Big Labor ‘License to Lie’ to the IRS?

Union Bosses Massively Underreport Their Political Expenditures

(source:  October 2014 National Right to Work Committee Newsletter)

Under the National Labor Relations Act (NLRA) and the Railway Labor Act (RLA), and under many state statutes that are patterned after these two federal laws, Big Labor wields the power to force millions of employees to pay union dues or fees, or be fired from their jobs.

Big-Labor-LM-2'And it is largely because of their special forced-unionism legal privileges that top union officials preside today, just as they have for decades, over the most powerful political machine in America.

Last year, a National Institute for Labor Relations Research analysis of reporting forms filed by union officials themselves with federal and state agencies conservatively estimated that Big Labor had spent $1.7 billion on politics and lobbying just in the 2011-2012 campaign cycle.

Even if one ignores union contributions reported elsewhere, the LM-2 forms that all larger private-sector and some government-sector unions are required to file with the U.S. Labor Department show a total of $1.37 billion in expenditures on “political activities and lobbying” in 2011-2012.

Forced dues-fueled political spending reported on LM-2’s does not go directly into candidate or PAC coffers, but does pay for phone banks, get-out-the-vote drives, propaganda mailings, and other so-called “in-kind” support for union boss-favored candidates.

In 2006, AFL-CIO Bosses Told IRS They Spent Zero Dollars on Politics!

In 2003, then-President George W. Bush’s Labor Department revised LM-2 forms with the avowed goal of helping millions of workers who are forced to pay union dues or fees as a job condition get a better idea of where their conscripted money was going.

Although the reform was ultimately watered down in a misguided and futile attempt to appease the union brass, since it withstood an extended Big Labor legal challenge nearly a decade ago, the revised LM-2 has required union officials to report each year how much they spend on electioneering and lobbying.

Union bosses know they face possible prosecution if they lie about their political spending on their LM-2 forms. But evidently many believe they can blatantly lie to the IRS without any repercussions.

As Connor Wolf of the Daily Caller reported on Labor Day, ever since LM-2’s began requiring union bosses to disclose how much they spend on “political activities and lobbying,” there have routinely been gross discrepancies between what Big Labor reports on these forms and what it reports to the IRS.

Like other nonprofit groups, unions are, at least in theory, legally required to disclose on the Form 990 they annually submit to the IRS their total political expenditures.

Moreover, as then-IRS Director of Exempt Organizations Lois Lerner admitted in 2007, in order to comply with federal tax law, a labor union must also report on its Form 990 all political expenditures that it is required to report on its LM-2.

Ms. Lerner made that admission after being informed in writing that the national AFL-CIO conglomerate, to take just one example, had reported $29.6 million in political and lobbying expenditures on its LM-2 in 2006, while claiming zero political expenditures on its Form 990.

She also conceded to her correspondent that such vast discrepancies in reporting had “raised concerns” at the IRS, but there is no evidence any investigation ever occurred as a result of the inquiry.

Some Union Bosses Have Stopped Trying to Hide Political Spending From IRS

National Right to Work Committee Vice President Greg Mourad noted that, since the IRS brushed aside complaints about false reporting on union bosses’ 990’s in 2007, officers of certain unions have stopped trying to hide their political expenditures from the agency.

“In 2011 and 2012, for example,” said Mr. Mourad, “political expenditures on Service Employees International Union bosses’ Form 990 were of a similar magnitude to what they reported on their LM-2. But the AFL-CIO brass left blank the 990 line on which they were supposed to report their total political spending. It seems that, for Big Labor, telling the IRS the truth is purely optional.”