THE SMITH CENTER

for Private Enterprise Studies

Lessons from the Washington Teachers Union

by

Charles W. Baird

Emeritus Professor of Economics and Former Director of the Smith Center
California State University

The Washington Teachers Union (WTU) is the exclusive bargaining agent for District of Columbia government school teachers. Teachers represented by WTU must, as a condition of continued employment, pay union dues whether they want WTU representation or not. WTU's website, www.wtulocal6.org, boldly proclaims its motto, "Building Better Schools: It's Union Work." Last December a sickening story of embezzlement, money laundering, fraud, and illegal campaign contributions over a six year period became public. The extent of the scandal is still unfolding as the FBI, the IRS, The Department of Labor and the DC inspector general carry on their investigations. The alleged perpetrators of what is now estimated to be a $5 million plundering of the WTU treasury for personal gain are former WTU president, Barbara A. Bullock, former WTU treasurer, James O. Baxter III, and Gwendolyn M. Hemphill who was Special Assistant to President Bullock.

The extraordinary details of the scandal are explained in depth by Patrick J. Reilly in the March 2003 issue of the Capital Research Center's Labor Watch (www.capitalresearch.org). In brief, it is alleged that Bullock, Baxter, and Hemphill charged personal expenditures on WTU credit cards, forged signatures on WTU checks, changed names of payees on WTU checks, and with the help of Bullock's chauffeur, Leroy Holmes, laundered WTU money through to their own personal accounts. At this writing only Holmes has been charged with a crime, and he pleaded guilty to at least one count of money laundering. Additional criminal charges are expected. The FBI confiscated much of the loot -- including furs, ball gowns, art, furniture, china, crystal, silver, jewelry and electronic equipment -- from the homes of the alleged perpetrators and some of their relatives.

Hemphill had been well connected in DC politics and with DC politicians such as former Mayor Marion Barry for many years. She was co-chairman of Mayor Anthony Williams reelection campaign in 2002. WTU money helped him win. Baxter was director of the DC government's Office of Labor Relations and Collective Bargaining under both Marion Barry and Anthony Williams. Baxter's brother, Curtis Lewis, who was the WTU's lawyer, hosted fund raisers for Williams and allegedly paid for them with a WTU credit card. Campaign contributions were made out of the WTU treasury to the Democratic National Committee and to the senatorial campaign of Hillary Clinton in 2002. The DNC and Clinton returned the money when the scandal became public.

Lessons to be Learned

This systematic looting of the WTU treasury was uncovered only because of a blunder by the alleged perpetrators. The WTU treasury was so depleted that the union could not pay its 2002 per capita dues to its parent, the American Federation of Teachers (AFT). Bullock needed $700,000 of union dues to turn over to the AFT in order for representatives of the WTU to be seated at the AFT's annual convention last summer. She allegedly "solved" this problem by a one-month increase of the dues that DC teachers are forced to pay from $16 to $160. The extra $144 per teacher would raise enough money to pay the AFT assessment. However, several teachers were outraged at the unexpected, and unauthorized increase and complained to the AFT which then began to make inquiries and ultimately hired an independent firm to undertake a forensic accounting investigation of the WTU. In addition several teachers filed civil suits against the WTU.

The AFT constitution requires its member unions to have their books audited at least every two years. There had been no audit of WTU since 1995. The AFT at least should learn to enforce the provisions of its own constitution. More importantly, union rank-and-file should learn that their union leaders cannot always be trusted. They must exert more diligence and control over their own locals. Before the scandal broke, the WTU had not held a membership meeting for five years because the required quorum of 100 teachers could not be assembled. The WTU represents 5,000 DC teachers.

Policy makers should tighten up the legal reporting requirements imposed on unions and should see to it that those requirements are enforced. The SEC imposes tight reporting and independent audit requirements on public corporations. In like manner, the Department of Labor (DOL) should impose and enforce similar rules on union. The Secretary of Labor has recently proposed revising the LM-2 reporting requirements that already exist for unions, but her proposals do not go far enough. As I said in my last column, at the very least DOL should require that unions get and publicize an annual independent audit of their books.

But the lessons about membership diligence, disclosure and independent audits are not the most important ones. Those lessons concern the very nature of compulsory unionism itself. Union members are not diligent because they have no effective control over union officers.. If teachers (as well as members of all other unions) were free to choose on an individual basis whether to join or support unions and free to disassociate from unions at will, union leaders would have to pursue teacher interests rather than their own interests because members would have the ultimate power of exit and withdrawal of support. With that power members would naturally be diligent.

In order for state and local government employees including teachers to be free on an individual basis to choose to associate or not to associate with unions, all the laws in the thirty-four states and the District of Columbia that provide for exclusive representation (deciding union representation by majority vote rater than individual choice) and union security (compulsory dues payments) would have to be repealed and replaced with legislation that protects the freedom of association of all individuals. In the private sector the National Labor Relations Act would have similarly to be repealed and replaced.

Union officials and the politicians in their thrall will dismiss such reforms as too extreme and radical to be taken seriously. I suspect most of the electorate would agree with them. But that is the real outrage. Individual freedom of association is guaranteed by the First Amendment to the Constitution. It ought to be widely accepted as a mainstream idea. That it isn't is perhaps the worst legacy of Franklin Roosevelt's New Deal, made possible by a complicit Supreme Court, whose fallacies have ever since been promulgated by the public school monopoly. Building better schools isn't union work. It is the work of competition and entrepreneurship in an open education market. Let's hear it for school choice in DC and everywhere else.