Department of Labor: Administering the Labor-Management Reporting and
Disclosure Act (Letter Report, 06/30/2000, GAO/HEHS-00-116).

Pursuant to a congressional request, GAO reviewed the Labor-Management
Reporting and Disclosure Act (LMRDA) of 1959, focusing on: (1) the
Department of Labor's organizational structure and use of fiscal year
(FY) 1999 resources to implement LMRDA; and (2) how the Department of
Labor administers and enforces each title of the act for which it is
responsible.

GAO noted that: (1) Labor's Office of Labor-Management Standards (OLMS)
responsibilities under LMRDA range from ensuring that union members gain
access to collective bargaining agreements to safeguarding unions' funds
from embezzlement and other illegal actions; (2) OLMS' national office
and its 21 field offices had a FY 1999 budget of just over $28 million
and 300 full-time-equivalent staff working primarily to administer LMRDA
and provisions of related legislation; (3) GAO's analysis of Labor's
efforts to administer each title of the act found that OLMS performs
investigations and compliance audits, monitors reporting and disclosure
requirements, and provides compliance assistance, but investigations are
the tool most frequently used; (4) OLMS uses voluntary compliance and
litigation to enforce the act's requirements, but the voluntary
compliance approach is used most often; and (5) regarding the Department
of Justice's (DOJ) enforcement efforts under the memorandum of
understanding with Labor, GAO found that DOJ plays a significantly
greater role in litigating cases involving reporting violations, which
are considered to be less serious infractions of the law.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-00-116
     TITLE:  Department of Labor: Administering the Labor-Management
	     Reporting and Disclosure Act
      DATE:  06/30/2000
   SUBJECT:  Labor law
	     Labor unions
	     Investigations by federal agencies
	     Reporting requirements
	     Litigation
	     Law enforcement

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GAO/HEHS-00-116

Appendix I: Labor's Organizational Structure and Use of Fiscal
Year 1999 Resources to Administer the Act

14

Appendix II: Title I: Bill of Rights of Union Members

22

Appendix III: Title II: Reporting Requirements and Public
Disclosure

25

Appendix IV: Title III: Trusteeships

34

Appendix V: Title IV: Union Elections

40

Appendix VI: Title V: Safeguards for Labor Organizations

50

Appendix VII: Title VI: Miscellaneous Provisions

59

Appendix VIII: International Compliance Audit Program

61

Appendix IX: Compliance Audit Program

65

Appendix X: Justice's Role in Enforcement

68

Appendix XI: Compliance Assistance

70

Appendix XII: Comments From the Department of Labor

72

Appendix XIII: Comments From the Department of Justice

73

Appendix XIV: GAO Contacts and Staff Acknowledgments

75

Table 1: LMRDA Provisions 6

Table 2: OLMS Staffing, Fiscal Year 1999 18

Table 3: OLMS Field Investigators' Workload and Use of Time by Title, Fiscal
Year 1999 20

Table 4: Resolution of Collective Bargaining Agreement Cases,
Fiscal Years 1998 and 1999 24

Table 5: Reports Required From Unions 26

Table 6: Reports Required for Unions Under Trusteeship 27

Table 7: Reports Required From Other Entities 27

Table 8: Number of Unions and Type of Report Filed 31

Table 9: Trusteeships Imposed and Ended, Fiscal Years 1995-99 36

Table 10: Results in Trusteeship Complaint Cases, Fiscal
Years 1995-99 37

Table 11: Field Recommendations and Headquarters Decisions in Trusteeship
Cases, Fiscal Years 1995-99 38

Table 12: Unions Represented in Election Cases Investigated,
Fiscal Years 1998-99 45

Table 13: Resolution of Election Cases, Fiscal Years
1998-99 45

Table 14: Waivers in Election Cases, Fiscal Years 1998-99 46

Table 15: Election Rerun Cases and Corresponding Union
Characteristics, Fiscal Years 1998-99 49

Table 16: Reasons Cases Were Not Delegated, Fiscal Years 1998-99 56

Table 17: Prosecution Results of Embezzlement Cases, Fiscal
Years 1998-99 57

Table 18: Bases for Indictments, Convictions, and Monetary
Restitution for Embezzlement Cases, Fiscal Years 1998-99 57

Table 19: I-CAP Cases Processed, Fiscal Years 1995-99 61

Table 20: Types of Violations Found in I-CAP Cases, Fiscal Years
1995-99 63

Table 21: Resolution of Particular Violations Found in CAP Cases,
Fiscal Years 1998-99 67

Figure 1: OLMS Organization Chart 15

Figure 2: OLMS Budget Expenditures, Fiscal Year 1999 17

Figure 3: Field Recommendations and Headquarters Decisions in
162 Cases, Fiscal Years 1998-99 47

Figure 4: Embezzlement Cases, Fiscal Years 1998-99 55

Figure 5: Resolution of 591 Compliance Audit Cases, Fiscal Years
1998-99 66

CAP Compliance Audit Program

CSRA Civil Service Reform Act of 1978

ESA Employment Standards Administration

FTE full-time-equivalent

I-CAP International Compliance Audit Program

LMRDA Labor-Management Reporting and Disclosure Act

MOU memorandum of understanding

OLMS Office of Labor-Management Standards

Health, Education, and
Human Services Division

B-282983

June 30, 2000

The Honorable John A. Boehner
Chairman, Subcommittee on
Employer-Employee Relations
Committee on Education and
the Workforce
House of Representatives

Dear Mr. Chairman:

The Labor-Management Reporting and Disclosure Act (LMRDA) of 1959 was
enacted to prevent and eliminate improper practices by labor organizations
after the Congress identified numerous instances of unethical conduct among
labor unions.1 The act focuses on union democracy--that is, the democratic
rights of union members--and the financial integrity of unions' assets. The
Secretary of Labor, the Attorney General, and union members each play roles
in enforcing provisions of six of the act's seven titles. The enforcement
responsibility of the Attorney General is carried out under a memorandum of
understanding (MOU) with the Secretary of Labor.2 The Secretary of Labor's
responsibilities are carried out through the Employment Standards
Administration's Office of Labor-Management Standards (OLMS) and its field
offices. As of February 2000, more than 31,000 private and federal employee
labor unions with

about 13.5 million members nationwide and total receipts estimated at over
$15.3 billion were subject to LMRDA or related legislation.3

Concerns about impediments to union democracy have been the subject of a
series of congressional hearings since May 1998. Congressional interest has
focused on the degree to which the rank-and-file members of unions have been
able to secure their rights under LMRDA and whether additional legislation
or changes to the act are needed. Accordingly, you requested that we review
(1) Labor's organizational structure and use of fiscal year 1999 resources
to implement LMRDA and (2) how Labor administers and enforces each title of
the act for which it is responsible.

To respond to your request, we reviewed Labor's organizational documents,
budget, and regulations for carrying out LMRDA. We also reviewed and
analyzed computerized data on nearly 7,000 cases that Labor processed in
fiscal years 1998 and 1999 to determine its efforts relative to the six
titles of the act involving the Department. For trusteeship4 and certain
compliance audit program cases, we reviewed case file data from fiscal years
1995 through 1999 because few or no cases were processed in fiscal years
1998 and 1999. Labor processed 116 of these two types of cases over the
5-year period. Because Labor does not separate cases by the different laws,
our analysis covers cases under both LMRDA and related legislation. Also,
Labor does not maintain case data by title, but the program codes for its
work activities clearly defined which cases belonged to various titles in
most instances. However, for three titles we assigned cases for three
provisions of the titles using additional information from OLMS.5 Our review
of certain cases in Labor's database identified errors such as missing data
fields, miscoded cases, and erroneous case results, but these errors did not
materially affect the statistical results in our analysis. When possible, we
resolved these errors with Labor officials. We conducted our review between
April 1999 and June 2000 in accordance with generally accepted government
auditing standards.

Labor's OLMS responsibilities under LMRDA range from ensuring that union
members gain access to collective bargaining agreements to safeguarding
unions' funds from embezzlement and other illegal actions. OLMS' national
office and its 21 field offices had a fiscal year 1999 budget of just over
$28 million and 300 full-time-equivalent (FTE) staff working primarily to
administer LMRDA and provisions of related legislation. Our analysis of
Labor's efforts to administer each title of the act found that OLMS performs
investigations and compliance audits, monitors reporting and disclosure
requirements, and provides compliance assistance, but investigations are the
tool most frequently used. OLMS uses voluntary compliance and litigation to
enforce the act's requirements, but the voluntary compliance approach is
used most often. Finally, regarding Justice's enforcement efforts under the
MOU with Labor, we found that Justice plays a significantly greater role in
litigating cases involving embezzlement or other similar wrongdoing than
cases involving reporting violations, which are considered to be less
serious infractions of the law.

OLMS, Justice, unions and their members, employers, and others play various
roles under six titles of LMRDA (see table 1).

 Title                                Provisions
                                      This title provides various
                                      protections for union members, such
                                      as guaranteeing them the right to
                                      elect officers and gain access to
                                      copies of collective bargaining
 Title I−Bill of Rights of      agreements. Labor may bring a civil
 union members                        action to enforce the protection
                                      related to collective bargaining
                                      agreements. For all parts of this
                                      title, it is up to those whose rights
                                      have been violated (such as union
                                      members) to bring a civil action to
                                      enforce those protections.
                                      This title requires labor unions,
                                      their officers and employees,
                                      employers, and others to file certain
                                      reports on financial and
                                      administrative practices with Labor
                                      in a timely and complete manner.
 Title II−Reporting             Labor is required to make these
 requirements                         reports publicly available. Labor may
                                      also bring a civil action to enforce
                                      these reporting requirements. Any
                                      willful violation of reporting
                                      requirements is a crime, which is
                                      within the responsibility of the
                                      Department of Justice.
                                      This title allows an international
                                      union or its intermediate bodya to
                                      take control of a subordinate body by
                                      suspending its autonomy under certain
                                      conditions. Union members or a
                                      subordinate body may file a complaint
                                      with Labor to protest a trusteeship.
 Title III−Trusteeships         Labor, union members, or a
                                      subordinate body may bring a civil
                                      action to ensure that trusteeships
                                      are formed and operated in compliance
                                      with the law. Any willful violation
                                      of this title is a crime, which is
                                      within the responsibility of the
                                      Department of Justice.
                                      This title provides for fair and
                                      democratic union elections. Union
                                      members have the right to protest
 Title IV−Union elections       elections' outcomes by filing a
                                      complaint with Labor after exhausting
                                      union remedies. Labor may bring a
                                      civil action to set aside invalid
                                      elections and hold new elections.
                                      This title seeks to protect unions'
                                      funds and assets against improper
                                      activities, such as embezzlement and
                                      certain loans to union officers and
 Title V−Safeguards of unions'  employees. Union members may bring a
 assets                               civil action for relief against those
                                      who have committed certain improper
                                      acts. Embezzlement and other willful
                                      violations of this title are crimes,
                                      which are within the responsibility
                                      of the Department of Justice.
                                      This title makes it illegal for
                                      unions to discipline, threaten, or
                                      use violence against union members
                                      for exercising their rights under
                                      LMRDA, and it prohibits union members
                                      from picketing to extort money from
                                      employers. This title also provides
                                      Labor authority to conduct
 Title VI−Miscellaneous         investigations of violations of any
 provisions                           provisions of the act (other than
                                      part of title I) and issue subpoenas
                                      to secure records and compel
                                      witnesses to testify. Certain
                                      violations of this title are crimes,
                                      which are within the responsibility
                                      of the Department of Justice, and
                                      others are enforceable by individuals
                                      by bringing a civil action.

a An intermediate body is a type of labor organization that is subordinate
to a national or international union but is not a local union. Examples
include district councils, joint councils, conferences, and certain types of
boards.

Labor's efforts under LMRDA are carried out in Washington, D.C., in the OLMS
national office and through OLMS' 21 field offices located around the
nation.6 The OLMS budget for fiscal year 1999 was just over $28 million, and
about 300 FTE staff worked primarily to administer LMRDA and related
legislation. Most of these staff were investigators located in field offices
who investigate complaints and criminal activity in unions, initiate
compliance audits, or provide compliance assistance to unions and others.

In fiscal year 1999, OLMS field investigators spent 62 percent of their time
protecting the financial integrity of unions' assets from criminal
wrongdoing--work that involved criminal investigations and compliance audits
(covered under title V of the act). Most of this time was devoted to
criminal investigations of embezzlement of unions' funds. Another 26 percent
of OLMS' field investigators' time was spent on ensuring that union members
obtained access to collective bargaining agreements, determining whether
groups met certain criteria to be considered a union, and investigating
complaints about trusteeships and union elections (referred to as union
democracy issues, covered under titles I−IV of the act). OLMS field
investigators spent another 5 percent of their time working to ensure that
reports required from unions and others were filed (covered under title II
of the act) and that the public had access to the information. Most of this
time was spent on getting unions to report required information in a
complete and timely manner. Finally, OLMS field investigators used 7 percent
of their time to provide compliance assistance, address inquiries, or plan
future criminal casework. Appendix I provides details on Labor 's
organizational structure and use of its fiscal year 1999 resources.

Labor's efforts to administer the act vary depending on the title involved,
but investigations are the primary method used. When OLMS investigations and
other efforts identify violations, OLMS uses voluntary compliance most often
to resolve cases involving violations. Justice's involvement in enforcing
provisions of the act is significantly greater for criminal cases such as
embezzlement than for other cases that are considered less serious
infractions of the law. Appendixes II through XI detail Labor's
administration of the act by title, its use of compliance audit programs,

Justice's involvement under the MOU, and Labor's compliance assistance
efforts.

LMRDA

Investigations. Under LMRDA, OLMS conducts civil and criminal
investigations. Civil investigations are conducted in response to
complaints, if they meet certain criteria, from union members about union
elections or trusteeships. Because OLMS is statutorily required to resolve
complaints about union elections in 60 days, according to OLMS officials,
this activity generally supersedes activity in other areas and is OLMS' top
priority. However, OLMS may request waivers of this time frame from the
union, and, according to OLMS officials, unions are generally willing to
grant these waivers. OLMS investigated over 300 cases in fiscal years 1998
and 1999 that involved complaints from union members about violations of
their rights in union elections. OLMS obtained a waiver of the 60-day time
frame in about half of these cases. Although OLMS does not have a statutory
time frame to resolve trusteeship complaints, in fiscal year 1999, OLMS
directed its field offices to complete these investigations within 45 days.
Our review of the seven cases initiated after the 45-day time frame went
into effect showed that five of these cases exceeded the 45-day time limit.
In fiscal years 1995 through 1999, OLMS processed 107 cases that involved
complaints about union trusteeships.

Unlike civil investigations, OLMS generally initiates criminal
investigations to follow up on information derived from union reports,
compliance audits, or leads from individuals or other government agencies.
In fiscal years 1998 and 1999, OLMS processed over 700 cases that involved
possible criminal activity.

Compliance Audits. At its own discretion, OLMS conducts compliance audits at
unions' headquarters level--international or national--as well as at the
intermediate or local level. Although compliance audits are important for
detecting violations of the act, including embezzlement, OLMS may
temporarily suspend them to allow staff to conduct investigations involving
complaints about union elections. Moreover, the number of OLMS compliance
audits has declined over the last 10 years as staff resources have
diminished. In fiscal years 1995 through 1999, OLMS

conducted nine compliance audits of international unions.7 In fiscal years
1998 and 1999, OLMS conducted nearly 600 compliance audits at the
intermediate and local levels of the more than 31,000 unions. These
compliance audits generated about 100 criminal investigation cases.

Monitoring Reporting and Disclosure Requirements. LMRDA requires that labor
unions report annually on financial and administrative activities. Other
entities--such as labor consultants, surety companies, and others--report
only under certain circumstances. OLMS uses similar methods for both groups
to ensure compliance. OLMS monitors unions' reporting dates, telephones and
mails unions notices when reports are delinquent, reviews reports for
completeness, and makes these reports available to the public. In fiscal
years 1998 and 1999, OLMS identified nearly 4,500 cases in which the more
than 31,000 unions that report annually were delinquent (and 125 cases in
which the information provided on these reports was deficient) as well as
about 190 delinquent or deficient reporting cases involving other entities.
OLMS also responded to over 15,000 requests to make the reports publicly
available.

Compliance Assistance. OLMS educates union members and officers about
LMRDA's requirements by conducting seminars and providing pamphlets and
other information to promote compliance. In fiscal year 1998, OLMS field
offices completed over 600 compliance assistance activities for nearly 4,400
union officials and members and made 481 liaison contacts with U.S.
Attorneys, law enforcement agencies, and others. In fiscal year 1999, OLMS
implemented two assistance initiatives, one of which focused on preventing
delinquent reporting among unions and the other on educating newly elected
union officials about LMRDA requirements.

Requirements

Voluntary Compliance. When OLMS finds a violation during a civil
investigation, it generally attempts to secure voluntary compliance with the
act's provisions before initiating any type of litigation. According to OLMS
officials, voluntary compliance achieves the goal of the act but uses less
time and fewer resources than litigation. In fiscal years 1998 and 1999,
OLMS secured voluntary compliance in 47 percent of the 100 union election

cases that involved violations that affected election outcomes.8 For
example, when OLMS finds that violations in union elections warrant a rerun,
OLMS may persuade unions to voluntarily rerun the election under OLMS
supervision. OLMS also secured voluntary compliance in about 34 percent of
the 35 trusteeship cases that involved violations in fiscal years 1995
through 1999 and in about 80 percent of the 469 compliance audit cases that
involved violations in fiscal years 1998 through 1999. Finally, OLMS also
seeks voluntary compliance to resolve cases involving reporting violations
even though LMRDA provides for criminal penalties when reporting violations
are intentional. According to OLMS and Justice officials, pursuing criminal
prosecution of reporting violations is not practical because Justice is not
likely to prosecute these cases unless they are associated with more
significant violations. To address reporting violations, OLMS has developed
several initiatives that include working with international unions to
address cases of delinquent and deficient reporting.

Litigation. Labor and Justice work together to prosecute criminal cases,
which can result in indictments, convictions, and monetary restitution to
unions and their members. In fiscal years 1998 and 1999, 22 percent of the
754 criminal embezzlement cases Labor processed resulted in indictments, and
more than 80 percent of these indictments resulted in convictions. Monetary
restitution for these convictions amounted to over $3.7 million. About 70
percent of these indictments and convictions were achieved using LMRDA,
while about 30 percent were achieved using other federal or local statutes.

Labor also works with Justice to litigate civil cases based on complaints
about union elections, trusteeships, or other activities. For example, if
the union does not voluntarily comply with the corrective action offered by
OLMS regarding elections, Labor, through Justice, may sue in federal court
to set aside a union election and require that the election be rerun. In
about 75 cases in fiscal years 1998 and 1999, Labor determined that
violations so affected the outcomes of union elections that reruns had to be
held under OLMS' supervision. OLMS decided to take legal action in four of
the 35 unlawful trusteeship cases identified in fiscal years 1995 through
1999, bringing court action against unions subject to LMRDA and initiating
administrative action before an administrative law judge against federal
unions subject to CSRA and other related legislation. As discussed earlier,
voluntary compliance was obtained in other trusteeship cases.

The MOU that the Departments of Justice and Labor signed in 1960 outlined
their respective responsibilities under LMRDA for investigating and
litigating criminal and civil violations of the act. Under the MOU, Justice
is responsible for investigating certain criminal violations, such as
embezzlement, although at Labor's request, Justice can delegate
investigative authority on a case-by-case basis to Labor. Labor is
responsible for investigating other types of criminal violations, such as
intentional delinquent reporting, as well as civil violations, such as
improper union election activities. Because Justice is responsible for
litigating all criminal violations of the act, Labor refers criminal
violation cases to Justice, which decides whether to litigate them. For
civil violations, Labor decides which cases it will refer to Justice for
possible litigation.

In practice, Labor generally investigates both criminal and civil cases
under LMRDA and decides which cases to refer to Justice for litigation.9
According to Labor and justice officials, Justice is less willing to
litigate such criminal cases as intentional reporting violations than
embezzlement violations because the former in and of themselves are often
not considered serious enough to warrant a court's time.10 As a result,
Justice plays a significantly greater role in litigating embezzlement cases
than reporting cases. Labor processed 754 criminal embezzlement cases in
fiscal years 1998 and 1999, and Justice accepted 87 percent of the 279 cases
Labor referred for prosecution. When Justice declined to accept cases, OLMS
either closed the cases without additional action or worked with state and
local officials to seek litigation under applicable state or local statutes.

Labor and Justice provided comments on this report (see apps. XII and XIII,
respectively). Justice generally agreed with our report findings. Labor said
that, in some instances, we underestimated cases with violations. We used
automated data that Labor provided, which were the best available at the
time. We had recognized in the draft report that our numbers might somewhat
understate the actual number of cases with violations. However, we did not
believe that the possible understatement would materially affect the results
of our analysis. The information Labor provided in its comments did not
cause us to change our position because that information showed only
relatively small differences in the number of cases with violations. We have
incorporated Labor's comments regarding these differences where appropriate.

Justice and Labor questioned whether we had appropriately reflected the
importance of Labor's Inspector General in enforcing LMRDA. While the
Inspector General has an important role in helping to enforce LMRDA, OLMS is
the primary Labor authority responsible for the implementation and
enforcement of LMRDA and, as such, was the major focus of this review. The
Inspector General's role is primarily related to addressing organized crime
and racketeering. We have reflected the Inspector General's role where
appropriate in the report.

Both agencies provided technical comments on the processes Labor uses to
administer and enforce LMRDA and on Labor's relationship with Justice under
the MOU. We have incorporated these comments as appropriate.

We are sending copies of this report to the Honorable Robert E. Andrews,
Ranking Minority Member, House Subcommittee on Employer-Employee Relations,
Committee on Education and the Workforce; the Honorable Alexis M. Herman,
Secretary of Labor; the Honorable Janet F. Reno, Attorney General;
appropriate congressional committees; and other interested parties. We will
also make copies available to others upon request.

If you have any questions about this report, please call me on (202)
512-7215. Other contacts and staff acknowledgments are listed in appendix
XIV.

Sincerely yours,

Marnie S. Shaul
Associate Director, Education, Workforce,
and Income Security Issues

Labor's Organizational Structure and Use of Fiscal Year 1999 Resources to
Administer the Act

The Secretary of Labor delegated the authority to administer the
Labor-Management Reporting and Disclosure Act (LMRDA) to the Office of
Labor-Management Standards (OLMS), located within the Employment Standards
Administration. OLMS and its predecessors have administered LMRDA since its
enactment. The office became known as OLMS in 1984, when it was a separate
agency in Labor headed by an Assistant Secretary. In 1992, OLMS became a
part of the Employment Standards Administration, and in 1993, OLMS was
transferred to the then newly created Office of the American Workplace. In
1996, the Office of the American Workplace was abolished, and OLMS was
transferred back to its current location. OLMS has about 300
full-time-equivalent (FTE) staff, and its budget was just over $28 million
for fiscal year 1999. OLMS administers LMRDA and provisions of related
legislation, along with employee protection programs established under the
Federal Transit Act and the related provisions of that act.11

A Deputy Assistant Secretary technically heads OLMS but the Director of OLMS
has the actual programmatic responsibility for LMRDA and provisions of
related legislation. OLMS has four headquarters units,12 five regional
offices, and 21 district offices (see fig. 1). In addition to these offices,
OLMS has eight smaller "resident offices" that carry out OLMS' work and
maintain a presence in locations that may be distantly removed from the
closest district office.

The four units at the OLMS headquarters level include an administrative
management and technology team and three divisions: enforcement, statutory
programs, and interpretations and standards.

ï¿½ The Administrative Management and Technology Team provides support and
services to OLMS for activities related to budget planning, personnel
management, labor relations, and computer systems and applications.

ï¿½ The Division of Enforcement oversees OLMS' criminal and civil enforcement
activities, including special investigations, compliance audit programs,
supervised union officer elections, and headquarters' public disclosure
operations under LMRDA and related legislation. This division also provides
advice and assistance to field offices; oversees the International
Compliance Audit Program; and coordinates criminal and civil enforcement
matters regarding LMRDA and related legislation with the Solicitor of Labor,
the Department of Justice, and representatives of other agencies.

ï¿½ The Division of Statutory Programs administers transit employee
protections established in federal transit law by certifying fair and
equitable protections for affected transit employees as a condition of
federal grant assistance.

ï¿½ The Division of Interpretations and Standards develops policy guidance and
administers OLMS regulatory activities for LMRDA and related legislation. It
also develops and administers OLMS' compliance assistance programs for
unions and others as well as training programs for OLMS staff.

The regional offices are staffed with two people who provide administrative
support to four or five larger district offices that each cover one or more
states or parts of states. Each region is headed by a regional director who
is assigned full program and oversight responsibility over all district
offices in the region. District offices are responsible for carrying out the
provisions of LMRDA and related legislation through investigations, audits,
and compliance assistance.

OLMS budgets by accounting categories, and in fiscal year 1999 it did not
track expenditures by program activity for LMRDA and related legislation or
for the Federal Transit Act. However, OLMS did track workload information
for LMRDA and related legislation and provided data on the number and use of
FTE staff and other personnel, as demonstrated through staff's time charges
for fiscal year 1999.

OLMS' budget is part of the Employment Standards Administration's (ESA)
budget process, and OLMS relies on ESA for its overall accounting needs.
OLMS' budget for fiscal year 1999 was $28.1 million and was spent largely on
providing personnel compensation and benefits and other services, as shown
in figure 2.

Note: Expenditures for "other services" included $2 million that the
Congress appropriated for Labor to develop and implement a system that
allows unions and others to report electronically and a corresponding
database that is accessible to the public through the Internet.
Miscellaneous expenditures were for printing, supplies, equipment, and
insurance.

The OLMS Director and the directors of the regional offices determine how
the annual budget will be spent. The OLMS Director allocates budget
resources for overtime; awards; rent for facilities; travel; printing; and
supplies for the regions, which in turn cover the districts' expenses. The
five regions' budgets for these categories totaled nearly $0.7 million of
OLMS' $28.1 million budget for fiscal year 1999. The regions' budgets did
not include personnel costs, which are centrally administered through ESA.

The OLMS staff level for fiscal year 1999 was 303 FTE staff. As of September
30, 1999, OLMS had 286 staff; 23 percent were located in the headquarters
office, and 77 percent were located in field offices around the country.
Managers, including two senior executive service employees and various
supervisory level employees (ranging in grade from GS/GM-13 to GS/GM-15),
accounted for 14 percent of staff; support staff accounted for 14 percent;
and professional staff made up 72 percent. Investigators and supervisory
investigators accounted for 67 percent of all staff, other staff occupations
accounted for 31 percent of all staff, and auditors made up about 2 percent
of the total staff. Table 2 shows OLMS staff dedicated to administering
LMRDA and provisions of related legislation as well as employee protection
programs under the Federal Transit Act.

                                                Professional
      Location       Managers Support                                 Total
                              Staff     Auditors Investigators  Other

 Headquarters
 Office of the
 Deputy Assistant
 Secretary and the  1         1         0        0              3     5
 Director
 Administrative
 Management and     1         0         0        0              5     6
 Technology Team
 Division of
 Enforcement        1a        2         0        7              0     10
 Section of Reports
 and Disclosure     1         5         2        0              11    19

 Division of
 Statutory Programs 2         3         0        0              12    17b
 Division of
 Interpretations and1         1         0        0              8     10
 Standards
 Subtotal           7         12        2        7              39    67
 Regional, district, and resident offices
 Atlantic Region    1a        1         0        a              0     2
 Boston District
 Office             2         0         0        6              1     9
 New Haven Resident
 Office             0         0         0        4              0     4

 Buffalo District
 Office             1         1         0        6              0     8
 New York District
 Office             2         2         0        7              0     11
 Newark Resident
 Office             0         0         0        4              0     4

 Philadelphia
 District Office    1         1         0        7              0     9
 Ohio-Potomac Region1a        1         0        a              0     2
 Cincinnati District
 Office             2         1         0        6              0     9
 Cleveland District
 Office             2         1         0        8              1     12
 Pittsburgh District
 Office             2         1         0        8              0     11
 Washington District
 Office             2         1         3        6              0     12
 Great Lakes Region 1a        1         0        a              0     2
 Chicago District
 Office             2         1         0        7              1     11
 Detroit District
 Office             1         1         0        6              0     8
 Grand Rapids
 Resident Office    0         0         0        1              0     1

 Milwaukee District
 Office             1         1         0        3              0     5
 Minneapolis
 Resident Office    0         1         0        4              0     5

 St. Louis District
 Office             1         2         0        7              0     10
 Kansas City
 Resident Office    0         1         0        3              0     4

 Gulf Coast Region  1a        1         0        a              0     2
 Atlanta District
 Office             1         1         0        8              0     10
 Puerto Rico
 Resident Office    0         0         0        2              0     2

 Dallas District
 Office             1         1         0        7              0     9
 Nashville District
 Office             1         1         0        6              0     8
 New Orleans
 District Office    1         1         0        5              0     7
 New Orleans
 Resident Office    0         0         0        2              0     2

 Miami District
 Office             1         1         0        3              0     5
 Pacific Region     1a        1         0        a              0     2
 Denver District
 Office             1         1         0        4              0     6
 Los Angeles
 District Office    1         1         0        9              0     11
 San Francisco
 District Office    1         1         0        6              0     8
 Honolulu Resident
 Office             0         0         0        2              0     2

 Seattle District
 Office             1         1         0        4              0     6
 Subtotal           33        29        3        151            3     219
 Total              40        41        5        158            42    286

aThe manager is a supervisory investigator.

bThese 17 staff are dedicated to the Federal Transit Act.

OLMS tracked time spent by field investigators on LMRDA in four major
categories: financial integrity, union democracy, reporting/disclosure, and
other. Financial integrity consumed the largest percentage of the OLMS field
investigators' time, followed by union democracy. Table 3 shows the program
activities and the associated titles of the act, case workload, and
percentage of time OLMS field investigators devoted to each activity in
fiscal year 1999.

                                                    Number of
        Program activity               Title          cases     Percentage
                                                    processed  of time used
 Financial integrity
 Criminal investigations          Title V          385         49.0
 Auxiliariesa                     Title V          (96)a       1.0
 Bonding investigations           Title V          160         0.3
 Special investigationsb          Title V          0           0

 International compliance audits  Discretionary    0           3.5
                                  work

 Compliance audits−locals   Discretionary    289         7.8
                                  work
 International compliance audit   Discretionary
 follow-up                        work             0           0

 Auxiliariesa                     Discretionary    (15)a       0.5
                                  work
 Subtotal                                          834         62.1
 Union democracy
 Elections−local            Title IV         145         13.7
 Elections−intermediate     Title IV         10          1.1
 Elections−international    Title IV         20          1.9
                                  Titles I and II
 Basic investigationsc            and Civil        90          0.7
                                  Service Reform
                                  Act
 Trusteeship investigations       Title III        14          0.7
 Election reruns−local      Title IV         29          4.1
 Election reruns-intermediate     Title IV         3           0.6
 Election
 Reruns−international       Title IV         3           0.2
 Auxiliariesa                     Title IV         (254)a      2.7
 Subtotal                                          314         25.7
 Reporting/disclosure
 Delinquent reports−unions  Title II         2,237       3.4
 Deficient reports−unions   Title II         84          0.3
 Special reports−others     Title II         114         1.0
 Auxiliariesa                     Title II         (10)a       0d
 Subtotal                                          2,435       4.7
 Other
 Compliance assistance            e                e           1.9
 Inquiries                        e                e           3.8
 Case targeting (planning future
 criminal work)                   e                e           1.4
 Subtotal                                                      7.1
 Total                                             3,583       99.6
 Total auxiliariesa                                (375)a

Note: Percentages do not total 100 because of rounding.

a"Auxiliaries" is the term used to describe investigative work performed on
the basis of leads generated from original cases. Auxiliaries are not
counted as additional investigations and are not included in the subtotals.

bThese investigations may be performed jointly with other government
agencies.

cBasic investigations cover such areas as access to collective bargaining
agreements, determinations of existence of a union, and other Civil Service
Reform Act requirements.

dAmount of time was less than 0.1 percent.

eAlthough staff time is spent on providing assistance to unions and others
to help them comply with all titles of LMRDA, as well as on responding to
inquiries, these efforts are not related to a particular title, nor are they
tracked as "cases."

Title I: Bill of Rights of Union Members

Generally referred to as the "Bill of Rights" of union members, title I of
LMRDA provides basic rights for union members, including the right to

ï¿½ nominate candidates for union office, vote in union elections, and
participate in union meetings;

ï¿½ meet and assemble freely with other members and express their opinions;

ï¿½ use democratic procedures if subjected to assessments and raises in member
dues;

ï¿½ be afforded a full and fair hearing of charges brought against them before
disciplinary actions are taken; and

ï¿½ receive and inspect collective bargaining agreements (which also applies
to nonunion members).

Both union members and the Department of Labor play roles in ensuring that
these rights are protected. The Secretary of Labor (through OLMS) is
responsible only for ensuring that union members and others gain access to
collective bargaining agreements and may institute civil action in federal
district court to enforce this provision (often referred to by its section
number: 104). Union members may bring a private suit against the union in a
federal district court to enforce all title I rights, but the union may
require members to first exhaust internal union remedies, which the union
has 4 months to provide.

Unlike LMRDA, OLMS investigates and enforces those sections of the Civil
Service Reform Act of 1978 (CSRA) and the other related legislation dealing
with the Bill of Rights for federal employee unions. OLMS enforces these
sections through its administrative process by referring cases for a hearing
before an administrative law judge and a final decision by the Assistant
Secretary of Employment Standards.

OLMS maintains case data on LMRDA and provisions of related legislation in
its Case Data System. We obtained the database and analyzed cases that OLMS
processed in fiscal years 1998 and 1999. The database did not track cases
according to titles of the act; however, for certain activities, including
collective bargaining agreements, 194 cases were grouped under a category
termed "basic investigations." We queried the database to identify those
basic investigations that were initiated as a result of complaints about
collective bargaining agreements and reviewed case summary sheets, which
provided general data about the cases. Through this process, we identified
21 cases in which union members complained about not having access to or
problems obtaining copies of collective bargaining agreements. We also
interviewed OLMS officials about the process for addressing complaints
regarding collective bargaining agreements.

In response to oral or written complaints from union members or others, OLMS
contacts local unions and, if necessary, unions' headquarters, about giving
access to collective bargaining agreements. If a union does not comply with
a request for copies of or access to a collective bargaining agreement,
OLMS' district office investigates and forwards a report to OLMS'
headquarters, which sends a "demand letter" to the union requiring its
compliance. If a union still does not comply, OLMS refers the case to
Labor's Office of the Solicitor for litigation. OLMS officials said section
104 does not generate a significant workload for OLMS, and the Secretary of
Labor has rarely initiated litigation to enforce its provisions.

The 21 cases we identified as involving collective bargaining agreements
during fiscal years 1998 and 1999 were based on complaints that a union
member had not been able to obtain copies of collective bargaining
agreements. The 21 cases represented 12 unions whose membership ranged from
35 to 34,177 members and whose total receipts ranged from $3,100 to
$19,913,660.

As shown in table 4, OLMS found violations in 15 of the 21 cases. In 13
cases (over 80 percent), OLMS was able to secure voluntary compliance by
contacting the unions and asking them to provide the collective bargaining
agreements. In one case, OLMS referred the case to Labor's Solicitor for
legal action and closed the case. The final case was resolved before OLMS
took action.

 Case status               Number Percentage of all  Percentage of cases
                                  cases              with violations
 Cases investigated
 No violation found        6      29
 Violation found           15     71
 Total                     21     100
 Resolution of cases with
 violations
 Voluntary compliance      13                        87
 Referred to Solicitor for
 legal action              1                         7
 Resolved before OLMS took
 action                    1                         7
 Total                     15                        101a

aPercentage exceeds 100 because of rounding.

Title II: Reporting Requirements and Public Disclosure

Title II of LMRDA requires labor unions; their officers and employees;
employers; labor relations consultants, under certain circumstances; and
surety companies to file certain reports with OLMS' headquarters in
Washington, D.C., and to retain the records necessary to verify the reports
for at least 5 years. Similar requirements under provisions of CSRA apply to
federal employees' unions. These requirements are important because they
ensure that union members have all the necessary information to take
effective action to protect their rights.

Important requirements of title II include the following:

ï¿½ Unions must file information reports that include the name and address of
the labor organization, address of the location where records required by
title II are maintained, and name and title of each officer, as well as
annual financial reports and copies of the constitution and bylaws.

ï¿½ Officers and employees of labor unions must report financial interest in,
business dealings with, and loans and benefits received from employers whose
employees their unions represent and from businesses that deal with their
unions.

ï¿½ Employers must report certain dealings with unions, such as payments or
loans to the union. Employers and others, such as labor relations
consultants, who engage in activities to persuade employees how to exercise
their union rights, must report certain information, such as their
expenditures.

ï¿½ Surety companies that issue bonds required by LMRDA or the Employee
Retirement Income Security Act of 1974 must report data such as premiums
received, total claims paid, and amounts recovered.

Title II requires that these reports and documents be made available to the
public, which OLMS does at its offices around the nation. Unions must also
make these reports available to members and permit members to examine
records. These or similar provisions apply to federal unions under CSRA. The
Secretary of Labor can bring civil action to enforce the reporting
requirements under LMRDA. Labor relies on Justice to litigate civil actions
brought under title II of LMRDA. Under CSRA, the Secretary uses
administrative action that involves a hearing before an administrative law
judge and a final decision by the Assistant Secretary for Employment
Standards. Title II also provides for criminal penalties when unions
intentionally13 violate reporting requirements; criminal matters are within
the responsibility of the Department of Justice. Tables 5, 6, and 7 show the
various reports required from unions, for unions under trusteeship, and from
other entities that do business with unions, respectively.

 Form number and
 name                Required filer            Reporting time frame
 Form LM-1 (initial)                           The LM-1 is due to Labor
                     Each union subject to     within 90 days after the
 Labor organization  LMRDA or CSRA             union becomes subject to
 information report                            LMRDA or CSRA requirements.
                     Each reporting union      The amended LM-1 form is due
                     (except federal employee  to Labor within 90 days
 Form LM-1 (amended) unions) that makes        after the end of the union's
                     changes in its practices  fiscal year during which the
 Labor organization  and procedures that are   changes were made, along
 report              not contained in the      with the appropriate annual
                     union's constitution and  form (that is, the LM-2,
                     bylaws                    LM-3, or LM-4).
                                               The LM-2 is due to Labor
                                               within 90 days after the end
                                               of the union's fiscal year
                     Each reporting union with under normal conditions. If
 Form LM-2           total annual receipts of  the union loses its
                     $200,000 or more and the  reporting identity through
 Labor organization  parent union for          dissolution, merger,
 annual report       subordinate unions under  consolidation, or other
                     trusteeship               means, the LM-2 is due to
                                               Labor within 30 days after
                                               the date of the union's loss
                                               of identity.
                                               The LM-3 is due to Labor
                                               within 90 days after the end
                                               of the union's fiscal year
                     Each reporting union with under normal conditions. If
 Form LM-3           total annual receipts of  the union loses its
                     less than $200,000 may    reporting identity through
 Labor organization  use the less detailed     dissolution, merger,
 annual report       form LM-3 if not under    consolidation, or other
                     trusteeship.              means, the LM-3 is due to
                                               Labor within 30 days after
                                               the date of the union's loss
                                               of identity.
                                               The LM-4 is due to Labor
                                               within 90 days after the end
                                               of the union's fiscal year
                                               under normal conditions. If
 Form LM-4           Each reporting union with the union loses its
                     total annual receipts of
                                               reporting identity through
 Labor organization  less than $10,000 may use dissolution, merger,
 annual report       the abbreviated form LM-4 consolidation, or other
                     if not under trusteeship.
                                               means, the LM-4 is due to
                                               Labor within 30 days after
                                               the date of the union's loss
                                               of identity.
                                               Simplified annual reports
                                               are due to Labor within 90
                     Parent body of a local    days after the end of the
                     union that has no assets, union's fiscal year. The
                     liabilities, receipts, or parent body must report
 Simplified annual   disbursements and is not  annually certain basic
 report              under trusteeship may     information about the local,
                     file simplified annual    including the names of all
                     reports on the local's    officers, together with a
                     behalf.                   certification signed by the
                                               president and treasurer of
                                               the parent union.

 Form number and name  Required filer              Reporting time frame
 Form LM-15 (initial)
                                                   The LM-15 is due to
 Trusteeship report    Each parent union that      Labor within 30 days
 (including statement  imposes a trusteeship over  after imposing the
 of assets and         a subordinate union         trusteeship.
 liabilities)
 Form LM-15
 (semiannual)                                      The semiannual LM-15 is
                       Each parent union that
                                                   due to Labor within 30
 Trusteeship report    continues a trusteeship     days after the end of
 (excluding statement  over a subordinate union    each 6-month period
 of assets and         for 6 months or more        during the trusteeship.
 liabilities)
                                                   The LM-15A is due to
                                                   Labor as required based
                                                   on the union's
                       Each parent union that      requirements for holding
                       imposes a trusteeship over  elections for its
                       a subordinate union if      officers. The LM-15A is
                       during the trusteeship the  due along with the LM-15
 Form LM-15A           parent union held any       within 30 days after the
                       convention or other         imposition of the
 Report on selection   policy-determining body to  trusteeship or the end
 of delegates and      which the subordinate union of each 6-month period,
 officers              sent delegates or would     or with the Form LM-16
                       have sent delegates if not  within 90 days after the
                       in trusteeship, or if the   end of the trusteeship
                       parent union conducted an   or the subordinate
                       election of officers        union's loss of
                                                   reporting identity
                                                   through dissolution,
                                                   merger, consolidation,
                                                   or other means.
                                                   The LM-16 is due to
                                                   Labor within 90 days
 Form LM-16            Each parent union that ends after the end of the
                       a trusteeship over a        trusteeship or the
 Terminal trusteeship  subordinate union or if the subordinate union's loss
 report                union in trusteeship loses  of reporting identity
                       its reporting identity      through dissolution,
                                                   merger, consolidation,
                                                   or other means.

 Form number and name        Required filer         Reporting time frame
                       Each employer that
                       engages in certain
                       specified financial
                       dealings with its
 Form LM-10            employees, unions, union   The LM-10 is due to Labor
                       officers, or labor         within 90 days after the
 Employer report       relations consultants or   end of the employer's
                       that makes expenditures    fiscal year.
                       for certain purposes
                       relating to employees' or
                       unions' activities
                       Each person who enters
                       into an agreement or
                       arrangement with an
                       employer to inform
 Form LM-20            employees about            The LM-20 is due to Labor
                       exercising their rights
                                                  within 30 days after a
 Agreement and         to organize and bargain    person enters into such
 activities report     collectively, or to        agreement or arrangement.
                       obtain information about
                       employee or union
                       activity in connection
                       with a labor dispute
                       involving the employer
                       Each person who enters
                       into an agreement or
                       arrangement with an
                       employer to inform
 Form LM-21            employees about            The LM-21 is due to Labor
                       exercising their rights
                                                  within 90 days after the
 Receipts and          to organize and bargain    end of the consultant's
 disbursements report  collectively, or to        fiscal year.
                       obtain information about
                       employee or union
                       activity in connection
                       with a labor dispute
                       involving the employer
                       Each union officer
                       (including trustees of
                       subordinate unions under
                       trusteeship) and employee
 Form LM-30            (other than employees      The LM-30 is due to Labor
                       performing exclusively     within 90 days after the
 Labor organization    clerical or custodial      end of the union
 officer and employee  services) who (or whose    officer's or employee's
 report                spouse or minor child)     fiscal year.
                       had certain direct or
                       indirect economic
                       interests during the past
                       fiscal year
                       Each surety company with
                       a bond in force insuring
 Form S-1              a welfare or pension plan  The S-1 is due to Labor
                       covered by the Employee
                                                  within 150 days after the
 Surety company annual Retirement Income          end of the surety
 report                Security Act, or insuring  company's fiscal year.
                       any union or trust in
                       which a union is covered
                       by LMRDA

We obtained data that Labor generated from two different electronic systems
to determine how it administers title II. OLMS maintains data on the daily
case workload in its Case Data System, which includes OLMS cases of
delinquent and deficient reports as well as cases to determine whether labor
organizations are subject to LMRDA's requirements. During fiscal years 1998
and 1999, the Case Data System included

ï¿½ 4,462 cases of delinquent union reports,

ï¿½ 189 cases of delinquent or deficient reports from other entities that deal
with unions,

ï¿½ 125 cases of deficient union reports, and

ï¿½ 113 basic investigation cases that dealt with whether labor organizations
met the criteria that would make them subject to LMRDA requirements or
provisions of related legislation. (Of the total of 194 basic investigation
cases, we identified and excluded 21 that were related to title I. This left
173 cases, from which we identified 113 that dealt with whether groups had
reported in compliance with the act.)

We obtained the OLMS computerized database for these cases, analyzed the
data, and reviewed summary sheets for some cases, which generally were one-
or two-page documents containing the name of the union, estimated membership
and receipts, rationale for the case, violation found, and disposition of
the violation.

We also reviewed hard copies of data from a second database that Labor
maintains that contains certain statistical data on labor organizations--the
Labor Organization Reporting System. This system contains data such as the
number of unions that file reports, the type of reports filed, the overall
memberships and receipts of all unions that file reports, and the number of
requests the public made for disclosure of reports filed. OLMS officials
describe the Labor Organization Reporting System as a dynamic system that
provides data at a particular point in time.

To administer title II's requirements, OLMS focuses on three factors: (1)
whether unions and other entities required to report information do so in a
timely manner, (2) whether the information submitted is complete and
accurate, and (3) whether all organizations subject to the requirements of
LMRDA and provisions of related legislation acknowledge that they exist by
reporting required information to OLMS.

To carry out its responsibilities under this title, OLMS headquarters
monitors unions' fiscal year-end dates, which determine the reports' due
dates; generates a list of unions that are delinquent; and sends this list
to the district offices for action. OLMS uses the list to contact unions by
telephone about the reports and encourage them to send in the required
reports. OLMS uses administrative staff as well as investigators to perform
this work. OLMS also uses mailings to remind unions to file on time.

Justice officials confirmed that they are not likely to prosecute cases if
reporting violations are the only basis for the case. As a result, OLMS
focuses primarily on using voluntary compliance to address delinquent
reporting. In fiscal year 1996, OLMS implemented an initiative that focused
on reducing the delinquency rate of unions with receipts of $200,000 or more
by mailing them reminder letters and notices of delinquency. At the same
time, OLMS decided to wait up to 3 years before opening delinquent report
cases on smaller unions with receipts of less than $5,000 that were late in
filing. In 1999, OLMS substantially revised its program to address
delinquent reporting by developing, among other things, a comprehensive
manual with step-by-step instructions for obtaining delinquent reports. In
February 1999, OLMS focused on unions that filed on time in the prior year
to encourage continued timely filing. OLMS implemented another initiative in
1999 through its compliance assistance program that focused on meeting with
national or international unions in an effort to get their delinquent
affiliates to file timely reports.

OLMS monitors other entities, such as labor consultants and surety
companies, on the basis of information the unions report, media and other
sources, and the entities' fiscal year-end dates. OLMS officials said that
reporting problems with other entities do not require similar levels of
effort as for unions because there are fewer other entities, and reporting
is required less frequently.

Regarding deficient reports, OLMS officials said that they perform a cursory
review applying minimal filing standards to assess completeness and accuracy
and follow up on any inadequate reports through telephone calls and
mailings. At the time of our review, OLMS had developed a draft "Reports
Electronic Audit Program" designed to identify reporting deficiencies in
annual financial reports (forms LM-2/3/4) through the application of the
following standard review criteria:

ï¿½ filing standards that address the minimum information a report must
contain to be acceptable by OLMS;

ï¿½ acceptability standards that address basic, key information that is
critical for adequate public disclosure; and

ï¿½ reporting standards that address other types of reporting errors and
deficiencies.

According to OLMS officials, in fiscal year 2000, OLMS created a structured
program that involved developing a detailed deficient reports manual to help
staff obtain amended reports.

Finally, OLMS monitors several sources to determine whether organizations
are subject to LMRDA and provisions of related legislation and have filed
the appropriate reports. The sources include newspaper articles; requests
for public disclosure; individuals; and others, including the National Labor
Relations Board, which can report whether the labor organization has been
certified.

OLMS makes reports available to the public at its offices around the
country. It is working on a new system that would permit unions to file
LMRDA reports electronically, which would allow OLMS to create an electronic
database that would make report data accessible to the public through the
Internet. OLMS expects full implementation of this system by the end of
fiscal year 2001.14

As of February 2000, OLMS reported that 31,411 unions with 13,577,606
members and total receipts of $15,304,997,046 were required to report
financial information annually on forms LM 2/3/4 or simplified forms. Table
8 shows the reports required of these unions, as of February 2000.

 Number of unions required   Unions' total
 to file                     receipts              Type of form
 5,946                       $200,000 plus         LM-2
 13,916                      Less than $200,000    LM-3
 9,112                       Less than $10,000     LM-4
 2,437                       $0                    Simplified annual report

During fiscal years 1998 and 1999, OLMS opened delinquent report cases on
about 12 percent of all unions15 that were delinquent in filing the required
reports with OLMS. OLMS' database identified 4,462 delinquent reports cases
(2,225 in fiscal year 1998 and 2,237 in fiscal year 1999) representing 3,974
discrete unions with memberships ranging from 0 to 195,383 and receipts
ranging from $0 to $225,470,553.16 OLMS reported a measure of success in
reducing delinquent reporting among unions with $200,000 or more in
receipts. According to OLMS officials, in fiscal year 1999, about 10 percent
of these unions were delinquent filers compared with over 20 percent in
fiscal year 1997. OLMS officials attributed this to its initiative of
contacting unions before the reports are due, which has been in place for
about 2 years. The initiative to not open delinquent report cases for unions
with receipts under $5,000 until they have been delinquent filers for 3
consecutive years, and the efforts to work with national and international
unions to get affiliates to report on time, had not been in place long
enough at the time of our review to develop or determine results.

Other entities, such as labor consultants, surety or bonding companies,
employers, union officers, and employees of unions, were also delinquent in
submitting required reports to OLMS. During fiscal years 1998 and 1999, OLMS
processed 189 cases of delinquent or deficient reports for 186 discrete
entities. OLMS telephone and mail efforts in these cases resulted in
98.5-percent voluntary compliance.

OLMS processed 125 deficient reports cases in fiscal years 1998 and 1999
representing 125 discrete unions with memberships ranging from 0 to 790,000
and receipts ranging from $0 to $140,000,000. OLMS found that 86 percent of
these cases violated title II provisions for completeness and accuracy.17
OLMS secured voluntary compliance in about 91 percent of the cases in which
violations were found, with unions submitting complete reports in response
to OLMS telephone and mail efforts. In the remaining cases, events beyond
OLMS' control made action unnecessary, or OLMS opened a follow-up case.
According to OLMS officials, OLMS instituted procedures in 2000 to more
effectively address deficient reports and will have improved data systems in
2001 for identifying deficient reports.

OLMS efforts to monitor union activity identified 113 cases in fiscal years
1998 and 1999 in which unions had not reported that they were subject to
LMRDA requirements or provisions of related legislation. These cases
represented 110 discrete unions with memberships ranging from 0 to 5,500 and
receipts ranging from $0 to $1,419,596. OLMS secured voluntary compliance in
96 percent of these cases, with unions submitting the required reports in
response to OLMS telephone and mail contacts. For the remaining 4 percent,
OLMS took no action, and the database did not contain explanations for OLMS'
decisions.

OLMS makes the reports unions and others submit available to the public at
its headquarters office and in field offices. Currently, the public can
order reports through the Internet and in fiscal 2001 should be able to
access reports directly through the Internet. During fiscal years 1998 and
1999, OLMS processed 15,685 disclosure requests and reproduced copies of
53,799 reports.

Title III: Trusteeships

Title III governs trusteeships: when a labor organization takes control of a
subordinate body by suspending the autonomy it otherwise has under its
constitution or bylaws, the subordinate body is said to be under a
trusteeship.18 Trusteeships can be imposed only for (1) ending corruption or
financial malpractice, (2) ensuring the appropriate implementation of
collective bargaining agreements or performance of other duties of a
bargaining representative, (3) restoring democratic procedures, or (4)
otherwise carrying out the legitimate objectives of a labor organization.

Under the act, a trusteeship that is established in conformity with the
constitution and bylaws of the union, which must include a fair hearing
process, is presumed valid for 18 months and may continue to exist during
that time, unless there is clear and convincing proof that it was not
established or maintained for a valid purpose. After 18 months, the
trusteeship is presumed invalid and must be discontinued unless the union
provides clear and convincing proof that it is still needed. Unions
establishing trusteeships over subordinate bodies must submit special
reports regarding trusteeships (see table 6).

When a union is under a trusteeship, the votes of that union's delegates
cannot be counted in any convention or election of officers unless the
delegates have been elected by secret ballot. The act also prohibits the
transfer of funds from the subordinate body except for normal per capita
taxes and assessments charged to all other locals. The intentional violation
of either of these provisions is a crime. All members have the right to file
a civil lawsuit against the national or international union in federal
district court to remedy violations of this title (for example, to terminate
invalid trusteeships).

Labor is required to investigate written complaints from union members or
subordinate (local) unions that title III has been violated. If Labor finds
probable cause to believe that the trusteeship is illegal, Labor must file a
civil action in federal district court for appropriate relief, such as
terminating the trusteeship. OLMS takes the position that it cannot take
enforcement action to remove a trusteeship--even if it has exceeded the
18-month time frame of presumed validity--unless it receives a written
complaint. Without receiving a written complaint, Labor can initiate
investigations (under title VI of LMRDA) of potential violations of any
provisions of the act, other than part of title I. However, Labor has no
enforcement authority under title VI, which means that it would have to use
enforcement authority granted under another title of the act. According to
OLMS officials, this authority is not applicable to title III because the
enforcement authority granted here is available only if a written complaint
has been filed.

We obtained general information on the number of trusteeships established,
the number of trusteeships that OLMS considered active trusteeships, the
dates these trusteeships were first imposed, and the length of time these
trusteeships existed during the period fiscal years 1995 through 1999. OLMS'
automated records from its Case Data System were limited to a 2-year period
and included only 34 trusteeship complaints; therefore, we obtained listings
of trusteeship investigations processed between fiscal years 1995 and 1997
to provide broader coverage of trusteeship cases and Labor's efforts to
administer title III. We examined the case files for 107 trusteeship
complaints, and we discussed the process for addressing trusteeships with
OLMS officials.

When OLMS receives a written complaint from a union member or subordinate
body alleging that the organization imposing the trusteeship has violated
title III, OLMS field office staff investigate.19 In order to conclude that
a trusteeship was imposed unlawfully, the field investigator must find proof
that the union under trusteeship is a labor organization as defined in the
act and that the trusteeship was in violation of the act. Specifically,
there must be proof that the trusteeship

ï¿½ involves withdrawing some or all of the autonomy over internal affairs
otherwise available to the union under trusteeship,

ï¿½ was not established for a purpose listed in the act,

ï¿½ was not established in accordance with the parent body's constitution and
bylaws, or

ï¿½ was not established or ratified after a fair hearing.

The statute does not provide a time frame for investigating trusteeship
cases, but in the 1999 planning guidelines to field offices, the OLMS
Director instructed that field offices give priority to trusteeship cases
and complete field investigations in 45 days. After the field office submits
the report of investigation, OLMS' Division of Enforcement and Labor's
Office of the Solicitor review it. A telephone conference among the field
investigator, the Division of Enforcement, and the Solicitor is held to
discuss whether to initiate legal action or to close the case. According to
Labor officials, they attempt to obtain consensus on what should be done to
resolve the case during this discussion.

Over the 5-year period that we reviewed, national or international unions
imposed 353 trusteeships on local unions or intermediate bodies, averaging
about 70 new trusteeships a year. National or international unions
terminated 259 trusteeships over the 5-year period, averaging about 50 a
year (see table 9).

                   Fiscal    Fiscal    Fiscal    Fiscal    Fiscal    Total
                   year 1995 year 1996 year 1997 year 1998 year 1999
 New trusteeships
 imposed           55        72        93        85        48        353
 Trusteeships
 terminated        13        10        66        90        80        259
 Net difference    +42       +62       +27       -5        -32       +94

As of September 30, 1999, Labor reported 313 active trusteeships, which had
been established by 47 national or international unions. A single
international union had established 74 of the active trusteeships. Over 90
percent of the organizations under trusteeship were local unions, and about
6 percent were intermediate bodies. The active trusteeships included 228
that had been in effect for more than 18 months (the time frame under the
act that trusteeships are presumed valid), ranging from 18.4 months to 214.3
months. According to OLMS officials, some national and international unions
place local affiliates under trusteeship as an administrative act when the
locals' employers have gone out of business or other actions reduce locals
to very few or no members.

Over the 5-year period reviewed, OLMS received and processed 107 trusteeship
complaint cases and found that 33 percent of the cases violated title III
requirements. Labor's efforts to resolve these cases ranged from seeking
voluntary compliance to taking legal action, as shown in table 10.

                  Fiscal  Fiscal  Fiscal  Fiscal Fiscal
                  year    year    year    year   year    Total Percentage
                  1995    1996    1997    1998   1999          of totala
 Trusteeship
 complaint cases  26      22      25      20     14      107   100
 investigated
 Cases with no
 violations       18      15      16      12     11      72    67
 Cases with
 violations
 (unlawful        8       7       9       8      3       35    33
 trusteeships)
 Resolution of
 violations
 Voluntary
 compliance       1       2       4       5      0       12    34b
 Other union
 actions          7       5       2       1      0       15    43b
 Legal action     0       0       1       2      0       3     9b
 Federal court
 actionc          0       0       2       0      0       2     6b
 Enforcement
 review not
 completed as of  0       0       0       0      3       3     9b
 10/21/99

aPercentages may not total 100 because of rounding.

bPercentages of total cases with violations.

cIn these cases, although complaints had been filed with OLMS, federal
district courts were also involved, so they had the authority to resolve
potential trusteeship violations.

OLMS field offices initiated seven cases after the 45-day time frame was
established, five of which (71 percent) exceeded the 45-day time frame
established by the OLMS Director.

Of the 107 cases for which the OLMS field offices conducted investigations,
35 trusteeships were determined to be unlawful. For seven of these cases,
the field offices recommended that action other than legal action be taken,
and OLMS headquarters concurred. In four of the seven cases, voluntary
compliance was achieved when the unions held elections and restored autonomy
to the subordinate bodies, and in the other three, the national or
international unions abolished the subordinate bodies.

For the remaining 28 of 35 cases, the OLMS field offices recommended that
OLMS headquarters take legal action to resolve the violations, but other
OLMS headquarters' actions or other events made the use of legal action
unnecessary in most cases. As shown in table 11, OLMS headquarters did not
have to take any action in 46 percent of the cases because the locals merged
and the trusteeship no longer applied, the international union terminated
the local union, the local union changed its affiliation to another parent
union, and in one case a federal court was responsible for taking action. In
29 percent of the cases, OLMS headquarters persuaded the national or
international unions to voluntarily comply by lifting the trusteeship. In 14
percent of the cases, OLMS headquarters decided to initiate legal action.
For the final 11 percent, OLMS headquarters review work and decisions were
not completed within the period reviewed.

                      Fiscal  Fiscal Fiscal Fiscal Fiscal
                      year    year   year   year   year   Total Percentage
                      1995           1997   1998   1999         of totala
                              1996
 Unlawful
 trusteeships         8       7      9      8      3      35    100
 Field office
 recommended no legal
 action and
 headquarters decided 1       0      3      3      0      7     20
 to take no legal
 action
 Field office
 recommended legal    7       7      6      5      3      28    80
 action
 Headquarters
 decisions and other
 events
 Other actions
 (reorganizations,    6       5      2      0      0      13    46b
 mergers, other)
 Voluntary compliance 1       2      3      2      0      8     29b
 Legal action         0       0      1      3      0      4     14b
 Decision pending or
 review work          0       0      0      0      3      3     11b
 incomplete 9/30/99

aPercentages may not total 100 because of rounding.

bPercentages of total cases in which field office recommended legal action.

A summary of the four cases in which OLMS decided to initiate legal action
follows.

ï¿½ In one case, Labor filed a suit in federal court that was ongoing at the
time of our review.

ï¿½ Two cases involved federal unions covered by CSRA rather than LMRDA. These
cases were referred by OLMS to Labor's chief administrative law judge. In
both cases, settlement was reached before the hearings.

ï¿½ In the last case, at the time of our review, a civil suit had yet to be
filed because the union had agreed to elections at the regularly scheduled
election date. According to OLMS officials, the elections were held, so
litigation was not necessary.

The trusteeship complaint cases involved subordinate bodies affiliated with
28 national/international unions. The subordinate bodies under trusteeship
ranged in size from 0 to 21,163 members, and the amounts of receipts ranged
from $0 to $9,291,571.

Title IV: Union Elections

Title IV provides guarantees for fair and democratic union elections to be
held periodically. It also provides other election-related rights to union
members and prescribes various procedures for conducting elections. Specific
requirements regarding elections under title IV include the following.

ï¿½ National or international unions must hold elections at least every 5
years, intermediate bodies every 4 years, and local unions every 3 years.20

ï¿½ Local unions must elect their officers by secret ballot; international
unions and intermediate bodies must elect their officers by secret ballot
vote of the members or by delegates chosen by secret ballot. Unions must
mail a notice of election to every member at the member's last known home
address at least 15 days prior to any election required to be held by secret
ballot. Election records must be maintained for 1 year.

ï¿½ A member in good standing has the right to nominate candidates; to be a
candidate, subject to reasonable qualifications uniformly imposed; to hold
office; and to support and vote for the candidates of the member's choice.

ï¿½ Unions must comply with a candidate's request to distribute campaign
material to members at the candidate's own expense and must also refrain
from discriminating against any candidate with respect to the use of
membership lists.

ï¿½ Union and employer funds may not be used to promote the candidacy of any
candidate. Union funds may be utilized for expenses necessary for the
conduct of an election.

Union members may protest elections' outcomes by seeking internal union
remedies. Once they have exhausted union remedies or the union has failed to
reach a final decision within 3 months, they can file a complaint with
Labor, which is required to investigate these complaints within 60 days. If
Labor finds probable cause that a violation affecting the outcome of an
election has occurred and it has not been remedied, Labor must bring a civil
action in federal district court, with Justice's approval, to set aside the
invalid election and hold a new election.

LMRDA title IV election standards also apply to most federal unions, which
are subject to CSRA. Consequently, the administrative and investigative
processes discussed below also apply to federal unions. However, the
remedies for resolving complaints involving federal unions are pursued
administratively, rather than through a federal district court. Also, the
60-day time frame is not legislatively mandated for federal union cases, but
OLMS officials said their policy is to treat the cases the same for
investigative purposes.

Automated data that we obtained from OLMS' Case Data System showed that OLMS
processed 321 election complaint cases in fiscal years 1998 and 1999. We
identified limitations in OLMS' database for union elections that in some
cases underestimate the number of cases with violations. However, we do not
believe this underestimation materially affects the results of our analysis.
We used cases for which the automated database indicated a violation had
occurred. The number of cases with violations was based solely on the status
reflected in the database as of September 30, 1999. We examined the case
files for all cases in which the database indicated differences between
field office recommendations and headquarters decisions. We analyzed
automated data for all supervised election cases that OLMS processed in
fiscal years 1998 and 1999. We also discussed the process for addressing
election complaints with OLMS officials in two district offices and the
headquarters office.

Complaints form the basis for cases that OLMS investigates under this title.
Complaints must meet the following specific criteria in order for OLMS to
accept them:

ï¿½ the complainant must be a member of the union;

ï¿½ the election must be a regular, periodic election of officers or delegates
who will elect officers;

ï¿½ the union must be covered by LMRDA or CSRA;

ï¿½ the allegations, if true, must constitute violations of title IV; and

ï¿½ the written complaint must have been filed within 1 calendar month after
the complainant either properly exhausted internal union remedies or
properly invoked internal union remedies for 3 calendar months without
obtaining a final decision.

LMRDA requires that union election investigations be completed and that
Labor decide whether filing a lawsuit in federal district court is necessary
within 60 days from the time a complaint is filed. OLMS allocates 30 days to
the field offices for investigating the complaint and the other 30 days to
headquarters for deciding on the appropriate enforcement action. OLMS limits
election investigations to those matters deemed to be within the scope of
the complainant's internal union protest and those matters not known to the
complainant that are uncovered during the OLMS investigation. The Supreme
Court has held that the Secretary of Labor may not challenge an election on
the basis of a violation that was known to the protesting member but was not
raised in the member's internal union protest.21

Subsequent to opening an election case, OLMS field office investigators
visit the union's national or international office and verify that the
complainant has properly exhausted union remedies and filed the complaint
with OLMS in a timely manner. Because the complainant and the union's
national or international office may be in different locations, the field
office where the complainant is located is responsible for the
investigation, but it may use an OLMS investigator from the pertinent OLMS
field office (referred to as the auxiliary field office) to do this
verification. During this visit the investigator may also obtain the union's
position on issues involved in the complaint, obtain copies of relevant
documentation, and clarify the union's interpretation of constitutional
provisions.

The field investigator prepares a written investigative plan that lists all
allegations within the scope of the complaint and outlines all the steps
necessary to resolve each allegation. The investigator must resolve each
allegation independently and cannot rely on the results of any internal
union investigation. The investigator must gather background information
about the union and the nomination and election process, including the
number of union members; the union composition (active members, retirees,
and apprentices); geographic jurisdiction; principal employers; dues
structure and payment method; and frequency and location of membership
meetings. The investigator also obtains information on the selection of the
election committee; date, method, and content of the nomination notice and
election notice; date, time, and place of nominations; date, time, location,
and method of polling; election results; and publication of results.

Investigators gather information by interviewing appropriate union members
and officials and reviewing relevant election records. If the union refuses
to produce records essential to the completion of an election investigation
or unreasonably delays doing so, OLMS can issue a subpoena ordering the
union to produce the designated records and to testify as to their
authenticity. If the subpoena is not honored, it can be enforced by federal
district court action. If during the course of the investigation the
investigator establishes that a violation has occurred that may have
affected the election outcome, the respective district director may try to
settle the case with union officials; but no settlement agreement can be
accepted without the concurrence of OLMS headquarters.

If field investigations or OLMS headquarters activities exceed the 60-day
time limit, district directors have the authority to request waivers from
the unions to extend the time. However, time waivers are only to be used
when absolutely necessary, such as when

ï¿½ OLMS or the union needs additional time to consider settlement proposals,

ï¿½ OLMS requires additional investigative time because of unusual
circumstances, or

ï¿½ in the judgment of the district director, a time waiver is in the best
interest of OLMS.

According to OLMS officials, unions generally grant these waivers.

Once the field investigator completes the investigation, he or she prepares
a Report of Investigation summarizing the findings. The district director
prepares a detailed Analysis and Recommendation Memorandum that discusses
all pertinent allegations and provides a recommendation for resolving the
case that is based on the investigative findings. The district director also
notifies the union of the preliminary investigative findings through a
Summary of Violations letter. This letter is intended to provide the union
an opportunity to present additional evidence, which may prevent OLMS from
initiating unwarranted litigation. This letter may also encourage the union
to reach a voluntary settlement agreement with OLMS. A similar letter, the
"15-day demand letter," is sent in CSRA cases by the chief of OLMS' Division
of Enforcement.

Within 10 days of receiving the Report of Investigation, the Analysis and
Recommendation Memorandum, and the Summary of Violations letter from the
district director, OLMS' Division of Enforcement at headquarters reviews the
case and makes a recommendation to the chief of the Division of Enforcement.
OLMS officials said the investigator, Division of Enforcement staff, and
staff from Labor's Solicitor's Office hold a telephone conference to attempt
to reach consensus on how to resolve the case. If the chief of the Division
of Enforcement decides the case should be litigated, the Solicitor's Office
prepares the documents necessary to file suit in federal court. Depending on
the location, once the U.S. Attorney has filed suit, Labor's Regional
Solicitor may handle the litigation under the supervision of an Assistant
U.S. Attorney. For cases in which a suit is not filed, the Solicitor's
Office drafts a Statement of Reasons memorandum for the chief of the
Division of Enforcement that lists the specific reasons why Labor did not
file suit. A letter is sent to the complainant and the presidents of both
the local union and the parent union with the Statement of Reasons
memorandum attached.

OLMS may conduct a supervised election as a result of either a successful
court suit or the voluntary settlement of an election complaint. OLMS must
then arrange, supervise, and control all phases of the election, including
the nominations, if appropriate. If the election is in response to a
successful suit, the chief of the Division of Enforcement certifies the
results, and either the U.S. Attorney or the Regional Solicitor of Labor
provides the certification to the court. Both court-ordered and voluntarily
supervised elections ideally should be completed within 90 days of the
court's order or the voluntary compliance agreement.

Over 80 percent of election cases investigated involved local unions. The
remainder of the cases were about evenly divided between international
unions' elections and elections for intermediate bodies. The size and
receipts of unions investigated vary considerably, as shown in table 12.

                        Unions
                Cases
                        Number Membership range  Receipt amount range
 Local unions   266     237    0−100,000   $0−36,039,077
 Intermediate
 bodies         28      25     0−191,484   2,295−78,503,617
 International
 unions         27      11     956−664,883 148,608−860,988,260
 Total          321     273

As shown in table 13, OLMS found violations in 162 of the 321 election cases
investigated in fiscal years 1998 and 1999. In 62 of the 162 cases, the
violation did not affect the outcome of the election or the union took
corrective action before Labor had to act, so no action was taken. Under
title IV of LMRDA, a court cannot remedy violations unless they may have
affected the outcome of an election. Accordingly, OLMS does not take action
in such cases through voluntary compliance or otherwise unless it has
probable cause to believe that a violation affected an election's outcome.
In 47 cases, OLMS was able to secure voluntary compliance from the union,
which negated the need for legal action. In another 24 cases, OLMS decided
to take legal action: 18 were referred to the chief administrative law judge
for review and subsequent civil enforcement action or to the U.S. Attorney
for civil enforcement, and for the remaining 6, a decision to take legal
action had been made but the action had not been initiated as of September
30, 1999. The final 29 cases include those that were pending or those that
were not referred to Justice or the Solicitor.

                                                      National or
                                                     international   Total
                           Local    Intermediate
                           union       body             union
 Total election cases
 investigated             266     28              27                 321
 No violation found       129     14              16                 159
 Violations found         137     14              11                 162a
 Resolution of cases with
 violations
 No action taken          54      5               3                  62
 Voluntary compliance     40      5               2                  47
 Case referred to chief
 administrative law judge 16b     2               0                  18
 or Justice
 Legal action pending     2       2               2                  6
 Case pending or other
 actions                  25      0               4                  29

a According to OLMS officials, this may be an underestimate of the number of
cases in which violations were found because of procedures for coding
violations, changes made to cases subsequent to our analysis, and database
errors that OLMS staff found through case file reviews.

b Includes one CSRA case.

OLMS obtained waivers to extend the time allowed in 151 cases, or about half
of all election cases, but OLMS obtained waivers in 85 percent of
international union elections cases. In about two-thirds of the
international union cases, OLMS obtained multiple waivers. The OLMS database
did not capture the length of time sought in the waivers. Table 14 shows the
number of waivers OLMS sought in fiscal years 1998 and 1999 for election
investigations.

                    Cases with no  Cases with    Cases with more Total
                    waivers        one waiver    than one waiver cases
 Local unions       146            59            61              266
 Intermediate
 bodies             20             5             3               28
 International
 unions             4              6             17              27
 Total              170            70            81              321

Of the 162 election cases in which OLMS found violations in fiscal years
1998 and 1999, we determined that the field office recommendation and the
headquarters decision were the same in 78 of these cases and differed in 70;
in 14 cases, OLMS headquarters had not yet made a decision as of September
30, 1999. Figure 3 compares field office recommendations and headquarters
decisions.

Fiscal Years 1998-99

a In the database, seven cases were recorded in error. The database showed
headquarters decisions to be different from field recommendations, but
further analysis showed that the decisions were the same.

As shown in figure 3, in 44 cases the field offices recommended that legal
action be taken but headquarters decided to close the cases. In 27 of the 44
cases, headquarters officials, working with the Solicitor's Office, decided
that there was insufficient evidence that the act had been violated to
litigate the cases. In another eight, although the act was violated, OLMS
officials did not think that there was evidence that the violation affected
the outcome of the election. For the remaining nine, OLMS did not pursue
litigation for various reasons, such as that the complainant did not
properly file the complaint or the union took action subsequent to the
investigation, which made the complaint moot. OLMS officials told us that
there are a number of reasons why field office recommendations and
headquarters decisions differ. For example, headquarters must bring
consistency and evenhanded treatment to cases handled by field offices that
may not always consistently apply program policies.

In the 23 cases in which the field recommended legal action, headquarters
secured voluntary compliance. OLMS officials said that voluntary compliance
is an alternative method of ensuring that a fair rerun election is held, and
voluntary compliance is often faster and less resource-intensive than taking
legal action. These officials said they do not consider this situation to
constitute a difference between the field office recommendations and
headquarters decisions.

In the final three cases, the field office recommended other action but
headquarters decided to take legal action. In the first case, the field
office had negotiated a voluntary compliance agreement with the union, but,
at the last minute, the union changed its mind and refused to sign the
agreement. As a result, OLMS headquarters filed a complaint with an
administrative law judge.22 In the second case, headquarters decided to take
legal action but after doing so, the union agreed to rerun the election,
making the complaint moot. In the last case, OLMS headquarters disagreed
with the recommendation to close the case and decided to file a lawsuit in
federal district court.

OLMS refers to supervised union elections as election reruns because
supervised elections represent a corrective measure to resolve violations
that affected the outcome of initial union elections. OLMS may conduct a
supervised election after first finding a violation and then filing a
successful suit in federal district court that demands the election be rerun
or after securing a voluntary compliance agreement from the union to rerun
an election. During fiscal years 1998 and 1999, OLMS conducted 75 rerun
elections, of which 61 were reruns of local union elections.23 Table 15
shows these rerun elections and characteristics of the unions involved.

              Election
              rerun    Unions      Membership range     Receipt amount range
              cases    involved
 Local unions 61       61          63−17,176      $2,606−14,893,915
 Intermediate
 bodies       8        8           0−26,182       19,200−9,606,318
 International
 unions       6        6           1,000−666,704  0−674,236,422
 Total        75       75

Title V: Safeguards for Labor Organizations

Title V provides safeguards to protect unions' funds and assets against
embezzlement and other criminal violations. The major provisions of title V
include the following:

ï¿½ officers have a duty to manage the funds and property of the union solely
for the benefit of the union in accordance with its constitution and bylaws;

ï¿½ a union officer or employee who embezzles or otherwise misappropriates
union funds or other assets commits a federal crime;

ï¿½ officials who handle union funds or property must be bonded to protect
against losses;

ï¿½ a union may not have outstanding loans to any one officer or employee that
in total exceed $2,000;

ï¿½ a union or employer may not pay the fine of any officer or employee
convicted of any willful violation of LMRDA; and

ï¿½ persons convicted of certain crimes, such as embezzlement or murder, may
not hold union office or employment for up to 13 years after conviction or
after the end of imprisonment, whichever is later.

Union members may bring a civil action for appropriate relief against union
officers who violate any fiduciary duties under this title. The Department
of Labor has no authority to enforce fiduciary standards under this title.

We discussed the process for addressing violations of title V and the
implementation of a 1960 memorandum of understanding (MOU) between Labor and
Justice with officials in Labor's OLMS and Solicitor's Office and with
Justice Department attorneys in both headquarters and field or district
offices. We obtained and analyzed automated data from the OLMS Case Data
System for criminal cases OLMS processed in fiscal years 1998 and 1999,
including 754 embezzlement cases; 217 bonding cases; and 3 cases regarding
prohibitions against certain persons holding office, which we identified
from 194 basic investigations cases. OLMS maintains the files for its work
on criminal cases in the respective field offices responsible for the cases;
therefore, our work addressing the results of OLMS' enforcement efforts was
limited to our analysis of computerized data and discussions with OLMS
officials. We tracked the 754 criminal embezzlement cases through key points
associated with investigations conducted in accordance with the MOU. These
cases included those (1) for which Justice delegated Labor investigation
authority; (2) that Labor referred to Justice for prosecution; (3) that
Justice accepted from Labor; and (4) for which Justice and Labor obtained
indictments, convictions, or monetary restitution. We also identified cases
that involved state and local prosecution and the case results. We
identified limitations in OLMS' database for embezzlement cases that in some
cases underestimate the number of cases with violations. However, we do not
believe this underestimation materially affects the results of our analysis.

We discussed work done on criminal cases with Labor's Office of Inspector
General and obtained its March 1999 audit report concerning Labor's
enforcement of the title V provision prohibiting individuals with prior
criminal convictions from holding union office. We also discussed LMRDA with
the Inspector General's Division of Labor Racketeering. While the Division's
investigations may result in cases in which union leaders are charged with
violations of LMRDA, the focus of the Division's work is organized crime in
labor unions, which is outside the scope of our work.

Under the 1960 MOU, Justice is to investigate and prosecute cases involving
criminal provisions of title V, such as embezzlement of union funds, willful
violations of the prohibitions against paying certain fines, and violations
of prohibitions against allowing certain persons to hold union office. Labor
also has the authority under the MOU to investigate certain other criminal
violations of the act, such as intentional reporting violations, bonding,
and certain loans by labor organizations to officers and employees. However,
to conduct embezzlement investigations, OLMS usually seeks a redelegation of
investigative authority from Justice. According to OLMS officials, this
redelegation is a formality, since Justice generally grants Labor's request.
In either case, OLMS confirms the delegation in writing to the appropriate
individual in the Office of the U.S. Attorney involved. When Labor
investigates criminal cases, it must refer these cases to Justice for
litigation, which then decides whether to prosecute. If Justice declines,
then Labor decides whether it is appropriate to contact state or local
officials regarding the possibility of referral for action under state
criminal statutes or to close the case.

According to OLMS officials, criminal investigations and subsequent
referrals for prosecution are significant programs for protecting union
democracy and financial integrity for two reasons. First, officers and
employees convicted of embezzlement and certain other related crimes are
barred from union office and employment for a period beginning with
conviction or the end of imprisonment, whichever is later, and extending up
to 13 years. Second, restitution is frequently made to the union as a result
of the investigation.

OLMS may open criminal investigations on the basis of complaints or on its
own initiative in response to information obtained from individuals, union
reports, OLMS audits of unions, or other government agencies. Investigators
do preliminary work based on a detailed investigative plan to determine
whether OLMS should seek delegation authority from Justice to investigate.

For criminal cases, such as embezzlement, in which Justice delegates
authority to investigate, the OLMS investigator determines the methods to be
used to obtain the necessary information.24 The OLMS investigator also meets
with the U.S. Attorney to discuss the findings and determine whether the
case will be prosecuted. The OLMS investigator then prepares a Report of
Investigation for the case that includes those requirements from the U.S.
Attorney who is likely to prosecute the case. If prosecution is likely, the
investigator prepares an Action Report of Investigation accompanied by
exhibits and a letter containing OLMS' prosecution recommendation and
analysis. However, if the U.S. Attorney declines to prosecute, the OLMS
investigator prepares a Closed Report of Investigation, which includes
exhibits and documentation of investigative activities and findings and
correspondence from the U.S. Attorney. OLMS also sends a case declination
confirmation letter to the U.S. Attorney confirming the reason the U.S.
Attorney declined to prosecute the case. As noted above, OLMS may refer
cases that the U.S. Attorney declines to a state prosecutor.

CSRA does not contain criminal provisions for the embezzlement of funds from
unions representing federal employees. As a result, OLMS investigates
embezzlement cases by federal union officials under other federal statutes
or relies on state and local prosecutors to accept these cases, since
embezzlement or its equivalent is a felony in every state.

OLMS may investigate violations of bonding requirements under the provisions
of the act and the MOU with Justice. OLMS' investigations of whether
officers and employees of unions are appropriately bonded are triggered by
complaints, audits, or information developed from union reports. Violations
include the failure to be bonded, inadequate bonding, knowingly permitting
unbonded people or groups to handle funds, failure to address
conflict-of-interest issues, and using an unacceptable surety company.
Bonding investigations focus on unions that are subject to LMRDA
requirements; those that have property and annual receipts of more than
$5,000 in the most recently completed fiscal year; and those that have
officers, agents, or employees handling union funds or property against whom
allegations have been made.

OLMS investigates certain violations under the payment of fines prohibition
that pertain to unions, while Justice investigates those violations that
pertain to employers under the MOU. Neither OLMS nor Justice provided data
on these cases. Under the MOU, Labor may also investigate certain loans by
labor organizations to officers and employees of the labor organization, but
we did not identify any such cases in fiscal years 1998 and 1999, the period
of our review.

Under its policy, OLMS generally does not initiate cases involving the
prohibition against certain persons holding office in unions except at the
request of a U.S. Attorney or other Justice official. However, OLMS told us
it sometimes contacts the U.S. Attorney or other Justice officials if OLMS
independently receives information regarding potential violations. If asked
to investigate, OLMS interviews the complainant, probation officers,
prosecutors, and other officials and obtains documentation of court
judgments, proof of employment, consultant status, and other information.
The investigator summarizes the findings in a Report of Investigation for
the U.S. Attorney. If no violations are established or the U.S. Attorney
decides to take no further action, the investigator prepares a Closed Report
of Investigation.

In fiscal years 1998 and 1999, OLMS processed 754 embezzlement cases under
the auspices of the MOU, and the results showed indictments in 167 cases (22
percent), convictions in 135 cases (18 percent), and monetary restitution
totaling over $3.7 million in 106 cases (14 percent). These cases involved
624 discrete unions identified in the OLMS database with memberships ranging
from 0 to 1,414,000 and total receipts ranging from $0 to $208,260,892. OLMS
found violations in 64 percent of the cases (484); however, because the
number of indictments, convictions, and restitution cases was dispersed at
various stages in the MOU process, as shown in figure 4, we used the overall
number of 754 cases to compute percentages for these categories.

According to the MOU, for criminal embezzlement cases, Labor must first
request that Justice redelegate it investigative authority. OLMS then
investigates and determines whether it will refer those cases to Justice for
prosecution, and Justice determines if it will accept cases for prosecution.
Figure 4 illustrates this process for the 754 embezzlement cases OLMS
processed for fiscal years 1998 and 1999.

Justice delegated to Labor the authority to investigate 398 of the 754
embezzlement cases and did not delegate the remaining 356. OLMS' database
showed a range of reasons why 104 cases were not delegated (see table 16).

                                    Number of cases  Percentage of cases
 Reason for not delegating
 Amount of money involved too small 43               12
 Lacked prosecutorial merit         17               5
 No violation                       13               4
 Lack of intent                     9                3
 Evidence problem                   6                2
 Restitution/recovery               6                2
 Other                              5                1
 Out of office                      1                0
 Delegated to other agency          1                0
 Frequency (data) missing           3                0
 Subtotal                           104              29
 Information not available          116              33
 Data not applicable
                                    136              38
 (Labor did not seek delegation)
 Total                              356              100

For 136 cases, the database showed that delegation data were not applicable,
but OLMS officials told us that they did not seek delegation authority in
these cases. According to OLMS officials, OLMS does not seek delegation when
preliminary investigations indicate that violations are not likely and there
is no need for further investigation. The OLMS database did not have
available information to determine why the remaining 116 cases were not
delegated.

As shown in figure 4, Justice delegated to Labor the authority to
investigate 398 cases. Of these 398 cases, Labor subsequently referred 279
to Justice for prosecution under LMRDA, and Justice accepted 242 cases (87
percent). Justice obtained indictments in 140 cases (58 percent) and
convictions in 117 cases (48 percent). Justice won monetary restitution in
92 cases (38 percent) totaling $3,690,733. The amount of restitution ranged
from $300 to $761,609.

Justice did not accept 37 of the 279 cases (13 percent) for prosecution. The
most frequently cited reasons for declining cases for prosecution were
evidence problems, the small amount of money likely to be obtained, lack of
prosecutorial merit, and unlikely restitution or recovery of funds. When
Justice declines to prosecute cases, Labor officials' efforts to resolve
cases vary. One official told us that his office closes the cases without
further action if Justice declines prosecution. However, another official
told us that his office seeks local prosecution or some other disposition
rather than simply closing the case.

For the 356 cases that Justice did not delegate to Labor, Justice and local
prosecutors won indictments, convictions, and restitution using other
federal statutes or local statutes to prosecute the cases. Of the 356 cases,
27 (8 percent) resulted in indictments, 18 (5 percent) resulted in
convictions, and 14 (4 percent) resulted in monetary restitution, as shown
in table 17.

 Number               Delegated to Labor     Not delegated to   Total
                      initially              Labor
 Total cases          398                    356                754
 Indictments          140                    27                 167
 Convictions          117                    18                 135
 Restitution          92                     14                 106
 Amount of restitution$3,690,733             $79,707            $3,770,440

Note: OLMS officials told us that they track indictments and convictions at
the time they are obtained, rather than in the year the cases are referred
to Justice; thus, OLMS reported 259 indictments as well as 259 convictions
in fiscal years 1998 and 1999, which included some cases referred to Justice
in prior years.

We also found that, even though these investigations were begun under LMRDA
or related legislation such as CSRA, about 30 percent of the indictments,
convictions, and monetary restitution were actually achieved under other
federal or local statutes, as shown in table 18.

 Outcome           LMRDA  Other federal or local statutes  Unknown
 Indictments (167) 69%    30%                              1%
 Convictions (135) 71%    27%                              2%
 Restitution (106) 70%    28%                              2%

OLMS processed 217 bonding cases and found violations in 198 cases (91
percent)--195 cases involved violations of various aspects of the statutory
provisions pertaining to bonding. Virtually all of these cases (196) were
resolved through voluntary compliance; the other two cases led to criminal
investigations. These cases represented 214 discrete unions identified in
the OLMS database, with memberships ranging from 0 to 270,430 members and
receipt amounts ranging from $0 to $15,914,220.

OLMS investigated three cases under the provision prohibiting union members
with prior criminal convictions, such as embezzlement, from holding office
for a period beginning with conviction or the end of imprisonment, whichever
is later, and extending up to 13 years.25 In two cases OLMS found no
violations; in the other, OLMS obtained voluntary compliance.

Title VI: Miscellaneous Provisions

Title VI of the act contains miscellaneous provisions that, among other
things,

ï¿½ grant Labor the authority to investigate possible violations of any title
of LMRDA (except for part of title I) and to enter premises, examine
records, and question persons in the course of investigations;

ï¿½ prohibit a union or any of its officials from fining, suspending,
expelling, or otherwise disciplining members for exercising their rights
under LMRDA;

ï¿½ prohibit unions from threatening or using violence that interferes with a
union member in the exercise of LMRDA rights; and

ï¿½ prohibit union members from extortionate picketing--that is, picketing for
the purpose of getting the picketed employers to pay individuals to stop
picketing.

Union members may bring a civil action for an appropriate remedy if the
union has improperly disciplined them. Violations of the use of violence
provision or the extortionate picketing provision are crimes that are within
the responsibility of Justice.

We discussed title VI requirements with OLMS and Solicitor's Office
officials as well as with officials from the Department of Justice. Labor's
automated database did not include any cases specifically generated under
title VI, and Justice did not separately maintain statistical data for title
VI cases under LMRDA.

Under title VI, Labor has authority to conduct investigations on its own
initiative--that is, without receiving a complaint from a third party. Labor
is authorized to conduct investigations, as it deems necessary, to determine
whether any part of the act, other than title I, has been or is about to be
violated. However, Labor interprets the act as not authorizing it to take
enforcement action under title III or IV without a written complaint.26

Labor delegated to Justice, under a 1960 MOU, the authority to investigate
and prosecute violations under several of the provisions outlined
above--namely, those that prohibit threatening or using force against union
members who exercise LMRDA rights and picketing with the goal of extorting
money from employers. Justice officials confirmed that Justice and,
occasionally, Labor's Inspector General investigate these provisions of the
act.

Labor officials told us that they do not generate separate workload
statistics under title VI for any of its provisions. Justice officials told
us that it is difficult to prosecute certain violations, such as picketing
to extort money from employers, under LMRDA, so they prosecute violations
found in these cases under other statutes.

International Compliance Audit Program

OLMS completed its first compliance audit of an international union in 1982.
Previously, OLMS had established its Compliance Audit Program in 1979 under
its discretionary authority to ensure that unions at intermediate and local
levels comply with LMRDA's provisions.27 Audits of union operations at union
headquarters (which can be at the international or national level) are
referred to as International Compliance Audit Program (I-CAP) audits. Under
this program, OLMS staff use specially designed techniques and procedures to

ï¿½ determine compliance by international unions with the criminal and civil
provisions of LMRDA and CSRA;

ï¿½ to the extent possible, review compliance by affiliated unions with these
acts;

ï¿½ provide assistance to international unions and their affiliates to help
them comply with the acts; and

ï¿½ increase communication and cooperation between OLMS and international
unions.

We examined case files for the I-CAP audits OLMS conducted in fiscal years
1995 through 1999. We used this 5-year period because the automated database
did not include any cases processed during fiscal years 1998 and 1999. We
identified nine I-CAP cases for this 5-year period. OLMS had three other
I-CAP cases under way and had begun preparatory work on another at the time
of our review. Table 19 shows the distribution of I-CAP cases reviewed.

 Fiscal year Number of cases
 1995        4
 1996        1
 1997        4
 1998        0
 1999        0
 Total       9

The nine unions that received an I-CAP audit varied in membership from 7,500
to 800,000, with annual receipts ranging from $2,110,675 to $307,261,268.

As part of OLMS' annual planning process, it selects international unions to
audit primarily on the basis of geographic location and amount of receipts.
OLMS' policy is to audit all international unions at least once before any
union is revisited. Between February 1982 and September 1999, OLMS completed
I-CAP audits at 152 international unions.28 At the time of our review, OLMS
had identified about 150 national or international unions, and although the
number of these unions had declined from past years, OLMS had not completed
its goal of at least one I-CAP audit per union.29

Before OLMS begins the audit work for I-CAPs, its Division of Enforcement
sends standard letters to the Department of Justice, the Federal Bureau of
Investigation, Labor's Office of Inspector General, and Labor's Pension and
Welfare Benefits Administration notifying them of OLMS plans to conduct the
audit and requesting any information in their files pertinent to the
scheduled audit. These letters not only gather valuable information for the
I-CAP but also provide these agencies an opportunity to raise any potential
conflicts with their own investigations or enforcement activities. OLMS
requires that the audit team contact the pertinent U.S. Attorney in the
locations where international unions are headquartered. The Division of
Enforcement also sends standard memorandums to OLMS field offices and
headquarters components to obtain information about the international union
being audited.

The OLMS headquarters office oversees the I-CAPs, which are carried out by a
team led by OLMS field office staff located where the international union is
headquartered and, as necessary, OLMS staff from locations where the
international union has affiliates. The team reviews a standardized briefing
book that includes items such as a list of current affiliated unions, a list
of any reports the union is delinquent in filing, and information concerning
embezzlement cases involving the international union and its affiliates. The
team completes a case-planning checklist designed to help it prepare for the
on-site audit and sends a standard notification letter to the international
union. The team then schedules and conducts an opening interview with
international union officials.

OLMS has designed an audit/investigative plan that consists of 25 mandatory
investigative steps: 15 designed to detect and correct civil and criminal
violations and 10 designed to examine the international union's financial
records. The team can select from an additional 35 optional audit steps
those that are most likely to uncover embezzlement violations. At the
conclusion of on-site activities, the team holds an exit meeting to discuss
results and to try to obtain voluntary compliance. Within 15 days after the
exit interview, the team prepares a Report of Investigation and closing
letter for review by the district director and submission to the chief of
the Division of Enforcement, except in cases involving criminal violations
requiring further enforcement action. Any investigative leads or case
referrals that have been accumulated are forwarded to the appropriate OLMS
district offices. Approximately 6 months after an I-CAP is completed, the
OLMS district director contacts the international union president by mail
and conducts a follow-up site visit to promote cooperation and determine
whether promises of future compliance made during the audit have been kept
and whether violations have been remedied.

The nine I-CAP cases that OLMS processed in fiscal years 1995 through 1999
identified violations ranging from delinquent and deficient reporting to
inadequate bonding (see table 20).

                      Number of cases with particular violation
 Type of violation
                      International unions   Affiliates   Total
 Delinquent reports   1                      6            7
 Deficient reports    7                      0            7
 Inadequate records   5                      1            6
 Bonding deficiencies 3                      1            4
 Other                2                      1            3

OLMS resolved most of these violations using voluntary compliance. However,
the disposition of violations in three cases required follow-up
investigations, which led to four criminal investigations: three addressed
potential embezzlement violations, and the fourth concerned the use of union
funds to pay for the defense of an officer convicted of crimes.

Compliance Audit Program

OLMS' Compliance Audit Program (CAP) is an investigative program established
in 1979 under OLMS' discretionary authority to detect criminal and civil
violations of LMRDA and provisions of related legislation. CAP audits are
conducted at the intermediate and local levels of unions. Over 31,000 of
these unions are subject to compliance audits. The compliance audits'
principal objectives are to

ï¿½ uncover embezzlement and other criminal and civil violations,

ï¿½ create a visible enforcement presence in the labor community, and

ï¿½ provide effective grass-roots compliance assistance directly to union
officials.

We obtained and analyzed automated data from the OLMS Case Data System for
591 CAP cases processed in fiscal years 1998 and 1999. OLMS maintains case
files in the field; therefore, our work on CAP cases was limited to data
obtained from the automated database and to discussions with OLMS officials
about the compliance audit process.

Each OLMS district office sets an annual goal for the number of CAP cases it
will conduct after considering its workload in other areas. Because CAPs are
discretionary activities, OLMS may temporarily suspend CAPs to allow staff
to conduct other higher priority investigations, such as those responding to
an election complaint. In its fiscal year 1999 planning guidelines, OLMS
directed that field offices give higher priority to eliminating criminal
case backlogs than to compliance audit work. According to OLMS officials,
OLMS has been forced to do a declining number of compliance audits as staff
resources have diminished. The officials noted that OLMS did 1,074
compliance audits in fiscal year 1990 but only 289 in fiscal year 1999.
Also, when selecting unions to audit, field offices were instructed to
strongly consider unions that are chronically delinquent report filers and
in particular those with receipts of more than $200,000 that were delinquent
in the prior year.

The district office sends a notification letter to every union selected for
a compliance audit that provides an overview of the program and enables the
union to gather the required information. OLMS uses a streamlined audit
approach that employs a checklist addressing the union's administrative and
financial operations and allows OLMS to complete its work in a minimum
amount of time. When OLMS completes a compliance audit, the district office
sends a closing letter to the union (unless the compliance audit results in
a follow-up criminal investigation case) that identifies all violations
found and those that have been remedied. The letter confirms actions unions
have agreed to take in the future to comply with requirements. Each closing
letter must indicate that the audit was limited in scope and that all
records and documents the union provided will be handled in a confidential
manner to the extent permissible by law. When OLMS initiates a follow-up
criminal investigation case, OLMS uses the same process described for title
V in appendix VI.

OLMS found violations in 469 (or 79 percent) of the 591 CAP cases processed
in fiscal years 1998 and 1999. In 84 percent of the cases with violations,
OLMS either secured voluntary compliance or it did not have to take action,
according to the database. In the remaining 16 percent of the cases, OLMS
initiated follow-up criminal investigation cases (see fig. 5).

aThese efforts resulted in 97 cases, 3 of which were referred to Justice for
prosecution.

bTwenty-five of these cases had both minor violations that were resolved by
voluntary compliance or did not require action as well as more serious
violations that led to follow-up investigations.

An analysis of the particular violations in these cases found that the most
common violations OLMS detected were failure to maintain records, deficient
reporting, failure to file, and inadequate bonding for union officials.
These also were violations that OLMS was most likely to resolve by securing
voluntary compliance from the union. Conversely, for embezzlement
violations, OLMS was most likely to open a follow-up criminal case. Some
cases involved technical violations, minor reporting deficiencies, or
nonactionable violations that, according to OLMS, did not need to be
resolved or corrected. Table 21 shows a summary of the violations detected
in the 469 compliance audit cases and the resolution of particular
violations.

                                         Resolution of particular violation
                     Number of cases     Voluntary              Follow-up
 Violation           with each                       No action
                     violation           compliance  taken      case opened
 Failure to maintain
 recordsa            272                 218         18         35
 Deficient
 reportinga          261                 225         17         18
 Failure to file     130                 109         8          13
 Inadequate bonding  109                 92          3          14
 Embezzlement        71                  0           1          70
 Destroying or
 concealing recordsa 29                  18          1          9
 False records       21                  3           1          17
 False report        11                  1           0          10
 Improper loans      7                   4           2          1
 Improper election
 procedure           3                   1           2          0
 Failure to adopt a
 constitution        2                   2           0          0
 Other criminal
 violations          1                   0           0          1
 Other civil
 violations          1                   0           0          1

aThe three cases that were referred to Justice involved these violations.

CAP cases involved 590 discrete unions with memberships ranging from 0 to
30,564 and total receipts ranging from $0 to $36,288,658.

Justice's Role in Enforcement

Section 607 of LMRDA authorizes the Secretary of Labor to make agreements
with any agency for cooperation or mutual assistance in performing functions
under the act. In 1960, the Departments of Labor and Justice signed an MOU
that outlined their respective responsibilities under LMRDA--that is,
investigating and litigating potential criminal and civil violations of the
act.

Under the terms of the MOU, Labor delegated to Justice the responsibility
for investigating certain criminal violations under the act, such as those
involving embezzlement, cases in which employers paid fines for union
officials or employees, and the prohibition against certain persons holding
offices or positions related to unions under title V as well as deprivation
of union members' rights, use or the threat of use of violence, and
picketing to extort money from employers under title VI. Labor is
responsible for investigating other criminal violations involving reporting;
trusteeships; and certain safeguards under title V, including bonding, loans
to union officers, and fines paid by unions on behalf of a union official or
employee. Also, Labor may request from Justice a "redelegation" of
investigative authority for particular criminal cases, such as embezzlement
cases, on a case-by-case basis. According to OLMS officials, the
redelegation of investigative authority is a formality, since Justice
generally grants Labor's request.

Once Labor has obtained investigative authority from Justice, Labor confers
with Justice during the investigation before any decision is made to close
or refer a case for prosecution. Once Labor has completed a criminal
investigation, it decides whether to refer the case to Justice for
prosecution, since Justice is responsible for litigating all criminal
violations of the act. Justice determines whether it will accept cases that
Labor refers for criminal prosecution on a case-by-case basis. If Justice
declines to prosecute a case, Labor decides whether it will close the case
or pursue litigation through other means, such as using local prosecutors.
Both Labor and Justice officials said that criminal cases involving
reporting violations or inadequate bonding are not treated with the same
priority as embezzlements. Although the act provides penalties for reporting
violations, such as delinquent reporting that is intentional, Justice
officials do not consider these violations serious enough to warrant a
court's time. Consequently, Labor is less likely to refer such cases to
Justice unless they also involve violations such as embezzlement.

Under the MOU, Labor is responsible for investigating potential civil
violations of the act relating to union elections, trusteeships, or
reporting. If Labor concludes that litigation is warranted, it will refer
the case to Justice with a request that a civil suit be instituted on behalf
of the Secretary of Labor. In turn, Justice will, for example, file suit in
federal court to require unions to rerun an election or to terminate an
unlawful trusteeship. Unlike criminal enforcement, Justice will not
institute civil enforcement action except at Labor's request, nor will
Justice voluntarily dismiss any action under way except with Labor's
concurrence. In civil enforcement, Justice and Labor attorneys collaborate
to prepare and present the case. According to Labor officials, in some
instances when Justice's resources are limited, Justice will delegate
prosecution authority to Labor--such as for elections--which requires
Labor's Solicitor to be the attorney of record.

Justice officials told us that when the MOU was signed in 1960, Labor did
not have experience investigating criminal acts such as embezzlement;
therefore, the Federal Bureau of Investigation conducted these
investigations. However, over the years, as Labor gained experience, Labor
began to conduct more of the embezzlement cases and Justice began to direct
its investigative resources to other priorities. According to statistics
that Justice provided, work on Labor cases accounted for less than 1 percent
of Justice's work in fiscal years 1998 and 1999. Labor officials described a
good working relationship with Justice on the basis of a customer
satisfaction survey OLMS conducted of U.S. Attorneys. Justice officials
confirmed that a positive working relationship exists between the two
Departments.

Compliance Assistance

OLMS' compliance assistance program is designed to

ï¿½ promote voluntary compliance with LMRDA by informing union officers and
others affected by the act of their responsibilities and

ï¿½ encourage union members to exercise their rights under the act.

OLMS' compliance assistance efforts also extend to the education and law
enforcement communities to foster a better understanding of the act and of
OLMS' responsibilities to achieve greater cooperation among agencies, and to
improve enforcement efforts.

We discussed OLMS' compliance assistance efforts with OLMS officials and
obtained documents describing these efforts for fiscal years 1998 and 1999.

OLMS headquarters and field offices conduct compliance assistance. The
headquarters office monitors and evaluates field office compliance
assistance activities and recommends successful programs to other OLMS field
offices for potential use. OLMS headquarters also identifies and develops
new and revised compliance assistance materials and conducts liaison
activities with union headquarters at the national and international levels
as well as with federal agencies. District directors determine what
compliance assistance activities the field offices will conduct on the basis
of perceived need. For example, unions identified as enforcement problems,
such as chronically delinquent report filers, are targeted for compliance
assistance.

OLMS district offices carried out 614 compliance assistance activities and
liaison contacts reaching 4,395 union officers and members in fiscal year
1998. In particular, OLMS made 481 liaison contacts with U.S. Attorneys and
Assistant U.S. Attorneys, law enforcement and other agencies, union
representatives, and educational institutions. In April 1998, OLMS initiated
its member outreach program, which was designed to target union members and
inform them about their rights under the act. In April 1999, OLMS drafted a
new proposal for a "Labor Organization Orientation Program," which was
designed to educate officers of newly formed labor organizations and new
officers in existing unions about their duties and responsibilities under
LMRDA. In fiscal year 1999, OLMS continued several previously implemented
initiatives and developed new ones that focused on reducing the number of
unions delinquent in filing the reports required under LMRDA (see app. III).
OLMS officials told us they are working on a major multiyear compliance
assistance initiative designed to help trustees in small unions conduct more
effective audits of their organizations' financial books and records.
Officials expect to publish a detailed guide for union officials in July
2000 and to conduct nationwide workshops on using the guide in fiscal year
2001.

Comments From the Department of Labor

Comments From the Department of Justice

GAO Contacts and Staff Acknowledgments

Lori Rectanus, (202) 512-9847
Jacqueline Harpp, (202) 512-8380

In addition to those named above, Robert Crystal, Lepora Flournory, Dennis
Gehley, Larry Horinko, Grant Mallie, Robert Sampson, John Smale, Joan Vogel,
and James Wright made key contributions to this report.

(205395)

Table 1: LMRDA Provisions 6

Table 2: OLMS Staffing, Fiscal Year 1999 18

Table 3: OLMS Field Investigators' Workload and Use of Time by Title, Fiscal
Year 1999 20

Table 4: Resolution of Collective Bargaining Agreement Cases,
Fiscal Years 1998 and 1999 24

Table 5: Reports Required From Unions 26

Table 6: Reports Required for Unions Under Trusteeship 27

Table 7: Reports Required From Other Entities 27

Table 8: Number of Unions and Type of Report Filed 31

Table 9: Trusteeships Imposed and Ended, Fiscal Years 1995-99 36

Table 10: Results in Trusteeship Complaint Cases, Fiscal
Years 1995-99 37

Table 11: Field Recommendations and Headquarters Decisions in Trusteeship
Cases, Fiscal Years 1995-99 38

Table 12: Unions Represented in Election Cases Investigated,
Fiscal Years 1998-99 45

Table 13: Resolution of Election Cases, Fiscal Years
1998-99 45

Table 14: Waivers in Election Cases, Fiscal Years 1998-99 46

Table 15: Election Rerun Cases and Corresponding Union
Characteristics, Fiscal Years 1998-99 49

Table 16: Reasons Cases Were Not Delegated, Fiscal Years 1998-99 56

Table 17: Prosecution Results of Embezzlement Cases, Fiscal
Years 1998-99 57

Table 18: Bases for Indictments, Convictions, and Monetary
Restitution for Embezzlement Cases, Fiscal Years 1998-99 57

Table 19: I-CAP Cases Processed, Fiscal Years 1995-99 61

Table 20: Types of Violations Found in I-CAP Cases, Fiscal Years
1995-99 63

Table 21: Resolution of Particular Violations Found in CAP Cases,
Fiscal Years 1998-99 67

Figure 1: OLMS Organization Chart 15

Figure 2: OLMS Budget Expenditures, Fiscal Year 1999 17

Figure 3: Field Recommendations and Headquarters Decisions in
162 Cases, Fiscal Years 1998-99 47

Figure 4: Embezzlement Cases, Fiscal Years 1998-99 55

Figure 5: Resolution of 591 Compliance Audit Cases, Fiscal Years
1998-99 66
  

1. Initially, LMRDA covered private sector employees only, but coverage
under the act was extended to Postal Service employees under the Postal
Reorganization Act of 1970. Subsequent legislation--the Civil Service Reform
Act of 1978, the Foreign Service Act of 1980, and the Congressional
Accountability Act of 1995--provided similar coverage to federal employees.
However, neither LMRDA nor this related legislation covers employees of
state, county, or municipal governments.

2. The MOU describes the types of cases that Justice is to pursue and those
that Labor is to pursue. Union members may enforce certain provisions of the
act through private suits in federal district court. This report does not
address the seventh title of the act, which amended the National Labor
Relations Act and is the responsibility of the National Labor Relations
Board.

3. The 31,000 unions include national and international unions; intermediate
bodies, which are various councils, conferences, or certain types of boards;
and local unions. Receipts include dues, fees, investments, or any
special-purpose funds that a labor organization receives, regardless of
source.

4. When a labor organization takes control of a subordinate body by
suspending the autonomy granted to that body under its constitution and
bylaws, the subordinate body is said to be in trusteeship.

5. See app. II (title I, collective bargaining), app. III (title II, the
determination of labor organizations subject to LMRDA), and app. VI (title
V, prohibition against certain persons holding office) for more information.

6. Labor's Office of Inspector General investigates racketeering in labor
unions, which may include LMRDA-related violations. The Inspector General's
focus is organized crime, which is outside the scope of our review.

7. Generally, the union headquarters is at the international level when the
union has intermediate or local bodies in more than one country.

8. An additional 62 cases involved violations, but the violations either did
not affect the outcome of the election or unions resolved the violations,
which eliminated the need for OLMS action.

9. According to OLMS officials, the redelegation of investigative authority
from Justice is a formality as Justice generally grants Labor's request for
this authority.

10. When such violations are alleged in conjunction with violations such as
embezzlement, however, Justice is more likely to litigate.

11. When federal funds are used to acquire, improve, or operate a transit
system, federal law requires arrangements to protect the rights of affected
mass transit employees. Arrangements must include such activities as
preserving rights and benefits under collective bargaining agreements and
ensuring reemployment priority in the event of a layoff. The Department of
Labor must approve these arrangements.

12. Labor recently implemented a new Division of Reports, Disclosure and
Audits, which replaces the subordinate unit of the Division of Enforcement,
formerly the Section of Reports and Disclosure. The new division will
administer all reporting and public disclosure responsibilities and will
oversee all compliance audit responsibilities formerly assigned to the
Division of Enforcement.

13. The statute uses the terms "willfully" and "knowingly."

14. See Labor-Management Reporting and Disclosure: Status of Labor's Efforts
to Develop Electronic Reporting and a Publicly Accessible Database
(GAO/HEHS-99-63R , Mar. 16, 1999).

15. Labor's system for capturing statistical data, such as the number of
labor organizations or unions, their membership, and their total receipts,
is dynamic, which means the data vary depending on when information is
requested. For example, as of May 11, 1999, the system reported 32,065
unions compared with 31,411 as of February 25, 2000. According to OLMS
officials, OLMS does not immediately open a delinquent report case on every
union that is late in filing the required reports. As a result, OLMS
reported that the actual delinquency rate for all unions is approximately 25
percent.

16. Membership in labor unions can be zero if the union's members are not
dues-paying members, or if the union is an intermediate body established for
specific reasons under a national or international union's constitution or
bylaws. Receipts in labor unions can be zero if dues, fees, and other
disbursements are made on a per capita basis through a national or
international union. Labor defines an intermediate body as a type of labor
organization that is subordinate to a national or international union but is
not a local union. Examples include district councils, joint councils,
conferences, and certain types of boards.

17. According to OLMS officials, some unions may have corrected deficient
reports and mailed them in after OLMS opened a case, which is why not all
cases identified as deficient resulted in a violation.

18. Congressional hearings in the 1950s that led up to the passage of LMRDA
disclosed that national or international unions or intermediate bodies
sometimes established trusteeships to drain local union treasuries or
perpetuate power by undemocratically controlling a local union's votes.

19. An investigation may be deemed criminal if it involves improper voting
or transferring funds while the union or subordinate body is under
trusteeship. Criminal trusteeship investigations may be opened on the basis
of a complaint, information from a compliance audit, or other information.

20. An intermediate body is a type of labor organization that is subordinate
to a national or international union but is not a local union. Examples
include district councils, joint councils, conferences, and certain types of
boards.

21. Hodgson v. Local Union 6799, United Steelworkers of America, 403 U.S.
333 (1971).

22. This case involved a federal union covered by CSRA.

23. OLMS' database does not identify the initial union election case that
generated the supervised election case, and we could not reasonably
determine whether any of the rerun cases resulted from the 162 election
cases with violations.

24. OLMS policy requires that particular care be given to the way in which
delinquent or deficient union reporting and other LMRDA civil violations are
addressed while a criminal investigation is in progress. Generally,
investigation and resolution of civil violations are to be deferred until
all criminal matters are resolved. In cases involving grand juries,
investigators must take certain steps to safeguard the information obtained.

25. In March 1999, Labor's Inspector General found 1.4 percent of indicted
union officers, employees, and agents that OLMS investigated had prior
criminal histories and should have been barred under title V provisions. The
Inspector General suggested that OLMS consider a more proactive approach to
detecting such violations and ensuring compliance.

26. Labor's interpretation is based on Supreme Court decisions indicating
that the Secretary of Labor may not bring an enforcement action without a
written complaint. See Hodgson v. Local 6799, United Steelworkers of
America, 403 U.S. 333 (1971) and Wirtz v. Local 125, Laborers, 389 U.S. 477,
483n.5 (1968).

27. See app. IX for a discussion of the audit program for unions at the
intermediate and local levels.

28. Fourteen international unions underwent second I-CAP audits between 1991
and 1994.

29. The number of national or international unions subject to OLMS
compliance audits varies over the years because of mergers and other changes
that affect the total number of unions.
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