Political Money Monitor #15: May 8, 1998

Contents* Government Official Uses Federal Funds to Oppose California “Paycheck Protection” Initiative
* United Way’s Misplaced Concern for Paycheck Protection
* Recent Departures Hurt Justice Department’s Campaign Finance Probe
* Court Refuses Member Intervention In Union Settlement 

Government Official Uses Federal Funds to Oppose California “Paycheck Protection” Initiative; Congressmen from Both Parties Criticize Misuse of Taxpayer MoneyRepublican and Democratic congressmen sharply criticized National Labor Relations Board (NLRB) Chairman William B. Gould IV for using taxpayer money to urge California voters to oppose Proposition 226, the paycheck protection ballot initiative appearing on the state’s June primary ballot. Saying he did not know it was against the law to use federal funds to lobby voters, Gould responded by having his previous statements against the initiative removed from the NLRB’s Internet web site.

Gould submitted written testimony to the California State Legislature on April 24 where he called Proposition 226, which would require employers and labor unions to get employee approval before using payroll deductions for state and local political activity, “bad policy” that would “cripple a major source of funding for the Democratic Party.” He added, “I plan to vote ‘no’ by mail absentee ballot, and I would urge all voters in California to do the same.” The NLRB sent out a press release over the PRNewswire service highlighting Gould’s remarks, and posted his testimony on the agency’s web site.

Members and staff of the House of Representatives’ Subcommittee on Labor Health and Human Services and Education pointed out Gould’s comments violated laws, including the Labor Appropriations Act, barring federal agencies from using federal funds for lobbying activity. Subcommittee spokeswoman Elizabeth Morra told The Washington Times, “This is a very political statement. He’s saying the [Clinton] administration’s against this because it hurts Democrats and helps Republicans.”

Gould has been criticized before for his partisanship. A Wall Street Journal editorial last October noted, “Of late, the NLRB has practiced an arrogance so blatant that judges who review its cases in the federal appeals courts have come forward with loud chastisement.” Criticism from judges on the U.S. Court of Appeals for the 2nd Circuit said the NLRB has “a decidedly pro-union bent.”

United Way’s Misplaced Concern for Paycheck Protection; Charities Are Not Affected By California InitiativeA “legislative alert” by the United Way of America warning that California’s paycheck protection ballot initiative could adversely affect the collection of charitable donations misinterprets the scope of the initiative’s protections and implies that charities are illegally spending money on politics.

“To comply with the new law,” the United Way report states, “employers may need to obtain information from charities about their past (up to five years) and planned efforts to engage in ‘political’ activity.” The California Attorney General’s summary of Proposition 226, however, states the initiative simply “[r]equires public and private employers and labor organizations to obtain permission from employees and members before withholding pay or using union dues or fees for political contributions.” Employees can authorize such deductions by signing a form on an annual basis. The language of the initiative also makes no reference to employers recording the political activity of any group.

Furthermore, charities are prohibited by law from engaging in political activity at the risk of losing their non-profit tax status. Violators are subject to fines and a revocation of this status by the Internal Revenue Service.

It should be noted that four members of the United Way’s national Board of Governors are labor union officials, three of them with the AFL-CIO. The AFL-CIO alone has pledged to spend at least $10 million to defeat Proposition 226.

Campaign Finance Factoids

Recent Departures Hurt Justice Department’s Campaign Finance ProbeTo counter congressional criticism that the Justice Department’s probe of campaign finance abuses – particularly those involving the President, Vice President and top Democratic fundraisers – lacked focus, Attorney General Janet Reno brought veteran prosecutor Charles Labella and FBI agent James Desarno to the investigation five months ago. Both recently announced they are leaving the investigation. Labella told Republican senators on May 6 that he recommended appointing an independent prosecutor, but Reno refused. Senator Fred Thompson (R-TN), who chaired Senate hearings on 1996 campaign finance irregularities, told The New York Times, “You have to remember why these men were brought in: to give the investigation credibility. This now runs the risk of going down as a massive cover-up.” Rich Galen, executive director of GOPAC, added, “Remember several months ago, when Louis Freeh, director of the FBI, thought an independent counsel should have been appointed, but was rebuffed by Attorney General Janet Reno? Remember how Freeh got shut down? This could be the sequel: Freeh Louie II.” Freeh has also renewed his call for an independent prosecutor.

Court Refuses Member Intervention In Union SettlementIn Washington State, the Thurston County Superior Court refused to allow a group of teachers to intervene in the settlement between the state attorney general and the Washington Education Association. The teachers contended a one-time, $5 reduction in dues does not address the extent the union used member dues for political activity in violation of a paycheck protection initiative passed in 1992. The court is still deciding on a case to determine if the protections of the initiative apply to union dues. Evergreen Freedom Foundation attorneys argue the union’s effort to circumvent the law proves its relevance.


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