OLMS

Paul Pringler of the LA Times has running a great series of stories about the corruption of the LA local of SEIU. The most recent places them all in context.  The basic idea is that the head of LA local, Tyrone Freeman, appears to be using union funds to route money back to his friends, family, and even spouse.

This story adds three important components. First, Freeman appears to run corrupt elections. Second, he is a "protege" of Andy Stern, the head of SEIU, and there is evidence that Stern and the (inter)national organization is covering up for Freeman. And, third, Stern has a strategy for using Freeman and his corrupt elections and embezzling to take over all of the California SEIU. If these facts hold up, it could lead to some very danger places for Stern and the SEIU.

The details from the story are all above the fold. The key point here is that these stories suggest a need to continue these investigations and examine both national and local SEIU expenditures much more closely.

One of the branches of the Department of Labor that provides a real services to all Americans is the Office of Labor-Management Standards. These are the guys who make sure that labor unions are being transparent about their finances. Or they try, when the Democrats don't cut their budget. But, for now, you get to see how unions spend their money.

For example, this spreadsheet shows 2006 disbursements by unions. It is in descending order by political disbursements. In 2006, AFL-CIO spent $41,620,583 on political activities, according to their filings with the Department of Labor.

However, in the fiscal year July 1, 2005 to June 30, 2006, they reported to the IRS on their 990 form (bottom of page 6 in the original PDF here, but you have to log into GuideStar), "direct or indirect political expenditures" of $0.00. Zero. Nothing. Now... Perhaps all the money was spent in the second half of the year. Unfortunately, I only have a free account on Guidestar, so I don't have all the years to check the numbers.

So what? Well. IRS regs (PDF, page 8) indicate that political expenditures are taxed at, I think, the corporate rate (35%):

IRC 527(e)(2) defines "exempt function" as "the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state or local public office or office in a political organization, or the election of Presidential or Vice-Presidential electors, whether or not such individual or electors are selected, nominated, elected or appointed." The term also includes payment of an incumbent's office expenses.

An IRC 501(c) organization that makes expenditures for such exempt function
activities is subject to tax under IRC 527(b)

So does that mean that AFL-CIO owes Uncle Sam $14m from 2006? Do you really believe that AFL-CIO did not engage in any political activities between July 1, 2005 and June 30, 2006?