Creative accounting masked AFL-CIO’s finances, official says
By: Holly Rosenkrantz
Associated Press
May 29, 2009
The AFL-CIO, the largest U.S. union organization, concealed deteriorating finances through “creative accounting,” according to a union leader.
Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, said in a report that the labor federation obscured its financial difficulties heading into last year’s presidential election campaign, in which it backed Democrat Barack
Obama. Net assets of the 11 million-member AFL-CIO declined to a negative $2.3 million as of June 30, 2008, from a $66 million surplus on July 1, 2000.
“A new leadership — leaders chosen by our members, leaders help accountable by our members — is needed,” wrote Buffenbarger, who is a member of the AFL-CIO’s finance committee and the president of one of the nation’s largest unions. Alison Omens, a spokeswoman for the AFL-CIO, declined to comment on the report.
The labor federation has been in talks about reuniting with Change to Win, a coalition of seven unions that left the federation in 2005 because of disagreements over finances and other issues. Buffenbarger’s report is intended to help strengthen the AFL-CIO, not prepare it for reunification, according to Rick Sloan, his spokesman.
“The report aims to increase the AFL-CIO’s clout and solvency,” Sloan said Wednesday. “We want to see the House of Labor renovated, not razed. The AFL-CIO needs a plan B.”
The departure of the seven unions to Change to Win in 2005 denied the AFL-CIO more than $13.9 million in annual revenue, the report said.
The report says the AFL-CIO should wind down its involvement in the National Labor College in Silver Spring, where labor organizers are trained. And it criticizes the federation for relying on HSBC Holdings Plc royalty payments for issuing Union Plus credit cards.
“If we are not careful, insolvency may be right around the corner,” the report said.
Buffenbarger’s report also criticizes the AFL-CIO for functioning as a “staff-driven operation” bogged down in “PowerPoints and briefing papers.”
Buffenbarger urges the AFL-CIO to be more aggressive in targeting politicians who vote against union interests. It suggests that labor’s top priority, the so-called Card Check bill, won’t pass Congress this year.
“We need an internal mechanism to declare a political boycott,” he said.
