If money is the mother's milk of politics, then organized labor has been the udder for the Democratic Party. In 1995-96 unions spent hundreds of millions of dollars trying to defeat Republicans in hopes of recapturing the House of Representatives for the Democrats. It was for them a Gettysburg. A victory could turn the war in their favor. A defeat would likely mean a continuing decline into oblivion, including congressional investigations into labor's financial dealings, campaign contributions and even its own internal elections. Most of all, a Democratic defeat would mean continuing scrutiny into labor's secret accounting practices.
Labor lost the battle, but it hasn't given up on the war. AFL-CIO President John J. Sweeney promises another multi-million dollar political attack campaign this year.
How much money have unions spent – or will they spend – to try to regain the House for the Democrats? No one knows for sure, and that's the problem. The AFL- CIO's well publicized $35 million voter-education campaign in 1996 was only what the organization was willing to officially reveal.
The Center for Responsive Politics reports that labor gave $58.1 million in 1995-96 to candidates and political parties. Professor Leo Troy of Rutgers University estimates the value of union staff time and other in-kind contributions in federal elections at $300 million to $500 million. The Employment Policy Foundation estimates that unions spent $330 million to $410 million, based on data showing that unions spend eight to 10 times as much on political activity as they contribute directly to candidates.
Has labor gotten its money's worth over the years? San Francisco Mayor Willie Brown thinks so. He recently told a room of union leaders that their campaign contributions had kept pro-labor Democrats in power in California for all but three of the past 40 years.
Ideally, workers represented by unions would know and approve of political spending by their unions. The Supreme Court affirmed this right in the 1988 Beck decision, holding that workers represented by unions are entitled to a refund of any portion of their dues spent on activities other than collective bargaining, contract administration and grievance procedures. Yet workers are poorly informed about their Beck rights, the laws go unenforced by the Clinton administration, rebate procedures are cumbersome and unions delay and evade their responsibilities to inform their members.
A major reason workers are uninformed about their union's political activity is that there is little financial accountability. Unions use in-house auditors rather than third- party auditors. When a member asks how his money is being spent, union officials often reply, "Look at our LM-2s," referring to the uninformative financial disclosure forms that unions file each year with an obliging U.S. Department of Labor. Thus it is no surprise that union officials have wide latitude to abuse the $7 billion in mandatory dues they deduct from the paychecks of members and covered nonmembers.
Unions protest that businesses also contribute to candidates and political parties. But there are key differences: businesses are subject to shareholder scrutiny, they cannot require employees to contribute to a fund as unions can and they are audited by independent third parties.
There is one other important difference: Business political giving is bipartisan. According to the Center for Responsive Politics, in the last election business gave Republicans 60 percent and Democrats 40 percent (it was about 50-50 before the Republicans won control of Congress in 1994). By contrast, 93 percent of union money goes to Democrats. To minimize unions' ability to extort their members' money to fund Democratic machines, two reforms need to be implemented: third-party auditing and paycheck protection.
On June 2, Californians will vote on the Campaign Reform Initiative that would bar unions from spending any portion of a member's dues on political activity without the member's written consent, renewable annually. Similar federal legislation, especially the Worker Paycheck Fairness Act (H.B. 1625) sponsored by Rep. Harris Fawell (R-Ill.), awaits action in the Congress.
Or the United States could do what New Zealand did in 1991: repeal the monopoly privilege of unions to represent workers in collective bargaining. Then unions would represent voluntary members only, forced unionism and forced dues would largely disappear, and only voluntary dues would be diverted to politics.
Such fundamental rethinking of our Depression-era labor law may not be politically feasible today, but as long as we permit unions to collect compulsory dues from members, we undermine the principle of freedom. And as long as we permit unions to hide their practices from their own members and the American people, we undermine the idea of the open society.