Michigan Moves to Collect Union PAC Money

Published March 1, 2008

Michigan’s Office of the State Employer (OSE) wants state agencies to have the power to deduct political action committee funds from the paychecks of state employees who are union members.

However, permitting payroll deductions of political action committee (PAC) contributions conflicts with state law and should not be permitted, according to Michigan Attorney General Mike Cox (R).

The OSE in December asked the state’s Civil Service Commission to permit state agencies to take the deductions. A decision is pending.

The Michigan-based Mackinac Center for Public Policy argues the OSE should not be advocating for union political benefits.

“The OSE’s responsibility to deal with the unions in collective bargaining in no way carries over to the unions’ political activities,” according to an analysis by the center’s legal analyst, Patrick J. Wright.

Conflict of Interest

Wright contends permitting payroll PAC deductions would put the state in the position of favoring one special-interest group over others.

“If state agencies are empowered to perform payroll deductions that benefit union PACs, why shouldn’t this opportunity be afforded to other political activists, such as the National Rifle Association, the National Organization for Women, the Sierra Club, National Right-to-Life, or the PACs of the Republican and Democratic parties?” Wright wrote.

“Even if the state received a fee that fully reimbursed the cost of collecting each of these political contributions, the state would shed its neutrality and become a facilitator of special-interest politics,” Wright continued.

For more information …

“State of Michigan Should Not Become Collection Agency for PACs,” Mackinac Center for Public Policy: http://www.mackinac.org/article.aspx?ID=9155

VEBAs: Union Slush Funds

Faced with dwindling member rolls and stretched budgets, union bosses have found a new way to fund their operations.

In “VEBAs: Union Slush Funds for the 21st Century,” the Capital Research Center (CRC) writes, “Labor unions have been searching for a revenue enhancer … and they’ve found it in VEBAs, the acronym for a heretofore obscure entity called a ‘voluntary employee benefit association.'”

Major U.S. employers facing bankruptcy have found union bosses will grant major concessions in return for billions of dollars in cash earmarked to fund employee benefit trusts. For union bosses these multibillion-dollar concessions are a “golden ticket to power” and are protected from the U.S. Department of Labor’s transparency regulations, CRC notes.

In 2007, the struggling United Auto Workers assumed responsibility for the health care trust General Motors Corp. owes its retirees, totaling $35 billion. The deal is similar to the 1998 UAW/Caterpillar deal in which the union took over a $32.3 million trust to fund payments for better health care coverage. Little oversight was provided, and within six years the trust fund ran out of money.

The 2007 UAW/GM deal likewise includes little oversight and gives the union an out if it again proves to be a bad manager. If the fund runs short, GM will infuse more funds and lobby for a federal takeover. Nobody knows what will become of the $35 billion if the UAW passes its retiree obligations onto the feds.

GM’s move was incredibly irresponsible because it “endangers the fiscal well-being of its retirees and hurts the public interest by thwarting the progress the Labor Department has been making in trying to more closely monitor union finances,” wrote CRC.

For more information …

“VEBAs: Union Slush Funds for the 21st Century,” Capital Research Center: http://www.capitalresearch.org/pubs/pubs.html?id=619

School Board Elections

“A school board member in Rochester and a nonprofit organization in west Michigan … say the public should be aware of the time, money and organization put into local races in particular by the political arm of the Michigan Education Association and its local affiliates,” writes the Mackinac Center for Public Policy.

The center cites Rochester Community Schools board member Steven Kovacs, who notes candidates not backed by the teachers’ union must run against opponents backed by an organization that covers the costs of fliers, postage, robocalls, public endorsements, get-out-the-teacher-vote efforts, phone calls, and mail campaigns.

“How do you run against a machine like that?” Kovacs asked.

The union understands the power its local politicking has established and is unapologetic. Campaign classes are regularly held during MEA’s state conferences. Classes include “Elect your Employer,” “We Elected Our Employer, Now What?” and “I Brought You into This World and I Can Take You Out!–How to Run a Successful Board Recall Campaign.”

Brochures advertise, “There is no more important elected official in the lives of MEA members than your local school board member.”

For more information …

“Tracking union money in school board elections,” Mackinac Center for Public Policy: http://www.educationreport.org/pubs/mer/article.aspx?ID=9096

Ryan Bedford ([email protected]) is a labor analyst with the Evergreen Freedom Foundation in Olympia, Washington.