Labor Department seeks to cancel rule on unions

WASHINGTON — The Labor Department moved Tuesday to rescind a regulation approved during President George W. Bush's last days in office that would have increased scrutiny of union finances to help root out financial corruption.

The agency said it considered the comments of numerous labor organizations that claimed the new rule was overly burdensome and would have little effect on efforts to detect fraud.

Unions had also complained that the previous administration failed to take into account how well existing compliance forms already worked. The agency agreed, saying it would conduct further review of current financial reporting requirements before deciding whether more regulations were needed.

A notice published in the Federal Register proposes to withdraw the rule entirely and seeks comments on the agency's proposal.

Union officials praised the decision, the latest in a series of pro-labor actions taken since President Barack Obama took office.

"From our perspective, the only interest served by this rule was to harass unions," said AFL-CIO attorney James Coppess.

Unions are required to file annual financial disclosure reports to the Labor Department's Office of Labor-Management Standards. The agency's criminal enforcement program uses the information to investigate embezzlement from labor unions and other types of union fraud.

Labor Department figures show that investigations of union fraud from 2001-2008 resulted in more than 1,000 indictments, with 929 convictions and court-ordered restitution of more than $93 million.

The new rule would have required unions to disclose even more information about compensation to union officers and employees, details about buying or selling union assets and additional information about union receipts.

When the Bush administration announced the rule on Jan. 16, Don Todd, then deputy assistant secretary for labor-management standards, said it would discourage embezzlement of union members' money and make such embezzlements harder to hide.

Wyoming Sen. Mike Enzi, top Republican on the Senate Health, Education and Labor Committee, criticized the effort to cancel the rule, saying it might prevent union members from becoming the victims of fraud.

"We should be giving the department more tools and resources to root out fraud and abuse, not taking tools away from them," said Enzi.

Labor Department spokeswoman Amy Louviere said Labor Secretary Hilda Solis is committed to "strong, fair and balanced enforcement" of labor management reporting laws.

Louviere said re-examining the rule "gives the Labor Department the opportunity to evaluate whether we are taking the best actions toward that goal."