Michigan’s public sector unions collect tens of millions of dollars from government and school employees, but if members want to learn how their dues money is being spent, all they'll find is a one-page report disclosing just three aggregated spending figures.

Unlike private sector unions, which are subject to federal labor law and financial disclosure requirements, state and local unions are subject to oversight by individual states. (This is related to the fact that states can also choose not to recognize or bargain with public sector unions.)

Michigan's financial reporting requirements for public sector unions are "ineffective in providing important information for union members,” according to Nathan Paul Mehrens, author of “Bringing Financial Transparency to Michigan’s Public Sector Unions,” a new study published by the Mackinac Center for Public Policy. Mehrens is a labor expert who helped draft a reform of transparency requirements at the U.S. Department of Labor during the early 2000s, and now leads the Americans for Limited Government Foundation.

He makes the case that Michigan should require large public sector unions to provide the same detailed disclosures mandated by federal regulations for large private sector unions (ones with annual receipts above $250,000). Smaller unions would be allowed to file simplified forms.

The study chronicles the history of union financial transparency, starting in 1959. That was when Congress enacted a federal Labor-Management Reporting and Disclosure Act following a series of historic hearings on union corruption. Among other things, those hearings revealed the shortcomings of existing disclosure requirements. For example, reports lacked itemization of large expenses, making it difficult to determine if union dues were misappropriated.

In the decades that followed, enforcement of this law was spotty, however. That changed in 2006, when the U.S. Department of Labor under Secretary Elaine Chao revised and updated the regulations. Chao wrote the foreword to the new study.

In Michigan, public sector unions are subject to far less disclosure than private sector unions, which must comply with federal regulations. Current state law only requires a one-page form with just three numbers: the aggregate totals of collective bargaining expenses, administrative expenses and grievance-adjustment expenses. None of the union spending lumped together in these numbers is itemized, nor are there any details of union income, assets, loans, investments, gifts or grants.

In the study, Mehrens shows an actual union filing that appears to have been written in haste, complete with handwritten numbers, one of which is crossed out.

While these amounts must be verified by an independent examiner and so are probably correct, "The information disclosed certainly does not provide a 'full accounting of all transactions involving their property,'" Mehrens said in his report.

None of this surprises Angela Steffke, a teacher. When she started looking into the finances of her union, the Taylor Federation of Teachers, which is an affiliate of the American Federation of Teachers, she was able to get information for just one year, 2012.

“I really had trouble finding out what AFT Michigan does with over half of my dues money,” said Steffke.

Steffke is trying to determine, for example, how much financial support her union gives to other unions that may have interests that may compete with those of teachers. She also wanted to learn how much of her local dues go to the AFT and its state affiliate, which support political causes that may not align with those of individual members.

The study makes specific reference to extensive political spending disclosures contained in "Schedule 16" of the federal LM-2 reports. The parent union of Steffke’s local, the AFT, is one of the top 10 labor organizations in political spending nationally, with a tally of $21,457,153 in 2012. (The SEIU tops the list, spending nearly $113,820,009 that year on political activity and lobbying.)

Steffke would also like to know how much local member dues payments are redistributed to other unions and locals.

“How much gets lost in the shuffle?” she asked.

The AFT does file a federal LM-2 report, as does the National Education Association, the parent of Michigan's other large school employee union, the MEA. Both national unions also represent some private sector employees, which triggers the federal disclosure requirements.

But those requirements do not apply to state and local affiliates, even large ones. For example, there are no detailed financial disclosures for Michigan's UAW 6000, which according to its website represents 22,000 state employees. Moreover, the one-page form it is required to file with the state is not easy to find. The Michigan Employment Relations Commission is supposed to post the filings on its website, but locating them there involves a good deal of searching.

In his study, Mehrens says that detailed, consistent disclosure is the best way the public and union members can be assured that dues payments are being spent appropriately.

“The amount of information required of Michigan’s public sector unions is minuscule. The state has the ability to change this by enacting enhanced disclosure requirements,” he writes.

The study includes model legislation showing what this might look like.

When teachers, other government employees or citizens want to learn how Michigan’s public sector unions spend dues money, details can be hard to come by.

“Our group tried to get officials to give us a breakdown of things like the amount spent on the liability insurance, legal services, Uniserv directors and support,” said Jim Perialas, a Roscommon teacher. He and his colleagues were once represented by a unit of the Michigan Education Association, which calls its contract negotiating arm "Uniserv."

“Basically we wanted to get it all. The organization was so bureaucratic, that we kept getting shuffled from person to person, and no one could give us an answer. It is very frustrating. When you get a lack of transparency, you can only assume that someone is hiding something,” he said.

The level of transparency varies by state because public sector unions are not covered by federal labor law, and need not engage in collective bargaining unless a state chooses to. Therefore, the amount of financial disclosure — or its lack — is determined by laws and regulations promulgated by individual states.

In Michigan this means government and school unions are allowed to operate without filing detailed financial disclosures like those mandated by the federal government for private sector unions.

Two of this state's larger public unions, the MEA and the American Federation of Teachers, do file federal “LM-2” disclosure reports because they also represent some private sector workers. But these filings do not detail how the unions' local branches spend money — even very large locals. For example, UAW 6000 represents about 22,000 state workers, according to its website. But under current Michigan law, it is only required to file a one-page disclosure report that carries three numbers.

Angela Steffke was prompted to look into her union’s finances when her dues jumped from $666.95 to $868.58. Her union, the Taylor Federation of Teachers, did explain how it spent some of its dues money but not all of it. TFT is affiliated with the nationwide American Federation of Teachers, which itself is part of the AFL-CIO.

“My local accounted for how it spent 52 percent of our dues. Why were we raising dues when we appeared to have so much saved? Where 48 percent of our dues went was a mystery,” said Steffke.

When she probed further, the union told her the remainder went to state and national organizations. So Steffke looked up an LM-2 for the national AFT, and learned that 98 percent of the political candidates who received union campaign donations were Democrats. She thought that was odd because most of the teachers she knew in her local group of 250 had no party affiliation and called themselves independent.

Steffke could also not understand why her local union was giving money to the AFL-CIO.

“I have no idea how this expense helps me in the classroom,” she said.

In 2012, Roscommon teachers voted to decertify the MEA — essentially to fire it — in part because of the lack of financial transparency. They formed an independent union, which Perialas says addresses this issue.

“Our financial records are totally open to our members. We send everyone updates. There is no hiding anything, because nearly everyone is involved in the decision-making process, regarding our revenue (dues) and expenditures,” he said.

Perialas and Steffke believe public sector unions in Michigan would be more accountable to their members if the state required detailed financial reports. Perialas said his independent union would welcome this reform.

“We’re not hiding anything. As a matter of fact, I’d like others to see how Roscommon is doing it. Our organization is quite simple, really,” he said.

Vickie Ackerman, a food service worker in the Plymouth-Canton Community Schools, has exercised her right to no longer pays union dues under Michigan's new right-to-work law. But she nevertheless wants more financial transparency because the union still has final say on her pay, benefits and working conditions.

“I never know how those dues are being spent and (the information) is not readily available to members. They have said at meetings all the benefits we have gotten for our money but [to] have a public filing would make them more accountable for their spending and there would be transparency,” she said.