Government Audit of AFL-CIO Reveals ‘Deficiencies’

By October 4, 2006Labor Unions

Well, the results are in from a year-long audit of the AFL-CIO’s finances conducted by the US Department of Labor (DOL). What it shows is a fair amount of pretty sloppy bookkeeping and the absence of some basic accounting standards. Among the findings of the report, some big, some small, some truly head-scratching:

— “The Federation did not reflect the beginning and ending balance for a Paris, France bank account….” Remember, AFL President John Sweeney was in Paris when the AFL announced massive staff cuts. Maybe they laid off the bookkeeper.

— The AFL apparently “misreported” various hotel, restaurant and “refreshment” expenses.

— A contractor for the AFL, who was also President of the Alliance for Retired Americans — apparently a labor front group formed to scare the bejesus out of senior citizens — was paid $36,000, but there was”no contractual documentation available to support the payments.” Who cares? It’s only members’ dues money, right? They flush $40 million of it down the rathole. $36,000 is a rounding error.

— The AFL didn’t “maintain supporting documents to substantiate the membership numbers ….for its associate members in Working America.” These are numbers that were no doubt inflated in the press — and not documented.

— “The Federation did not have written loan agreements to document the loan terms and conditions for: $75,000 to Union Community Fund, $400,000 to the Alliance for Retired Americans, $560,000 for the National Labor College….and $185,000 for the Center for Working Capital.” Apparently the folks who fought for Sarbanes-Oxley transparency for business don’t particularly care to have any of it themselves.

A Daily Labor Report story by Michelle Amber quotes a September 29 letter from Sweeney to his Executive Council, typically in denial, saying that the audit did not raise any questions “concerning the Federation’s expenditure of funds on behalf of workers.” Right. Despite his breezy dismissal, Amber quotes DOL spokesman David James as saying that the audit, “raised significant issues [emphasis ours] that go beyond merely technical bookkeeping errors, such as the lack of a travel policy for AFL-CIO officers, reporting of executives’ spouses’ travel expenses, handling of credit card charges, missing loan documentation and other items.”

We’ll let you decide for yourself. Here’s a link to the 14-page letter issued by DOL, and here’s the PDF. Having watched them dump hundreds of millions of their members’ hard-earned dues money down the drain, we are not surprised at the cavalier way they have responded to this audit. After the first few hundred million, what does it matter?