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ESA News Release: [12/20/2002]
Contact Name: Sue
Hensley
Phone Number: (202) 693-4676
Labor Department Seeks to
Improve Union Financial Reporting
Reforms Will Ensure More Transparency,
Accountability to Union Members
WASHINGTON—The U.S.
Department of Labor today announced that it will seek to update and improve the
annual financial reports filed by the very largest labor unions, to better
serve union members. The Department’s Employment Standards Administration
will introduce a Notice of Proposed Rulemaking to revise the LM-2, the
reporting form required for large unions under the Labor-Management Reporting
and Disclosure Act of 1959. The LM-2 form has not undergone significant change
since it was first promulgated more than 40 years ago.
The proposed LM-2 form will give union members more detailed information
about the financial activities of their unions, in an easily understood format
that will be available on the Department’s website. The new forms will be
usefully organized according to the services and functions of the union,
enabling members to identify major receipts and disbursements for these various
activities. For the first time, union members will be able to examine financial
transactions of “joint trusts” and subsidiaries managed by their
unions, which currently have little or no accountability to rank-and-file
members.
Enhanced disclosure will help union members better exercise their
self-governance rights and detect financial mismanagement and misconduct by
union officials. U.S. Labor Department investigations of union financial fraud
result in an average of 11 criminal convictions a month, with a total of more
than 640 convictions during the past five years.
Only the largest and most financially sophisticated unions—about
20%—will be materially affected by these proposed transparency reforms.
The Department expects the burden of compliance to be substantially reduced by
new reporting software it is developing for unions to use, free of charge, in
preparing and filing their reports.
“Despite the increasing complexity and activity of labor unions
over the years, the form used to disclose their financial information to
members has remained virtually unchanged in the last 40 years,” said
Victoria Lipnic, Assistant Secretary for the Employment Standards
Administration. “These reforms will give union members better, more
understandable information for them to judge the financial health and integrity
of their unions.”
The LM-2 form was created under the Labor-Management Reporting
Disclosure Act, passed by Democrats and Republicans in 1959.
As part of the proposed rulemaking, comments are invited for 60 days
after publication in the Federal Register. Comments may be transmitted by email
to FormLM2-comments@dol-esa.gov or by fax to (202) 693-1340.
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