ARE UNION SURPLUS FUNDS TEMPTING AGENCY TARGETS?

You bet they are! We are not talking about a couple of million set aside for rainy days, but when unions sock away surplus wealth measured with eight digits to the left of the decimal point, then people take notice. In fact, a tiny LR think tank operation in a rather large federal agency has taken a passionate interest in these rarely talked about union surpluses. More specifically, it is kicking out ideas for how to use the money if union leaders do not take steps soon to channel the cash to internally improve their unions.  Here is a little of what unions can expect to see soon, especially if Trump’s anti-employee executive orders are upheld by the courts.

If you do not know anything about your union’s rainy-day fund, don’t feel bad. That is the union’s plan. Generally, only the top one or two elected leaders of the union know much about them; even national executive board members are rarely told anything about where the money came from, how it is invested, and what it might be spent on.

You can find out how much money your union has socked away by looking at the union’s annual LM-2 report at DOL.gov. Open the most recent report and focus on lines 22 through 29, and especially line 26. The better agency LR shops have already done this for the unions they deal with.

While it is wise for unions to have rainy-day funds, does that mean they should be allowed to build mountains of stock, bond, real estate, and cash assets while still asking agencies to subsidize certain LR costs? (We won’t even dwell on the upsetting irony of unions increasing dues every year while having enough money to fund the union for months or years without a single dime of additional dues money.)

Trump and the right-wing union haters behind him are trying to vastly reduce agency subsidies of LR activities such as through official time, office space, travel etc.  But it could be much worse.  Rather than allowing agencies to give the union an hour of official time per unit employee per year, the leaders of this union-crushing pack soon could be demanding that agencies only provide an hour of official time for every hour of LWOP union reps take where the rep is paid out of the union’s mountain of surplus wealth.

Or crafty agency negotiators could use term negotiations to make a big deal at the bargaining table out of these surpluses and in the process drive local union leaders on the team to start asking the national leader why the union is looking more and more like a hedge fund than a union. What is a national leader going to say if top local leaders start asking why s/he does not use the surplus to

• lower dues,
• pay out even modest dues rebates,
• establish a dues paying holiday,
• increase services to the locals,
• subsidize local training expenses, or
• even offer substantial cash incentives to solicit new members?

Deliberately breaking the solidarity of a union bargaining team helps agencies greatly in negotiations.

Or the White House could double down and decree that unions with surpluses over a certain amount not even get an hour of discretionary official time until their surpluses are lowered to more reasonable levels, e.g., maybe three months of operating expenses.

Unions have been careless, if not irresponsible, with allowing national leaders total, virtually secret control over tens of millions in surplus funds. We are not talking about stunts like Jimmy Hoffa funding the Vegas mob with Teamster surpluses. But technically nothing stops federal sector national union leaders from using the surplus money on perks for themselves, nice severance packages, even highly risky investments or to buy off (and out) political opponents. National unions are not required to have investment committees controlling their investments and surpluses. Under the law, it is OK if only the national president makes decisions if the local elected leaders feel they are not knowledgeable enough to understand money management—or if they just do not care. After all, there is so much more exciting stuff to do at the convention hotel pool, bar, and casino.

Agency negotiators are preparing now to initiate actions aimed at these surpluses sometime in late 2019, hoping that union leaders will not have time to protect union assets. Don’t say we did not warn you, Mr. and Ms. Union Leaders.