As political scholars and pundits across the nation continue with their post-mortem analysis of the disastrous recall effort against Wisconsin Governor Scott Walker, one charge that has gained a significant amount of traction has been that the recall campaign against the governor was overwhelmed by the amount of “secret and corporate money” that propelled the Walker campaign to victory. 
At its core, this claim echoes many of the criticisms that have been directed against the Supreme Court’s decision in Citizens United v. Federal Election Commission in which the Court held that corporations and unions enjoy the same rights of free speech as those of natural human beings.  Whether or not this decision and its laissez-faire attitude towards political speech and campaign finance regulation compromised certain desirable qualities of the electoral process is certainly worthy of a serious and candid discussion. Nevertheless, there is also a great deal of irony in invoking this line of criticism within the context of the Wisconsin recall insofar as the very entities that led the attack against Governor Walker – i.e. the public sector unions of Wisconsin and the larger Midwest- themselves enjoy a level of privacy with regards to their financial affairs that is disproportionately greater than most other private and corporate entities in the United States.
In an attempt to make this point more clear (and the consequences that stem from it more palpable), this article will briefly describe the basic financial reporting requirements that govern public sector unions. Following from this discussion, this article will then detail a few sources of information on the public sector unions and the benefits that are conferred upon their members. To illustrate these methods, the financial positions of several major public sector unions in California will be also be given. In conclusion, this article will consider the nature of this problem in relation to the size and power of these unions and the need for an update to the laws that govern their financial reporting requirements.
Financial Reporting Requirements of Public Sector Unions
In general, public sector unions have very few reporting requirements when it comes to disclosing their financial positions to their members and to the public. This dearth of oversight is a significant contrast from the financial reporting laws that govern private sector unions, most of which impose a much greater level of openness and transparency than is found with public sector unions.
Under federal law, most of the labor unions that represent private sector employees are bound by reporting requirements of the Labor Management Reporting and Disclosure Act (LMRDA), which among other things, requires that they file an annual financial report with the Department of Labor.  This law was specifically designed to make the internal workings of the labor unions fully transparent to both their members as well as the public in the hopes that such openness would hinder corruption on the part of union management.  This law also applies to unions where an individual chapter or affiliate represents both public and private sector employees.  Certain chapters of the IBEW, for instance, fall under the reporting requirements of this law insofar as they have members who are employed by both municipal and private entities. 
In most circumstances, a union that is bound by the reporting requirements of this law will have an outside accounting firm conduct an audit of their financial records, and they will then prepare and file either an LM-2, LM-3, or LM-4 form that details their findings. The LM-2 forms are filed by unions who have over $250,000 in annual receipts; the LM-3 form is for unions that have less than $250,000 but more than $10,000 in annual receipts; and the LM-4 forms are for those unions with less than $10,000 in annual receipts.  These reports reflect the standard financial metrics typical of any financial statement, such as the union’s assets and liabilities, expenditures, the salaries of the union’s board members and employees, any monetary disbursements made by the union, etc.  Although these reports are fairly comprehensive in the data they report on, they only represent a snapshot view of a union’s financial position at the end of the fiscal year, so their application is generally limited in the absence of more extensive information.
The LMRDA also requires that these reports must be made available to all members of the union every year.  And in the event that a grievance suit is initiated by a union member concerning the union’s finances or its use of membership dues, the raw data from which the figures in the report are derived (e.g., accounting statements, receipts, etc.,) must also be provided to the complaining party for review upon a showing of just cause. 
For unions that are comprised solely of public sector employees, however, federal law does not impose any reporting requirements under the LMRDA or any law similar to it. Instead, they are only required to file a 990 tax form with the IRS, which is the same tax form that is used by most non-profit entities that fall within 501(c) of the tax code and do not claim any income.  This form is fairly similar in content to the LM-2/3/4 forms, and all private and public-sector unions alike must file one. But as with the LM-2/3/4 forms, the 990 provides little more than a cursory glance of a union’s financial position at the end of the fiscal year, so their usefulness is fairly narrow.
Under state law, the financial reporting requirements of the public sector unions are more scant than under federal law. In fact, they are almost non-existent. An overwhelming majority of states impose no financial reporting requirements at all upon the public sector unions that operate within their state, and only a very small few actively collect any financial data at all.  California, for example, only requires that a yearly financial statement be “made available” to the board of each union and to the individual union members themselves.  These reports that are provided to the members of the union are sometimes referred to as Hudson Reports, and like the other various filings that have been discussed, these forms only provide a very basic overview of the union’s financial position at the end of the fiscal year.
In our own discussions with the California Public Employment Relations Board, we were able to confirm that this agency does not actively monitor the financial expenditures of California’s public sector unions.  We were even informed that this agency will only collect a union’s financial report upon the filing of grievance complaint. Additionally, it also appears that no other state agency reviews this information either. So for all intents and purposes then, it appears that public sector unions such as the CTA or SEIU 1000, both of whom command tens of millions of dollars in revenue, are free from any significant threat of an audit or internal review of their operations.
Collecting the Data
As we have shown, there are very few available sources of information on the financial data of the public sector unions. However, there are still a number of sources from which fairly solid data on these organizations can be obtained.
From our own experiences, we believe that the most consistent and direct way to gather data on these organizations is to first obtain their 990 forms that they must file each year with the Internal Revenue Service. This can be accomplished by using the databases provided on websites such as guidestar.org or foundationcenter.org.  (It does not appear that the Internal Revenue Service provides any sort of database for searching the 990 forms of 501(c) entities). These two sites gather a wide variety of data on non-profit organizations, including their 990s, and they allow their users to search by region, city, net worth, etc. Although these sites generally do not charge anything to run a basic search, they may require an email registration to use their services.
For unions that fall under the reporting requirements of the LMRDA, you can obtain their financial statements (LM-2, et seq.) and other required disclosures through the portal maintained by the Department of Labor at http://kcerds.dol-esa.gov/query/getOrgQry.do. This site is a very useful option as well, and the information it provides often compliments the other sites quiet nicely. The only real limitation with this site, however, is that financial documents it provides do not offer a very penetrating account of the financial position of the unions it reports on. It is also worth pointing out though that this site also has certain other documents available through this site such as private and public sector collective bargaining agreements. But these documents are not always current, so they are sometimes of little help. 
Incidentally, it is also worth noting that it is sometimes possible to obtain financial information and other relevant data on a public sector union from their own website. The website for the Southern California division of the SEIU 721, for instance, provides links to its bylaws, constitution, and current and past financial statements.  Although this is atypical of most other unions, it would not be a waste of time to explore this option in the chance that such information is being made available. These sites are can also be extremely useful when reviewing the search results from other sites such as guidestar.org or even Google because they can help delineate each chapter and affiliate. One city may contain several chapters or affiliate unions with similar name, so these sites can provide an invaluable reference point for keeping each entity clearly identified.
Another important and closely related source of information on the public sector unions is the collective bargaining agreements and memorandums of understanding that they enter into with the cities and counties they contract with. In California, all state and local government websites will provide links through their human resources websites to the MOUs and salary/benefit schedules that they have stipulated to under the collective bargaining agreement. These are very helpful to review because they detail the nature and duration of the collective bargaining agreement currently in force between the unions and the municipalities that their members are employed by. These documents are indispensable when conducting a more extended analysis of a city’s finances because they provide a necessary foundation for analyzing how their budget is shaped. The only downside to these documents is that they usually do not provide any specific numbers or actual expenditures. Without more facts to work with, these items can only provide a general idea of the financial obligations that a municipality or other state entity has committed themselves to.
Summary of 990 Data on Major California Public Sector Unions
To better illustrate some of the methods that have been discussed here about gathering public sector union data, we have created a table below that details the financial holdings of several major California public sector unions. These findings are based on the 990 and LM-2 data that we obtained from the websites we listed, and we have also included links to the pdf copies of all of these documents as well for further verification.
Links to all of the Federal 990 forms used for the information presented on the above table are listed as reference links immediately below this article. It is important to emphasize that the 16 entities represented here represent only a small fraction of the public sector labor organizations active in California. For example, there are 20 (public sector) SEIU local affiliates, 42 AFSME local affiliates, 45 AFT local affiliates, over 1,300 CTA local affiliates, several hundred CSEA (School Employees) local affiliates, and hundreds of CPF (Firefighter) local affiliates. With the possible exception of the CCPOA, most of the statewide unions noted here, such as the CTA, the CSEA, the CFT, and the CPF, collect revenue from members through their local affiliates, which themselves retain most of the money for local collective bargaining and political expenditures. As can be seen, many of these local affiliates are quite powerful financially – just the local police unions in the City of Los Angeles plus Los Angeles County spent nearly $20 million in 2010 (the data presented for local union chapters referenced in this article and on the above table is net of the funds transferred to state headquarters to avoid double counting). Then there are federations of various unions, such as the California State Employees Association and the Peace Officers Research Association of California, which also collect revenue from members through local affiliates.
To amalgamate the financial information provided by literally thousands of local public sector union affiliates across every department and agency throughout California’s 478 incorporated cities and 57 counties would be a herculean task, but it is reasonable to assume that the total annual dues revenue and expenditures of California’s public sector unions is at least twice what the total derived from totaling these 16 major organization’s 990 data. Put another way, at the end of 2010, following a lively election season, California’s public sector unions, collectively, were probably still sitting on well over $200 million in cash, and had just spent nearly $1.0 billion dollars on collective bargaining and political activity. It is left to the reader to ascertain why any spending to pursue the agenda of organized government workers is not intrinsically political, but dissecting actual political spending from the sparse data provided in 990 forms is an exercise in futility. And it is sobering to think that after 2011 (typically the unions file for an extension, meaning we won’t see their 2011 financials until sometime in September at the earliest), during which little election activity occurred, California’s public sector unions will probably have amassed additional hundreds of millions in cash.
As we have shown, there are only a few effective ways in which to gather data on the public sector unions and their finances. Insofar as these same entities exert an enormous amount of influence with state and national politics, it should be clear that their financial reporting requirements need to be brought up to the same standards as those for all other corporations and private sector unions. As noted above, the headquarters for the California Teacher’s Association reported a net worth of $186 million dollars for the 2009 fiscal year, an amount that does not include the net worth of the individual chapters of the California Teacher’s Association. As anyone who has ever spent anytime studying California politics well knows, this organization wields a massive amount of political power in state and local government. Yet, most citizens would probably find it shocking to know that the CTA is burdened with such little oversight. Given the well recognized legal problems associated with campaign finance on both sides of the political spectrum and the almost universal desire to keep the political process free from “secret money”, it should hardly be an extreme position to argue that these laws need to be updated.
 Brendan O’Brian, “Democratic Leader Consoles Party After the Recall,” Reuters, June 9, 2012, http://in.reuters.com/article/2012/06/09/us-usa-wisconsin-recall-idINBRE8580BQ20120609. See also E.J. Dionne, Jr., “Secret Money Fuels the 2012 Elections,” Washington Post, June 13, 2012. http://www.washingtonpost.com/secret-money-fuels-the-2012-elections/2012/06/13/gJQAsZ4FaV_story.html?tid=pm_opinions_pop.
 Citizens United v. Federal Election Commission, 558 U.S. 50 (2010)
 Labor Management Reporting and Disclosure Act, 29 U.S.C.A. §§ 401, 431(b) (1959). For more information see also: http://www.dol.gov/olms/regs/compliance/rrlo/lmrda.htm.
 See McNamara v. Johnston, 360 F. Supp. 517, 522 (D.C. Ill. 1973).
 29. U.S.C.A. §402(j)
 IBEW Local 47 is one example of such a union. This union represents workers for a number of private and municipal employers throughout Southern California. See http://www.ibew47.org/ for further details.
 29. U.S.C.A § 431(b)
 Id. § 431 (c)
 Benjamin DeGrow, Public-Sector Union Transparency, (2009) http://www.bestthinking.com/articles/politics_government/legislation/public-sector-union-transparency
 Cal. Gov. Code §§ 3546.5, 3587; Cal. Pub. Util. Code § 99566.3 (West, 2010).
LINKS TO FEDERAL 990 FORMS FOR MAJOR CALIFORNIA PUBLIC SECTOR UNIONS
United Teachers Los Angeles (CTA Chapter)