Increase Public Sector Union Financial Transparency

The U.S. Department of Labor proposed a rule that would require public sector unions to provide more details on the financial information they already report publicly, predominantly through the LM-2 forms. APF submitted the following comments in favor of the rule change, with recommendations, on December 14, 2020. Click here to open a PDF of the comments in a new tab.


As a point of contact for union members in Alaska, Alaska Policy Forum has heard from union members in our state who are dismayed at the lack of transparency from their unions. They pay dues into the union, but they are concerned that there are not currently in place systems to prevent malfeasance within their unions. Lack of access to information makes them leery about what may be happening, and they simply want full financial information to be publicly reported. In particular, our organization has had requests about how to find out how much money is being paid to those people in leadership within their unions, and how much is being spent on political activities (beyond what is now required to be reported).

Alaska Policy Forum supports all of the proposed changes with a couple of small recommendations. Thresholds for reporting of additional income and foreign transactions should be lower, perhaps $500 or $1000, to provide transparency and accountability. Of the proposed changes, specifically, our organization would benefit from being able to access the information bifurcated between “contract negotiations” and “organizing.” It is important for the public and union members to be able to see how much is being spent on actual representation separately from activities to organize new members.

We have specific comments on two proposed changes.

Proposed change to require separate reporting of “Political Activities” and “Lobbying”: In Alaska, our state public reporting requirements for lobbying and other state political activities are already required at a very granular level, so this change will not impose new burdens on the unions but instead will just make this information more publicly accessible.

Proposed change to require reporting for “indirect disbursements for travel-related expenses when payment is made” directly or through a credit card: In the same way that our organization must be accountable to our board for actual spending on travel, etc. and not disguise those expenses as simply all-encompassing payments to a credit card, unions should be expected to report indirect disbursements in a meaningful way.

There are a couple of items not addressed by these changes but that we would urge the department to consider. The first is adding a line that simply requires the union to indicate the number of workers the union represents per fiscal year. This is certainly in line with giving union members the ability to know what percentage of the fiscal responsibility is theirs, since some public employees do not pay dues.

The second addition we would request is requiring disclosure of confidential settlements paid out by unions.

We would like to respond to the Department of Labor’s questions about the confidential exemption, employer EINs, whistleblower policies. In all three instances, we would advocate for removing exemptions and requiring broader disclosures.

With over 15 years having transpired since the last true update to union disclosure requirements, it is high time that these updates be made. Unions have swollen in the intervening years by conglomerating and becoming more interconnected, creating circuitous relationships that are hidden from public view. Union members and the public should be allowed access to the data so that they can ensure unions are serving honorably and allow members oversight of the personal funds they provide to the unions by way of dues.

These proposed changes are relatively minor so we would encourage the department to accelerate the implementation of this rule by making it effective upon publication in the Federal Register. It is time for a refresh of union reporting.