Association for Union Democracy

Getting an audit of the union finances

A: The LMRDA (Labor Management Reporting and Disclosure Act) does not specifically require audits, so you have to do more work.

Your first step was good, trying to get the finance committee to handle this. The next step might be to bring the issue to a membership meeting in a slightly different form: try to get a motion passed to have an outside audit by a reputable independent accounting firm. The motion can include the election of a committee to find the accountant, coordinate the audit, and bring the results to the membership. To get such a motion passed, you will probably need to mobilize a lot of members to go to the meeting and be ready to get your motion heard, seconded, and approved. If you succeed and the leadership has something to hide, you can expect them to attempt to overturn your resolution and pull the plug on your audit at future meetings. So, you will need to keep your support mobilized and informed.

You can also write to the local, certified mail/return receipt requested, to request that the local carry out an audit. If (when) the local officers refuse, you can send the same letter to the International. If (when) the International refuses, you have a few options:

If you have evidence of wrongdoing — receipts for improper expenses, reimbursement for fictional expenses, loans to an officer or member from the union for more than $2,000, etc. — you can go to court and sue under Title V of the LMRDA to get the money returned to the union treasury.

If your analysis of the local’s LM-2 financial reports filed with the U.S. Department of Labor over the past several years raises some unanswerable questions or suspicion of possible wrongdoing, you can, with the aid of an attorney, file suit under Title II of the LMRDA to get access to, and to analyze the local’s underlying books and financial records yourself. You will want the aid of an attorney and/or personal accountant.

If there is criminal activity involved — fraud, theft, etc. — you may be able to get help from the local District Attorney’s office, the U.S. Department of Labor, or your United States Attorney.

In any event, you’ll want to share with your fellow members any information about financial wrongdoing that you happen to discover, what the union leadership is doing (or not doing) to solve it, and what you are doing to deal with the problem. Get the information in the hands of the members: put it in a newsletter or on a website. Post it on a bulletin board. Information can be a powerful political weapon that can be used to reform corrupt unions.

Finally, if the problems you are having are serious enough to think about going to court or organizing a movement to force the leadership to do what they should be doing anyway, you need to organize an independent, rank-and-file committee or caucus. The committee can create an agenda for change in the union, and take action to make it happen, including running candidates for office.

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