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SEIU’s Wisconsin Political Shell Game

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Daily Caller uses NILRR.org Data to Expose SEIU

In Connor Wolf’s Daily Caller article Major Union Makes $2 Million Magically Disappear, Wolf uses National Institutes for Labor Relations Research (NILRR) data below to expose SEIU’s forced-dues shell game. While “SEIU, its local committee and Wisconsin Jobs Now did not respond to a request for comment” by the Daily Caller, Wolf did note that Jennifer Epps-Addison posted a resignation from Wisconsin Jobs Now (WJN) on the WJN blog. “SEIU, its local committee and WJN did not respond to a request for comment by The Daily Caller.”

Below, you will find more details about WJN, SEIU, and SEIU’s Milwaukee Workers Organizer Committee (MWOC).  NILRR is currently working on similar research for future reports about other unions.

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SEIU’s Wisconsin Shell Game: Where Millions Disappear

SEIU’s[i] Milwaukee Workers Organizer Committee-Wisconsin Jobs Now scheme conceals union treasury funds from federal disclosure regulations, and likely violates state and federal election and tax laws.

SEIU International Headquarters (SEIUHQ) union bosses took $2,169,932 from SEIUHQ’s forced-dues-filled treasury and disbursed the money into union shells and made it disappear by ignoring federal disclosure laws.

seiu-wisconsin-shell-game_03SEIU’s Milwaukee local union re-classified over 90% of these funds as Union Administration[ii] expenses when it transferred most of it to a Wisconsin 501(c)3 tax-exempt non-profit, Wisconsin Jobs Now.  Wisconsin Jobs Now lobbies and endorses political candidates. For example,  Wisconsin Jobs Now’s Facebook page has boasted about their activities disrupting Trump for President rallies, its involvement with Black Lives Matter’s social unrest, and promoting political candidates.

The Shell Game[iii] Breakdown

seiu-wisconsin-shell-game_04The first shell in the game is SEIU International Headquarters where local labor unions across the United States deposit forced-union dues.

The second shell is an SEIU local union in Milwaukee, Wisconsin operating under the name Milwaukee Workers Organizing seiu-wisconsin-shell-game_05Committee.  Both of these shells file U.S. Department of Labor (USDOL) LM-2 Labor Organization Financial Disclosure forms (LM-2).

According to the LM-2 disclosure reports submitted by both organizations for the 2013 calendar year, $782,648 disappeared when the money changed hands from the SEIUHQ to the SEIU local MWOC.

seiu-mwoc-dol-missing-money

seiu-wisconsin-shell-game_06According to the 2013 LM-2 filed by Milwaukee Workers Organizing Committee, its officers are Michael Lauer[iv] (President), Jennifer Epps-Addison[v] (Vice President), and Jacqueline McElroy[vi] (Sec.-Treasurer).  Subsequent to receiving union funds listed above, MWOC officers transferred most of the union’s treasury to a different shell organization also controlled by Lauer and Epps-Addison.

MWOC reports transfering $1,133,407 to the third shell in the game: Wisconsin Jobs Now (WJN).  WJN does not file USDOL disclosure reports, nor does it file IRS 990[vii] substantive disclosure reports.

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WJN claims to be an independent 501(c)3[viii] tax-exempt public charity, unlike MWOC and SEIUHQ which file as Labor Organization IRC 501(c)5[ix] entities.  Because WJN provides nominal public disclosure reports, the forced-dues money trail ends here with the disappearance of the last $1,133,407 from MWOC’s 2013 and 2014 LM-2 reporting periods.  In fact, the only records that NILRR research found regarding 990 reports, WJN reported $0.00 income in 2014. [re-verify]

eiu-wisconsin-shell-game_07SEIUHQ’s 2013 & 2014 LM-2 reports disclosed that the union sent $91,823 directly to WJN for “support for organizing” in addition to the $1.1 million SEIUHQ funneled to WJN through the Milwaukee Workers Organizing Committee. The bulk of these additional SEIUHQ “organizing” payments interestingly occurred about 30 days before the 2014 Election Day.

Additionally in 2013, MWOC reported paying a fourth SEIUHQ shell, SEIU Healthcare of WI, $120,000 for “REIMBURSE FOR SERVICES” in the union’s disbursement ‘UNION ADMINISTRATION’ category

Inconsistent Vendor Relationship: Wisconsin Jobs Now

Inconsistently, MWOC union officers transferred most of its treasury to the Wisconsin Jobs Now for “Union Administration” while SEIU officials in Washington, DC transferred all the original $2 million to the “Union” MWOC as “Support for organizing.”  (SEIUHQ union officers also transferred money directly to the “Non-Profit Organization” WJN and designated the purpose as “Support for organizing” or “Support for political advocacy.”)

It is inconsistent accounting for the same money to paid for “Support for organizing” to become “Union Administration” under the same USDOL Form LM-2 reporting scheme.

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Another Oddity:  Who Was On Strike?

If these LM-2 disclosures are not weird enough, during the 2013-2014 reporting periods, the Milwaukee Workers Organizing Committee union spent $75,905 on “Strike Benefits.”

While Milwaukee Workers Organizing Committee’s website claims that “We represent workers from more than 19 employers — food and retail…” in reality the union’s LM-2 reports for 2013 & 2014 state that MWOC has “0” (zero) members.

The USDOL instructions define Strike Benefits explicitly as follows:

“STRIKE BENEFITS – Enter the total amount of all disbursements made to, or on behalf of the members (or agency fee paying nonmembers) of the labor organization, and others, associated with strikes (including recognitional strikes), work stoppages and lockouts during the reporting period.” [verify others]

If MWOC has no members, then who got the $75,905?

USDOL Union Financial Disclosure: LMRDA Historical Background

Under the LMRDA of 1959 labor union disclosure law, sponsored by Sen. John F. Kennedy and Rep. Robert Griffin among others, unions must report[x]:

“salary, allowances, and other direct or indirect disbursements (including reimbursed expenses) to each officer and also to each employee …”  Additionally, under the LMRDA labor union officers and staff have duties to disclose certain conflicts of interest “any stock, bond, security, or other interest, legal or equitable, … directly or indirectly held in, and any income or any other benefit with monetary value (including reimbursed expenses) … directly or indirectly derived from, a business any part of which consists of buying from, or selling or leasing directly or indirectly to, or otherwise dealing with such labor organization;…”

SEIU union officials have chosen to ignore the law in a shell-game-like scheme to avoid union financial disclosure and have concealed funding MWOC officer’s lobbying and labor persuader activities.

Conclusion: Likely Federal Union Disclosure Violations

The Milwaukee Workers Organizing Committee 2013-14 LM-2 reports[xi]  signed by Lauer and McElroy appear to circumvent the Labor-Management Reporting and Disclosure Act of 1959[xii] (LMRDA).  Under the LMRDA labor union disclosure law[xiii], unions must disclose details regarding how they spend forced-union dues and other receipts.

However, these SEIU union officers, who control both the Milwaukee Workers Organizing Committee and the Wisconsin Jobs Now entities, chose to conceal almost all union expenditures by outsourcing the union’s books to a non-profit which they control and then failing to report MWOC’s actual union expenditures to the USDOL.

Both state and federal enforcement agencies need to look into this shell game to determine the magnitude of SEIU’s financial shell game.

[i] Service Employees International Union

[ii] The USDOL LM-2 Form defines Union Administration as:

“the labor organization’s direct and indirect disbursements to all entities and individuals during the reporting period associated with union administration. Union Administration includes disbursements relating to the nomination and election of union officers, the union’s regular membership meetings, intermediate, national and international meetings, union disciplinary proceedings, the administration of trusteeships, and the administration of apprenticeship and member education programs (not including political education which should be reported in Schedule 16).”

The USDOL LM-2 Form does not include in Union Administration disbursements the following:

  • “Representational Activities”
  • “Political Activities and Lobbying”
  • “Contributions, Gifts, and Grants”
  • “General Overhead”
  • “Benefits”
  • “Per Capita Tax”
  • “Strike Benefits”
  • “Fees Fines Assessments etc.”
  • “Supplies for Resale”
  • “Purchase of Investments and Fixed Assets”
  • “Loans Made”
  • “Repayment of Loans Obtained”
  • “To Affiliates of Funds Collected on Their Behalf”
  • “On Behalf of Individual Members”
  • “Direct Taxes”
  • “Withholding Taxes and Payroll Deductions”

Union Administration disbursements do not include “SCHEDULE 11 – ALL OFFICERS AND DISBURSEMENTS TO OFFICERS” and “SCHEDULE 12 – DISBURSEMENTS TO EMPLOYEES.”  According to both the 2013 and 2014 LM-2 disclosures, the Milwaukee Workers Organizing Committee union’s officers received neither income nor benefits.

[iii] Shell Game, Wikipedia, The shell game (also known as Thimblerig, Three shells and a pea, the old army game) is portrayed as a gambling game, but in reality, when a wager for money is made, it is almost always a confidence trick used to perpetrate fraud.  (accessed 03/14/2016) https://en.wikipedia.org/wiki/Shell_game

[iv] Michael Lauer – State Director FFE at SEIU, Location Greater Milwaukee Area, Industry Political Organization (source: LinkedIn)

[v] Jennifer Epps-Addison – Chief Program Officer, Liberty Hill Foundation, September 2015 – Present (9 months)|Greater Los Angeles Area. Co-Owner Synergy Consultants, LLC, January 2011 – Present (5 years 5 months). Executive Director Wisconsin Jobs Now, September 2013 – January 2016 (2 years 5 months)|Greater Milwaukee Area. (source: LinkedIn)

[vi] Jacqueline McElroy – SEIU Healthcare Wisconsin VP, MWOC VP (source: USDOL)

[vii]SEE IRS records

[viii] 501c3

[ix] 501c5

[x] LMRDA purpose: “The Congress, therefore, further finds and declares that the enactment of this Act is necessary to eliminate or prevent improper practices on the part of labor organizations, employers, labor relations consultants, and their officers and representatives which distort and defeat the policies of the Labor Management Relations Act, 1947, as amended, and the Railway Labor Act, as amended, and have the tendency or necessary effect of burdening or obstructing commerce…”

[xi] First, let’s look at what was reported on Milwaukee Workers Organizing Committee’s 2013-14 LM-2 reports. MWOC’s LM-2 details provide:

  • Three union officer’s names
  • Each officer paid $0.00 per year.
  • MWOC President Lauer spent 50% of his time on Representational Activities and 50% of his time on Administration
  • In 2013, MWOC spent $24,700 on strike benefits for members.
  • In 2014, MWOC spent $51,205 on strike benefits for members.
  • In 2013, MWOC reported $514,605 paid for Union Administration.
  • In 2014, MWOC reported $738,907 paid for Union Administration.
  • In 2013, MWOC reported $544,852 in total receipts from 1/1-12/31/2013.
  • In 2014, MWOC reported $ 842,432 in total receipts from 1/1-12/31/2014.

The MWOC’s LM-2 reports include the following disbursements with $0.00 reported:

  • “Representational Activities”
  • “Political Activities and Lobbying”
  • “Contributions, Gifts, and Grants”
  • “General Overhead”
  • “Benefits”
  • “Per Capita Tax”
  • “Strike Benefits”
  • “Fees Fines Assessments etc.”
  • “Supplies for Resale”
  • “Purchase of Investments and Fixed Assets”
  • “Loans Made”
  • “Repayment of Loans Obtained”
  • “To Affiliates of Funds Collected on Their Behalf”
  • “On Behalf of Individual Members”
  • “Direct Taxes”
  • “Withholding Taxes and Payroll Deductions”

[xii] LMRDA, Labor-Management Reporting and Disclosure Act of 1959

[xiii] LMRDA purpose: “The Congress, therefore, further finds and declares that the enactment of this Act is necessary to eliminate or prevent improper practices on the part of labor organizations, employers, labor relations consultants, and their officers and representatives which distort and defeat the policies of the Labor Management Relations Act, 1947, as amended, and the Railway Labor Act, as amended, and have the tendency or necessary effect of burdening or obstructing commerce…”