Labor Union Caught in Dues Skim Fails to File Annual Report with Federal Government

Last year when SEIU Healthcare Michigan reported losing more than 80 percent of its members, the story garnered headlines nationally. This year, the union known principally for Michigan’s health care “dues skim,” has failed to file the annual financial disclosure report required by the federal government.

“All labor organizations are required to file an LM report, if their receipts are $250,000 or more, within 90 days of the end of their fiscal year,” said Matthew Perry, an investigator with the regional field office of the Office of Labor-Management Standards, a part of the U.S. Department of Labor. “For SEIU Healthcare Michigan, their fiscal year ended on Dec. 31, 2014. That means they should have filed by March 31. It looks like they haven’t filed yet and if they are late they are in violation.”

SEIU Healthcare Michigan’s reported receipts were more than $12 million at the end of 2013, so it is not plausible that its receipts have fallen below the $250,000 threshold.

The dues skim was created in 2005 when Jennifer Granholm was governor. It used the device of a dummy employer and a mail-in stealth election to bring about the forced unionization of home-based caregivers serving patients collecting Medicaid benefits. It lasted from 2006 to early 2013.

Under the forced unionization, money was deducted from the Medicaid checks of home care patients as union dues and fees for the caregivers, many of which were friends and relatives. This scheme brought more than $34 million to the SEIU.

In 2014 the union waited until two weeks after the deadline to file the required disclosures. That report covered the 2013 calendar year, during which the dues skim ended. It showed that 44,347 home-based caregivers had opted to stay out of the union after the forced unionization was no longer in effect. The loss of those members dropped the union’s official membership from the 55,265 it reported at the end of 2012 to the 10,918 it reported at the end of 2013.

However, it is unclear whether the 10,918 figure reported last year was the actual membership count at the end of 2013. Because the dues skim didn’t end until March 1 of 2013 it might have been necessary for the union to add a formulated number to its actual membership total to represent the fact that home-based caregivers had been dues-paying members in January and February of that year.

The report for 2014, which the union has so far failed to file, would be the first to cover a full year in which the union operated entirely without the dues skim. SEIU Healthcare Michigan now apparently only represents employees in private sector medical facilities and, according to sources within the union, some restaurant employees.

“Last year, SEIU’s financial report showed more than an 80 percent drop in members when people taking care of sick relatives and friends were no longer forced to be a part of its scheme,” said Vincent Vernuccio, director of labor policy with Mackinac Center. “This year the union is late on its financial filings and the question is whether there is a good reason. Are they trying to hide something, or are they simply just embarrassed to show another massive loss?”

Michigan Capitol Confidential called attention to the union’s failure to file the required report by making inquiries. After Perry checked and found that no report from the union had been received, he was asked what action is taken when a union is in violation.

“We can’t comment on that, but we do have our process for assuring that a report gets filed,” he said. “Most people don’t understand that these reports are sent in electronically and go directly to the [federal office's] website.”

Henry Kalinowski of the Office of Labor-Management Standard's Washington, D.C. office also verified that SEIU Healthcare Michigan has not as yet filed its 2014 report.

“I can see that they haven’t filed yet,” Kalinowski said. “The office here deals strictly with disclosures. Pursuing the matter is the responsibility of the regional field office.”

In recent years SEIU Healthcare Michigan has experienced internal turmoil, including lawsuits and disputed union elections and lawsuits. Sources within the union who oppose union president Marge Robinson (formerly Marge Faville) have expressed concerns that she wants to give home-based caregivers (for which she allegedly still possesses home addresses) honorary membership status and on that basis be deemed eligible to vote in future union elections.

This, according to the sources, could be a factor behind the union delaying its filing of the required report with the federal government.

SEIU Healthcare Michigan was contacted but declined to comment.