Commentary

Unions hid millions in 2020 political spending

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Unions dropped a whopping $67 million in hidden political spending between 2019 and 2020, according to a new study from the National Institute for Labor Relations Research (NILRR).

According to the Washington Free Beacon, unions paid millions of dollars to liberal groups while classifying the expenditures as charitable activities or grants– a side-step of federal labor laws that are supposed to protect workers from funding political causes they don’t want to support.

The many millions that went unreported are just a drop in the bucket compared to the nearly $1.8 billion that was reported by America’s most prominent labor unions.

The NILRR study found that $1.8 billion was classified under the “Political Spending and Lobbying” sections in federal labor filings from 2019 and 2020. The extra $67 million in miscategorized political expenditures was listed in the “Representational Activities” and “Contributions, Gifts, and Grants” sections.

Workers who don’t want to fund particular political causes can pay only partial dues to their union, but that blockage does not apply to representational activities or other potentially misclassified spending.

“The real scandal here is that the hundreds of millions of dollars that unions are spending belongs to teachers and other public servants and should be used to feed their families, not spent to elect liberal politicians who want to increase their taxes,” Aaron Withe, CEO of the Freedom Foundation, told the Washington Free Beacon.

Existing loopholes allow union officials to obscure political spending

Per the study, “LM-2 Schedule 16 activities are often underreported because union officials classify clearly political activities as ‘Schedule 15–Representational Activities’ and ‘Schedule 17–Contributions, Gifts, and Grants.’ Under the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), neither of these two schedules would be [the right one] if the expenditure satisfies the Schedule 16 definition. The combined Schedule 15 & 17 disbursements to payees for the 2019-20 reporting period was $6,295,191,497.”

Clearly, there is the potential for a massive discrepancy or hiding of funds under Schedules 15 and 17 instead of 16, as the two combined total roughly $6.3 billion.

The NILRR report also notes another loophole for unions. Some are not required to file LM-2 reports due to a lack of spending and instead file alternative reports that do not include listings for political spending. Large unions can then give money to smaller unions that are not required to report it, allowing for millions in additional political spending to go untraced. The hidden funds from labor unions revealed by the NILRR is just the tip of the iceberg in terms of so-called “dark money” in politics, though.

According to OpenSecrets, a nonprofit organization that tracks the flow of money in U.S. politics, “dark money” spending topped $1 billion in the 2020 election at the federal level. The last election was historically expensive and reached new levels of unreported political spending over the campaign season.

The above graphic displays the differences in quantities of “dark money” donations that benefited our two major political parties in 2020, per OpenSecrets. It also shows what portion of each was reported and what was not, revealing the major gap between the two.

About Nick Linder

Nicholas Linder, of Cincinnati, is a communications Intern for Maine Policy Institute. He is going into his second year of studying finance and public policy analysis at The Ohio State University. On campus, he is involved with Students Consulting for Nonprofit Organizations and Business for Good.

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