Madam President, I believe, in accordance with our understanding on both sides, it would be appropriate for me to call up amendment No. 3373, and I do so now. Madam President, I ask unanimous consent…
Madam President, I believe, in accordance with our understanding on both sides, it would be appropriate for me to call up amendment No. 3373, and I do so now.
Madam President, I ask unanimous consent that reading of the amendment be dispensed with.
Madam President, this amendment is similar to the one I introduced yesterday, except it provides a different offset to pay for the needed additional funds for the Office of Labor-Management Standards in the 2008 Labor-HHS budget.
This is a program that I believe is critically important. It is a program that has been very successful. It has resulted in over 700 prosecutions in the last several years and restitution to union members and union locals in the amount of about $101 million.
This is an important program. It is a working program. It represents the only required audits, the only required reporting and disclosure for unions in the country. The Securities and Exchange Commission does that for corporations and other institutions that are required to be audited. Other than this program, there is no real integrity to protect union members from fraud and corruption and theft. I will mention in a moment some extraordinary thefts that have occurred from union members, why this is important, and I will express my personal and deep belief that one reason we have as much broad corruption in unions is because we are not auditing them. We are not doing it. Even with the current level of funding, we are way behind and it would take, at this rate, 33 years to do a basic audit of all the unions around the country. That is not acceptable.
People are not being watched. They feel like they are free and temptation and money is coming before them. Obviously, people are succumbing to that temptation. More rigorous enforcement and audits are needed. The Office of Labor-Management Standards is a group that is required to enforce the statutory provision that mandates that unions provide, each year, public disclosure of how they spend their money. It was a bill offered and passed in 1959 by former Senator and former President, John F. Kennedy. It was an important reform.
During the Clinton years, sadly, this reporting requirement was almost totally abandoned and, under Secretary of Labor Elaine Chao, in recent years she has worked hard and those reporting numbers are up. But 36 percent still don't report. There is not even a way, with our staffing level, that she can insist on that. So 36 percent are not reporting properly. The members don't know where their money is being used. That is the fundamental question.
The committee mark doesn't even flat fund the Department; it cuts its funding by $2 million. Every other enforcement agency is given an increase, but this one is cut. I think our members ought to ask themselves, do we need to be listening to certain union leaders who don't want disclosure, or do we need to be listening to union members whose funds and dues are being misappropriated? If we do regular audits, they will be more effective, and
I am convinced we will see a dropoff in this kind of problem. It is the right thing to do.
My proposal is to add $5 million, $2 million of which would get us back to last year's budget only, and a $3 million cost of living on top of that, so they can continue an aggressive effort to ensure integrity.
I have Senator Enzi with me, the ranking member of the Health, Education, Labor and Pensions Committee, and Senator Alexander, who are both interested in speaking on this. I will yield to Senator Enzi at this time. I believe I have 30 minutes; is that right?
Madam President, I thank the Senator from Wyoming.
I yield to the Senator from Pennsylvania.
Madam President, I thank Senator Alexander for his comments. Indeed, what we are talking about is funds contributed by union members to further union causes, not to line the pockets of persons who embezzle, steal, or otherwise cheat and use the money. That is an important issue we need to keep in mind. It is troubling to me that we have opposition to keeping this program on track.
I have offered this amendment, as I indicated earlier, a new amendment that has a different offset. I know there was concern over the international union funds that go to the U.N.-affiliated agency. There is a big increase in that program, a $10 million increase. I am troubled by that increase, frankly, because last year Secretary Chao met with the people who were receiving this money, and they gave very inadequate explanations of where the money went. In fact, they couldn't explain where it went. I don't know whether it is being well spent.
At any rate, the most important thing for us to do is focus on making sure we are protecting the contributions of union members and that their funds are being protected. That is why I altered the offset to one that takes this $5 million from the administrative, management and related expenses of the Department of Labor, the Department of Health and Human Services, and the Department of Education. That is where the funds would come from. I believe that would not be a heavy burden on those agencies. In fact, they can absorb it readily, and this is clearly, as a question of priorities, more important to make sure we are not cutting back on this budget.
Senator Specter talked about the status of the budget. I repeat, I think he understood it and explained it eventually correctly that the committee mark cuts the budget $2 million below last year's funding level. Because of inflation and cost increases, that is a most significant $2 million cut.
What we are proposing is that there be a $3 million increase in the overall budget, a total of $5 million--$2 million to get up to last year's funding and an additional $3 million to increase the funding. I think this is valid. I think it is justified. It is something we really should do. If we don't do it, we are going to have a severe, adverse impact on the ability of OLMS to fulfill their statutory requirement of auditing unions and requiring unions to publicly file their financial disclosures.
Some say this is a burdensome regulation, but in today's day and age, being able to maintain records of where you spend your money is not too much to ask. Most of these records are done by computers now. People have bookkeepers, and if they don't, they are taking serious risks. So to be able to report this information is not too much to ask. It is very valuable to their members. Union members should have the same protection, as Senator Alexander said, as corporate stockholders. This OLMS legislation is to union transparency what the Securities and Exchange Commission is to corporate transparency.
This chart shows the mission of OLMS. The mission of OLMS is a good mission. It is not to harm anybody. It is to assist in the integrity of this system--No. 1, to provide union financial transparency. That is why the bill was passed in 1959, so that union members can know where their money is being spent. That is the report which is required. Then to protect union financial integrity--that is part of the audit function of the OLMS. They are required to audit the union activities, and they do so, but, as I noted, even at this current level of funding, they only get around to doing every union in the country once every 33 years. Until we had some increases in this budget, it was once every 133 years. It is a small agency, $47 million in last year's budget, but it has shown big results.
OLMS does not tell unions how to spend their money; it simply requires them to file accurate and timely reports, which allows union members to determine for themselves whether the expenditures that are being made are appropriate. If they don't know what is happening, they cannot express their opinions in leadership meetings.
That there is a high level of demand from union members for this kind of information is very evident. This is a remarkable number. Between May of 2006 and May of 2007, on the Web site of OLMS where these reports are posted so members can access them--so they don't have to go down and ask the officer or the boss at the local union to ``give me your records,'' they can just access them on the computer--767,980 hits were identified on last year's Web site. People are looking to see where their elected union officers are spending their money. Why shouldn't they? That is an average of 64,000 a month and over 2,100 a day. If union members don't care about how their hard-earned dollars are being spent, I ask, why do they take time to access this Web site? Of course they want to know, they have a right to know, and the only way they are able to get this information in a readily available form is through this reporting requirement.
Unfortunately, the reports are not being submitted, and because of shortage of personnel and a certain lack of legal enforcement ability, only 36 percent of unions are not filing the appropriate forms. The delinquency rate is 36 percent. That is not good for union members.
Now, Secretary Chao has met with union leaders. But let me tell you what happened. Under the Clinton years, this was not being enforced. That is just it. You want to know the truth? It was not being enforced. And the number of personnel went from 427, in about 1990, down to 260. They just weren't enforcing this 1959 mandate. When Secretary Chao realized it was her responsibility to make sure union members could see financial disclosure forms, and she asked that it be done, a lot of grumbling occurred. They said, oh, it was burdensome; oh, there were problems. So she met with them and met with them and they altered plans and they figured out ways to do it that were cheaper and better and less burdensome, but she required them to comply with the law that requires this disclosure.
Now, after our colleagues have gained ascendancy in the Senate, lo and behold we come in and whack their budget. Now, who is being listened to, politically powerful bosses or is it the interest of union members? Embezzlement is not something we ought to
support and put up with. We in Congress are focusing on transparency right here. We talk about it a lot. It is embarrassing to me that our colleagues have seen this budget be reduced.
This chart gives a clear indication of just how significant overall the problem is we are dealing with. From 2001 to 2007, 796 people were convicted. Most of them pled guilty, and court-ordered restitutions totaled $101 million. But I indicated to you that less than 5 percent of the unions per year are being audited, and it appears that for every four of the audits that are conducted, about one person is convicted of something, on average. So we have a problem, we really do. And I submit it is not because people are necessarily bad people. Some of them may be, but a lot of it is because there is no real oversight and accountability, and temptation is too great.
I have been a prosecutor for 15 years. I will tell you, you give people lots and lots of money, it goes through their hands and nobody is watching it. Temptation takes over, and you will rightly expect problems to occur if you don't have tight fiscal controls. We don't have it. I think we need to have a lot more emphasis in this area than we do, other than just a $3 million increase in this department. It is obvious.
We hear a lot of talk about integrity in here about our financial disclosures and other things. Well, if we don't do our duty, people will complain. If businesses don't file their reports, they will complain. And we need to make sure unions do the same, not to beat up on unions but to help unions have integrity.
Now, not to be monotonous--and I find this remarkable--but some may say, well, they are abusing unions and picking on people. But the conviction rate is 95 percent--95 percent of all indictments have resulted in convictions. They do not always get big sentences. I thought some I have seen were pretty light. But the point is, if you are convicted of these kinds of offenses, you lose your leadership position in a union, and that is important. So if you are stealing from a union, you ought not stay in as an officer.
So I would just suggest that from my review of the cases, people are not being abused. They are being fairly treated. Overwhelmingly, the defendants are pleading guilty, and restitution is being made. People who are corrupt are not being able to remain in office to keep their hands in the till where the money is.
The legislation that requires this is not new. This law has been on the books for some time. I will admit that we been very lax, and it was not being enforced, but the conviction rate, the amount of restitution, the number of fraud cases per audit indicates that was not a good decision. And if the audit rates had been maintained, I submit we would have had a lot less crime and fraud and loss of union members' money. This occurred in 1959. One of the leaders of it was our own Senator Robert Byrd. He spoke earlier today. He has been here a long time. He was here in 1959 when this bill passed. And as a Senator from West Virginia, a State with a strong union heritage, a proud union heritage, he decided to vote for this bill.
The bill was actually introduced and led by Senator John F. Kennedy. This is what Senator Kennedy said at the time.
The racketeers will not like it, the antilabor extremists
around the country will not like it, but I am confident that
the American people, and the overwhelmingly honest rank and
file union members, will benefit from this measure for many
years to come.
And until we stopped enforcing it a few years ago, or got lax, it has been beneficial. I think the work that is being done now, the $101 million in restitution, indicates that progress has been occurring that has benefitted union members.
Now, Senator Byrd wrote a letter that was included in the Congressional Record in response to certain criticisms he received from a district president of a union in West Virginia. They sent a letter of condemnation, and Senator Byrd was direct about it. He responded:
The bill which passed the Congress will not hurt honest
unions, and it will give added protection to the rank and
file members in the unions. Honest union leaders have nothing
to fear from this legislation. The corruption and
racketeering that have been revealed in the fields of both
labor and management made it imperative that some kind of
legislation be enacted.
And I think that remains as true today as it was when he made those comments in 1959.
Madam President, since 2001, OLMS has only had the resources to audit 3,275 of the 26,000 unions on record. That means in the past 7 years combined, only 12.5 percent of the unions have been audited. It is able to audit only about 2 to 4 percent of the unions each year. It is important to note that unlike corporations, unions are not required by law to have outside auditors. Most corporations have to have outside auditors. So in many cases, this audit is the only outside audit a union will have.
In 2000, OLMS only did 204 audits out of well over 20,000 unions. That is the equivalent of a union being audited once every 133 years. Last year, they did 736 audits, a better number, but that still translates into an audit only once every 33 years at that rate. It is better, but I think we need to do a lot more.
With the $2 million reduction in funding which is currently in the bill, it is estimated there will be approximately 350 fewer audits each year, and that is almost cutting the number in half. So we should be seeking more, really, considering that from those 3,267 audits that were completed there came 827 indictments and 796 convictions. OLMS has been funded below the President's requested levels over the past several years. Yet if the proposed cuts in the bill are implemented funding will drop from $47.7 million to $45.7 million. That is below last year's budget. So I would just note again that we had 427 employees in this department in 1990. It fell down to 260, it has been inched up to 331, and if this bill passes in this form, cutting the budget, we are going to see a loss of personnel instead of an increase in personnel. We ought to be closer to the 400, it seems to me. OLMS was the only enforcement agency in the Labor Department that received a budget cut during the congressional markup.
Let me mention this story of the United Transportation Union. We have a picture I think is sad. It is a picture from an undercover operation. The person who is handing off this money that is on this picture is a UTU-designated legal counsel by the name of Victor Bieganowski. The person receiving the money is John Russell Rookard, 58, of Olalla, WA, a top special assistant to Alfred Boyd, Jr., UTU president at the time this bribe money was paid.
In 2004, Boyd, the international president of the Nation's largest railroad operating union, pleaded guilty to participating in a bribery scheme involving Houston lawyers. Union officials extorted bribes from the lawyers in exchange for access to injured union members.
A March 12, 2004, Houston Chronicle article explains that Byron Alfred Boyd, Jr., of Seattle, is the last of four officials of the UTU to plead guilty in a plan to extort bribes from lawyers in exchange for access to these injured members.
Boyd admitted using the bribes he was paid--get this--to gain control of the union. He persuaded former union president Charles Leonard Little of Leander, near Austin, to resign in exchange for $100,000 and a new pickup. This would allow him, Boyd, to assume the presidency of the union. Little resigned, but I guess he didn't get a promissory note or a mortgage because he was never paid his $100,000. Boyd not only stole from his union and breached the trust of his union members, he didn't pay the man he promised to pay to give up his office. Little pleaded guilty last year, as did former union insurance director Ralph John Dennis.
We have too many examples of this kind of disregard for the integrity of the funding of unions. People are being entrusted with this money, and it is not being managed well. And it is something that we need to do more about, in my view.
Madam President, I would just share a few other examples which I think are instructive of some of the problems that have occurred in recent years.
In Pennsylvania, in June of 2007, in the eastern district of Pennsylvania, Lawrence Marable and Deborah Powell, former president and treasurer of AFGE Local 1793, representing employees at the VA Medical Center, both
pled guilty to conspiracy and theft of property in a special territorial case. They conspired to convert dues checks and issued Local 1793 checks for their personal use totaling $184,129. This was a very serious matter, I suggest.
In May of this year, in Michigan, Alan Raines, former financial secretary of Steelworkers Local 1358 was charged with embezzling union funds in the amount of $274,262. That is not chicken feed. That is huge money. A lot of these unions do not have that many members, and the cost per member in one, I remember specifically, was about $1,000 per member in the amount of loss that occurred.
Here, on April 2, 2007, in Puerto Rico, the president of the International Longshoremen's local was found guilty of 12 counts of embezzlement. He was charged among other counts with conspiracy to embezzle union funds in excess of $1,950,000. That is a breathtaking amount. Both of those, in May and April of this year. In March of this year, in New York, John Daley, former chief financial officer of the New York State Nurses Association, was sentenced to time in prison after pleading guilty to grand larceny for taking $1,193,000 in union funds. These are public records. These are huge amounts of money.
In June of last year in Connecticut, a former financial secretary of Local 745 of PACE was charged with taking $138,000, embezzling that much money.
In June of this year, in my hometown, sadly, the Southern District of Alabama, where I at one time was a Federal prosecutor myself in the United States District Court there, Kenneth Mays, the former treasurer of IBEW Local 1053, was sentenced after pleading guilty to embezzlement and ordered to pay $37,000 in restitution, reimbursement. This is right in my home state.
On July of last year, in Fulton County, GA, in the district court, a bookkeeper for IBEW Local 613 was indicted for taking $11,000.
In December of 2005, in the Northern District of Iowa, Debra Herrig was sentenced and pled guilty to embezzling union funds and made restitution in the amount of $13,000.
In December of 2004, in the United States District Court for the Southern District of Iowa, Rodney Fox was charged with embezzling $89,000 of union funds.
In May of 2005, in the Southern District of Iowa, Amanda Kemmer was sentenced to 24 months and ordered to pay $209,000 in full restitution for embezzling union funds.
There are lots more I can indicate.
I will repeat. I don't believe there is any need for this kind of criminal activity to go on. I believe a lot of it occurs because there is so little oversight. If we had a rigorous oversight and audit function by the Department of Labor, we would see a lot less of it. If the unions were required to promptly and fully report the expenditures, union members would be able to watch for problems and pick them up sooner and keep these kind of embezzlements from going to hundreds of thousands of dollars, even millions of dollars. That is why this office, of all offices, should not be reduced.
I understand some people believe it is a burden, and for a good union that never had any problems I guess filing it is a burden. It may not be a necessary thing. But, really, probably it is because the union members get to see where their funds are being spent, honestly and fairly.
Most unions, of course, are honest and do a good job, and most union members are the salt of the Earth and couldn't be better people, and most union leaders are honest and decent and work hard every day to protect the interests of their own members. They try to make sure they get a fair deal in the workplace.
I am telling you we need to be attuned to that because wages are not what I think they ought to be for the average worker in America today. There are a lot of reasons for that. I suggest one of them is this very large surge of low-wage labor that comes into our country illegally.
But, regardless, we want to help our union members receive the highest possible wage and to be able to know that their leadership is honest and trustworthy and doing the right thing. I believe we have to get this money back into this account. We need to be sure we have at least a modest increase in spending to keep up with the inflation rate so we can continue at least this modest rate of enforcement.
I urge my colleagues to not see this as an action that goes against unions but as an action that will strengthen unions, that will affirm the importance of the union members' money that they contribute, and to make sure it is spent wisely.
It is sad to say, sometimes you get a big restitution order of $1 million--I have been there and seen them, but it is like getting blood from a turnip. It will never come back. It is gone and the members have actually lost it and nobody can do anything about it.
I urge my colleagues to give serious consideration to this amendment. I think it is reasonable and fair and the offset, let me repeat, does not deal with the controversial ILO, International Labor Organization, that does some good. It certainly has good objectives. How well they spend their money, I have my doubts, but it has good objectives. It is an offset against administrative expenses, and across the board it will be a small impact on the administrative budgets of these agencies.
I yield the floor.
I ask unanimous consent that the order for the quorum call be rescinded.
Madam President, I wish to share a few thoughts on some of the discussion we had earlier today. My colleagues shared some ideas about whether we are funding OSHA sufficiently, that sort of thing. The spending per business from OSHA is different from spending per union. OSHA has many businesses they serve, and so they go out to each one and make their visits and do their inspections and assess penalties. But unions serve many businesses, and one inspector would come there and spend some time and would cover their relationship with quite a number of businesses. All workplaces are not unionized so I don't think that was a fair comparison.
Also, the Department of Labor just reported that the indictment and conviction numbers continue to go up. They now have 798 convictions and 834 indictments. It seems every day they are out there making good progress, where they have the capability to do so, against fraud and corruption.
With regard to the full-time equivalent, the number of employees, in recent years we have seen an increase in the number of employees--that is true--but the truth is those increases have been modest. For example, in 1990, there were over 400 OLMS employees. Now that number dropped down below 300. Mostly during the period of the Clinton administration there was a sharp dropoff. Now it is back up to 331, but that is well below the amount it used to be.
I don't think there is anything that can be said except that Secretary Chao has begun to restore that office a bit, tried to get it on a stronger basis, have it do a better job of enforcing the law. She needs that. One can only interpret this budget cut--the only budget cut within this whole line item of appropriations to her enforcement agency, the agency that requires the unions to publish their expenditures, the enforcement agency that actually does audits--as an indication of something rather serious, especially when the audits are uncovering extraordinary amounts of problems. That is what we have. We have a situation in which we have had so little oversight that there is abuse of union members' money going on on a regular basis. That money is too often being abused. Not by everybody; overwhelmingly, the average union leader is honest and decent. The locals are run by good people elected by their members. But long-term tenures, lack of controls, no audits puts people in a position where their good discipline fails.
I have seen it in churches. People in church have access to large amounts of money. Nobody is monitoring it, and they take it, sometimes large amounts. So we need to understand that oversight, auditing, and financial disclosure is not punishment. It is not demeaning. It is serving the rank-and-file union members. It is serving their interests so they can know their leadership is functioning honestly and with integrity, and they can know what they are spending their money on. It may be an honest expenditure, but a union member might look at it and say: They paid too much for this copy machine because that is his brother-in-law. They might want to complain about that. Isn't that the way we want it to happen? That is what the whole system is about.
It is disappointing to me to see that we have a cut in this agency, of all agencies. I am disappointed in that. I know Secretary Chao would be concerned that people thought that somehow in doing these few audits--and we are so slow in what we are doing and doing so few it would take 33 years to audit all existing unions. But to suggest they were spending so much money on that, and they weren't protecting workers. There is actually some good news there. For example, since fiscal year 2001, the fatality rate among Hispanic workers has fallen by over 18 percent. Since 2002, the injury and illness incident rate has fallen from 5.3 per 100 workers to 4.6 per 100 workers, a drop of more than 13 percent in the injury and illness incident rate, which is a substantial improvement.
With regard to the number of resources, from 1992 to 2002, there were budget cuts and the FTEs dropped 34 percent. That is the number of workers during basically the period in which President Clinton was in office. The audits of unions, the local unions dropped by two-thirds in that decade. That is all we are saying. Secretary Chao has a statutory responsibility to do audits, a statutory and compelling responsibility to insist on these reports being filed on time. They are required by a law that was passed in 1959. Thirty-six percent of the unions are not submitting those reports on time so their members cannot access where their money is going. We had almost a million people in the last year access the Web site where these reports are required to be filed to see where the money is being spent. This is union members accessing these Web sites so they can find out where the money they are contributing to the local union is being spent. What is wrong with that? Why would we want to cut this agency when we still are not where we need to be? We are auditing only a very small fraction of the unions, and a substantial number, over a third, are failing to report as required by law--not a law I am asking us to pass, not a law that is part of this amendment--a law that was passed by then-Senator John F. Kennedy in 1959.
So I believe this is a good government issue. It is the right thing to do. It will not hurt unions. It will strengthen unions. It will make people feel better about their membership. It may be some bosses do not want to have to disclose where they spend their money, and they may be contacting Senators and telling them: Don't give in. Fight. Don't let them go back and make us do these audits. Don't do it. Cut their budget. Stop Elaine Chao from doing what she is required by law to do. Don't give her the money.
Maybe that is what is happening. I do not know. I hope not. I think we ought to keep this going. We ought to at least have this modest increase which is a little more than the inflation rate--a net $3 million increase on a $47 million budget from last year. That modest increase will allow her to keep the momentum, to keep these delinquency rates going down, moving in the right direction, with financial disclosure, sunshine. That is going to help eliminate fraud in itself. Then she will be able to also do a certain number of other audits. Maybe we can see not an increase in convictions, but we might see a decrease, if we know there is more accountability.
Again, there were 796 criminal convictions over the last 6 years, with court-ordered restitution of $101 million. Whose money is that? Whose money was being ordered to be paid back? It is union members' money--working Americans who have trusted their leaders. Maybe in the union hall there are 10 officers and leaders and only one of them found themselves in a position to steal. I am not saying we have this wholesale problem. What I am saying is there is a very real problem. There is no doubt about it. We are finding far too many criminal cases for each audit that is done.
As a result, it takes up time by the investigators. It takes up time by the auditors. It results oftentimes in a loss of money that no matter what the judge orders to be restored--no matter how much restitution they order--it may not actually ever be paid back if they do not have it. That is a true fact.
So I urge my colleagues to support this amendment. Once again, some of you may be concerned that the offset was to take money from the ILO, I believe it is, the U.N.-affiliated international labor group that is supposed to help labor conditions around the world. They certainly have high and good goals. I am not sure they have been very effective. But this money for my amendment is not coming from there anymore. I know a lot of people want to see that budget increased.
So this offset will be an offset from administrative expenses of Labor and HHS and Education. It will be a small impact on their overall budget.
I urge my colleagues to vote for this amendment.
I yield the floor.