The U.S. Department of Labor approved a final rule Thursday requiring unions to file annual financial reports concerning their trusts, as the federal agency aims to increase financial transparency amid recent convictions of officials from the UAW and automakers.
The final rule requires labor unions with total annual receipts of $250,000 or more to file an annual report — referred to as “Form T-1” — under certain circumstances for each type of trust as defined by the Labor-Management Reporting and Disclosure Act. Unions also must file an annual trust report if they select or appoint the majority of the members of the trust’s governing board or contribute more than 50 percent of the trust’s receipts, according to the rule.
Any contributions related to a collective bargaining agreement will also be considered the union’s contributions, the department said.
The department’s announcement Thursday came directly after federal prosecutors charged Gary Jones, a former UAW president, with embezzling more than $1 million from the union.
Jones is expected to plead guilty and cooperate in the ongoing investigation, a years-long corruption probe that has revealed millions of dollars intended to train workers was instead spent by some UAW leaders on assorted luxuries.
To date, Jones is the 14th person charged in the investigation. In addition to Jones, 13 other former union and automaker officials have pleaded guilty.
In October 2019, sources told Automotive News the UAW’s jointly operated training center with Ford Motor Co. would stay open, but it would be restructured to avoid the misuse of funds that occurred at the General Motors and Fiat Chrysler Automobiles training centers. GM’s union contract called for the closure and sale of its training center. FCA and the UAW agreed to dissolve their jointly run National Training Center.
The department said the final rule, which will be published Friday, takes into account the recent convictions of UAW and FCA officials “for criminal acts involving funds meant to operate a training center for union members.”
“Had the Form T-1 been in place, these acts would likely have been discovered earlier,” the department said, adding that the reporting requirement may have even deterred the criminal behavior from happening in the first place.
“Full disclosure of trust operations gives workers the information they need to make informed choices, and more information means better decisions,” Arthur Rosenfeld, director of the Office of Labor-Management Standards, said in a statement. “This rule will increase financial transparency, encourage responsible union democracy and foster accountability of union officials.”