The Organized Labor Loophole

For several years, there has been much hysteria about how soft money has corrupted the political process. Democrats, self-serving media organizations and Sen. John McCain (the Keating Five-tainted presidential aspirant whose campaign was trounced by George W. Bush) have been shedding crocodile tears over soft money. As it happens, during the 1999-2000 electoral cycle, each of the two major political parties raised about $250 million in soft money from corporations, unions and individuals. Every dime of those evenly divided soft money donations was publicly disclosed. Any interested voter was free to make his own informed judgment about the source and the size of the soft money contributions the parties received.

The real scandal involving soft money, however, relates to the fact that labor unions have been laundering the dues of their members through their union treasuries and into the coffers of the Democratic Party. This, despite the fact that voter-exit polls have revealed that nearly 40 percent of union workers and members of their households have voted for the Republican presidential candidate since 1980. Yet, even this scandal pales in comparison to the hundreds of millions of dollars in indirect and in-kind contributions that labor unions routinely make on behalf of the Democratic Party. These sorts of contributions are, of course, never disclosed. Indeed, labor economist Leo Troy of Rutgers University has testified before Congress that unions regularly spend an estimated $500 million during each two-year cycle to elect Democrats. Yet, only a relatively small portion of these funds — specifically, the soft money donations and the contributions from political action committees (PACs) — are disclosed.

The audacious operations of the National Education Association (NEA) demonstrate precisely how scandalous labor's gambit has been. As the Landmark Legal Foundation has meticulously documented in several complaints filed with the IRS and the Federal Election Commission, the nonprofit, tax-exempt NEA has literally spent tens of millions of dollars since 1994 on political operations. Each year, however, according to Form 990 that it is required by the IRS, the Washington-based NEA claims that not a dime of its resources is expended on political matters. Since at least 1994, Form 990's line 81a, where the NEA is required to "[e]nter the amount of political expenditures, direct or indirect," has been blank. Anyone who reviews Landmark's complaints, which are available on its website (http://www.landmarklegal.org), can appreciate how staggering the NEA's annual violations truly are.

While Landmark has concentrated on the NEA's national affiliate, the Heritage Foundation has attempted to review Form 990s filed with the IRS by teachers unions representing the 100 largest, public-school districts and the 50 representing them at the state level. These included affiliates of both the NEA and the American Federation of Teachers (AFT), the other major teachers union.

By law, these NEA and AFT affiliates are required to provide copies of their most recently filed Form 990s to anyone requesting them. In fact, many affiliates refused Heritage's request. Nevertheless, apart from the contributions by their PACs, only two of the 63 Form 990s examined by Heritage reported any "political expenditures, direct or indirect" on line 81a. (National Education of New York and the Hawaii State Teachers Association reported "direct or indirect" political expenditures of $69,272 and $136,285, respectively — political spending, if Landmark's review of the NEA's national affiliate is any guide, that is probably drastically understated.) Equally revealing was the fact that those forms showed average annual dues income exceeding $4.1 million, while expenditures for collective bargaining — a union's principal purpose — averaged a mere $103,000.

Once Senate Republicans cast the deciding, filibuster-proof votes to ban soft money, which, in practice, Republicans have used to balance the "under-the-radar" political spending by labor unions on behalf of Democrats, those GOP senators will have nakedly exposed themselves to the loophole-smashing tactics of a labor-Democratic cabal.

If W thinks that offering many union jobs to the teamsters by opening ANWAR or placating the steel industry with raising tarriffs on steel will change this situation he is in for another rude awakening. I suspect he thinks he is outsmarting the unions and leftist Democrats by coopting their pet issues, and that may be true with some members/voters, but the leadership of the unions, the ones who control the money, are hardcore con-artists-leftists who are impervious to charm and peace offerings. They see such actions as weakness and become even more determined to exploit that weakness. Throw in the press who supply propaganda for free and the good guys have a tough row to hoe.

I put much of the responsibility on political consultants, those folks hired by nearly all politicians to keep them from stepping on their tongues. By nature, just as bureaucrats, these consultants practice defense. They advise to keep a low profile - high visibility for PR sake but do so while remaining a small target - and as soon as someone screams about a supposed faux pas, immediately apoligize so as not to seem mean. Just as there are few, if any, daring leaders in a bureaucracy, political consultants seldom advise their clients to be bold. Political consultants are usually cowards playing CYA, just as are bureaucrats. Their main goal is to not advise anything that would bring blame upon them if it doesn't work. Political consultants should be clerks, not advisors.

If the estimated $500,000,000 per cycle for the last ten election cycles had been invested in the Union Pension Funds then without interest Union workers would have access to $5 Trillion.

Currently. Union-related pension funds control a mind-boggling $6 trillion — one of the largest pools of capital in the world. They own nearly one-fourth of the shares of U.S. corporations.

If they did not politically squander these resources the Union Pension plans would be worth $11 Trillion dollars. Gee! it's only a dollar a week.

OTOH, if he can undermine the leadership significantly, and get the actual people to actually vote against the Dems their money is going to, he may have won.

If the estimated $500,000,000 per cycle for the last ten election cycles had been invested in the Union Pension Funds then without interest Union workers would have access to $5 Trillion.

Remedial government school "Real Big Numbers" class:

$500,000,000 = $500 million.
10 x $500 million = $5,000 million = $5 billion.

The treasury calls that a round-off error.

Even with interest, that is still pretty far from $5 trillion, unless they had Hillary invest the money in cattle futures for them.

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