Most of what members and the general public know about how unions spend dues money comes courtesy of the Labor Management Reporting and Disclosure Act (LMRDA) of 1959. Unions subject to the law are required to itemize virtually every financial transaction they make and file an annual report, known as an LM-2. Because of the LM-2, members and the public know how much unions have spent on ballot initiatives, contributions to advocacy groups, and compensation to each officer and employee.
The law was interpreted from the beginning to apply only to unions operating in the private sector. That may be about to change, however, and it will have dramatic consequences for affiliates of many public employee unions — particularly teacher unions — that have been operating out of the public eye.
Before I can explain how or why, we’ll need a short history lesson. I’ll try to make it as painless as possible.