(The Associated Press distributed the following article on December 1.)
WASHINGTON — The AFL-CIO is suing the Bush administration in an effort to block a new regulation that requires the nation’s largest labor unions to disclose financial details, such as how much they spend on politics, gifts and management.
The lawsuit against Labor Secretary Elaine Chao was filed last week in federal court in Washington. It says Chao acted “arbitrary, capricious and in excess of her statutory authority” in issuing the new regulation. It takes effect next year, but unions will not have to file a report until March 2005.
The labor federation wants the U.S. District Court for the District of Columbia to postpone the rule from taking effect Jan. 1, and to permanently block its implementation.
The rule will force national, regional and local unions with an income of more than $250,000 to provide much more financial detail in the annual forms they are required to file with the Labor Department. Expenses and receipts of more than $5,000 must be itemized. Unions also will be required for the first time to file a new form detailing the finances of related trusts.
Department officials say the forms haven’t been updated in more than 40 years.
“The department takes seriously its responsibility to make sure that rank-and-file union members know how their dues are being spent,” said Labor Department spokesman Ed Frank. “We are confident that the final rule will withstand this legal challenge.”
The lawsuit says the new rule “imposes massive new reporting requirements” that place “an enormous, unjustified burden on unions.” Unions do not have enough time to change their accounting systems and compliance costs will skyrocket, the AFL-CIO claimed in the lawsuit.
About 40 percent of the unions affiliated with the AFL-CIO make more than 1,000 annual disbursements over $5,000, it says.
The Labor Department says the new requirements will cost unions about $80 million in the first year. Unions say the cost will be well over $712 million.