and our responsibility to 

examine that topic. But there are many legitimate topics that the leadership of the Committee has 

chosen not to pursue. And I think that this hearing is a reflection of the wrong priorities for the 

Committee to have. 

 We are going to pursue these priorities in whatever forum we are given, at every 

opportunity we are given, because we believe that the full range of questions affecting the working 

people of the country ought to be explored with great enthusiasm. And I would yield back. 

Chairman Johnson. Thank you, Mr. Andrews.

We are considering other hearings. This is just one in a series. Unemployment actually 

went up after we increased and extended unemployment insurance. It didn't go down. Pensions 
5

were being investigated by both the Department of Labor and Department of Justice, and 

investigations are still going on. So there was action being taken. 

 At this time, I would like to recognize Chairman Norwood. If you care to make an opening 

statement, please do so. 

OPENING STATEMENT OF CHAIRMAN CHARLIE NORWOOD, 

SUBCOMMITTEE ON WORKFORCE PROTECTIONS, COMMITTEE ON 

EDUCATION AND THE WORKFORCE 

Thank you, Mr. Chairman. 

Mr. Andrews, you will be interested to know that the Commerce Committee is having a 

hearing tomorrow afternoon regarding the 44 million Americans that don't have health care 

insurance presently. So this is another area we are working on some. 

 As of June 2000, the General Accounting Office study concluded that the reporting 

requirements under Title II of the Labor Management Reporting and Disclosure Act, and I quote, 

“are important because they ensure that union members will have all the necessary information to 

take effective action to protect their rights.” 

 I hope they didn't spend a lot of money on that report. It seems to be self-evident. What is 

the fundamental right that may need protecting? That is really what this is all about. I still think 

that Thomas Jefferson put it best by stating, “To compel a man to furnish contributions of money 

for the propagation of opinions which he disbelieves is simple and tyrannical.” I couldn't agree 

with that more, and that is the crux of what we are concerned about here today. We want to be sure 

that workers are not compelled to support causes and activities which they simply do not believe in. 

 Would any union worker or would any of us, for that matter, want their monetary 

contributions to be used for the personal benefit of their leadership to the tune of stealing hundreds 

of thousands of dollars from union accounts? Or would any union worker want their leadership 

charging hundreds of thousand of dollars to their union supplied credit cards, or spending 

thousands of dollars of dues money at topless clubs? Of course we wouldn't, and we will bring 

some of that out today. 

 Would your average conservative union worker want their monetary “contributions” to 

support lawsuits to force the Boy Scouts to change their policy on homosexuals, or support political 

candidates who are pro-abortion or anti-Second Amendment? Of course not is the answer there, 

and certainly, of course not in my district. Yet, this happens to union workers quite often because 

the reporting requirements that are meant to ensure that workers have real and accurate and useful 

information about the finances of their unions have failed, Mr. Deputy Secretary. 
6

 The Department of Labor under both Republican and Democrat administrations has been 

very lax in its enforcement of the existing reporting regulations, as well as very lax in going after 

corruption. The reporting and disclosure provisions of Landrum-Griffin are a failure because 

among other things the LM-2 form only requires unions to report their expenses in very broad 

categories. International unions are regularly late in filings these forms. In fact, many local unions 

don't even bother to file any reports, as the Chairman so amply pointed. The result is that they can 

hide illegal or questionable disbursements. 

 The Department's performance in going after corruption in the unions has ranged from 

lackadaisical to downright lethargic. For instance, from the years 1998 to 2000, DOL audited only 

two of the 141 international unions, and no union was prosecuted for failing to file a financial 

disclosure form. Yet the law says you should, but a third didn't file. 

 And it is not like Congress has been unaware of these problems. In 1998, Congress directed 

the Department to establish an alternative system for the electronic submission of these reports, Mr. 

Deputy Secretary. We also called for an index computer database on the information for each 

report that is searchable through the Internet. This was supposed to be in place in January of 2000. 

Well, here we are two years later, and still no closer to having such a system although Congress put 

money in place for such a system. 

 The only thing I can compare this lack of enforcement to is the prohibition era when 

speakeasies operated openly because of paid off local police and politicians. Labor leaders know 

that they can do just about anything because the Department of Labor will look the other way in 

hopes of getting union support for the incumbent president, and there is little that the average 

worker can do about this. 

 This creates a permissive atmosphere that is ripe for a scandal like the Teamsters scandal. It 

also creates an atmosphere where the AFL-CIO can flaunt its own rules for removing officials who 

plead the Fifth Amendment when questioned by a grand jury, as Richard Trumka did when asked 

about his participation in the embezzlement of $150,000 of Teamster funds. 

 So we have a situation, ladies and gentlemen, where workers are kept in the dark about the 

ways in which their union representatives are using their union dues. And the government agency 

charged with oversight in this area has been asleep at the wheel. So you can guess what I am going 

to want to be told during the course of this hearing: (1) I want to know how the Department is 

going to ensure that no one will be allowed to take these very critical reporting requirements so 

lightly; (2) I want to know how the Department intends to begin enforcing these legal obligations; 

and, (3) I am going to want to know how this information in the reports can be put in a form that is 

useful to the average worker, so they can protect their own interests. 

 With that, Mr. Chairman, I yield back the balance of my time. 

WRITTEN OPENING STATEMENT OF CHAIRMAN CHARLIE NORWOOD, 

SUBCOMMITTEE ON WORKFORCE PROTECTIONS, COMMITTEE ON EDUCATION AND 

THE WORKFORCE – SEE APPENDIX B 
7

Chairman Johnson. Thank you. 

Chairman Norwood. I now ask Mr. Owens, the Ranking Minority Member of the Workforce 

Protections Subcommittee, if he would care to make an opening statement. 

Mr. Owens? 

OPENING STATEMENT OF RANKING MEMBER MAJOR OWENS, 

SUBCOMMITTEE ON WORKFORCE PROTECTIONS, COMMITTEE ON 

EDUCATION AND THE WORKFORCE 

Thank you, Mr. Chairman, for saving some time for me. I want to welcome today's 

witnesses and thank all of you for taking the time off to be here this morning. I hope that your time 

is put to good use. 

 My problem is that the jurisdiction of the Workforce Protections Subcommittee, of which I 

am the senior Democrat, for the subject matter of this hearing seems to be rather tenuous at best. 

The Workforce Protections Subcommittee has no legislative jurisdiction for either the National 

Labor Relations Act or the Labor Management Reporting and Disclosure Act. The extent of the 

Subcommittee's jurisdiction in this area is limited to oversight of compulsory union dues. A 

reasonable reading of that would mean that the Subcommittee has oversight jurisdiction as it relates 

to the right to work for less laws and is stretching it slightly for issues related to the big decision on 

the use of union dues. 

 It is claimed that this hearing is relevant because LMRDA reports include information 

regarding the receipt and the use of union dues money. However, workers have an independent 

right under the NLRA, apart from any rights under LMRDA, to obtain an accounting of that use of 

compulsory union dues. To contend that this is an LMRDA issue or should be an LMRDA issue is 

to ignore what the law actually provides and the rights workers already have. By calling this a joint 

hearing, my Republican colleagues appear to have either misrepresented the law or disregarded the 

Committee's rules establishing jurisdiction. However, having said that, I guess this is an oversight 

hearing intended to inform Members of Congress, and I strongly believe that all interested 

Members of the Committee should be able to fully participate. 

 I have a most serious objection to this hearing, and that is that union democracy is a serious 

subject deserving an honest discussion. It does not appear that such a discussion will happen today. 

Instead, the subject matter of today's hearing seems to be what can we do to impose even more 

regulatory burdens and paperwork requirements on unions. 

 The problem with the focus and the obsession of these requirements on unions is that this 

Committee and the rest of Congress ignores where the real problem is. The Enron pension funds 

and the Global Crossing pension funds involving billions and billions of dollars have not been 
8

given the proper attention because we are focused in the wrong direction. 

 I believe unequivocally that the Subcommittee's time could and should be better spent. This 

is the eighth hearing, by the way, of the Subcommittee on Workforce Protections in this Congress. 

Of the eight hearings of this Subcommittee, this is the third time the Subcommittee has held a 

hearing on subject matter over which it has no legislative jurisdiction. Thirty-seven percent of the 

Subcommittee's time has been spent on issues it has no authority to do anything about. Of the 

remaining hearings, two have criticized the way both legal and voluntary health and safety 

standards are developed, and one hearing has looked at ways to reduce employer overtime costs at 

the expense of workers. 

 The other two legislative hearings conducted by the Subcommittee involve one bill that 

would take away the right of certain sales workers to receive overtime pay, and another bill that 

would undermine overtime pay for all workers by allowing employers to exclude bonuses from 

overtime calculations. 

 Congress has not increased the minimum wage since 1996. That does come under the 

jurisdiction of this Subcommittee. A full-time minimum wage worker makes less than the poverty 

level for a two-person family, yet we have not had a single hearing on raising the minimum wage. 

 At the beginning of this Congress, we repealed an ergonomics regulation that had been 

developed over a ten-year period. We repealed it with less than 48 hours of debate. Ergonomic 

injuries remain the single largest cause of injuries. An estimated 5,000 workers a day are injured as 

a result of ergonomic hazards, yet this Committee has not even raised the issue this year. 

 We are failing to address the issues that are most important to work and families. We are 

not helping workers. Instead, this is a record that clearly demonstrates a gross disregard by the 

Republican majority for the rights and welfare of workers and working families. 

 I yield back the balance of my time. 

Chairman Johnson. Thank you, Mr. Owens. I appreciate your comments. 

You know, the reason we are in joint jurisdiction today is because of a possible overlap in 

our jurisdiction, not necessarily that one or the other has direct jurisdiction over any issue. As I 

said in my opening statement today, we are assembled in a joint meeting to exercise our duty to 

conduct program oversight of the various functions of the agencies that discharge the statutory 

mandates of the laws under the jurisdiction of the Committee on Education and the Workforce. 

 Programs subject to our oversight inquiry today are the union reporting programs under the 

LMRDA. There is an LM-2 form over there on those boards which you are welcome to look at. 

Those are the basic forms, by the way. When you get the whole thing put together, it looks like 

this. This happens to be the Teamsters report, and it is this thick. There are 30,500 of those that 

are supposed to come in every year. 
9

 Accordingly, we have asked the Department of Labor to provide someone knowledgeable 

about these programs so we might discuss the performance of the programs. And we are honored 

today that the witness chosen by the Department is the Deputy Secretary of Labor, Mr. Cameron 

Findlay.

 While most of us know Mr. Findlay and are aware of his outstanding background of 

accomplishment, for the record, let me just note that the Deputy Secretary of Labor is the number 

two official in the Department, and as such acts as the Department's chief operating officer, 

oversees the Department's $59 billion budget, chairs the Policy Planning Board, and serves as a 

principal advisor to the Secretary on a wide range of issues. In addition, the Deputy Secretary is 

responsible for coordinating the activities of all Department of Labor agencies to ensure an 

integrated approach to the development, funding, and delivery of the Department's programs and 

activities. 

 With that, I will ask you to begin with a brief summary of your written statement, Mr. 

Findlay, followed by questions. And if you could, sir, try to stay within our five-minute time limit. 

Thank you very much for being with us today. 

STATEMENT OF D. CAMERON FINDLAY, DEPUTY SECRETARY OF 

LABOR, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C.

Thank you, Mr. Chairman, and thank you to all the Members of the Subcommittees. I 

appreciate the opportunity to be with you here today to talk about the Department of Labor's 

enforcement of Title II of the Labor- Management Reporting and Disclosure Act, which is 

commonly known as the Landrum-Griffin Act. 

 My department views Landrum-Griffin as just one of a number of important statutes that 

have been entrusted to my department to safeguard the rights of workers. We have the 

Occupational Safety and Health Act to protect the safety of workers. We have the Fair Labor 

Standards Act to guarantee worker wages. We have the ERISA statute to protect worker pensions, 

and then of course we have Landrum-Griffin to protect the right to know of union members. We 

take very seriously our obligation to enforce each of these worker protection statutes. 

 The roots of the Landrum-Griffin Act, as many Members of this Committee know, can be 

found in the famous McClellan committee hearings of the 1950s, which put the spotlight on a 

number of improper practices by union leaders such as embezzlement, shakedowns, and even the 

use of union funds to build luxury homes for union officials. In the wake of those hearings, in 

1959, Congress overwhelmingly passed the Landrum-Griffin Act by a 95 to 2 vote in the Senate, 

and a 352 to 52 vote in the House. These majorities were the most lopsided votes ever on any 

major labor law legislation. This is, in short, an important and bipartisan law. No one is in favor of 

embezzlement. No one should minimize the importance to union members seeing their hard earned 

dues taken away from them. 

The Act has five main titles, but the focus today is on Title II. Title II may well be the most 

important title of the Act because, as I said, it establishes a right to know of union members. 
10

Simply put, transparency leads to more accountability, less opportunity for corruption, and 

enhanced union democracy. As the Enron example vividly shows, no entity should be allowed to 

shield its finances from its stakeholders. Because Title II empowers union members, people who 

believe in strong unions should support strong enforcement of Title II of the Act. 

 The question today is how good a job has DOL been doing in enforcing this statute. The 

answer, quite frankly, Mr. Chairman, is that DOL has not done as good a job in the past decade as 

it should. 

 First, a significant number of unions consistently fail to comply with the statutory 

requirements that they timely file annual reports with DOL detailing their finances. In recent years, 

approximately 1/3 of all unions were either untimely in filing their reports or they did not file at all. 

 Second, the number of OLMS compliance audits has fallen from a high of 1,583 in 1984, to 

just 238 in the year 2001; and today, 10 of the largest unions have never once been audited. 

 Third, OLMS existing forms, which were created 40 years ago and have been substantially 

unchanged since then, utilize such broad and general categories that many union members find it 

difficult to detect overspending, financial mismanagement, embezzlement, or other irregularities. 

 Fourth, many observers believe that OLMS does not have sufficient tools to enforce the 

law. In particular, OLMS lacks authority to impose fines on unions that fail to file timely reports. 

 Now if this level of noncompliance and decreasing enforcement were the case under the 

Occupational Safety and Health Act, under ERISA, under the Fair Labor Standards Act, or any of 

the other statutes that we enforce, it simply would not be tolerated, and it should not be tolerated. It 

should also not be tolerated under this statute. The Landrum-Griffin Act is a worker protection 

statute just like the others that we are charged with enforcing at our department. 

 How can we improve enforcement of this statute? Well, we do have a few suggestions. 

 First, we need to provide OLMS with sufficient resources to enforce the law. To this end, 

we requested in the President's fiscal year 2003 budget, $3.4 million in additional funds, which 

would fund 40 new FTEs to enforce this law. And I would like to thank both Subcommittee Chairs 

here today, as well as Chairman Boehner, for their support of this budget request. 

 Second, the Department of Labor intends to step up its efforts of compliance assistance and 

enforcement. Just as with our other statutes, compliance assistance is absolutely essential. Our aim 

is not to pursue after-the-fact enforcement against union filers that get their forms in late. It is, first 

of all, to work with unions to help them avoid being tardy filers in the first place. And if those 

efforts don't work, then we want to use the stick as well as the carrot. 

 Beyond stepping up our compliance assistance and enforcement efforts, we intend at DOL 

to look at everything we do. Our enforcement plans, our disclosure forms, and E-government 

initiatives, to ensure that we are doing the best job we can to enforce this important law on behalf 
11

of individual union members. 

 The Department of Labor appreciates the interest of the Subcommittees in enforcement of 

the Landrum-Griffin Act, which is critical to safeguarding union members' hard earned money. 

Thank you again for giving me the opportunity to be with you today. And, at this time, I would be 

happy to answer any questions you might have. 

WRITTEN STATEMENT OF D. CAMERON FINDLAY, DEPUTY SECRETARY OF LABOR, 

U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C. – SEE APPENDIX C 

Chairman Johnson. We appreciate your comments. Thank you again, for being here. 

 As I stated about a third, or 34 percent, of the unions didn't file on time, some never at all. 

You agreed with that, and to me it means that almost 10,500 active labor unions didn't file on time, 

and 4,000 never filed at all. 

 I am told that in fiscal year 2000, the Department of Labor conducted only 200 audits. That 

means only 1 out of 150 reports were audited and none of the largest unions at the 

national/international level in fiscal year 2000 were audited. 

 If these figures are correct, I am concerned about the Labor Department's performance in 

carrying out the law. Can you tell me what you are doing now to change this and make sure the law 

is followed in the future? 

Mr. Findlay. Yes, as I said in my opening statement, Mr. Chairman, the Department is not proud 

of how the Landrum-Griffin Act has been enforced over the past decade. We intend to change that.

As I mentioned, we believe that the first step is to get new resources for this agency. 

 In my written statement, I pointed out that in the mid-1980s this agency had 460 full-time 

equivalents to enforce the law. Over the past decade, that number was cut down to 260, essentially 

a loss of half their people. 

 We believe that as a first step to restoring the resources of this agency, we ought to add 40 

people back. Now that does not get us back to the 460 levels of the mid-1980s. But it does take us 

from this very low level, which we consider to be below the minimum level, and gets the number 

back up to about 300, and that is a good first step. 

 Beyond getting OLMS more resources, I think the leadership of the Department is 

committed to enforcing this far better. We have asked OLMS to come forward with a compliance 

assistance plan to work with unions to assist them with compliance. And I am happy to say that 

OLMS was the first agency in our department to come up with a compliance assistance plan. We, 

as I say, are looking at everything OLMS does to improve their performance. 
12

Chairman Johnson. Were there increases in the budget for that? 

Mr. Findlay. Yes, as I mentioned, we saw it in the fiscal year 2003 budget, $3.4 million, which 

would increase the number of FTEs in that agency by 40. 

Chairman Johnson. What is the remedy that you have for penalizing unions that fail to follow the 

law?

Mr. Findlay. Well, Mr. Chairman, we do not have in OLMS, as we do in OSHA, in the Wage and 

Hour Division, in the Mine Safety and Health Administration, any authority to fine unions that 

violate the law, in terms of the filing requirements. We have found it difficult, as a result, to make 

entreaties to unions to comply with the law. Because, really, currently there is no stick, there is 

only a carrot.

Our people at OLMS try very hard. They send out a disk at the end of the union's fiscal 

year, which helps the union file. They send out a letter to every union that has been delinquent in 

past years 30 days before the filing date. If a union does not file, they send out another letter 15 

days after the filing date. But, right now, our efforts necessarily have been limited to jawboning 

because we don't have these enforcement tools that our other agencies have. 

Chairman Johnson. You can bring civil litigation, and you can seek criminal prosecution through 

the Department of Justice for violations of LMRDA. In our reviews, zero cases were referred to 

the Department of Justice, and I was wondering why more cases weren't referred to your own 

solicitor's office. 

Mr. Findlay. Well, the number you referenced was under the previous administration. It is true 

that during the year 2000, zero cases were referred to the Department of Justice. In the year 2001, 

we decided to begin looking at this. Of course, when we began doing that September 11th and the 

anthrax scare came along. Mail has been considerably delayed. And so we have been a little 

reticent about bringing actions this year. 

 But I can assure the Chairman that it is something we are looking at very carefully. As 

Chairman Norwood mentioned, the GAO issued a report in the year 2000. And the GAO noted 

that the Department of Justice, for better or worse, has not considered this to be a priority, but we 

want to work with the Department of Justice to use the tools that we have. 

Chairman Johnson. We want to work together with you to make the program work. And I would 

just like to ask you one final question. What changes or tools are necessary for you to ensure 

efficiency in compliance? 

Mr. Findlay. Well, I think, first of all, we have to use the tools that we have better. And we 

certainly are trying to change the culture at our department, so that we do aggressively engage in 

compliance assistance and enforcement where necessary. 

 But beyond that I think, first of all, OLMS needs greater resources, and we believe we have 

made a first step toward that. Second of all, we think that this Committee should look at whether 
13

the enforcement tools are sufficient because our other agencies are able to levy fines, whereas, 

OLMS is not. I think that we have to look at everything we are doing, from the forms which have 

been unchanged for 40 years, to the compliance assistance efforts to see that we increase the level 

of compliance by unions. 

Chairman Johnson. Thank you. I appreciate your testimony. The gentleman from New Jersey, 

Mr. Andrews, do you care to question? 

Mr. Andrews. I do. Thank you, Mr. Chairman. 

Mr. Findlay, I know that you wouldn't want to leave misimpressions from your testimony, 

so I want to get into some facts. I note that your written statement did not include your reference to 

union leaders building luxury homes for themselves, and the like, and I wouldn't want to leave the 

impression that that is the norm in American labor, but I think your statement does leave that 

impression. 

 I want to ask you some questions about these numbers. On August the 15th of last year, 

Deputy Assistant Secretary Todd wrote to Chairman Boehner and the other Members of the 

Committee, about failure to comply for the year with reports that were due on March 31st of 2001.

And that is the 34 percent statistic that is flying around the room today. As Chairman Johnson just 

said, 34 percent were filed late or not at all, and that represents something over 10,000 reports that 

were due. But it is true, isn't it, that as of August the 15th about 60 percent of those late reports 

were actually filed? Isn't that right? 

Mr. Findlay. I don't have the number in front of me, but that sounds about right. 

Mr. Andrews. The number is 4,025. Now the kinds of reports that had to be filed are an LM-2 for 

a union that brings in more than $200,000, an LM-3 for a union that brings in between $10,000 and 

$200,000 a year or an LM-4 for a union that brings in $10,000 or fewer dollars per year. Is that 

correct?

Mr. Findlay. That is right. 

Mr. Andrews. Well, let me ask you this question first. Since August the 15th, when this letter was 

written to the Committee, how many of the 4,025 delinquent filers have filed? 

Mr. Findlay. I don't have that number, Congressman. I had better leave it at that, because I just 

don't know the answer. 

Mr. Andrews. I would appreciate and request that you supplement the record by answering that 

question.

Mr. Findlay. We will do that. 

Mr. Andrews. Now I am going to look at the breakdown of the 4,025 non-filers as of August the 

15th. Can you tell us of those 4,025 non-filers, which represent about 12 percent not 34 percent of 
14

all of those that had to file, what percentage were LM-3s that have revenues between $10,000 and 

$200,000? 

Mr. Findlay. I think it would be a substantial percentage. As the letter we sent shows, the larger 

unions are better than smaller unions in terms of being on time. The record for any of these unions 

is not very good. 

Mr. Andrews. I understand. According to the Department's own statistics in the letter, the answer 

is a little less than half. It is 1,962 that are in the category of unions with less than $200,000 worth 

of revenue. Do you know how much were for LM-4s, which are unions with less then $10,000 

worth of revenue? 

Mr. Findlay. Again, I would assume that it is a substantial percentage, but we consider any of 

these late filings to be too many. 

Mr. Andrews. I agree with you. I think that the money of members in small unions is just as 

important as the money of members in larger unions. The answer is 1,613, according to your 

department. That means that of the reports that were still not filed as of August 15, 2001, 3,575 of 

the 4,025 non-filers were unions with less than $200,000 a year worth of revenue. 

 Do you know how many of those unions have paid staff? 

Mr. Findlay. I don't know. But my assumption is, especially for the LM-4 filers, they are less 

likely to have paid staff than the 272 larger unions that didn't ever file. 

Mr. Andrews. Of the LM-2 filers who had not filed as of August the 15th of 2001, which would be 

about 300 filers, how many of those have you conducted an audit of since August 15? 

Mr. Findlay. I don't have that number. 

Mr. Andrews. Could you supplement the record for that as well? 

Mr. Findlay. I would be happy to. 

Mr. Andrews. I want to say for the record, I think that if you are in a union that has $5 worth of 

annual revenue, you ought to know where your money is being spent. But the use of the statistic 

that a third of the unions in the country aren't filing is deceptive. 

 The use of that statistic in the context of anecdotes about union officials spending lavish 

amounts of money on themselves is even more deceptive. Your own statistics show that as of 

August the 15th of last year, 60 percent of the non-filers were simply late filers. You can't tell us 

how many of the non-filers as of August 15 have filed since then. And your own statistics tell us 

that the vast majority, about three-quarters of the non-filers as of August 15, are unions with less 

than $200,000 worth of revenue. So I think that we need to be careful and be specific about what 

these facts are. 
15

Mr. Findlay. Thank you, Congressman. And certainly we do not want to leave the impression that 

it is the norm that this sort of embezzlement goes on, but every year we see very serious cases of 

mismanagement of union members' hard-earned dues by union leaders. 

 Just recently, in the Capital Consultants case, we found that union leaders in the Pacific 

Northwest were accepting payoffs for steering investments to another company. In my hometown 

of Chicago, just a few weeks ago, a man named John Serpico pled guilty to mail fraud because he 

had embezzled money from his union. 

Mr. Andrews. Mr. Secretary, I appreciate that. And I could respond by giving you anecdotes of 

criminal misbehavior by corporate leaders across the country, and then extrapolate from that by 

using some statistic that if corporations filed some report like that there is systemic corruption in 

corporate America. I think we have to be very careful to look at the facts before us and not let that 

lap over into anecdotal mischaracterizations.

Mr. Findlay. Thank you, Congressman. We certainly don't want to leave the impression that the 

vast majority of union officials are corrupt, because that is not the case, but we do have a law that 

Congress has entrusted us to enforce. And we feel that any noncompliance is too much 

noncompliance, just as we do with the other statutes that we enforce. But I appreciate the 

Congressman's comments. We certainly do not want to leave the impression that all unions are 

corrupt, because they are not. 

Chairman Johnson. Mr. Andrews, I might add that those reports are due in March, and you are 

talking about August. You know they are late by that time. You could not file your income tax 

that late and not get challenged. So I think we have to be careful as well because I think that as you 

stated, the small unions need just as much comfort as the large ones from us. 

Mr. Andrews. If the Chairman would yield, I would appreciate in your next reference if you would 

point out that ..8 percent of large unions were not in compliance as of August 15, 2001, not 34 

percent. Because of unions with more than $200,000 in revenue, who had not filed as of August 

the 15th, it was less than 1 percent of the 30,000 filers. 

Chairman Johnson. Well, I don't think you have to differentiate between the unions. I think that 

large and small alike need to file and need to obey the law. Would you agree with that? Thank 

you.

Chairman Norwood, do you care to question? 

Chairman Norwood. Thank you, Mr. Chairman. Mr. Andrews that was very well done. I thought 

you thought through that very well. 

Mr. Andrews. It is like pulling teeth. 

Chairman Norwood. That is easy to do. This is hard to do. I think we all could also agree 

though, that the law is the law and it doesn't matter how much funds your particular union has any 

more than it matters what your income is with IRS. You are supposed to file, and you are supposed 
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to file on time. 

Mr. Findlay thanks for being here. I do appreciate that. Tell me what an ICAP is? 

Mr. Findlay. An ICAP is the sort of audit we do with the largest international unions. 

Chairman Norwood. How many ICAPs did the DOL perform in FY 2000? 

Mr. Findlay. In FY 2000, I am sorry to say that under the previous Administration they performed 

no ICAPs. 

Chairman Norwood. Well, what about over the past decade? 

Mr. Findlay. I don't know the exact number. But it is a fairly small number, somewhere in the 

single digits or teens. 

Chairman Norwood. Do you think it is correct to do it that way? 

Mr. Findlay. We believe that we need to do more ICAPs. They are very resource intensive. It is 

my understanding that it takes 500 to 1,000 person-days to conduct one of these audits. And, 

frankly, the OLMS has not had the resources in recent years to conduct as many of these audits as 

they ought to. 

Chairman Norwood. Well, isn't Landrum-Griffin in place to protect the worker? 

Mr. Findlay. It certainly is. 

Chairman Norwood. Okay. And does that mean that our excuse for not protecting the worker is 

we simply don't have the resources, or haven't prioritized our resources? Is that what you are 

telling me? 

Mr. Findlay. Well, to some extent, the Landrum-Griffin Act itself prioritizes our resources. The 

Act requires OLMS to do union election disputes. And so, they have no discretion as to whether 

they can do those. What has happened in recent years is that OLMS has been forced to devote a 

large chunk of resources for these election disputes and there is not much left over to deal with 

these ICAP audits, which we do consider very important. 

Chairman Norwood. The bottom line, we are not doing the job are we? 

Mr. Findlay. I think it is fair to say that over the past decade OLMS has not done as good a job as 

they should have. 

Chairman Norwood. These examples of corruption that you have mentioned, and I am going to 

mention some too, the ones in which DOL turned up or Justice turned up, was it discovery in court 

that gave us this information, or did your Department? 
17

Mr. Findlay. I don't know the timing of events, but I know the Department of Labor was involved 

in both of those investigations. 

Chairman Norwood. The LM-2 form doesn't really give the Department of Labor enough 

information to turn up any of that? 

Mr. Findlay. Well, as I mentioned earlier, I think the LM-2 form has not kept up with the changes 

in financial practices over the past 40 years. It does utilize broad and general categories, but it 

doesn't break down within each of these categories in such a way that a union member can look at 

an LM-2 and really figure out what is going on. So I think one of the things we are looking at is 

whether improvements can be made to that form. 

Chairman Norwood. Actually, even if everybody were on time, you are not going to see anything, 

or at least an average member who works in the union wouldn't have a clue. 

Mr. Findlay. I think the LM-2 form, if used by a union official that wants to hide things, can be 

used to hide things. 

Chairman Norwood. DOL sends out notices to unions before reports are due informing them of 

this duty. Is that a correct statement? 

Mr. Findlay. That is right. 

Chairman Norwood. If their reports are not filed in a timely fashion, then you send out late 

notices informing the union of these defects, is that correct? 

Mr. Findlay. That is correct also. 

Chairman Norwood. If the union does not respond to the first notice, and then the follow up late 

filing notice, what does DOL do next? 

Mr. Findlay. We ask our OLMS field offices to go out and contact the union directly by letter, by 

telephone, by personal visit. And we are essentially in a position where we have to plead with 

these unions to file their legally required forms. 

Chairman Norwood. You have to plead with them. And if they aren't turned in at that point could 

you characterize that as an intentional failure to act on their part? 

Mr. Findlay. It would depend on the case obviously. But in a number of these cases, I think it 

could be classified as an intentional or willful failure to file. 

Chairman Norwood. Maybe some of us will volunteer to try this on the IRS, and see what 

happens. Let’s see if they will come plead with us to file our tax returns. 

Mr. Chairman, I see my time is up. I hope we can have another little shot at the Secretary. 
18

Chairman Johnson. Thank you. Mr. Owens, do you care to question? 

Mr. Owens. Thank you. Mr. Secretary, you mentioned that among the responsibilities of your 

department was ERISA, correct, safeguarding pension funds of workers? 

Mr. Findlay. Yes, sir. 

Mr. Owens. While I agree that every union member has a right to some safeguards against 

corruption as a result of this Act, the volume of pension funds versus union dues is so much greater 

that if you have limited resources, it seems to me directing them where the greatest amount of 

activity is taking place and the greatest danger of real harm is an appropriate direction. Do you 

have any estimate of how many trillions of dollars there are in pension funds? 

Mr. Findlay. I used to know that number. I don't know it now. But it is a substantial amount of 

money.

Mr. Owens. In the trillions, right? 

Mr. Findlay. It is in the trillions. 

Mr. Owens. And the union dues will not even reach a billion. If you put them all together, they 

wouldn't reach a billion dollars. 

Mr. Findlay. I don't know, but I will take your word for it. I just don't know. 

Mr. Owens. Maybe you can look that up and get back to us on it. Just to get the perspective 

straight, Mr. Andrews has said that the impact of late reporting for the largest unions is .8 percent.

Was that correct? All right, so pretty low, although we like to see everybody comply with the law. 

The larger unions are the ones that really represent the most people, and they had the greatest 

amount of corruption. 

 I am not belittling the fact that corruption in the small unions is serious for the union 

member who is a victim, but let's keep our perspective straight. Would you say that the late 

reporting by the unions has any impact on the domestic economy at all? If they report late, will that 

impact negatively in some way on our economy? 

Mr. Findlay. I think, of course, it does. Even if it is not in the trillions of dollars, it is substantial 

amounts of money. And if you are a union member who pays $600 a year to your union, and it is 

mismanaged or stolen, I think it matters a lot. 

Mr. Owens. I am not saying it is malfeasance or mismanagement. I am stating the fact that they 

report late. We don't have a great problem with non-reporting. The problem is late reporting, right? 

Point .8 percent are guilty of late reporting for the larger unions? 

 What is the statistics for non-reporting, total non-reporting? 
19

Mr. Findlay. I'm sorry? 

Mr. Owens. Non-reporting by the largest unions, what is the percentage, totally non-reporting? 

Mr. Findlay. Somewhere between 10 and 15 percent. 

Mr. Owens. Between 10 and 15 percent could have an impact on the economy? 

Mr. Findlay. I think the idea behind the Landrum-Griffin Act, which, as I said is a statute that has 

been given to us, is transparency. We did not ask for it, but we have to enforce it. The idea behind 

that law is that transparency will lead to more accountability with these hundreds of millions of 

dollars in the economy. 

Mr. Owens. No, I agree. I just want to get the perspective back, you know. Do we have 

indignation in search of a scapegoat here? And should that indignation be directed in another 

direction, is the question? Is our competitive position in the world altered in any way by whether 

these reports are filed or not, or whether they are late? Is our productivity altered whether they are 

filed or not, or whether they are late? Do they have any impact on international matters? 

You know, why is it so much more important than, for example, the impact that the 

mismanagement of the pension funds of Global Crossing or Enron, or other large corporations, may 

have on the economy domestically, on our reputation internationally, on the trustworthiness of our 

corporations internationally? They are all under your jurisdiction. So I would like to see your 

resources directed where it matters most, because we all have limited resources. 

Mr. Findlay. We certainly have been directing substantial resources to those other matters. And I 

think it is not fair to say that there has not been a little bit of indignation about the Enron and 

Global Crossing matters. My own department, of course, had launched an investigation into Enron 

well before this became a large public issue. We proposed a new retirement security bill, which is 

before the Full Committee, and also the Finance Committee, or the Ways and Means Committee. 

 And so we believe that all of the laws are important. We don't think that because there is 

more money in the other area, that we can completely ignore this statute. For better or worse, 

Congress decided by very large majorities that the Department of Labor ought to enforce this law. 

And we feel like we would be disrespecting what Congress told us to do if we were to decide this 

doesn't matter. It is not as much money. 

Mr. Owens. Do you think you could use more resources, more employees to adequately cover the 

problem presented by pension fund mismanagement? 

Mr. Findlay. Yes, and we have sought more resources and more employees. 

Mr. Owens. Thank you. 

Mr. Findlay. And we will seek even more next year. 
20

Mr. Owens. Thank you. I yield back the balance of my time. 

Chairman Johnson. Thank you, Mr. Owens. Mr. Ballenger, do you wish to question? 

Mr. Ballenger. Yes, sir, if I may. 

Mr. Findlay, everything that we have said so far fits perfectly with one of the statements 

made over and over again in your testimony. You might remember that paragraph you had. It says 

scholars and experts believe that without Title II, all of the other components of the LandrumGriffin Act would be difficult, if not impossible to achieve. In short, let's hope that more 

transparency would lead to more accountability. 

 In other words, this one thing we are discussing either makes or breaks the effectiveness of 

the Landrum-Griffin law, pretty much exactly as your statement says. Is that not true? 

Mr. Findlay. Congress believed that Title II was at the heart of Landrum-Griffin because without 

Title II all of the other substantive protections against embezzlement or in favor of union 

democracy, and so on, would be very difficult to enforce. 

Mr. Ballenger. That is sort of like saying that if we did not have to have Enron keeping books, 

they might have lasted for a couple of more years without going down the tubes. 

Mr. Findlay. I think the idea behind Landrum-Griffin is very similar to the idea behind our 

securities law, which is that disclosure and transparency is a good thing for large organizations with 

lots of money. 

Mr. Ballenger. Right. That disk that you have showed us earlier is something that you have sent 

out to all of the unions. I don't know what it does, but I am just guessing. Does it explain how to 

fill out the forms? 

Mr. Findlay. Yes, it is very much like a Quicken program, or the tax programs where you can sit 

down at your computer and you just answer a series of questions, and it fills out the form for you. 

Mr. Ballenger. In other words, even in a union that didn't have over 5 or 10 members, if one of the 

members happened to have a computer, it would not be difficult at all to fill out these forms? 

Mr. Findlay. That is true. And not only that but also for the LM-4, which is the form used for the 

smallest unions, the ones without any full-time employees that Congressman Andrews spoke of. 

The LM-4 is a very simple form. It is kind of analogous to the 1040 EZ form in some ways. The 

LM-3, which is the form used for middle-sized unions, is simpler than the LM-2 as well. But this 

disk tells you how to fill out all of them, and it really should not be difficult to do if you keep your 

books and records in order. 

Mr. Ballenger. I am just curious. Considering the fact that all of the taxpayers in this country are 

paying for the cost of what Landrum-Griffin mandates, do you believe that a civil monetary penalty 

for lack of filing might help you fund additional staff? You could catch the crooks, but at the same 
21

time catch someone’s attention about the fact that here is a simple little way of reporting. You stick 

it in your computer it will print it out. If you have a piece of paper, you can do it. I know that that is 

not going to strike a happy note with anybody. But the fact is that you are under funded and 

understaffed, and we have not given you the ability to enforce the law that almost everybody voted 

for

Mr. Findlay. I think it is human nature if you have two obligations. One is to file something with 

the IRS, where you could be subject to fines and criminal penalties if you don't file. Then you have 

another obligation where you file something with the Department of Labor, and the Department of 

Labor doesn't have any independent enforcement authority. You are more likely to take an 

obligation seriously when it is backed up by a sanction. 

Mr. Ballenger. Almost everybody on the Committee knows that I have a small business back in 

North Carolina. And over and over again, you sit down and ask how much is it costing us to fill 

out the forms? You can get an extension from the Internal Revenue Service, but not from OSHA. 

And I might say that workmen's comp is not like that. If we are going to let labor unions not file 

the forms, how about taking the pressure off in a whole bunch of other situations? 

 I figure at least we have two people in a small company in North Carolina that do nothing 

but fill out government forms on various other things, responsibility being ours, or you go to jail, or 

at least that. That is almost as bad as having OSHA come into your plant. 

Mr. Findlay. Well, I think we view OSHA, and Mine Safety and Health Administration, and the 

Wage and Hour Division, and OLMS all the same way. We think that all of them ought to be out 

there vigorously enforcing the law; all of them ought to be out there engaging in compliance 

assistance. 

 I think OSHA is a great agency. I think it has done a lot better than it has in past years, and 

under Secretary Chao's leadership we are trying to make it even better. 

Mr. Ballenger. I would agree with that, having come from North Carolina where the previous 

OSHA head was from, we worked together trying to make it easier on business to at least 

participate in making the decisions. 

 Obviously, I think that nobody on this Committee, not even our legal friends on the other 

side, would recommend that we allow businesses of any size the right to file late without penalty 

forms that we have to give to the Federal Government. That is a completely biased statement, and I 

thought I would make it. 

Mr. Findlay. We view this as a very simple question. Congress entrusted us with a law to enforce.

We feel like we have to enforce it, and we feel that way about all of our statutes. 

Mr. Ballenger. What would you think about a late fee? That makes a lot of sense to me. I mean 

you wouldn't really be penalizing anybody except somebody that wasn't playing the game properly. 
22

Mr. Findlay. I think that is something the Committee would want to consider. 

Mr. Ballenger. I will try to get a co-sponsor on the other side. Thank you very much, Mr. Findlay. 

Mr. Findlay. Thank you. 

Chairman Johnson. You get your “get out of jail free” card. 

Ms. Rivers, would you care to question? 

Ms. Rivers. I do. Thank you, Mr. Chairman, Secretary Findlay. 

 I happen to agree with you that all of these laws are important. And this issue of disclosure, 

and the importance of letting members know where their union dues are going is something that I 

think is important. Congressional oversight is also important. 

 It was interesting to me in the course of the questions that there was a discussion about the 

fact that the IRS has a good vehicle for this kind of oversight because they have penalties, and also 

because of the structure of that Agency. 

 Given that we are going to leave very soon today to go to the floor to vote on “527s”, which 

are laws that are put in place through the IRS to force labor unions and other groups that engage in 

campaign expenditures to guarantee disclosure and oversight, do you think that the Administration 

would be inconsistent if they didn't support both the measures you are proposing and the 

publication of information from “527”? 

Mr. Findlay. I am just not familiar enough with the “527” legislation to make a comment. 

Ms. Rivers. Well, do you think in general we should always err on the side of disclosure and 

oversight, as opposed to secrecy? 

Mr. Findlay. I wouldn't want to make as broad a statement as that. 

Ms. Rivers. You think secrecy in some instances would be good? Why would that be? 

Mr. Findlay. I think just as unions have some rights to not disclose every single penny they spend, 

it may well be that in other cases that is appropriate too. But, again, I don't know enough about the 

legislation to comment, or to distinguish between the two cases. I just don't know. 

Ms. Rivers. If your concern is that members of unions or those who pay carrying charges to unions 

need to have the ability to know whether or not their contributions, or dues, or carrying charges are 

being used to campaign, or to help the campaigns of people whose views they don't share, don't you 

think we should at every level of the government make certain that that kind of disclosure is 

available? I mean wouldn't this 527 offer the same sort of information that you're concerned about? 
23

Mr. Findlay. I don't believe I have testified that union members or anyone else should have an 

absolute right to withhold dues for views they don't share. 

Ms. Rivers. I said they have a right to know if their union is spending money, which is of course 

what 527 is about, disclosure of where the money comes from and what it is being used for. And it 

seems inconsistent to me that, on the one hand in this Labor Subcommittee, we are going to talk 

about how important it is that there be no secrecy, and how people have a right to know what is 

happening to their money. But then we are going to go to the floor and argue that these 

organizations are going to be unduly burdened by having to say where their money is coming from 

and where is it going and have public oversight. I am trying to reconcile that. 

Mr. Findlay. Well, I am trained as a lawyer, Congresswoman Rivers. 

Ms. Rivers. Me, too. 

Mr. Findlay. And you know what it means to distinguish two cases. But in order to distinguish 

two cases, one needs to know the facts of both of them, and I just don't know the facts of 527. So I 

am afraid I can't help you in terms of distinguishing them or explaining why they are consistent or 

inconsistent. 

Ms. Rivers. All right. Thank you. 

 Thank you, Mr. Chairman. 

Chairman Johnson. Thank you. I am going to recognize Mr. Tierney, if he cares to question. 

Mr. Tierney. I do. Thank you, Mr. Chairman. I want to thank the witness, Mr. Findlay, for 

spending some time with us this morning. 

Let's start with the assumption that when Congress passed by the wide margins that it did, 

that there was wide agreement in the need for Title II in its provisions. My understanding is that in 

1998, we directed OLMS to establish an alternative system for electronic submission of reports. 

And I think that progress on that was supposed to be accomplished by the end of 2001, if I am not 

mistaken. 

 It would be important to us since it would allow over the Internet, as I understand it, every 

member of a union to be able to get in and get that information, as well as your office I assume, to 

be able to get ready access to it, or probably avoid any problem with the mail and things. Do you 

have the kind of resources that you need in your department to finish that job? 

Mr. Findlay. I think we do, Congressman, and I think we are very close to finishing the job. As I 

noted, we have created a CD-rom that allows unions to put together the forms electronically. It has 

turned out that there has been software bugs that we have had to overcome in terms of facilitating 

electronic filing. We have had to get past the electronic signature issue. But we believe that we 

will be able to offer electronic filing sometime within the next few months. 
24

Mr. Tierney. Hopefully, that will do away with some of the delay problems. So if anybody wants 

to blame the mail or anything of that nature, we will know as soon as the deadline arrives at least 

whether or not they are filed. Your office can go through the process presumably with fewer 

personnel.

Mr. Findlay. I think that is right. This is a very important step to make it easier for unions to get 

things in on time. 

Mr. Tierney. Well, I think it is all about the tools, and probably why I am going into this line of 

questioning. On the ICAPs or the CAPs, you indicated that you have the authority to have a 

streamlined audit under the ICAP situation. The question here is whether or not you have the 

resources to perform those audits, and you indicated that you think perhaps you don't. The problem 

that I see with that is we have a lot of agencies that we don't think have enough resources to do the 

job it is supposed to do. 

 We have the conflict of people in the majority hating government, and a lot of times what 

that does is leave us with a shortage when they pare back budgets. One of the analogies we can 

make is with the IRS. You know, Commissioner Rossotti was here telling us that they were 

auditing far more low wage earners than people that file for business partnerships and trusts at a 

higher income level where he fears there is much more cheating. We are losing billions of dollars 

because he does not have the personnel to go where the money is. 

 I think a little bit of what you are telling us here is you don't have the personnel to actually 

do the CAPs and the ICAPs that you need to do. And I think we ought to discuss that and see 

whether or not we can help out in that area and move in that direction. 

 One of the other things that I noted in the correspondence that went back and forth between 

the Department and the Committee was that few of the record-keeping violations are considered 

intentional. You spend a lot of your time when you are doing the audits, if they are not intentional 

and if they are routine in terms of errors, actually helping the unions to correct and refile them. And 

I assume that in those instances penalization is not the goal that you are going after. It is getting 

the materials and getting the information, and eventually getting it up on the Internet if we are all 

successful on that. 

Mr. Findlay. That is exactly right, Congressman. Our aim is not to go out and be punitive. That is 

not what we are about, and it is certainly not an effort to impose burdens that shouldn't be imposed. 

We, for that reason, have asked OLMS, as I mentioned, to put together a compliance assistance 

plan that will make it easier for unions to file these forms. 

 Along with the electronic filing, and some of the other innovations, we go out and give 

seminars, and we have prepared a lot of web-based materials that I think will be able to increase 

compliance efforts as well. 

Mr. Tierney. It looks to me like you have the tools. The question is whether or not you can 

implement them, whether or not you can get the technology into the condition that you want, 
25

whether or not you can get the personnel in to do what the statute allows you to do. 

 I am a little concerned with the flow of this hearing and some of the legislation that has 

been filed that takes you where you just said you don't want to go, or would point in the direction 

of being punitive, as opposed to getting accomplished what the statute wants to be accomplished. 

Before we start looking at new legislation, or giving your department more authority, I think we 

ought to get an assessment once you get your computer system up, once you get some personnel to 

do the CAPs and the ICAPs, and take a look at it then to see whether or not you are still having 

problems, and work on it that way. 

 I am very loath to give your department authority to start finding people. You can already 

bring a civil action. You can already pursue criminal penalties for a willful failure to file required 

reports. I think that is quite sufficient if you utilize the materials that you have within the statute, 

and you get those going, and you get the resources. Given the way we politicize this whole union 

issue and anything like it, I would be loath to give the administration any ability to just go out and 

fine or whatever, until you have fully applied those tools and resources and shown us that the 

statute is deficient somewhere. 

 I just think it causes us to put you in an awkward position. Because, certainly, I think 

anything you did along that line would be challenged, especially as it comes on the heels of 

administrations and policymakers who sometimes make no bones about their position with respect 

to unions. 

 I think that Congress, by a large bipartisan majority, has passed legislation that gave the 

tools. Let's implement them, and let's make sure that the resources are there, and then let's make an 

assessment before we put ourselves in the position of being accused of being vindictive or partisan 

in some way. 

Mr. Findlay. Well, I certainly appreciate your point, Congressman. I guess I would analogize to 

our other agencies, like OSHA, where we are trying to put a greater emphasis on compliance 

assistance. 

 We are trying to be less punitive with respect to OSHA as well, but we still recognize that, 

while we are putting a greater focus on compliance assistance, that enforcement is also a necessary 

part of a balanced strategy. 

Mr. Tierney. But you have the tools for enforcement here. You have the civil penalties. 

Chairman Johnson. The gentleman's time has expired. 

Mr. Tierney. The fact of the matter is that you don't have a track record with full implementation 

and full resources to show us that there is a need to go further, and that was my point. Thank you. 

Chairman Johnson. Thank you, Mr. Tierney. Ms. Solis. 
26

Ms. Solis. Thank you, Mr. Chairman. Also, thank you, Mr. Findlay, for taking the time to come 

out.

 My concern is with respect to how well you have been communicating with the different 

unions that obviously would be affected by these types of decisions that we are discussing here. It 

seems to me that overall the other areas of the agency are out there trying to consult with the 

different parties that would be involved in trying to provide some regulation here. But I would like 

to know if there has been any discussion on your part with any of the large labor unions that we are 

discussing here today that you claim have not been audited. 

Mr. Findlay. The ones that have not been audited? 

Ms. Solis. Or any, for that matter. 

Mr. Findlay. I am certain that OLMS is in contact with many of the unions, certainly, the ones that 

have not been filing on time. If your question is: Have we been consulting with them about not 

filing on time? 

Ms. Solis. I mean where did this issue come up that there is a problem here? Have union members 

or individuals representing those unions come forward, and in what number, and who are they? 

Mr. Findlay. We get about 50,000 requests a year for this information. So I think it is something 

that is of great interest to union members. And then, of course, as some of the examples I 

mentioned earlier show, often these complaints can lead to fairly serious charges by law 

enforcement authorities. 

 So we think there is a significant problem here that needs to be addressed. In terms of 

consulting, I think we meet all of the time with the leaders of the unions here in town. Secretary 

Chao has had dozens of meetings with union leaders. 

Ms. Solis. On this issue? 

Mr. Findlay. I have not been in any of these meetings, so I can't say exactly what has been 

discussed. But union leaders certainly have had many opportunities to discuss these issues with us.

And if they haven't raised them, then I don't know why that would be. 

Ms. Solis. You said 50,000 complaints. Is it with respect to this particular issue? 

Mr. Findlay. I wouldn't want to characterize it as complaints; 50,000 requests for information or 

contacts.

Ms. Solis. But not necessarily regarding this particular issue? 

Mr. Findlay. No, about the LM-2, LM-3, and LM-4 forms. 
27

Ms. Solis. I guess it would be nice to be able to get that information from you in terms of how that 

breaks down in specifics. 

Mr. Findlay. I would be happy to try and supplement the record if we have that information. I 

don't know if we break it down that way. 

Ms. Solis. Thank you. Also going back over the material, the majority of the unions are quite small 

and they don't really have full-time officers, and it appears those that do have union officers are 

serving on a volunteer basis. They are either representing the nursing groups, or Teamsters. It 

might be truckers or people that have another full-time job. It just seems ironic that people that are 

actually doing some of this work on a volunteer basis are really being asked to provide information, 

I mean let's be realistic about this, in the kind of role that some of these officers would play. 

Mr. Findlay. Well, I think there are lots of small companies in this country too where it is really 

just one or two people like mom and pop stores, small partnerships, or small corporations. We 

require those people to file tax forms and other information with the government, and we think that 

the same should apply for small unions who are collecting hundreds of dollars from each of their 

members. 

 And I would say that, as I mentioned before, we do try very hard to minimize the filing 

requirements for the smallest unions. For the very small ones under $10,000 a year, we basically 

ask a very limited number of questions on that LM-4. The LM-4 itself is not a particularly onerous 

form either. I mean it is just a few pages. So we are trying very hard to minimize the paper work 

burdens, recognizing, as you say, that many of these unions are kind of mom and pop operations 

themselves. 

 We do feel like even small entities, just like small business entities, should comply with the 

law and file their forms. 

Ms. Solis. Right, and I don't doubt that. I also am in support of fully disclosing how monies are 

spent. But I think at times that it is unnecessary if there isn't a big problem or issue. I haven't heard 

this from any of the unions in my area, and I communicate with them quite often. I haven't heard 

anything about problems there. 

 And I would just add that it would be good if you did begin consultations or set up some 

kind of a task force or advisory group where you could consult with some of the unions, so we can 

work out or hash out any foreseeable problems that there might be. That is a process that is 

probably more valuable than just some of us sitting up here trying to decide what is right and what 

is wrong, instead of asking those that are in the field for their responses. 

Mr. Findlay. Well, we would certainly welcome any input from unions on how to improve our 

forms, how to improve our compliance assistance. 

Ms. Solis. Would you go as far as maybe setting up an advisory board and allowing individuals to 

serve on that to give you that kind of information? 
28

Mr. Findlay. I am hesitant to commit ourselves to set up yet another committee because we have a 

lot of them. 

Ms. Solis. But if this is such an important issue, and we are talking about proposed legislation and 

putting more resources into this, I think it would be well advised to look at it. 

Mr. Findlay. We will consider that. And, obviously, if we ever were to make regulatory changes, 

it would go through a notice and comment rulemaking process where everyone would have plenty 

of opportunity to tell us what we are doing right and what we are doing wrong. 

Ms. Solis. Thank you. 

Chairman Johnson. Thank you, Ms. Solis. It is the intent of the Chair to recognize Chairman 

Norwood for another question. But we are expecting a series of three or four votes in 10 or 15 

minutes. So after his questioning, we will try to get the rest of the panel in. 

Mr. Payne. In order to try to save time, I won't ask questions. 

Chairman Johnson. Thank you, Mr. Payne. It is a pleasure to work with you.

Chairman Norwood, you are recognized. 

Chairman Norwood. I thank the Chairman. 

Mr. Findlay, I want to associate myself with some of Congressman Tierney's remarks, 

because I agree with him particularly about electronic filing, and maybe especially about Chairmen 

doing whatever they want to do. I have been here about seven years, and I don't see any hope any 

time soon for that to change. 

 I think, at least as far as I am concerned, we have perhaps established that there are 300 

unions that simply don't follow the law and don't file LM-2s at all. But I want to get away from 

that because I think it has been well said in every way it can be said, that your obligation is to do 

something about it. 

 By the way, the electronic filing will be available in a couple of months? Can we count on 

that by July 1st? 

Mr. Findlay. Our folks tell me that they should have it done by the end of May. 

Chairman Norwood. Good. I will call you on June 1st then. 

Mr. Findlay. You may call us on June 1st. And I am sure if we haven't gotten it done, you will. 

Chairman Norwood. We are going to receive testimony from our second panel of witnesses that 

includes the following statement, and I am going to quote out of their testimony. “Unfortunately, 

using today's LM-2s, there is no way an outside observer can effectively determine whether a union 
29

is spending dues revenue consistently with its fiduciary obligation to its members.” Do you agree 

with that? 

Mr. Findlay. I think I spoke earlier about the shortcomings of the LM-2. It is possible for an 

unscrupulous union official to use the broad and general categories of LM-2 to conceal things that 

he or she would like to conceal from his or her members. I think I do agree with that statement. 

Chairman Norwood. I do. I am glad to hear you do, too. I think it is pretty clear. I want to talk 

about DOL's auditing of reported financial forms. Explain to me the procedure for determining 

which disclosures are subject to an audit and which are not. 

Mr. Findlay. Well, for the CAP program, which was for the non-international unions, the decision 

is left to the career staff out in the OLMS field offices. And they do it, as any investigator would, 

based on tips, complaints and intelligence. If something just doesn't look right, then they might do 

an audit. 

 For the ICAPs, which are the audits of large international unions, the decision is made in 

the national office by a sort of systematic analysis. And there is actually a system in place that is 

supposed to flag particular unions for audits at particular times. 

Chairman Norwood. Is that a better process than a random process for auditing? 

Mr. Findlay. Well, I think if you did a random process with 30,000 unions, you could go about 

150 years before a union was audited. And if you know your odds of having an audit are once 

every 150 years, and if your union official is only going to be there say 50 years, you only have a 1 

in 3 chance of having an audit. 

Chairman Norwood. Well, perhaps you could consider both, a few random every year, as well as 

a systematic approach. Once these LM-2 forms are collected electronically as of June, will they be 

made available to anyone who wants to review them over the DOL's website? 

Mr. Findlay. Yes, we have been working with the Department of Commerce, which somehow 

hosts this disclosure system. We believe that we are working out the kinks in that system, and we 

ought to have that up and running by the summer as well, about the same timeframe as electronic 

filing.

Chairman Norwood. All right. And another thought about that form. Later today we are going to 

hear one of the witnesses make a suggestion that DOL be required to compile an aggregate data 

report from the LM forms, so that union members can effectively compare the financial 

performance of their union with others. What is your reaction to that kind of thinking? 

Mr. Findlay. I think in an age of unlimited resources, it would be a great idea. I would think that 

we would want to focus our resources first on increasing the level of compliance, and also doing 

more audits. 
30

 And one other thing I would say about that is once we have the database up on the web, it 

will be searchable and people such as those on the next panel that follows me will be able to 

compile those sorts of reports themselves, I believe. 

Chairman Norwood. So you think the electronic mechanism will be user friendly, so that there 

can be comparisons. 

Mr. Findlay. We are already trying to make it as user friendly as possible. But I think your point 

is something that we will look at to see whether it is easy for us to do as well. 

Chairman Norwood. Later this morning, or after the votes, we are going to receive testimony 

from one of our panelists that has been a labor beat reporter for many years. He is going to testify 

that he and many of his fellow reporters use the financial reports, but find them of very little value 

in terms of receiving useful information when they are investigating allegations of corruption. 

 The fact that seasoned reporters and labor lawyers find these reports of marginal utility, 

suggests to me that the information contained therein obviously is not represented in a way that is 

user friendly for a member of the rank of file. And that is really who I am trying to speak for. 

 What is your opinion on the value of this information for the average member of a union, 

and how do you think these reports can be made more user friendly? 

Mr. Findlay. Well, I would have to defer the questions on how difficult it is for reporters and 

others to look at the forms to the next panel. As I mentioned, many observers have said that these 

forms are very difficult to follow, and that it is very easy to conceal through aggregation particular 

expenditures.

 We are taking a hard look at the LM-2s, and the LM-3s, and LM-4s, as well, to see if they 

can be made more user friendly. There was a proposal in the prior Bush administration to break it 

out in a particular way. We are aware of that proposal. Others have made different proposals. So it 

is something we are looking at, but we have made no decision yet. 

Mr. Payne. Mr. Chairman, may I have a point of personal privilege. 

Mr. Chairman, I think it is really unfair. I, in deference to the witnesses on the other panel, 

was going to forego questions. I have many questions I could have asked, but I thought that 

because we were going to have votes, I would not ask a question. And here we have 10 minutes of 

additional questioning on a second round. I think we all have to try to be fair. We all have a lot of 

intelligence, and we have a lot of things to say, but it is unfair to the other witnesses. And, really, I 

feel it is unfair for me to give up my time, and then listen to 10 minutes of questioning. That is not 

fair.

Chairman Norwood. Mr. Payne, I am very grateful, and I am going to yield the floor.

Mr. Chairman, I do have a lot of other questions. 
31

Chairman Johnson. Fine.

Mr. Payne, if you desire to question, you may. 

Mr. Payne. No, I still have a concern about the other witnesses. It is unfair to them. I want to hear 

what they have to say, so I will not, as I said before, ask any questions. However, I think it is 

inappropriate, and actually rude that we do this to the witnesses. 

Chairman Norwood. Mr. Chairman, point of personal privilege. 

Mr. Payne, I have other questions that I am not going to ask. But I do want to submit them 

in writing to Secretary Findlay and ask that the answers be put in the record. 

Chairman Johnson. All Members will be allowed to submit questions for the record, and the 

record will remain open for 10 days. I presume you would be happy to respond. 

I want to thank you for joining us and once again, and to inform the Department through 

you that this Committee wants to work with you all to improve performance in these critical 

reporting areas. And with those words of thanks, I will dismiss the Secretary at this time, and ask 

our second panel of witnesses to please take the table. At this time, I will also turn the chair over to 

Chairman Norwood, who will introduce the second panel of witnesses. 

Thank you for being with us. 

Mr. Findlay. Thank you, Mr. Chairman. 

Chairman Norwood. [Presiding] I believe that we have learned much from Mr. Findlay, and now 

we have a second panel of witnesses, who will add to this overall understanding. And my friend, 

Mr. Payne, can be assured he is going to have all of the time he wants. 

 First, my fellow Members, we have Mr. Robert Fitch, who is a freelance reporter from New 

York City. Mr. Fitch has covered the labor beat as a freelance reporter for many years and is 

prepared to share with us his perspective on how the information in reports we have been 

discussing is used by the news media. Second, we have Mr. James Coppess, Associate General 

Counsel of AFL-CIO, Washington, D.C. And third, we have Mr. Phillip Wilson, Esq., who serves 

as Vice President and General Counsel for LRI Management Services, Inc., located in Tulsa, 

Oklahoma. 

 Before asking our panelists to begin, I want to remind each of our witnesses that they have 

been invited to speak for approximately five minutes before this joint gathering of Subcommittee 

Members, summarizing their written statements and adding what they feel is appropriate. And I do 

thank all of you gentlemen very much for being here. 

Mr. Fitch, you will begin, and Mr. Coppess, and finally Mr. Wilson will follow you. 
32

STATEMENT OF ROBERT FITCH, FREELANCE REPORTER, NEW 

YORK, NY 

Thanks for inviting me. And second, I want to thank you for your efforts to tear down the 

wall that separates union members from the information they need to hold their leaders 

accountable. Workers need unions to protect them from arbitrary dismissal, to win a measure of 

respect from their employers, to gain the share that they have earned of America's prosperity. 

 In the effort to make sure unions can accomplish these goals, they have been granted 

extraordinary and probably self-defeating privileges. In most states, unions are allowed to impose 

membership on employees where they have jurisdiction. 

 Unions are permitted to levy what amounts to compulsory taxes. They can collect those 

taxes through a compulsory dues check off system. Unions have the right of exclusive 

representation, which means that a union is allowed to act as a monopolist, depriving members of 

seeing how another union might handle the same issues of representation. 

 In the United States, no other nongovernmental organization is allowed these privileges.

The Methodists don't have a jurisdiction, which forces all believers to become Methodists, 

similarly, fraternal organizations, educational organizations, or charitable organizations. Nowhere 

outside of Great Britain do western European countries grant unions these powers. At least they 

haven't since the age of medieval guilds. Given their monopoly status, unions have no incentive to 

provide information to their members. 

 It is up to the Federal Government, which has granted these monopoly powers, to ensure 

that members have the information they need to participate in the decisions that affect their lives. 

At least Congress thought so in 1959, when it passed the Landrum-Griffin Act. Since then I would 

submit the government still has not brought unions into the Information Age. 

 Four primary problems need to be addressed: availability, reliability, intelligibility, and 

comprehensiveness. Because these problems exist, however, it doesn't mean that the LM-2, as it 

presently stands, is worthless. I believe it has some deterrent effect. 

 Union leaders would prefer not to have their salaries and expenditures revealed. This was 

driven home to me in the '90s, when I was working as a consultant to a union. On the basis of my 

experience as a union organizer, I identified several targets for potential organization to a public 

sector union. 

 I was told by a top officer that the union would not be participating in any organization 

drives involving private companies because that would require the union to file the LM-2. Secrecy, 

in other words, trumped the expansion of the membership. 

 Potentially, however, if the material were more available, the LM-2 could provide a greater 

deterrent effect. Unlike federal documents, which researchers can generally depend on being there, 
33

like the information required by corporations from SEC, when it comes to the LM-2, investigators 

find that the form, for one reason or another, is not available. They are in Washington; they are 

misfiled; somebody may be using them; or, as has been pointed out in the hearings, the unions 

simply don't file. 

 The timeliness of this information is very important for investigative journalists. Say, you 

have been assigned a story because there is a union election that particular week, maybe you have 

heard that the incumbent received a huge raise by an executive board dominated by his retainers. 

The problem is that you have heard that from a secondhand source, who is hostile. The union 

president has no comment. He can avoid exposure in the press, simply not filing the LM-2 until 

after the election. The membership is denied the facts that they need to make an informed decision. 

 Besides not filing, the information is simply not reliable in many cases because the union 

leadership can file false information. Can they get away with it? My impression is yes. Union 

leaders don't fear the Office of Labor Management Standards the way taxpayers fear an audit by the 

IRS. Depending on that category, auditing enforcement is from slim to none. Officials do check to 

see if there is a discrepancy between administrative expenses and dues. But what comes of it? 

 Perhaps, I am mistaken, but in New York City I don't know of any significant corruption 

case that has been initiated by an investigation carried out by the local Office of Labor 

Management Standards. This is not because union corruption is unknown in the jurisdictions of 

New York and New Jersey. 

The minimal standards of information, audit enforcement, ought to be one that the SEC 

requires of corporations selling stock to the public. Why shouldn't workers be entitled to at least as 

much information about their union on the LM-2 as investors receive about their corporation on the 

Form 10-K? After all, investors don't have to buy the stock of any particular corporations. For 

workers, membership in a union can be compulsory. 

WRITTEN STATEMENT OF ROBERT FITCH, FREELANCE REPORTER, NEW YORK, NY – 

SEE APPENDIX D 

Chairman Norwood. Thank you very much, Mr. Fitch, for your insightful testimony. 

Mr. Coppess, you have five minutes now please, sir. 
34

STATEMENT OF JAMES B. COPPESS, ASSOCIATE GENERAL 

COUNSEL, AFL-CIO, WASHINGTON, D.C. 

I will briefly summarize the testimony I have submitted in writing. Thank you. 

 The letter I received from the subcommittee last evening explaining the purpose of this 

hearing today stated the Committee's belief, and I will quote, “that a fully informed rank and file is 

the cornerstone of union democracy.” 

 We believe that that sentiment provides the proper focus for the inquiry of the LM reporting 

forms for two reasons: First of all, it is clear under the Landrum- Griffin Act that the purpose of 

requiring union financial reports is to assist the membership in exercising the democratic rights 

within their unions granted by that statute. Secondly, in the end, it is the membership that must pay 

for any reporting that is required by the government through their dues. Their resources should not 

be wasted on generating reports that the membership does not find useful. 

 Given those two facts, which the Committee has recognized in calling the hearing, the need 

for any additional reporting requirements should be driven by membership demand, not by the 

needs of labor management, consultants, or reporters. 

 There has been no suggestion that I have heard that any members have come forward and 

suggested that the forms provide them with too little information, or that whatever delays there 

have been in filing have created problems for the membership in exercising their rights. 

 I would ask the Committee to keep its focus on the members, and not the other interests that 

can intersect on this issue. It was only through reviewing the materials to this Subcommittee that 

we learned that the Department was at all considering any changes in the form. 

 It is most certainly not true that the Department has made any attempt to consult with the 

labor unions about any needs in the reporting requirements, or any systemic problems that should 

be addressed in late reporting or a failure to report. 

 Something much like this occurred in the waning days of the first Bush Administration 

when the LM-2 forms were used opportunistically as a club to attack labor unions. The 

Department of Labor in the first Bush Administration proposed changing the forms in such a onesided and ill-considered way that the effort was denounced by the very persistent Secretary of 

Labor, whose name the proposals appeared over, one Robert Guttman. 

 He called the proposals, I quote, “a lot of junk,” that imposed, and I quote again, 

“unconscionable burdens on unions,” and he complained that the Department hadn't conferred with 

labor unions at all in coming up with the proposal, but had only conferred with the Right to Work 

Committee in the single accounting firm. That was the very official in the first Bush Administration 

who is nominally responsible for this reporting requirement denouncing the very effort. And it 

seems as though that the Department of Labor in the second Bush Administration is well on the 

way to repeating those errors. 
35

 Reading the Department's testimony here today, it appears that there are two primary 

concerns that they have raised: the first is with late and non-reporting; and the second, more 

vaguely put, is with the broad categories of the forms. 

 With respect to late and underreporting, as the members have brought out during the 

testimony by the Department spokesman, the Department's figures reflect in fact a very high degree 

of reporting by the larger labor organizations; in fact, a figure of less than one-half of one percent 

of non-reporting, some 20 unions out of 5,000 filers in that category. 

 There have been late reports, that is true, by about a quarter of the filers, but these late 

reports are undoubtedly due to three factors: 

 First of all, as Chairman Johnson indicated, by holding up the very thick packet of paper 

that constitutes a typical LM-2 report, they are very complicated forms. 

 Secondly, the due date for the LM form is considerably before the due date for the 990 form 

required by unions to file with the IRS. 

 And, finally, unlike the IRS filings, there is no mechanism for requesting an extension of 

the filing of the LM form. 

 As to the broad categories, it may be that all of the categories need to be reconsidered. 

Some of them are ridiculously fine others may be too broad. But you would think that that would 

be a matter of consultation with the reporting organizations, and with the people who are supposed 

to be using the forms. 

 I will just rest on the rest of my written testimony. I can see everybody is in a hurry to get 

out of here. 

WRITTEN STATEMENT OF JAMES B. COPPESS, ASSOCIATE GENERAL COUNSEL, AFLCIO, WASHINGTON, D.C. – SEE APPENDIX E 

Chairman Norwood. Actually, we are just going to go vote and come back. Thank you very 

much, Mr. Coppess, for your testimony. 

Ladies and gentlemen, what we will do is finish Mr. Wilson's testimony, and then recess for 

one hour while we go through 1515 and 527, and then come back at whatever time that will turn 

out to be. 

Mr. Wilson, you now have five minutes. 
36

STATEMENT OF PHILLIP WILSON, VICE PRESIDENT AND GENERAL 

COUNSEL, LRI MANAGEMENT SERVICES, INC., TULSA, OK 

Thank you, Mr. Chairman, Members of the Committee. I will try to keep my comments 

brief, so you can get to your vote. 

 The purpose, as has been testified here, of the Labor Management Reporting and Disclosure 

Act, is to give information to members so that they can democratically police their own unions. As 

has also been testified, it is clear that the enforcement and the administration of the LMRDA are 

failing in this regard. 

 I would like to agree with Mr. Coppess's testimony that the focus of this hearing and the 

focus of the legislation should be on the members. But I would disagree with him that it should be, 

for example, on the convenience of the labor organizations that would request to get either 

extensions or just simply choose not to file the information. That does not help union members. 

 Our firm, although it does help management, regularly gets requests from union members 

for copies of these LM forms. The fact of the matter is that unions do not distribute these forms 

readily. They are difficult to get a hold of. In fact, one of the reasons that businesses like ours exist 

is because of the fact that these forms are difficult to understand. They are very difficult to get a 

hold of for a layperson. And once they get a hold of the form, they really don't know what to make 

of the information. 

 I have done an extensive review of the history of the Act and of the latest filings by 10 of 

the largest labor organizations in the country, as well as the AFL-CIO's latest LM-2 filing, and have 

found numerous inconsistencies, both in their complying with the requirements of the Secretary of 

Labor, and, additionally with the requirements of the Labor Management Disclosure Act's Title II 

provisions. In many ways, the instructions on the LM-2 form, in my opinion, do not comport with 

the requirements of the Labor Management Disclosure Act's Title II provisions, whatsoever. 

 So even if a union were to comply with the instructions, which as we have learned today, 

doesn't happen that regularly, their report is still not going to give union members the information 

that Congress in the Landrum-Griffin Act wanted them to have. 

 The three major criticisms of the Act, and I won't go into detail on these because we have 

talked about them a lot, are that there is late filing and no filing. These forms are not distributed to 

union members. They are also often incomplete and inaccurate. There are no audits of these 

forms. And, finally, they are just not functional. 

 My testimony that I have submitted makes a series of recommendations. I would like to 

highlight four. The first recommendation is that Section 9(f) of the National Labor Relations Act 

should be reinstated. This section was repealed by the LMRDA back in 1959, and it provided 

basically that in order for a union to have access to the National Labor Relations Board process, 

that it would certify with the Department of Labor that it had complied with the requirements of 

filing its constitution, its bylaws, and its LM form, whether that be an LM-2, LM-3, or LM-4. 
37

 Additionally, the union had to certify that it had provided these documents to its union 

members. Now, if our focus here is going to be on the members, I think it makes an imminent 

amount of sense to include 9(f) back into the National Labor Relations Act. 

 This gets the enforcement out of the hands necessarily of private union members who very 

often do not have the resources to bring a private action. It gets it out of the hands of the 

Department of Justice and the Department of Labor, that we have heard today have other priorities, 

and, possibly, even more important priorities. And it gets it back into the hands of unions and 

companies that whenever the union wants to use the processes of the National Labor Relations 

Board, it should have to comply with its reporting requirements in giving information to its 

members. 

 The other three recommendations I make are to add civil penalties. I won't talk about that 

because it has already been discussed earlier. I think that there should be detailed schedules for all 

transactions over $250 by unions. This is the same requirement that is required by Schedule 1 of 

the current LM-2 form, and I think that it is the best reported section of the current form. 

 Finally, I think there should be functional reporting. By that, I mean that the union should 

have to report according to how much money they spent on organizing, how much they spent on 

contract administration, and how much money is spent on nonrepresentational issues. This will 

help both with the compliance with the Beck decision by the U.S. Supreme Court, and also will 

make the forms functional and understandable for union members. As we have said here today, this 

should be the focus of our discussion. 

 With that, I will close, and I am happy and looking forward to hearing your questions. 

WRITTEN STATEMENT OF PHILLIP WILSON, VICE PRESIDENT AND GENERAL 

COUNSEL, LRI MANAGEMENT SERVICES, INC., TULSA, OK – SEE APPENDIX F 

Chairman Norwood. Thank you very much, Mr. Wilson. 

The Committee will be in recess until 1:15 p.m. Everybody please try to be back exactly at 

that time, because there is another hearing this afternoon. Have some lunch. We will be back as 

quickly as we can. 

[Recess.]

Chairman Norwood. This hearing will come to order. 
38

In returning, I would like to note that Mr. Coppess had a previous engagement and has 

asked us to note that he is very sorry he is not going to be here, but he would be delighted to 

answer questions for the record 

Mr. Andrews, I would like to let you start with questions, and back to me, if you please. 

Mr. Andrews. Thank you very much, Mr. Chairman. I appreciate the witnesses being here. I 

know it has been a long day, and please do not take the scheduling disruption as any disregard for 

your testimony, or disrespect for your time. It is the fault of the Majority on the floor. 

Mr. Wilson, I wanted to ask you about a proposal I thought I heard you talk about here. Did 

I hear you say you thought there should be greater reporting descriptions of transactions by unions 

in excess of $250? 

Mr. Wilson. Yes, that was one of my recommendations. 

Mr. Andrews. Well, tell me more about what kinds of disclosures you think ought to be made in 

such transactions? 

Mr. Wilson. Well, unfortunately, we haven't really talked very much today about what exactly is 

on the LM-2 form and Schedule 1. 

Mr. Andrews. I did read your statement though. 

Mr. Wilson. Okay. 

Mr. Andrews. Schedule 1 that is on the current form requires unions to list any loan in excess of 

$250. In my review of all of the FY2000 LM-2 forms from the 10 largest unions I thought that that 

was probably the best reported section on the form. And I believe in many of these broad 

categories for example, professional fees, gifts, there is literally millions of dollars reported on the 

form with no follow-up schedule. 

 And by the way, I would say parenthetically, that I think that each of the two witnesses is 

right. The uses of generic categories on the reporting forms are not very helpful. You really can't 

do much to figure out where your money is going if you are a member. 

 But I want to ask you this question. If a union paid a $325 phone bill, what would they 

have to disclose about that transaction? 

Mr. Wilson. I guess, first of all, I would say that the Secretary of Labor, probably in consultation 

with unions and their members, would want to come up with some type of reporting that makes 

sense. But, in my opinion, the payment of the $325 phone bill simply would just be reported as 

that.

Mr. Andrews. Would you require that the itemized phone bill be made part of the record? 
39

Mr. Wilson. Again, I would probably think the Secretary after investigating it, would probably 

know better. 

Mr. Andrews. What about bills submitted by law firms representing the union? How much 

disclosure would there have to be? 

Mr. Wilson. Right now, that would be included in professional fees. My proposal is not just that 

the bills, or the amounts paid to people like law firms be disclosed, but also were those payments 

the matters that were being discussed, were they related to organizing, were they related to 

collective bargaining, or were they related to non-representational matters? 

Mr. Andrews. How detailed does it have to be? What if a union under your proposal submitted a 

bill that said we paid a law firm $5,000 last month to give us advice on organizing? Is that good 

enough? 

Mr. Wilson. Again, I would leave that to the Secretary. It would be vastly better than what we 

have now, which is as you know, “we spent $5 million on professional fees”. 

Mr. Andrews. Well, I appreciate you wanting to leave it to the Secretary, but it was your proposal, 

and I just want to flesh it out. The specific point that I raise is lawyer/client privilege. You are an 

attorney, I assume? 

Mr. Wilson. Yes. 

Mr. Andrews. If we were involved in a civil dispute, and I, in discovery, attempted to get from 

your client copies of the bills that you had submitted to the client, I assume that you would object, 

quite justifiably, on grounds of lawyer/client privilege. It might tell me about what advice you are 

giving them. 

Mr. Wilson. Right. 

Mr. Andrews. To what extent should lawyer/client privilege be accommodated in your proposal? 

Mr. Wilson. Well, because I wouldn't have a fiduciary duty to the opponent in the lawsuit, I would 

feel differently about that case than I would in the case of a union. 

Mr. Andrews. But, of course, you are talking about public disclosure, not just to those to whom a 

union has a fiduciary duty. Is that right? If it is going to go on the Internet, everybody could read 

it, right? 

Mr. Wilson. Well, the idea is that it gets to the union members. And so for those purposes, in 

order for them to meet the burden of their fiduciary duty, I think that they should have to report 

those fees. 

Mr. Andrews. But report what about them? Is the example I gave you sufficient? 
40

Mr. Wilson. For what category? My proposal is that they report what category that they fit in. So 

is it advice on organizing? Is it advice on collective bargaining? Is it advice on nonrepresentational matters? 

Mr. Andrews. I will conclude. I just want to state the question one more time. What I am asking 

your opinion on is whether or not a disclosure that says, “We spent $5,000 for XYZ law firm to 

give us advice on organizing,” is a sufficient disclosure, in your opinion? 

Mr. Wilson. I believe so, or at least some matter that the fees were aligned to, so that a union 

member that was interested in finding out what fees were paid to what firm for what matter could 

figure it out. 

Mr. Andrews. Thank you. 

Chairman Norwood. Thank you, Mr. Andrews. 

Mr. Fitch. Can I add on to what Mr. Wilson said about legal fees, in response to the Congressman? 

Chairman Norwood. Certainly you can. 

Mr. Fitch. In New York City, in the case of District Council 37, the American Federation of State 

County Municipal Employees, it eventually turned out that more than half of the locals were 

headed by people who were indicted and/or convicted of felonies. The case turned on a situation in 

a small local, where the president kicked back a half million dollar legal fee to a mob-connected 

attorney.

I feel that if the unions were required to identify their 10 largest vendors, which might very 

well include a law firm, it might be possible for members and reporters to smoke out some of these 

people, and that would act as a deterrent to a great deal of the corruption that we see day-to-day in 

cities like New York. 

Chairman Norwood. Thank you, Mr. Fitch.

I will yield myself five minutes for questions. I am sorry Mr. Coppess is not here, because 

one of the statements he made is that he thought that we might be making a terrible error by asking 

the unions to report in detail how they spend their union members money. 

 I think that is really all I see this as. There should be a responsibility, to the people who pay 

their dues, for the people who run the unions to simply disclose to the members how they expend 

their funds. 

Mr. Fitch, there has been a lot of talk this morning in this hearing about how corruption is 

not a problem in the labor movement. All of this is just after going after a few rotten apples. Now 

you have a great deal of experience in this area as an organizer, and a labor reporter. I would like 

for you to talk a few minutes based on your experience. How really serious do you think 
41

corruption is in the unions today? 

Mr. Fitch. Thank you, Mr. Chairman. I have a lot of experience in hearing the argument that it is 

only a few rotten apples. Almost every response to a major corruption case is that these cases are 

isolated. Even people who were strongly critical of union corruption will always minimize it, in 

terms of the existence of 6,000 locals in the United States. I submit that the efforts to identify 

corruption simply are nonexistent because it is just anecdotal, and has to fail because there haven't 

been any systematic studies of the kind you really need. 

 For example, when Erin Brockovich was finding all of these cases of cancer that were 

caused by PG&E, they were always dismissed as anecdotal, but it wasn't possible to find out 

exactly what the incidence was until much more research of a comprehensive kind had been done. 

 At the present time, because no such comprehensive examination has been done, we have to 

look at those instances that are most telling. And I would suggest two: One is the case of D.C.37, 

which I just mentioned, which was the largest municipal local in New York City, which had a 

membership of 125,000, but perhaps more importantly was identified by academic authorities as 

probably the outstanding municipal union in America. And it turned out that over half of the union 

presidents in that institution were guilty of felonies. 

 I would also suggest that the recent Global Crossing case is relevant. According to 

information that has been developed by the Wall Street Journal in last Friday's feature story, the 

board of directors of ULLICO appropriated approximately $7 million in insider trading income. 

Business Week has run several stories, and the Engineering News Record has also reported. Their 

ability to carry out this insider trading was completely connected to the price of Global Crossing 

stock, and they were a major stockholder in Global Crossing and had a member of their board on 

Global Crossing's board. 

 It seems to me that if you have well over a third of the entire leadership of the AFL-CIO 

involved in alleged conflicts of interest like that, it indicates a very serious problem. 

Chairman Norwood. Would an LM-2 form that is extensive and clear explain that? 

Mr. Fitch. Yes, sir. 

Chairman Norwood. Or have discovered that? 

Mr. Fitch. Yes, the proposal that I was suggesting would require that the outside income of labor 

leaders be reported. Then they would have to list the income they made from selling their ULLICO 

stock, which was hundreds of thousands of dollars. 

Chairman Norwood. And as an investigative reporter with a good LM-2 form, or one that 

certainly is expansive, you could have determined that early on. 

Mr. Fitch. This does not require a great amount of effort, just list your major outside sources of 

income, and it certainly would have been helpful. It is only until recently that I discovered that 
42

ULLICO, which is a labor movement institution that goes back to the 1920s, had changed its 

corporate governance, so that it is possible for the directors to make large amounts of money on 

these kinds of trades. 

Chairman Norwood. I see my time is up. Major Owens, would you like to question for five 

minutes? 

Mr. Owens. Yes, his launch into corporate corruption interests me a great deal. I was going to let 

you go on. But I think seriously there is a question of why unions should have a duty to the 

LMRDA. They already must lead under NLRA. 

 If you want to refine this process, and I am all in favor of it, update the process so you get 

information that you really need. But when I hear you want to report on $250 loans, and break out 

what lawyers did, I would be willing to help develop the forms to do that if we are doing it for 

corporations as well as for unions. 

 It may be that wherever you find a species of homo sapiens corruption is a possibility, and 

usually corruption will take place if you don't have some kind of check and balance or some kind of 

safeguard. Let's assume that, but develop in a rational way. 

 When you are talking about a $250 loan being detailed, you breed contempt for the 

reporting process. So we ought to jointly try to develop some way to monitor and hold accountable 

all of these institutions. But the lopsided nature, with respect to corporate America, gets away with 

almost no significant exposure of what they are doing. 

 The people who are the little guys in the unions what with the 401(k)'s and the pension 

plans that companies have don't know what the board of director members are paid as stipends, let 

alone can they keep up with the amount of money the corporate executives are paid. Because you 

have to be a genius to figure out the combination of salary plus options and all of the things that go 

into financial enumeration for a corporate executive. So we could use some honesty all over, and I 

think it ought to be across the board universally. 

 I wonder even if you had had the top notch reporting on the present forms, how much 

would you really have learned, Mr. Fitch? Did you spend much time with these LMRDA forms? 

Do they really tell you much, or do you complain about the fact that the forms don't really tell you 

much? 

Mr. Fitch. No, I didn't say that. I said the opposite. I said that they do produce a deterrent effect. 

Mr. Owens. But D.C. 37, the form would not have caught them, would it? 

Mr. Fitch. It certainly would have.

Let's take Al Diop. If Al Diop had been forced to indicate that in a union where the 

members talk about the little guys averaging $20,000 a year, he was making a quarter of a million 

dollars a year just on salary. I think that if members were outraged at that, they might have been 
43

able to take care of Al Diop before the district attorney. 

Mr. Owens. But they had reported. 

Mr. Fitch. They did not.

The difference is this, Congressman. D.C. 37, the entire entity of the district council, does 

have to report because they represent private sector employees. But locals, like Al Diop's Local 

1549, did not have to report because he is not covered by the Act. 

Mr. Owens. So I would be willing to help you develop a better form of reporting, as long as it 

made sense, as long as it was across the board, and we reigned in corporate power that has billions 

and billions of dollars more at stake for ordinary people than for unions. 

Mr. Fitch. But we have to acknowledge that there are union leaders who reinforce that corporate 

power by illegally colluding with them, Congressman. 

Mr. Owens. Small fries, yes. 

Chairman Norwood. Major Owens, are you done? 

Mr. Owens. Yes, I believe I am done. 

Chairman Norwood. Okay. There will be additional questions, gentlemen, in writing that we 

would all appreciate your attending to and answering, and we will submit those for the record. 

 And I want to say to both of you how much I appreciate your time, and effort, and energy to 

be here. I view this as a project that really should be bipartisan in nature, because I really believe 

we are all on the same page, and we are all interested in trying to protect those workers. 

 Let me summarize what I think we have learned today. The LMRDA reporting 

requirements and agencies at the Department of Labor that administer these laws are critical, in 

terms of ensuring that union members will have all of the necessary information to take effective 

action to protect their rights. I think that is what this is about. This is supported by a GAO study. 

And I will note for the record that basically Mr. Coppess did not agree with the testimony that we 

have received today. He actually said he thought it would be a great error for us to have unions 

report in detail how they spent their money. 

Mr. Andrews. Chairman, may I? 

Chairman Norwood. I will certainly yield. 

Mr. Andrews. I want the record to reflect that that would not be my characterization of what Mr. 

Coppess said, and his words will speak for themselves. But he wanted to be sure that there were 

not unduly burdensome requirements on people unable to comply. 
44

Chairman Norwood. You are correct. But he did say the other, too, and I'm correct because I 

copied it down as he said it. And the record will speak for itself. 

 Despite the importance of these programs and a general recognition that these programs are 

essential for the principles of union democracy, that we hold so dear, in order for unions to be able 

to function properly, these reporting programs have been undeniably plagued with a record of poor 

performance over the years. 

 First, data strongly suggests that many unions simply do not take these legal obligations that 

seriously. In too many instances, current information is not available due to the disregard for filing 

deadlines, or in some cases, a total failure to meet these obligations altogether. 

 Secondly, this flaunting of the law is understandable because of a total lack of enforcement 

by the DOL. I view them as just as guilty. This lack of enforcement stems from three strange 

phenomena. DOL lacks an effective statutory authority to compel timely filing of the reports. 

Voluntary compliance has resulted in a terrible track record of performance in which as many as 

one-third of the universe of reporting entities reported late or not at all. DOL severely lacks the 

resources to adequately enforce these reporting requirements. What statutory authority they do have 

now is severely hampered by legal and program conflicts that render these important reporting 

functions of secondary importance. And one wonders if DOL has had the desire to effectively 

enforce these laws. 

 While lack of legal authority and resources are critical components of failure, so is doing 

little to nothing to try to maximize a program outcome with what DOL has had available to them. 

We learn that the process of auditing the information received is severely lacking. DOL has 

conducted few audits of large international unions in recent years, and has conducted few audits on 

the smaller unions. As a result, no one seems to be able to tell us whether the information we have 

reported is accurate and complete. We learn that while these reports were seen as critical in 

empowering union members, the value of the required information to be reported is really of very 

marginal use. Simply stated, it is not user friendly and must become so if it is to have any real 

value for union members in their efforts to oversee the financial management of their organizations. 

 And, finally, and of most importance, we learned that DOL wants to work with Congress to 

improve the value and performance of these reporting programs. We have agreed to work together 

to see that these programs fully achieve their statutory mandate. And I underline we have agreed to 

work together. I really do believe strongly that both sides of the aisle need to come together to do 

what we set out to do, which is to help the actual members of the union. 

Mr. Andrews. I assume that the record is being kept open for the addition of further comments 

from Members of the Subcommittees. 

Chairman Norwood. So ordered. 

Mr. Andrews. With that, I would yield back. 

Chairman Norwood. Thank you. Gentlemen, we now stand adjourned. 
45

Whereupon, the Subcommittees were adjourned. 
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Table of Indexes 

Chairman Johnson, 2, 4, 7, 8, 11, 12, 13, 15, 18, 20, 22, 23, 25, 28, 31 

Mr. Andrews, 13, 14, 15, 38, 39, 40, 43, 44 

Mr. Ballenger, 20, 21, 22 

Mr. Findlay, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31 

Mr. Fitch, 33, 40, 41, 42, 43 

Mr. Norwood, 3, 7, 15, 16, 17, 28, 29, 30, 31, 33, 35, 37, 40, 41, 42, 43, 44 

Mr. Owens, 18, 19, 20, 42, 43 

Mr. Payne, 28, 30, 31 

Mr. Tierney, 23, 24, 25 

Mr. Wilson, 35, 38, 39, 40 

Ms. Rivers, 22, 23 

Ms. Solis, 26, 27, 28 


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271

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN A. BOEHNER, Ohio, Chairman 

THOMAS E. PETRI, Wisconsin GEORGE MILLER, California 

MARGE ROUKEMA, New Jersey DALE E. KILDEE, Michigan 

CASS BALLENGER, North Carolina MAJOR R. OWENS, New York 

PETER HOEKSTRA, Michigan DONALD M. PAYNE, New Jersey 

HOWARD P. “BUCK” McKEON, California PATSY MINK, Hawaii 

MICHAEL N. CASTLE, Delaware ROBERT E. ANDREWS, New Jersey 

SAM JOHNSON, Texas TIM ROEMER, Indiana 

JAMES C. GREENWOOD, Pennsylvania ROBERT C. “BOBBY” SCOTT, Virginia 

LINDSEY O. GRAHAM, South Carolina LYNN C. WOOLSEY, California 

MARK E. SOUDER, Indiana LYNN N. RIVERS, Michigan 

CHARLIE W. NORWOOD, JR., Georgia RUBEN HINOJOSA, Texas 

BOB SCHAFFER, Colorado CAROLYN McCARTHY, New York 

FRED UPTON, Michigan JOHN F. TIERNEY, Massachusetts 

VAN HILLEARY, Tennessee RON KIND, Wisconsin 

VERNON J. EHLERS, Michigan LORETTA SANCHEZ, California 

THOMAS G. TANCREDO, Colorado HAROLD E. FORD, JR., Tennessee 

JIM DeMINT, South Carolina DENNIS KUCINICH, Ohio 

JOHNNY ISAKSON, Georgia DAVID WU, Oregon 

BOB GOODLATTE, Virginia RUSH D. HOLT, New Jersey 

JUDY BIGGERT, Illinois HILDA L. SOLIS, California 

TODD RUSSELL PLATTS, Pennsylvania SUSAN DAVIS, California 

PATRICK J. TIBERI, Ohio BETTY McCOLLUM, Minnesota 

 RIC KELLER, Florida 

 TOM OSBORNE, Nebraska 

 JOHN ABNEY CULBERSON, Texas 

 JOE WILSON, South Carolina 

Paula Nowakowski, Chief of Staff 

 John Lawrence, Minority Staff Director

 

 SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS 

 SAM JOHNSON, Texas, Chairman

JIM DeMINT, South Carolina ROBERT E. ANDREWS, New Jersey

JOHN BOEHNER, Ohio DONALD M. PAYNE, New Jersey 

MARGE ROUKEMA, New Jersey DALE E. KILDEE, Michigan 

CASS BALLENGER, North Carolina LYNN N. RIVERS, Michigan 

PETER HOEKSTRA, Michigan CAROLYN McCARTHY, New York 

HOWARD P. “BUCK” McKEON, California JOHN F. TIERNEY, Massachusetts 

THOMAS G. TANCREDO, Colorado HAROLD E. FORD, Jr., Tennessee 

PATRICK J. TIBERI, Ohio 

JOE WILSON, South Carolina 
272

HEARING ON REPORTING AND DISCLOSURE UNDER 

THE LABOR-MANAGEMENT REPORTING AND DISCLOSURE ACT: 

LEGISLATIVE REFORM PROPOSALS 

Table of Contents 

OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, SUBCOMMITTEE ON 

EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON EDUCATION AND THE 

WORKFORCE ........................................................................................................................... 276

STATEMENT OF CONGRESSWOMAN LYNN RIVERS, SUBCOMMITTEE ON 

EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON EDUCATION AND THE 

WORKFORCE ........................................................................................................................... 278

STATEMENT OF PAUL HUEBNER, CARPENTER AND UNION MEMBER, TAKOMA 

PARK, MD ................................................................................................................................. 279

STATEMENT OF ROBERT F. O'BRIEN, ATTORNEY, TOMAR, O'BRIEN, JACOBY, AND 

GRAZIANO, CHERRY HILL, NJ............................................................................................. 281

STATEMENT OF PAUL ROSENZWEIG, SENIOR LEGAL RESEARCH FELLOW, CENTER 

FOR LEGAL AND JUDICIAL STUDIES, THE HERITAGE FOUNDATION, 

WASHINGTON, D.C................................................................................................................. 284

STATEMENT OF PHILIP B. WILSON, VICE PRESIDENT AND GENERAL COUNSEL, LRI 

MANAGEMENT SERVICES, INC., TULSA, OK ................................................................... 286

APPENDIX A - WRITTEN OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON 

EDUCATION AND THE WORKFORCE................................................................................. 303

APPENDIX B - WRITTEN STATEMENT OF PAUL HUEBNER, CARPENTER AND 

UNION MEMBER, TAKOMA PARK, MD.............................................................................. 309

APPENDIX C - WRITTEN STATEMENT OF ROBERT F. O'BRIEN, ATTORNEY, TOMAR, 

O'BRIEN, JACOBY, AND GRAZIANO, CHERRY HILL, NJ................................................ 315

APPENDIX D - WRITTEN STATEMENT OF PAUL ROSENZWEIG, SENIOR LEGAL 

RESEARCH FELLOW, CENTER FOR LEGAL AND JUDICIAL STUDIES, THE HERITAGE 

FOUNDATION, WASHINGTON, D.C..................................................................................... 321
273

APPENDIX E - WRITTEN STATEMENT OF PHILIP B. WILSON, VICE PRESIDENT AND 

GENERAL COUNSEL, LRI MANAGEMENT SERVICES, INC., TULSA, OK.................... 329

APPENDIX F – SUBMITTED FOR THE RECORD, STATEMENT OF THOMAS J. 

VERDONE, FORMER RECORDING SECRETARY, MILLWRIGHT LOCAL 1693 – 

CHICAGO, JUNE 15, 2002 ....................................................................................................... 335

APPENDIX G – SUBMITTED FOR THE RECORD, STATEMENT OF GREGG SHOTWELL, 

DELEGATE, UAW LOCAL 2151, JUNE 22, 2002.................................................................. 339

APPENDIX H – SUBMITTED FOR THE RECORD, STATEMENT OF PHILIP LAVALLE, 

CARPENTERS LOCAL 225, ATLANTA, GA, VICE PRESIDENT, CARPENTERS FOR A 

DEMOCRATIC UNION INTERNATIONAL........................................................................... 343

APPENDIX I – SUBMITTED FOR THE RECORD, STATEMENT OF MICHAEL BILELLO, 

CARPENTERS LOCAL 157, NEW YORK, NY ...................................................................... 347

APPENDIX J – SUBMITTED FOR THE RECORD, STATEMENT OF ROBERT L. 

CARLSTON, MEMBER, UBC LOCAL 1977, LAS VEGAS, NV........................................... 351

APPENDIX K – SUBMITTED FOR THE RECORD, STATEMENT OF CHUCK CANNON, 

UBC PILE DRIVERS LOCAL 34 ............................................................................................. 357

APPENDIX L – SUBMITTED FOR THE RECORD, STATEMENTS, JEFF RUHA, 

ONGOING IBT/OFAA BATTLE OVER LOCAL 2000 AUTONOMY, JULY 10, 2002, ET AL

.................................................................................................................................................... 367

APPENDIX M – SUBMITTED FOR THE RECORD, STATEMENT OF MICHAEL 

LIVINGSTON, L.U. 157, NEW YORK, NY,............................................................................ 381

APPENDIX N – SUBMITTED FOR THE RECORD, STATEMENTOF MARTIN CONLISK, 

IBEW #134, JULY 4, 2002 ........................................................................................................ 385

APPENDIX O – SUBMITTED FOR THE RECORD, STATEMENT OF DAVID JOHNSON, 

CARPENTERS UNION 44, CHAMPAIGN, IL........................................................................ 389

APPENDIX P – SUBMITTED FOR THE RECORD, STATEMENT OF MIKE GRIFFIN, 

DECATUR, IL............................................................................................................................ 393

APPENDIX Q – SUBMITTED FOR THE RECORD, STATEMENTOF JACKIE 

FITZGERALD, MEMBER, UTU .............................................................................................. 399

APPENDIX R – SUBMITTED FOR THE RECORD, STATEMENT OF JAMES LYNCH, 

UNITED BROTHERHOOD OF CARPENTERS, DOCKBUILDERS LOCAL 1456, NEW 

YORK, NY ................................................................................................................................. 403
274

Table of Indexes.......................................................................................................................... 406
275

HEARING ON REPORTING AND DISCLOSURE UNDER 

THE LABOR-MANAGEMENT REPORTING AND DISCLOSURE ACT: 

LEGISLATIVE REFORM PROPOSALS 

____________________

Thursday, June 27, 2002 

Subcommittee on Employer-Employee Relations 

Committee on Education and the Workforce 

 U.S. House of Representatives 

Washington, D.C. 

 The Subcommittee met, pursuant to notice, at 10:52 a.m., in Room 2175, Rayburn House 

Office Building, Hon. Sam Johnson, Chairman of the Subcommittee, presiding. 

 Present: Representatives Johnson, McKeon, Andrews, Kildee, Rivers, and Tierney. 

 Staff present: Steve Settle, Profesional Staff Member; Dave Thomas, Legislative Assistant; 

Travis McCoy, Legislative Assistant; Ed Gilroy, Director of Workforce Policy; David Connolly, 

Jr., Professional Staff Member; Patrick Lyden, Professional Staff Member; Deborah L. Samantar, 

Committee Clerk/Intern Coordinator. 

Camille Donald, Minority Legislative Counsel; Peter Rutledge, Minority Senior Legislative 

Associate/Labor; Dan Rawlins, Minority Staff Assistant/Labor. 
276

Chairman Johnson. The Subcommittee on Employer-Employee Relations will come to order. 

Since we had an unusual ruling out west, I am going to ask everyone to stand, and we are going to 

say the pledge of allegiance to our flag. Will you join me? 

I pledge allegiance to the flag of the United States of America, and to the republic for 

which it stands, one nation, under God, indivisible, with liberty and justice for all. 

 Thank you. You may be seated. The Subcommittee is going to hear testimony today on 

reporting and disclosure under the Labor-Management Reporting and Disclosure Act. We are going 

to specifically focus on two bills that I have introduced, H.R. 4054 and 4055, which would help to 

ensure that the financial reporting system under the Act benefits rank and file workers. 

 I am eager to get to our witnesses, so I am going to limit opening statements to the 

Chairman and Ranking Minority Member. If other Members have statements, they will be included 

in the record, if they so desire. With that, I ask unanimous consent for the hearing record to remain 

open 14 days to allow Members' statements and other extraneous material referenced during the 

hearing to be submitted for the official record. Hearing no objections, so ordered. 

OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS, 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

 I remember on April the 10th, this Subcommittee began hearings to assess the strengths and 

weaknesses of the programs to implement Congress' mandate for reporting and financial disclosure 

under the Labor-Management Reporting and Disclosure Act, or LMRDA, otherwise known also as 

the Landrum-Griffin Act. 

 This act was designed to give union members a variety of rights, including the right to 

know how their money is being spent. It also requires that these individuals and entities file 

reports. That hearing began with my stating something that I firmly believe; the cornerstone of 

union membership rights is the availability of current, complete, and reliable information about the 

activities of a labor organization. 

 It is clear that Congress expected, with the passage of LMRDA, that union democracy 

would be the first line of defense against union corruption. In essence, armed with knowledge, 

union members will elect leaders who work in their best interests, and rid themselves of union 

officials who serve their own interests. 

 As Cameron Findlay, Deputy Secretary of the Department of Labor stated in his April 

testimony, “Knowledge and information are among the most powerful tools for a democracy, 

including democracy within labor unions.” Findlay also mentioned that existing forums that were 

created 40 years ago and have been substantially unchanged since then simply have not kept pace 
277

with changes in financial practice. 

 Despite the level of importance, what the Subcommittee learned at that hearing was very 

disappointing. Unions have exhibited a poor record of performance. In far too many instances, 

current information is not available, due to either a complete disregard for filing deadlines, or total 

failure to comply with the law. Amazingly, we discovered that in the year 2000 over one-third of 

the unions required to report annually did not. Can you imagine what would happen if one-third of 

America's taxpayers didn't report their earnings to the IRS? 

 How should Congress respond, after learning that reporting and disclosure obligations are at 

a 34 percent rate of non-compliance? That's a 34 percent failure rate, by any standard. That can 

only be described as full-fledged flaunting of the law. The rate is not acceptable, and these 

programs must be revised and reformed immediately. And today, we're going to begin the 

discussion of turning these programs around, and trying to find solutions. 

 First, these programs have been given a very low priority by previous administrations. In 

the past, the resources available to the Department of Labor have been inadequate. This 

Subcommittee is working with the Bush Administration and Secretary Chao to reprioritize 

LMRDA enforcement. Second, we found that it's necessary for the Administration to improve the 

regulatory requirements for reporting and disclosure, and hopefully update financial report forms. 

Our objective is to ensure the delivery of timely, accurate, and understandable information. Finally, 

we have found that a significant cause of the program's poor reporting performance is the lack of an 

effective enforcement authority. 

 In summary, the problems are threefold, the combination of fiscal limitation, administrative 

failure, and statutory weakness. And we will look at two specific proposals that I have introduced 

to correct the statutory weaknesses. 

 First, H.R. 4054 would amend LMRDA to provide for the assessment of monetary penalties 

by the Department of Labor for a failure of employers and unions to comply with the reporting 

obligations. The second, H.R. 4055, would enhance notification to union members of their rights, 

and would enable the Secretary of Labor to bring a civil action on behalf of a union member for 

violation of his/her rights. 

Our panel of witnesses today has been asked to advise the Subcommittee on the values and 

merits of these two suggested approaches. Specifically, we want to know whether these proposed 

legislative solutions will take care of the problems they seek to address, and whether there are ways 

to improve the effectiveness of the proposed solutions. 

WRITTEN OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE 

ON EDUCATION AND THE WORKFORCE – SEE APPENDIX A 
278

Chairman Johnson. I am going to yield now to Congresswoman Rivers, who is here representing 

the Minority, for an opening statement. 

STATEMENT OF CONGRESSWOMAN LYNN RIVERS, SUBCOMMITTEE 

ON EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

Thank you, Mr. Chairman. Mr. Andrews, Ranking Member of the Subcommittee, is at a 

meeting on prescription drugs. But I would like to make two comments of my own as a way to 

begin the hearing. 

 The first is to point out that it may be correct to say that one-third of unions did not file 

reports on time. However, I believe it is completely inaccurate to say that one-third of unions did 

not file reports at all, which I believe is what you said. And so that should be cleared up, for the 

record.

 Secondly, you talked about clear understanding and discussion of the merits of the bills. 

But I would also hope that we would have a clear understanding of what drives the desire for the 

bills and that we would make some sort of an attempt to examine the problems that currently exist. 

 In other words, are we finding that union members are filing a lot of complaints against 

their unions or with the Department of Labor? Do we find that there are problems that have existed 

for a long period of time? I would hope we would not jump at solutions until we make sure that the 

solutions have a reasonable attachment to some existing problem. Thank you. 

Chairman Johnson. Thank you, Ms. Rivers. I appreciate your comments. Now, let me introduce 

our witnesses. 

 Our first witness is Paul Huebner, from Takoma Park, Maryland. Our second witness is 

Robert O'Brien, from the Tomar, O’Brien, Jacoby, and Graziano law firm in Cherry Hill, New 

Jersey. Our third witness is Paul Rosenzweig, from The Heritage Foundation, Washington, D.C. 

and our fourth witness is Phillip Wilson from LRI Management Services, Tulsa, OK. 

 Before the witnesses begin their testimony, I would like to remind Members that we will 

ask questions after the entire panel has testified. In addition, Committee Rule (2) imposes a fiveminute limit on all questioning. 

 Concerning witness testimony, there are lights down there that give you five minutes to talk 

to us, with green, yellow, and red indicators. We would appreciate it if you would try to end your 

testimony when the red indicator light comes on. 

Mr. Huebner, you may begin your testimony now. Thank you. 
279

Mr. Huebner. Mr. Chairman, before making my statement, I would like to present the 

Subcommittee with testimonials from 10 other union members associated with the Association for 

Union Democracy, and Carpenters for a Democratic Union International. 

 Each of them believes strongly that Congress must take action to protect the rights of rank 

and file union members. I would suggest to you that over the next several weeks you will receive 

additional letters. I would also like to suggest that if this were not a working day for most men and 

women of the trade unions, we could have filled the room with people. Today's testimony will cost 

me $200 in wages, alone. 

 My point is that I am not alone today. In the future, if Congress is serious about reforming 

the LMRDA, I want to promise you that a chorus of voices from working men and women will be 

heard, asking that such actions to protect their rights be taken. 

 I would ask that the Subcommittee include these testimonials, and the others that will arrive 

over the next few weeks in the official record, please. 

Chairman Johnson. Yes, without objection, they will be entered into the record. So ordered. 

STATEMENT OF PAUL HUEBNER, CARPENTER AND UNION MEMBER, 

TAKOMA PARK, MD 

Firstly, I would like to say that I am honored to appear before this august body. I never 

thought I would be sitting here. And I am honored to represent, to some small degree, the hopes 

and aspirations of thousands of carpenters and workers who know they need help, but may not 

know what they need or how to get there. 

 My name is Paul Huebner, and I'm just an ordinary rank and file union member, a carpenter 

by trade. Over the past several years, I have not only been active in union politics in my own local 

and district council here in Washington, D.C., I have also networked with carpenters and many 

other union members around the country. And we have been fortunate to get assistance from the 

Association for Union Democracy in our campaign of uncertain outcome to regain democratic 

control of our union. Some of my opinions this morning are based on very direct personal 

experience, and some on what I have learned by networking with others. 

 I must confess that it is with considerable apprehension that I am appearing here today. In 

the past, when I have stuck out my neck to “tell it like it is,” my honesty and forthrightness have 

caused great consternation among the officialdom of the union. And as a direct consequence, I 

have suffered harassment, physical intimidation, economic retaliation, as well as formal discipline 

and deprivation of my rights as a member. Not only will my union not be happy that I am here 

today, it will undoubtedly be even less happy with what I have to say. 
280

 While I will keep my comments brief, and focused on the two bills you are considering at 

the moment, the bulk of my concerns go way beyond these two bills, and are covered in the written 

statements by other union members that have been and may still be submitted for inclusion in the 

record.

 The LMRDA has been on the books for over 40 years. And the time has come when it 

needs some serious fine-tuning. I have previously transmitted to the Committee staff my 

suggestions for additional amendments, which I hope the Committee will act upon in due course. 

 My general impression is that unions don't particularly care for the LMRDA. At best, they 

consider it a nuisance. But from a member's perspective, the LMRDA is absolutely critical. It's 

often the only thing that keeps union officials honest and accountable to members. That is, when it 

is working the way I think it was originally intended to work. 

 The problem is that, in a number of key respects, it's not working. First, if members are to 

hold their officers accountable to them in periodic elections, they need to understand that they 

enjoy a number of rights as union citizens, if you will, and that their officers have a duty to conduct 

themselves in accordance with a number of standards contained in the LMRDA. 

 While some significant fraction of union members are aware, generally, that their union 

constitution gives them a few rights and a lot of duties and procedures they must uphold and 

follow, only a very tiny fraction are aware of their democratic civil rights, and their officers' 

obligations under the LMRDA. 

 Without question, the life of a union officer becomes more difficult if the members exercise 

their rights and attempt to hold these officers accountable for their actions. Why, then, would 

officers want to educate their members about the LMRDA? They probably wouldn't. But section 

105 says unions are supposed to inform members about their rights and their officers' 

responsibilities under the LMRDA. 

 So what have they done to comply with this section? Absolutely nothing. For the past 40 

years, since the law was enacted, they simply ignore the provision. Finally, only with the help 

from the Association for Union Democracy, were a few machinists able to bring a lawsuit against 

their union a couple of years ago and win a decision ordering it to take concrete steps to comply 

with section 105. I refer to the Thomas v. Machinists case. 

 But how many other members are going to be willing and able to sue their unions to make 

them educate all their members about the LMRDA? Precious few. At the moment, the way the 

law is written, only union members can sue to enforce this provision. Too few members have the 

courage and way too few have the resources needed to sue their unions. 

 It doesn't take a rocket scientist to figure out that one reason the LMRDA hasn't worked the 

way it was intended to is because members who are entrusted with the responsibility of enforcing 

many of its provisions don't even know of its existence. And the only way all union members 

across the land are going to learn about it will be if the Labor Department tells each and every one 

of the unions exactly what they must do to inform their members about the LMRDA, and then 
281

forces them to do it. 

 That's what I understand H.R. 4055 would make possible. It would merely correct a major 

oversight. A few lawsuits by members of just a few unions winning various different court orders 

simply will not breath life into section 105. Only the Labor Department could make that happen, 

assuming the Department takes its responsibility seriously, and does not knuckle under to pressure 

from unions, and allow them to continue to keep their members largely in the dark. Congress needs 

to tell the Department that its mission is not just to require unions to give their members some sort 

of legal notice; they need to educate their members about its provisions in a meaningful way. 

 I am somewhat less familiar with the rationale underlying H.R. 4054. As a former local 

secretary/treasurer of my local, I am familiar with the obligation of unions to prepare annual LM-2 

financial statements with the Labor Department. When in office, I prepared and filed them in a 

timely manner for my local. But I gather that a number of unions did not file these statements in a 

timely manner, some not at all. The real issue here is not whether some piece of paper is or isn’t 

mailed to some government agency, it's whether union members have access to rudimentary 

financial information about their unions and will permit the members to hold their officers 

financially accountable when spending their hard-earned dues money. 

 Without that information, members cannot make the LMRDA work the way it was 

intended. So, sure, if the IRS can make taxpayers file 1040s every year on April 15th, and the SEC 

can require corporations to submit various filings, why shouldn't the Labor Department have some 

tool to make union officials file their annual LM-2 reports by their deadline? 

 Currently I understand that the Department has no such tool. H.R. 4054 would simply 

remedy that oversight. How controversial can that be? If you have any questions, now or later, I 

would be happy to try to answer them. 

WRITTEN STATEMENT OF PAUL HUEBNER, CARPENTER AND UNION 

MEMBER, TAKOMA PARK, MD – SEE APPENDIX B 

Chairman Johnson. Thank you for your testimony, I appreciate it. 

Mr. O'Brien, would you care to testify? 

STATEMENT OF ROBERT F. O'BRIEN, ATTORNEY, TOMAR, O'BRIEN, 

JACOBY, AND GRAZIANO, CHERRY HILL, NJ 

Ms. Rivers, Mr. Johnson, Mr. McKeon, I am a practicing attorney. I represent labor unions, 

both international and local unions, as well as on occasion those who run for office in labor unions. 
282

I have been doing it for 33 years now. 

 I got a little anecdotal in my statement noting that when I was a teenager, I remember 

coming home and my dad worked shift work and I remember he had the McClelland hearings on, if 

you remember in the late '50s. I don't know if the tapes are still available, but there are some pretty 

interesting things on those tapes. John Kennedy sat on that Committee, it was a Senate select 

committee on improper practices in the labor management field. And as a result of the hearings of 

the McClelland Committee, they passed Landrum-Griffin. 

 And it's interesting that back then, historically, many of the union heads, the chieftains, 

were very arrogant and very much not particularly engaged in their members' interest. As a result 

of the McClelland hearings, however, we had Landrum-Griffin come forward, and here we are, 43 

years later. 

 As a practitioner, I deal with the statute fairly frequently, weekly, if not more than weekly.

And as a practitioner, that statute, in my experience, has been the easiest statute to deal with, 

compared with the plethora of other federal labor legislation such as the ADA, or the ERISA 

statutes. At least, in Landrum-Griffin, I know what the statute says. I also know, for the most part, 

in my experience it has been a learning curve for a lot of the unions. And it's not unlike Miranda in 

the criminal law, where there were a lot of complaints when Miranda came down from the Supreme 

Court. Professional policemen will tell you that they believe often times Miranda is a good 

decision, and that they can live with it. 

 And I think you will find that many of the unions that I represent simply take it for granted, 

and I think that's a truism, that they have to file these reports, that they have to file them not only 

timely, unless they get an extension and by the way, Ms. Rivers pointed out there is a big 

difference between not filing and filing late. 

 Lots of times the DOL does give extensions, and I don't know whether the assistant 

secretary talked about a new form. They now have a new form the DOL called the LM-4, which 

they are now experimenting with to get some of the less sophisticated unions to file. Hopefully it's 

a very simple form and hopefully you are going to get some good experience out of that. 

 But one of the things that is very, very important is not only the timeliness of it, but also 

what is in it. And it's been a long learning experience for a lot of our clients, particularly ones I 

represented 20, 25 years ago, that the accuracy of the form is really, really important. 

 Initially, when Landrum-Griffin started, there were a number of Justice Department 

prosecutions of officers. Now, the chief executive officer of a union has to file that LM form, and 

they have to indicate that they understand it's under penalty of perjury, and that they are conversant 

with the contents of the form. 

 There were a number of Justice Department prosecutions in the '70s and the '60s, after the 

statute took place, by people who put false information into it. There are not so many of those 

prosecutions any more, and I think it's because the union leadership is aware of the filing 
283

requirements. 

 Interestingly, and as an aside, Mr. Johnson, they are now talking about requiring the chief 

executive officers of various corporations in their SEC filings you know, their section 14 and their 

section 8 filings to sign that personally, and to attest to what is in there, which has not up to this 

time been done. As some commentator said, they're flying at 50,000 feet up in the air, and their 

underlings are filing SEC reports which are incorrect and improper, and the contents of which are 

sometimes often not known by the CEOs.The Landrum-Griffin Act remedied that situation with 

labor unions. When those LMs get filed, the people who file them have to be conversant with 

what's in them, and that it is indeed true. 

 The other point that I would make is that it's been my experience that we are seeing now 

more activism in unions. There is more activism in taking on union leadership. And maybe I am 

from a unionized state, but we are seeing a high degree of involvement by officers. 

 In fact, we just had a big election from the biggest union in the State of New Jersey, the 

Bartender's Union and the Hotel Workers, where employees ran a slate, and they didn't get to the 

point where they could get an actual eligibility list, which was appropriate. The DOL sued last 

year, set the election aside, and they had a full-fledged election. 

 So, my point about the statute is in my experience, there is a lot of sophistication in the 

work place. There is a lot of knowledge. When they come to see me, they know about LandrumGriffin. They come into my office, inevitably. They have got a copy of that LM-1 or that LM-2.

They know what's in there. In fact, in the Bartenders' case I just told you about, they were running 

because of what they considered to be excessive expenditures of the local union. 

 But at this point, to take the statute and make changes to it which require some legalities to 

be complied with, including member notification, as well as to require that there be civil penalties, 

I think we're going down the wrong road. 

 Again, my experience has been with the sophistication level in the workplace and the 

statute's self-enforcing mechanisms, and lastly, the big thing in the statute is if you don't do it right, 

particularly with the election provisions, you get a rerun. And what a mess the reruns are. Nobody 

wants to have egg on the face and a rerun. But they are getting them, they are getting them. 

 In any event, I thank you for your attention. 

WRITTEN STATEMENT OF ROBERT F. O'BRIEN, ATTORNEY, TOMAR, 

O'BRIEN, JACOBY, AND GRAZIANO, CHERRY HILL, NJ – SEE APPENDIX C 

Chairman Johnson. Thank you for your testimony. I think after the length of time that law has 

been on the books, it does need looking at. You make some good points; we need to be careful 

about how we restructure it, if we do.
284

Mr. Rosenzweig, you may begin your testimony. 

STATEMENT OF PAUL ROSENZWEIG, SENIOR LEGAL RESEARCH 

FELLOW, CENTER FOR LEGAL AND JUDICIAL STUDIES, THE 

HERITAGE FOUNDATION, WASHINGTON, D.C. 

Thank you, Mr. Chairman, and thank you for inviting me to testify today. As you said, I am 

with the Heritage Foundation. I am also an adjunct professor of law at George Mason University, 

and those affiliations oblige me to begin with the ritual disclaimer that the opinions I express are 

my own, and not those of any of the organizations I am affiliated with. Indeed, sometimes they are 

shocked at what I say. 

 I come to this hearing with a very different perspective. I am not a labor law expert by any 

stretch of the imagination, like Mr. O'Brien, but I come as one who has been a prosecutor for 15 

years before joining The Heritage Foundation, and who writes and thinks about the appropriate 

structures of enforcement regimes. Therefore, my testimony is principally directed at H.R.4054, the 

provision suggesting civil penalties for the reporting requirements, and less so to H.R.4055, though 

my written testimony contains something about it. 

 The LMRDA is, as far as I can tell, unique in a modern American regulatory system, in not 

providing for a graduated system of penalties. Every other regulatory structure that I am familiar 

with, and I am always hesitant to testify to a negative, “There are no others,” but I couldn't find 

any, and I know of none, has a graduated system of administrative penalties, followed by civil 

penalties in federal district court, followed by criminal sanctions for the most significant and 

severe. And there are two reasons for that.

One is normative, or philosophical, and one is practical. The normative or philosophical 

one, is that we want to restrict criminal penalties for the truly egregious violators, the most willful 

people who act in a way that is in violation of a known legal duty. And those people are deserving. 

We call it the “just deserts” theory of criminal punishment. 

 But there are wrongs that happen, and wrongful conduct occurs that is not done with willful 

intent that is the product of mistake or accident, neglect, or some lesser type of deliberate conduct 

that isn't a willful violation of law. And typically, we address those in a civil context, or an 

administrative context. 

 One thinks of the other provisions of the labor laws, the Fair Labor Standards Act, for 

example, and the OSH Act, the Occupational Safety and Health Act. One thinks of the SEC that 

has civil and criminal enforcement authority. One thinks of the Environmental Protection Agency, 

which has administrative, civil, and criminal enforcement authority. 

 So, as a normative matter, it is exceedingly weird and unusual to find a regulatory structure 

that has no civil penalty. It is also probably not as effective in deterrents. And I mean, we see the 

statistic you sited from 2000 of 34 percent delinquency or non-compliance. 
285

 I called over to the Department of Labor, trying to root out some statistics, and the 

preliminary numbers for 2001 are 60 percent. That will probably come down since there are late 

filings and all that, but obviously, the reporting requirement itself is not being adhered to, certainly 

in the timeliest way, if not altogether. And that reflects the fact that criminal sanctions are rightly 

rare, and difficult to use. 

 But if you don't give the regulatory system enforcement tools less than the blunderbuss of 

criminal sanction, and rely only on voluntary compliance, what you come up with is a system that 

simply doesn't have any deterring effect, doesn't induce the compliance that we want. 

 I read Mr. O'Brien's testimony and I thought it would be useful to respond, and he made 

some arguments about why civil penalties would be bad, that they would deter good people from 

joining the unions, that there would be increased costs through insurance requirements for union 

officers, and that if the union was to pay penalties, those would come out of the dues of innocent 

union members. 

 Those are all good arguments. They are the exact same arguments that are made against 

criminalizing, for example, corporate conduct. The innocent shareholder pays the fine, and if we 

have too many civil penalties against directors and officers we will deter good people from joining 

businesses. It’s the same argument that is made in small businesses, that the increases in the 

regulatory state deter people from joining the business community. 

 Those may or may not be good. You have to make the judgment whether or not these 

reporting requirements that the LMRDA has are worth it. But once you make that decision, it 

makes no sense to say that there shouldn't be a graduated means of enforcing that law, such that we 

don't just use the blunderbuss, that we have some lesser method of ensuring compliance. 

 I thank you for your attention, and I look forward to answering any questions. 

WRITTEN STATEMENT OF PAUL ROSENZWEIG, SENIOR LEGAL 

RESEARCH FELLOW, CENTER FOR LEGAL AND JUDICIAL STUDIES, THE 

HERITAGE FOUNDATION, WASHINGTON, D.C. – SEE APPENDIX D 

Chairman Johnson. Thank you for your testimony, I appreciate it, and your frankness. 

Mr. Rosenzweig. Thank you. 

Chairman Johnson. It sounds like we have a divergence of feeling here, and that is okay. 

Mr. Wilson, I appreciate you being back with us, and thank you for your book, which I am 

sure everyone has seen. You may begin your testimony now. 
286

STATEMENT OF PHILIP B. WILSON, VICE PRESIDENT AND GENERAL 

COUNSEL, LRI MANAGEMENT SERVICES, INC., TULSA, OK 

Thank you, Chairman Johnson, and Members of the Committee. I am happy to be back, 

and I appreciate you inviting me back. 

 I would like to limit my comments to, first of all, congratulating the Committee on the 

oversight that has occurred up to now. In April, when I was here last, you will remember Deputy 

Secretary Findlay from the Department of Labor came in and testified about the LM reporting 

form, and also, in particular, was questioned pretty aggressively about when these forms were 

going to go on the Internet. 

 Within the last month, the Department of Labor has posted all the LM-2, LM-3, and LM-4 

forms on its website on the Internet. It is easy to search. I have been unable, so far, to find one that 

is not posted. There may be some that aren't, but any one that appears to have been filed is 

available on the Internet right now. That, I think, probably more than anything that we are going to 

talk about today, is a huge step for union members in the United States. 

 Now, I think one of the bills that is under consideration, H.R. 4055, which deals with giving 

access to information as a requirement within the first 90 days of joining a union, is even going to 

go a step further. The problem I am guessing, and Paul might be able to speak to this, is that the 

vast majority of union members in America and very few labor lawyers are not aware that the LM2s are now available on the Internet. I am sure that most union members are not aware of that. 

 However, I think that if unions were required to notify their members, or if the Department 

of Labor was able to take some sort of action to notify union members that this stuff is available on 

the Internet, that is an enormous step. Any person who has access to a computer now can go and 

find out what their local union is spending money on, by looking at the forms. As you will probably 

recall, I have a lot of issues with the form itself, and the disclosures that are on those forms. But 

the fact that they are available on the Internet, I believe, is a huge step forward for access to 

information for union members. 

 In addition to that, we also have the two bills that have been submitted, H.R. 4054 and 

4055. As you will probably recall from my testimony in April, I also believe that the enforcement 

strategy that currently exists in the LMRDA is very inadequate. I think that providing civil money 

penalties is a good approach. As Paul testified, I agree that there needs to be a graduated system. 

 Deputy Secretary Findlay testified last time that right now, the basic approach used by the 

Department of Labor for late filers or people that don't file is just nagging them with phone calls. 

That clearly is not enough. And when the Department of Justice says, and probably rightfully so, 

“Look, you know, we're not going to sue a union because they failed to file their LM-2 form, we've 

got other, more important things to do,” there is no incentive whatsoever for these forms to be filed. 

So, the fact that they are available over the Internet for free is great, but we still need to take steps 

to try to make sure that the things get filed. 
287

 Secondly, and as I alluded to earlier, I think the 90-day reporting requirement in H.R. 4055 

is eminently reasonable because of the issue about the expense to hand out materials to their 

members being a burden on small unions. I think the Department of Labor has taken care of that. If 

it's posted on the Internet, a union, in my mind, simply has to say, “Union Member, you can get 

access at any time to all of our information by logging in to this website.” And if union members 

are given that on a regular basis, I think anyone who is interested in pursuing that information will 

get it right off the website. 

 The other point that I would make is, in addition to the financial form we haven't really 

discussed the constitution and bylaws. I think that it's also vitally important that those are posted 

on the Department of Labor website as well, so that a union member that is interested, and wants to 

enforce their rights, or enforce the rules of their union has access to those rules. My experience is 

that unions typically do not hand out those documents. In fact, I know personally of several formal 

union organizers that just flat-out say, “We never would give that stuff out. We would make 

people jump through hoops to try to get it, and most people just wouldn't get it.” I think if that was 

available on the Internet that would be another huge step for union members. 

 The bottom line reason why I think all of us are here is to try to make sure that the union 

movement is strong. It's in crisis right now, and I won't go into a lot of detail, it's in my written 

statement. But I think a strong, accountable labor movement is important. From a management 

consultant, that may sound strange. But I think it is very important that unions remain accountable 

and democratic. I think one of the main reasons that unions are in decline today is because people 

don't trust them. You see the same thing in the stock market. People don't trust companies right 

now because of the financial reporting problems. I think that the same thing has been happening in 

unions for years. People don't feel as if they get a good deal, and they don't join. 

 I look forward to your questions. 

WRITTEN STATEMENT OF PHILIP B. WILSON, VICE PRESIDENT AND 

GENERAL COUNSEL, LRI MANAGEMENT SERVICES, INC., TULSA, OK – 

SEE APPENDIX E 

Chairman Johnson. Thank you. I guess we could get Arthur Andersen to audit all of them, and 

they would be doing a lot better. 

Mr. Huebner, how many members make up your local union? 

Mr. Huebner. Between 550 and 600. That's the local, sir. 

Chairman Johnson. You stated in your testimony that while you were secretary/treasurer of the 

local union, you prepared the financial statements required by the Department of Labor. Did you 

have any problem filing those forms on time, and is there any reason why you wouldn't file those 
288

financial statements? 

Mr. Huebner. No, sir. As a matter of fact, our international requires a semi-annual bond report. 

We had additional forms to submit to the international, so it was almost pro forma to have it. 

 Since we had income of a certain level, we did contract with a CPA to prepare the actual 

forms, but with the directive to my staff that we get it done in a timely fashion, because I knew that 

the limit was 90 days. So, halfway there, I would call up the CPA and ask him if we were on track. 

Chairman Johnson. Were you ever late with your filings? 

Mr. Huebner. No, sir. 

Chairman Johnson. Okay. Thank you for that statement. Do you think it's easier now, with it online? 

Mr. Huebner. Absolutely. 

Chairman Johnson. And what do you think about Mr. Wilson's comment that your bylaws ought 

to be on-line as well? 

Mr. Huebner. Well, if I can comment about that, not only do I think that's a good idea, but I think 

the wonderful place to put the LMRDA Labor Bill of Rights is right in the back of the constitutions 

that the international should be giving out to each and every member. 

Chairman Johnson. I will make a note of that. We can put that on-line, too. If the members have 

access to that sort of thing, they can follow up on it. 

Mr. O'Brien, in a letter to Mr. Andrews, who is my friend and yours, too, it was wiser that 

“compliance be achieved with a spirit of self-policing now effectively in place.” The self-policing 

you referred to has resulted in a lot of unions not filing, and a lot of them filing late. Do you think 

that's a success, really? 

Mr. O'Brien. One of the things I don't think the Department of Labor went into, Mr. Johnson, was 

the fact that the DOL gives extensions of time to file. In other words, it's not uncommon for a 

union to ask for an extension of time in which to file a report. In fact, I have a number of unions 

who have done that regularly, in getting it in. 

 In my view, it's very important that the report be accurate. I'm not here to protect nonfilers; there is no excuse for that. And I think the DOL is addressing that with this new LM-4 form.

And a lot of that is simply lack of resources, lack of sophistication. 

Chairman Johnson. So you think it's the small unions that are not complying, for the most part? 

Mr. O'Brien. I think so, sir.
289

Chairman Johnson. But I am aware that the Teamsters are having trouble filing, and that's a pretty 

good-sized union. 

Mr. O'Brien. Timely, timely, yes. And I think it's important that they be timely filed, but I also 

think it's important they be accurately filed. 

 Now, my understanding is that I know the unions that I represent, and I know most of the 

international unions in the AFL-CIO do have filings. Whether they are as a result of extensions, I 

do know that they do get filed. In other words, it's not an absence of any filing. 

 And again, we advise the unions to, “Make sure the information in there is accurate; if you 

need an extension, get the extension but make sure the information in there is accurate, because that 

can come back to haunt you.” 

Chairman Johnson. But I think 19 of the 25 largest labor unions filed late or not at all in the year 

2000, so it is not the small unions, necessarily, who don't have the resources. 

Mr. O'Brien. I think they have filed late. I think you will find, though, that almost every 

international union has filed. Now, I don't know of any who have not filed at all. They have filed 

late, and often times that late filing is as a result of an extension DOL has given them. I do know 

that.

Chairman Johnson. Mr. Rosenzweig, do you agree with that statement? 

Mr. Rosenzweig. Well, I know that there is a delinquency problem. And I called up when I heard 

what Mr. O'Brien had written. 

 My understanding is, and perhaps this is something you should clarify with the Department 

of Labor, that is not how they count them. They do not classify someone as delinquent who has 

gotten an extension, just as the IRS does not classify me as delinquent if I file on April 14th for an 

extension to August. 

 So as I understand it, the numbers that they are reporting to you, the 34 percent and the 

preliminary figure of 60 percent that I had gotten from the Department last week, are people who 

have either not filed at all, or filed late without previously having been granted permission to file 

late.

 Obviously, we have a different understanding of that, and you should clarify that with the 

Department of Labor, which is the source of everything in this. But if my understanding is correct, 

then the problem is a different one. It's not being late and accurate permissibly; it's being late 

without permission. And that, I think, is something to address in the civil context. 

Chairman Johnson. Yes, thank you. I am going to adhere to my own time schedule, and my time 

has expired.
290

I now recognize Ms. Rivers for questions. 

Ms. Rivers. Thank you very much, Mr. Chairman. 

I am looking at the materials that Mr. Huebner brought with him, the letters from the other 

union members, and I am particularly interested in the letter from Mr. Shotwell, which talks about 

his experiences at the UAW constitutional convention in Las Vegas. 

 He says, “Delegates are, theoretically, the highest tribunal in that organization, but we were 

treated like a captive audience, and browbeaten with speeches by politicians. Delegates were given 

very limited opportunities to debate issues relevant to our union. Controversial topics were cut 

short, and Roberts Rules of Order were honored at the whim of the ruling party. In a word, the 

convention was totally engineered.” 

 After eight years of being here in the Minority, I would suggest that I deal with this 

behavior all the time, and that my complaints are treated as the disgruntled views of someone who 

has lost a democratic election. How do we know that the people who are raising these kinds of 

concerns are not just people who are on the wrong side of an outcome of a particular union 

election? 

Chairman Johnson. Are you posing that question to one of them? 

Ms. Rivers. To anyone. I am asking for the underlying problem. People are claiming that they are 

being mistreated. 

Mr. Huebner. Have you ever been to one of these conventions? 

Ms. Rivers. Mm-hmm, I have. 

Mr. Huebner. They are set up like a dog and pony show. 

Ms. Rivers. I understand. 

Mr. Huebner. They arrange everything in meetings before you go, and you can't even discuss the 

issues. The core issue in our union, the United Brotherhood of Carpenters, is whether a member 

can vote on his contract and the people that represent him at the bargaining table. 

Ms. Rivers. The point I am trying to make, Mr. Huebner, the point I am trying to make is that is 

exactly what happens across the street in the highest democratic body in the country. And the 

explanation for letting that happen is one party won the election and gets to decide, and the other 

party has to abide by the decisions of the winners. 

 And what I am asking is, as I read through these things, some of them look like people who 

lost elections. Their side didn't win. And I am trying to make a distinction between the 

unhappiness of having your point of view made manifest in the decisions that ultimately get made 
291

versus real violations of law that are causing problems for us, from a public policy perspective. 

Mr. Huebner. All right. Can I give a specific example about the reporting and disclosure? 

Ms. Rivers. Yes. 

Mr. Huebner. One of the members of my executive committee was giving out a copy of the Labor 

Bill of Rights in the work place, and he was told that he had to leave the work place, or he was 

going to be physically removed. He was threatened. He subsequently left the executive board and 

resigned from the union all together. This wais for passing out a copy of the Labor Bill of Rights 

in the work place. 

Ms. Rivers. Did he file a complaint with the agency? 

Mr. Huebner. What agency, the Department of Labor? 

Ms. Rivers. The Department of Labor. 

Mr. Huebner. For what? There is nothing that can be done. 

Ms. Rivers. He was threatened, physically? 

Mr. Huebner. All they can say is that he has the right. Nothing happens. He still gets thrown out 

of the work place; he still gets discriminated against by the employer and by the union for the 

opportunity to work. He is removed from the work place, he is physically threatened, and he is 

verbally intimidated. 

Ms. Rivers. But there are laws against physical intimidation. 

Mr. Huebner. That is a specific example of what happens to people. 

Ms. Rivers. No, I am trying to understand. I understand your passion. But I am trying to 

understand, if he was physically intimidated, why didn't he file charges with the appropriate 

authorities? That is against the law right now. We don't need to change a law to deal with that. 

Mr. Huebner. Well, if you would like to discuss my personal experience with this, a person 

physically intimidated me, and threatened me, and I wrote letters to the union. I am still appealing 

a charge, a conviction in 1998.

Ms. Rivers. A conviction for what? 

Mr. Huebner. I don't want to belabor my testimony at this Committee. If you want the personal 

facts, I am still appealing a conviction for interfering with a business representative who is now 

incarcerated for three counts of attempted murder. He threatened me to get out of the work place. 

Then they charged me. 
292

Ms. Rivers. How? 

Mr. Huebner. I'm just trying to give you a specific example of what happened. 

Ms. Rivers. No, no, I'm trying to understand how the change being advocated here would change 

those things. 

Mr. Huebner. That's not the issue here at hand. You asked me about people exercising their rights, 

and if the other member, Mike, had gone to the DOL. Well, I have gone through the internal 

policies, I have been to the Department of Labor, I have been through an investigation, and nothing 

happened. Subsequently, this person that threatened me has been incarcerated for attempted 

murder.

Ms. Rivers. My question was about many of the people who are raising concerns about the LMRD, 

whether or not they were unhappy about other things, and your testimony seems to suggest they 

are. And then secondly, how the change in the law that is being proposed would address the 

problems you raise. It doesn't sound like they will. 

Mr. Huebner. Oh, no, I would be happy to answer that. Number one, when I have gone to the 

DOL Report and Disclosure at Third and E, where the tunnel bridge is, not only are the reports late, 

they are years late. They tell me they come in 12 to 18 months after they are due. 

 A term in office is three years in a union. By the time you get the records, the guy is out of 

office, and his buddy is in office. Anything he did is past and long gone. What's the point? The 

DOL says, “By the time we bring suit another 18 months elapses, and there’s no fine, no penalty, 

no problem.” 

Ms. Rivers. But you're not telling me how the change in the law is going to change things with 

regard to people who physically intimidate others. 

Mr. Huebner. That's a different issue. I thought we were talking about reporting now. 

Ms. Rivers. I'm trying to ask you how the reporting is going to change the complaints. 

Mr. Huebner. The civil penalty for the reporting clause would strengthen DOL enforcement, 

because then there would be a penalty involved. With no civil penalty for enforcement of the 

reporting requirements, unions typically and systematically file 12 to 18 months after the 90-day 

reporting period has ended. That means that it has been two years since the fiscal year has ended, 

and at most, one year to the termination of office of anyone who has done anything wrong. 

Ms. Rivers. The concerns that people are raising in these stories are about all kinds of things, most 

of which are not related to whether or not filing deadlines are being met, and what I am trying to 

determine is if these are complaints about being in the minority, or about not having your point of 

view manifest in the decisions reached by the organization. That is a separate issue from changes in 

the law around reporting, and I don't see the connection with many of these complaints. Are we 
293

going to somehow answer these complaints simply by changing how we handle reporting? 

Mr. Huebner. Oh, okay. First of all, those of us that are involved in rank and file union politics in 

many different unions hope this is a first step in an effort to change the laws. The address of 

grievances usually ends up not in the member's favor, but in favor of the administration or the 

organizational structure in the union because there are no penalties, no enforcement, or the law is 

woefully inadequate. 

 Our opinion is that the law is woefully inadequate to deal with the real issues. We see these 

bills as a part of a process. These are wrongs that need to be rectified. There are many other 

inadequacies with the law that we would like addressed further. Our understanding was that we 

should submit the other inadequacies in the law in writing to the Committee for the record, so that 

they can analyze these things outside of this particular hearing, which deals with the issues of civil 

penalties on reporting. I have been to the DOL, and filings are 12 to 18 months late after the 90-day 

period, routinely and all the time. 

 In terms of passing out the LMRDA Labor Bill of Rights, I tried to give you a particular 

example of one union member who was trying to exercise his rights with the Labor Bill of Rights 

that he got off the Internet. When he brought that to other members, he was harassed, he was 

intimidated, and he was removed. 

Ms. Rivers. Who asked you to bring these? 

Mr. Huebner. Who asked me what? 

Ms. Rivers. You said you were told to bring in these examples so that they could be analyzed for 

future laws. Who asked you for that? 

Mr. Huebner. Our organizations, the Association for Union Democracy and Carpenters for a 

Democratic Union, have been in contact with Steve Settle and with Maria Cuprill.

Chairman Johnson. Let me clear that up. They asked if they could, and we said we would 

welcome their submissions. 

Ms. Rivers. That's not what he said. He said he was asked to bring them. 

Chairman Johnson. No, we told them it was fine to do that if they wanted to. 

Ms. Rivers. Thank you, Mr. Chairman. 

Mr. Huebner. Would you like me to address the real issues that I care about? I care about these, 

but there are much more important issues. There are issues of far greater importance, and they have 

to do somewhat with the way international conventions are organized, they have to do with the 

corporate organization of unions, they have to do with the fact that members can no longer vote on 

dues increases because intermediary bodies can pass dues increases on members, they have to do 

with the fact that we can no longer vote on our contracts, and that we have no control over our 
294

health and pension funds. These are issues that affect all members equally. 

Ms. Rivers. I understand that. 

Mr. Huebner. These issues affect members, too. 

Ms. Rivers. But the legislation before us today would not impact any of those, correct. 

Mr. Huebner. The legislation before us today will affect two significant portions in a ladder, in a 

succession of events that will amend the law so that it will substantially affect the lives of working 

people across the country. 

Ms. Rivers. So your goal is many more changes in the law, beyond just what we are talking about 

today.

Chairman Johnson. The lady's time has expired, and we will explore all avenues. Thank you, Ms. 

Rivers.

 I would like to recognize Mr. Andrews if he cares to make a statement. 

Mr. Andrews. I do. I first want to apologize for my tardiness at the hearing, and thank Ms. Rivers 

for so ably representing the Minority side. 

 To carry forward a point Ms. Rivers just made, the reason I am late is one of the points she 

made about the rights of the Minority here. It is the intention of the Majority to bring the 

prescription drug legislation to the floor this afternoon, and it is the present intention of the 

Majority to deny the Democrats the opportunity to offer our alternative, so it can be debated and 

voted upon. So I was at a meeting with Ms. Pelosi and others in our leadership, trying to figure out 

how we can foster the cause of democracy in the House of Representatives. 

 I do want to thank the Chairman for having the hearing, and for his courtesies. I want to 

especially welcome Bob O'Brien, who has been a friend for many, many years, whom I know as a 

practitioner in this area. He is someone who has given very excellent and fair representation to his 

clients over the years, and who had a lot to do with my interest in this area of the law. Bob, it's 

great to formally welcome you to the Committee. 

Mr. O'Brien. Thank you very much, Congressman. 

Chairman Johnson. Thank you Mr. Andrews.

Mr. McKeon, do you care to question? 

Mr. McKeon. Thank you, Mr. Chairman. I would like to thank the panel for being here, and 

especially Mr. Huebner, for giving up wages to be here. I think that is indicative of your passion 

about the subject. 
295

 I am really pulled in two directions with this. I would like to see less regulation, less 

reporting. We are working on a bill right now to try to streamline federal regulations, and I am 

concerned that there is a lot of reporting that nobody ever reads. 

 On the other hand, it seems to me that the purpose of this report is to let the union members 

know what their leadership is doing. It sounds like, from your testimony, Mr. Huebner, you cannot 

get that from your leadership, and the only way to get it would be from an outside force that 

required them to file this report. Maybe we should look at the report, maybe that could be 

simplified and more streamlined. I think that would probably be important. 

 I met with a group yesterday that came to my office representing a university that has civil 

penalties for what is called “incentive compensation,” where a school gives a bonus for recruiting 

students. This particular school did that one year, decided not to do it, and were not aware of the 

law apparently. And when they found out about the law, they discontinued the practice. A couple 

of years later, the Department found out about it, and the auditing body that found it recommended 

a $7.7 million penalty, which could cause great disruption for that school, and eventually for their 

students who would end up paying for the penalty. 

 So, I think that we have to be careful about the size of a penalty, and probably as we look at 

it, it should be relegated to the size of the union. A large union with a great amount of dues could 

pay a higher penalty than maybe a local of 400 or 500 members. So I think that would be 

something that we should consider. 

 But I certainly see nothing wrong with civil penalties if that's what it takes to get people to 

report on time. We just came up with a new report for us, as Members of Congress. We have to 

file a report showing all kinds of things. My wife does that, and I hear about all of these hoops that 

she has to jump through to report, and it goes on the Internet. 

 So I see nothing wrong with doing the same thing, and I would support this bill. I would 

support doing something to clean up, simplify the reporting, and make it beneficial to the members 

who really are the ones that are looking for this report. 

Mr. O'Brien. Congressman, part of the way the statute is proposed makes it applicable in the civil 

penalties both to persons and to organizations, and it talks about how those penalties are to be 

imposed. 

 And again, my experience with many of the unions that we represent has been that we are 

talking about people who hold full-time jobs outside of union office. And again, we are talking 

about trying to get the best and the brightest out to run for union office, often times taking them out 

of the store, for at least part of their time, or taking them off the shop floor. 

 The fact of the matter is, when you encourage rank and file democracy, you want to get the 

very best. But if you tell them that, “Hey, look, if your reports aren't going to be timely filed, or if 

you don't file a report you are subjecting yourself both to individual liability here, that is a fine 

from the DOL, as well as subjecting the membership, the treasury of the union.” That's nothing 

more than money out of the members' pockets. You're going to subject them to a fine as well. I 
296

have some problems with that. 

 Because, as I said, my experience has been one where information, and we all agree here I 

think, is power. I mean it gives the incumbent as well as those who decide to run against the 

incumbent, a lot of power. One of the good things perhaps, Congressman Johnson, that has come 

out of this is you now have the DOL with on-line LMs. 

 But getting that LM information and the fact that a member may now access it is power 

Previously a member could get it simply by writing or calling the DOL and get it overnight, and 

there are reporting companies that provide that information. But my experience has been when 

somebody wants to run, or somebody wants to get involved in union affairs, they have been able 

pretty much to get into the information about the union. 

 I agree, Mr. Johnson that occasionally it's not as fresh as sometimes we would like, but I’m 

sorry.

Mr. McKeon. In reclaiming my time, I agree with the point you are making. I have been in a 

union, and I have been on the other side, negotiating with unions. The stronger the leadership, the 

better they are at representing their people, and the better it all works. We should get the best 

people.

Mr. Rosenzweig, did you have a comment on that, also? 

Mr. Rosenzweig. Yes. I guess my response is that it's a unique form of “particularism.” The same 

arguments could be made in any other context. That the threat of enforcement penalties deters 

people, and that is their purpose, actually. The ultimate goal here is not to impose penalties on 

people who stand up and join the union. They are to be commended. The ultimate goal here is to 

ensure that they and the union that they belong to file the reports in a timely manner. 

 I am personally agnostic on what should be in the forms, because I don't know enough. But 

if you and the Department of Labor implementing the laws you passed, have reached the 

conclusion that these are useful reporting tools that are necessary for labor democracy, it doesn't 

make any sense to say that unions and union members should be treated, for enforcement purposes, 

in a way that is different from people who file tax returns, Congressmen who file returns, or small 

businessmen who file OSHA forms. 

 Everybody else has a graduated system because we actually think it's better. Because by 

graduating we think that we can calibrate punishment more. If you just have the blunderbuss of 

criminal law, it essentially becomes what we call an unenforced norm. Nobody enforces the 

criminal law, and rightly so. 

 I mean nobody should go to jail for filing an LM-2 late, ever, unless it is deliberate and 

willful, or to conceal some other financial skullduggery. We need some other way of saying to 

people who don't file on time, “Come on, and get with the program.” 
297

Mr. McKeon. Probably, if civil penalties were imposed that would take care of the problem. 

Mr. Rosenzweig. The real answer is to file on time, and then there is no penalty at all. 

Mr. McKeon. Thank you, Mr. Chairman. 

Chairman Johnson. Thank you. 

Mr. Andrews, do you care to question? 

Mr. Andrews. I do. Let me begin with the assertion that I think that everyone on our Committee 

shares a common belief that we think everyone ought to comply with the law. And we think that 

every union member, irrespective of whether he or she agrees or disagrees with the leadership of 

that union, ought to have all the rights that the statutes and the constitution vest in them, and so 

forth. I don't think there is any disagreement over that. 

Mr. Rosenzweig, I did want to ask you some questions, though, about some conclusions 

that you draw. You make reference to the fact on page three of your testimony that 34 percent of 

the LM forms in the year 2000 were filed either late or not at all. Can you tell us how many were 

filed not at all? 

Mr. Rosenzweig. The Department of Labor does not provide data broken down that way, so I don't 

know.

Mr. Andrews. They did provide it to the Committee. 

Mr. Rosenzweig. Okay.

Mr. Andrews. The “did not file at all” is about 13 percent, not 34 percent. So, first of all, about 

two-thirds of the 34 percent that you are talking about did file, they just filed late. 

 Do you know how many of those that didn't file were in the LM category, which is where 

the largest amount of money is involved? Could you guess? 

Mr. Rosenzweig. Sure. It's relatively small. The larger ones are typically more compliant, yes. 

Mr. Andrews. It's about 5 percent. Now, that's a serious problem. I don't disagree with you that it 

ought to be zero percent, and it should be zero percent in the smaller unions as well, with less 

amounts of money involved. 

 Do you know how many enforcement actions the Department of Labor initiated, with 

respect to non-filers in 2000 the year that you cite data for? 

Mr. Rosenzweig. Relatively few. I don't have the number off the top of my head. I read it in Mr. 

Findlay's testimony. 
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Mr. Andrews. The reason I raise this is that I think there is a leap of logic here that I have a hard 

time following. You start with the assertion that 34 percent are filed late or not at all, but we now 

know that about two-thirds of that figure is filed late. So it's about one-third of your 34 percent that 

are not filed, so it's 13 percent. 

 And then you draw the conclusion that we need new remedies and new laws to make sure 

that the 13 percent is filed. But what we really don't have is much of an assessment as to whether 

the Department of Labor is adequately using the existing laws to do something about that, right? 

What do you know about their use of the existing laws to do something about the problem? 

Mr. Rosenzweig. I know that they have lost staff in the past few years and that they have asked for 

more money to do more enforcement. 

Mr. Andrews. Would you support an increase in their enforcement staff? Is that something you 

think is a good idea? 

Mr. Rosenzweig. I think that if the Department of Labor thinks it is, it is. I mean I'm not qualified 

to say how many is the right number. 

 But I think I disagree with the premise that underlies your question, which is that it is 

simply a redirection of effort. The problem with a structure that doesn't encompass civil penalties 

is that it creates perverse incentives, in a way. It relieves the Department of Labor in some ways of 

the obligation of adequately addressing the problem. 

Mr. Andrews. But Mr. Rosenzweig, if I were the Secretary of Labor and you were my counsel, 

and I came to you this morning and said, “Mr. Rosenzweig, we have 4,025 filers that out of the 

30,000 that should have filed, haven't filed. What can I do this morning to make sure they filed?” 

What's the answer to that question, assuming that this bill was not the law? 

Mr. Rosenzweig. I assume that the answer is some other form of enforcement action in the 

Department of Labor such as injunctive relief, possibly, or criminal referral for somebody who is 

doing it deliberately and willfully. 

Mr. Andrews. Well, until we know how thorough and how aggressive the Department has been in 

pursuing those means, how can we recommend new laws and new remedies? 

Mr. Rosenzweig. Well, I guess my answer to you is two-fold. First off, we know now what 

doesn't work. I mean, 34 percent late. 

Mr. Andrews. Doesn't work, or because they are not using the tools that they have? 

Mr. Rosenzweig. Well, we know that the criminal law is too blunt a tool. We know that no other 

regulatory regime, as far as I can tell, in the entire cornucopia of American law has a criminal 

penalty without an attendant civil penalty, not in Fair Labor Standards, not in OSHA. So, even if it 

were purely a question of resources, I would object to a system that only has criminal penalties on 
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normative grounds. 

Mr. Andrews. You make reference to OSHA. Could you tell us what percentage of OSHA 

complaints are followed up with an investigation in a civil penalty by the Department? 

Mr. Rosenzweig. I have no idea. 

Mr. Andrews. So how do you know, then, that civil penalties are an effective remedy there? 

Mr. Rosenzweig. I know that they are an existing remedy, and I know that they outnumber 

criminal sanctions. 

Mr. Andrews. Existing doesn't mean effective, though. 

Mr. Rosenzweig. How do you know that of any enforcement system? I mean, if you want to know 

what an enforcement system is, and its effectiveness, you need to ask the Department of Labor to 

talk about compliance rates and not count beans at all. 

Mr. Andrews. We did at the last hearing, and we are anxiously waiting for them to respond. 

Mr. Rosenzweig. Yes, I'm sure. I read that.

Mr. Andrews. Well, having read that, I am a little curious frankly as to why you would then 

reiterate this misleading 34 percent figure? You then go on to talk about people not filing their SEC 

forms. I mean it's misleading. 

Mr. Rosenzweig. No. 

Mr. Andrews. It's not true that 34 percent of the people don't file? 

Mr. Rosenzweig. The comparable rates in the SEC for filing late are substantially lower. 

Mr. Andrews. Is it lower than 13 percent? 

Mr. Rosenzweig. Yes. 

Mr. Andrews. How much? 

Mr. Rosenzweig. I believe, in the SEC, that the number of late filers who are impermissibly late is 

about 4 percent. The SEC is very aggressive. And the environmental area, which is an area I come 

from, is probably roughly comparable. I haven't looked in the last couple of years. 

Mr. Andrews. But you do acknowledge that the 34 percent figure you use is not accurate, that it's 

not 34 percent that don't file. 
300

Mr. Rosenzweig. I didn't say it was, sir. I don't acknowledge that. I said it was late, not filed or 

late. And that's an accurate figure. 

Mr. Wilson. Mr. Chairman, I don't think Mr. Andrews was here when Mr. Huebner testified that 

the problem with late filings is that by the time the forms get filed and a member with an issue with 

someone who is in power can get access to the information, that person is no longer in power 

anymore. So, there is a huge problem with late filings. 

Mr. Andrews. Well, I don't think you are aware of the fact that all of the late filings were within 

60 days of the grace period. So these are not the kind of filings that Mr. Huebner was talking 

about. These are filings that are filed no later than about 60 days after the deadline. So it's really 

not the same issue. 

 Thank you, Mr. Chairman. 

Chairman Johnson. Yes. Mr. Andrews, they tell me that 72 of the 91 unions with assets over $1 

million either filed late or not at all during the reporting year, and that's a pretty large number. 

Mr. Andrews. Seventy-two out of what? 

Chairman Johnson. Out of 91. Those are unions with over $1 million in assets. 

Mr. Andrews. Well, the Department of Labor's own data, which they gave us at the last hearing, 

talks about the LM-2 forms as being 272 not received out of 5,417. 

Chairman Johnson. I hear you. 

Mr. Andrews. I think that's a different figure. 

Chairman Johnson. We're getting conflicting data. 

Mr. Kildee, do you care to question? 

Mr. Kildee. Mr. Chairman, I apologize for being tardy today, but my presence was required at a 

prescription drug meeting. 

Chairman Johnson. Well, I am glad you all figured that out, because I like the decision, thank 

you.

Mr. Kildee. We said nice words about you, too. 

Chairman Johnson. Am I going to be healthy now? 

Mr. Kildee. Guaranteed. But I do appreciate the testimony. 
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[Laughter.]

Chairman Johnson. Go ahead. 

Mr. Kildee. I have no questions I just appreciate the testimony. 

Chairman Johnson. Okay. Thank you, sir.

Mr. Wilson, could you respond to a statement that a witness made in April? If a union 

official wanted to conceal a very large and unjustified salary without the threat of detection and 

enforcement because he or she was concerned that the size of this salary would jeopardize reelection, could the union official simply wait to file the annual union report, which would contain 

that information, until after the election? Help me understand how that is possible. 

Mr. Wilson. I think we have heard today that there are a considerable number of these reports that 

are filed late. And with a 60-day window, or an 18-month window as Mr. Huebner testified, if you 

wait to file that form, then the other issue is that the union member has no way of knowing when 

the form actually gets filed. 

 So if you show up 60 days later and the form is not filed, unless you wanted to go down to 

the Department of Labor on a daily basis to see if the form got filed, there would be no way of 

knowing until they became available on the Internet. 

 But ultimately, to answer your question, you either wouldn't file, or another way to hide it 

would be to get paid through subsidiary organizations in $10,000 amounts, where those amounts 

are not reported on the form. We talked about that at the last hearing. There would be plenty of 

places to hide large salaries in these forms either throughout other subsidiary organizations, or 

within very large aggregate amounts that currently are reported on the form. 

 That's why I think that the Committee has made huge progress in getting these things on the 

Internet, but ultimately, if the forms are going to be effective, and if union members are going to be 

able to exercise their rights effectively, I believe that the forms also need to be modified so that the 

amounts that are reported on them actually tell you something. 

Chairman Johnson. Thank you. Mr. O'Brien? 

Mr. O'Brien. Thank you, Mr. Johnson. I want to point out that under the statute, there is a 

provision in section 201 that says every labor union that is required to submit a report under the 

statute shall make available the information required in the report to all of its members, and that its 

officers shall be under a duty enforceable at the suit of any member in any United States district 

court.

 So there is a provision currently in the statute and if the filing isn't made, underlying 

information such as the union's financial information, and I'm not saying it's the easiest procedure 

to invoke, but it is available if you go into federal district court, and there is no surfeit of lawyers 
302

willing to take those cases many times. And if they are successful, often times there is a fee 

shifting provision in the statute. Thank you. 

Chairman Johnson. So it's a lawyer bill that you like. 

Mr. O'Brien. We have to live. 

Chairman Johnson. Mr. Huebner, did you want to reply? 

Mr. Huebner. First, I’d like to make a comment about Mr. O'Brien's statement. As an elected 

trustee of the local union on a slate with the financial secretary, I went to the union office to view 

the financial bills, and I was told I didn't have access to them. I had to call the international to get 

in there. 

 Now, many members don't know about their labor bill of rights. They don't have the time 

or the energy. I have gone to the Department of Labor over here I live in Washington. But for the 

guys that we talk to out of state, in Utah or wherever, if the forms are filed late, they have to call on 

a daily or a weekly basis to find out if the reports have ever been filed. 

 And you can't get through on the phone, so they have no realistic, reasonable means to 

ascertain if the reports have been filed on time, without continually calling the Department of 

Labor. The DOL reporting and disclosure is not going to call a guy back in Washington state, or 

Oregon, and tell him that the LM-2s have been filed for his local, or for his counsel. So he has no 

realistic way and can be hindered at the local level from gaining access to records, unless he is 

really willing to stick to his guns and put his job on the line. 

 And that's the perspective of people around the country. We feel we need some sort of 

penalty clause invoked. Because when unions don’t file there is no deadline, and DOL really won't 

do anything. 

Chairman Johnson. I want to thank all of you all for being here today. Your energetic responses 

are stimulating for us, and I thank all the witnesses for their participation. 

 If there is no further business, the Subcommittee stands adjourned. Thank you. 

Whereupon, at 12:05 p.m., the Subcommittee was adjourned. 
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Table of Indexes 

Chairman Johnson, 276, 278, 279, 281, 283, 285, 287, 288, 289, 290, 293, 294, 297, 300, 301, 302 

Mr. Andrews, 294, 297, 298, 299, 300 

Mr. Huebner, 278, 279, 287, 288, 290, 291, 292, 293, 294, 302 

Mr. Kildee, 300, 301 

Mr. McKeon, 294, 296, 297 

Mr. O'Brien, 288, 289, 294, 295, 301, 302 

Mr. Rosenzweig, 285, 289, 296, 297, 298, 299, 300 

Mr. Wilson, 285, 300, 301 

Ms. Rivers, 290, 291, 292, 293, 294