School & District Management

Union Filings Give In-Depth Look at Spending Patterns

By Bess Keller & Vaishali Honawar — January 10, 2006 5 min read

The two national teachers’ unions have provided the most detailed public accounting to date of their spending, as a result of new federal requirements.

Both the nation’s largest union, the National Education Association, and the smaller American Federation of Teachers were required last year to submit financial reports to the U.S. Department of Labor that call for a new level of detail on such matters as political spending, contributions and grants, management, and overhead. The NEA turned in its 335-page report last month; the AFT’s shorter document was filed in September.

Both open vistas onto organizations with well-paid workers and substantial political activity, though the NEA spends proportionally more on donations to nonunion organizations with political purposes than the AFT. According to the forms, which cover the 2004-05 fiscal year, the AFT spent $54 million, or nearly a quarter of its total outlay, on “representational activities,” including bargaining contracts, resolving grievances, organizing locals, and recruiting members, while the NEA spent $53.7 million, slightly more than a sixth of its total, for those purposes.

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Table: Follow the Money

Critics of the unions have been pushing for more detailed reports since early in the Bush administration and hailed the new information as a victory for union members.

The law calls for labor unions with receipts of more than $200,000 that represent any private-sector workers to file the reports, even if the vast majority of their members are public employees, such as public school teachers. Labor Department officials initially called for every state affiliate of the NEA and the AFT to file separately, but the AFL-CIO fought the requirement in court and won. As a result, only about 25 of the national unions’ affiliates are subject to the disclosure law, which dates to the late 1950s.

Averting Scandal

The financial form’s revision, completed in 2002, was the first in 40 years. The AFL-CIO lost a suit to block the new disclosure regulations, arguing that compiling the information was burdensome and went beyond that required of corporations, for instance.

“We’re extremely satisfied” with the new forms, said Mark R. Levin, the president of the Landmark Legal Foundation, a conservative public-interest law firm with offices in Leesburg, Va., and Kansas City, Mo. The firm complained to the Labor Department in 2002 that the NEA was spending millions of dollars in members’ dues for political activity without reporting the amounts or incurring any tax liability.

Union officials have maintained that their spending is a legitimate union function and not taxable. They have also acknowledged that the Internal Revenue Service is auditing their accounts.

“The whole purpose [of the disclosure] is to help the union members, to bring internal transparency to the finances of these unions,” Mr. Levin said. He added that his group was still analyzing the NEA’s report.

The U.S. Department of Labor provides a search engine to access the annual financial reports submitted by the National Education Association and the American Federation of Teachers.

Watchdog groups say the new disclosures will help avoid a situation like the corruption scandal that rocked the Washington Teachers’ Union a few years ago, when it was discovered that top officials had used more than $5 million in union funds to pay for items including a mink coat, plasma televisions, and designer clothing.

“That case is something of a poster child for why you need this sort of disclosure,” said Kenneth Boehm, the chairman of the National Legal and Policy Center, a union-watchdog group based in Falls Church, Va., which lobbied for the new forms.

Stefan Gleason of the National Right to Work Legal Defense Foundation agreed that “more disclosure is better,” though he expressed disappointment that the Labor Department had ultimately backed off on some of the reporting requirements officials had originally proposed. He would have liked to see, for instance, expenses for member recruitment and organizing broken out from the rest of the representational-activities category.

“It’s of interest to members to know their union is not spending money to represent them but to corral more workers into union membership,” Mr. Gleason, a vice president of the Springfield, Va., advocacy group, said.

Gifts and Politics

The reports detail for the first time contributions the unions make to other organizations. About a third of the AFT’s total of $1.7 million in gifts, grants, and contributions—$550,000—went to the Economic Policy Institute, a Washington think tank that has called for more education spending and issued reports critical of charter schools and vouchers. The NEA gave the group $45,000.

Minority and civil rights groups were prominent among the recipients of the unions’ contributions. The AFT’s gifts included the National Democracy Institute in Washington, which received $51,000, and the Congressional Hispanic Caucus Institute, also in Washington, which got $36,675. The NEA gave $35,000 to the Hispanic Caucus.

The NEA also shelled out $30,000 to the Learning First Alliance, which works to raise student achievement, while the AFT sent $30,000 to the Tsunami Relief Project.

Mr. Boehm of the National Legal and Policy Center said that teachers who join a union expect representation on issues like collective bargaining but often don’t agree with the union’s “political agenda.”

“When the union takes money from teachers and spends it on promoting certain organizations and candidates who have beliefs that differ from those of members, there is a problem,” he said. The new disclosures, he said, could spur a change in that aspect. “Because individual teachers will see how the money is being spent, it will act as a check or balance and keep the unions from getting abusive,” Mr. Boehm said.

‘Advancing Causes’

Alexander Wohl, an AFT spokesman, said that any contributions of a “significant size” are approved by the organization’s governing council, which is made up of elected members. “We support organizations that we believe are doing an important job of advancing causes that are important to our members, like civil rights,” he said.

The NEA did not respond to several requests for comment.

Payments from the NEA in the category of “political activities and lobbying” included $3 million to a Denver media-strategies firm, more than $900,000 to two direct-mail consultants, and $302,000 to a polling firm with ties to the Democratic Party.

Mike Antonucci, a teachers’ union critic who publishes an online newsletter about the unions and who has analyzed the reports, said he was surprised by the size of the unions’ “outlays on political consultants, polling firms, media-strategy experts, and marketing specialists.”

Taken together with the donations the unions made, he wrote in an e-mail, the expenditures show the extent to which the unions are “an integral part of the liberal political movement.”

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