ALBANY — At a time of declining union membership nationwide, New York's second-largest public sector union recently made a striking move and intentionally dropped 100 dues-paying members from its ranks.

The loss has another, less obvious upshot: The Public Employees Federation will no longer have to provide information to the public about how it spends some $40 million annually. That's because the members who left PEF were its only remaining private-sector workers, and the union now comprised entirely of public-sector members is no longer subject to certain federal regulations.

That's significant, according to Kevin Jones, a member of PEF's executive board, because the union is no longer subject to federal rules governing its elections and free-speech rights, or that guard its  members from unwarranted retaliation by PEF leadership.

In a recent Facebook post, Jones recounted a PEF executive board meeting earlier this month, where he claims PEF president Wayne Spence misinformed trustees that state laws would govern PEF in the same manner as the dispatched federal law.

"He said there was 'virtually no difference' between the federal laws covering state unions and the state laws," Jones recalled in an interview with the Times Union.

Yet when it comes to internal union elections and political disputes, state laws have little teeth compared to the sweeping federal law, Jones said, and none of the spending transparency requirements for unions.

"The whole panoply of laws and regulations is at the federal level," Jones said.

At the recent meeting, according to Jones, Spence didn't mention the extensive differences.

Jane Briggs, a PEF spokeswoman, said that Spence's statement was taken "out of context."

"President Spence was not discussing finances at that time, but was talking about members retaining their right to seek recourse against PEF under the NYS Taylor Law," Briggs said.

The federal law that formerly covered PEF, The Labor Management Reporting and Disclosure Act, was adopted in 1959 to curb racketeering and corruption in the labor movement. But the law only applies to unions that include at least some private sector employees.

The other biggest New York public workers' unions, the Civil Service Employees Association and New York State United Teachers, both have private-sector members and are subject to the law.

PEF, whose more than 52,000 members are primarily white-collar state government workers, until recently did have a very small private sector contingent. But with PEF's encouragement, about 100 technicians and office workers at Eastern Niagara Hospital in Lockport, near Buffalo, voted in August to leave PEF and affiliate with the healthcare workers union 1199 SEIU. It was the final step in making PEF entirely public sector.

The decision is striking in the wake of a U.S. Supreme Court decision last year, Janus v. AFSCME, which prevented public sector unions from collecting dues-like fees from workers who choose not to be union members, according to Ken Girardin, a policy analyst at the Empire Center for Public Policy.

Girardin detailed the recent PEF dealings in a blog post on the fiscally conservative think-tank's website. He noted that about three percent of PEF membership stopped paying dues after the court decision, yet PEF was still encouraging certain members to leave.

"New York state confers a tremendous privilege on these unions by making employers collect hundreds of millions of dollars of dues for them each year," Girardin told the Times Union. "It's a big disservice to union members that the state doesn't protect their right to see where the money winds up or ensure that union executives are following their own rules."

At PEF's recent executive board meeting, according to Jones, Spence cited PEF's contentious leadership elections as the impetus for becoming entirely public.

PEF's elections occur every three years, and recent campaigns have resulted in complaints that were investigated by the federal Office of Labor-Management Standards. In fact, it was a federal Department of Labor investigator that first informed PEF leadership that election inquiries could be avoided going forward, Jones recalled Spence saying at the meeting.

In addition to union elections not being subject to federal oversight, PEF members will no longer retain the benefits of the federal "Union Members' Bill of Rights." Those rules are meant to guard members' free speech against improper disciplinary action.

There will also now be fewer checks on union corruption, which previously would be investigated by the federal government.

"If you take out all the financial reporting requirements, people are more likely to misbehave," Jones said. "With no one to look over their shoulder, you're just asking for trouble."

Jones, who worked at PEF for three years as its organizing director under Spence, was eventually fired from the position and more recently elected as an executive board member.

While the stated rationale was "incompetence," Jones maintains he was actually fired for being too independent from Spence. Jones also confirmed that he is "exploring" a run against Spence for PEF president in 2021.

Briggs, the PEF spokeswoman, said that PEF's constitution provides similar rights for union members as federal law. PEF also must also continue to run its union elections under the "standards" of the federal law, Briggs said.

With regulators from the federal Department of Labor no longer in play, however, future disputes would more likely have to be adjudicated in court.

Avoiding costly post-election disputes and the extensive federal reporting requirements will likely save PEF money. Still, Briggs said the main reason PEF agreed to shed 100 workers was to help them.

"While the administrative burden of LMRDA reporting was a consideration, our main concern was ensuring that members at Lockport were in the strongest possible bargaining position. That was the main focus of the talks involving this change," Briggs said.

Briggs said the members in Lockport voted overwhelmingly to join the rest of the facility's employees at Eastern Niagara Hospital, who were members of 1199, the giant and politically powerful healthcare union. In fact, it was the federal Department of Labor that suggested PEF look at transferring the 100 employees, Briggs said, to better allocate union resources.

"No one does public sector representation and bargaining better than PEF, and no one does private sector healthcare representation and bargaining better than 1199," Briggs said. "This notion, coupled with the hospital's takeover by another company, led to the members' logical conclusion that they were stronger together with 1199. ... PEF agreed that the members would be in a stronger bargaining position and able to secure area standards set and enjoyed by their sisters and brothers in 1199."

There has been corruption in the past from PEF leaders, which is notable given that its finances will now shrouded in greater secrecy. For instance, Debbie Lee, a local PEF leader, was found to have misused a PEF credit card and misappropriated tens of thousands of dollars under the administration of former PEF President Susan Kent.

Though the general public will no longer be able to pull up PEF salaries, spending and other financial details online, union members will still have access to information.

"PEF has strengthened its internal fiscal oversight with new policies proposed by PEF Secretary-Treasurer Kay Wilkie and adopted by the PEF Executive Board," Briggs said. "This includes providing annual fiscal reports to the entire membership."

For union dissidents that are PEF members, however, gaining information about finances is not always easy. In January, for instance, Wilkie rejected a request for all PEF financial records since August 2018 which had been filed by Nikki Brate, a former PEF vice president and a vocal critic of Spence.

Not only was the request "overbroad," Wilkie wrote, but Brate needed to provide "the reason for seeking access" to the records.

PEF would allow access to records "for which you provide just cause," Wilkie wrote to Brate.

Briggs argued that the union was actually "very transparent to our members regarding financial matters" and noted that members have access to PEF's audits and financial updates in the union's monthly magazine, The Communicator.