Jan.02, 2010, From:WSJ.com

The surreptitious union takeover of the private day-care industry in Michigan, acting in cahoots with Michigan's Department of Human Services, seems to be a simple case of money laundering, at least in spirit, if not in technical terms (Cross Country: "Michigan Forces Business Owners Into Public Sector Unions" by Patrick J. Wright and Michael D. Jahr, op-ed, Dec. 26). Michigan's independent day-care providers, mostly small business owners, were blind-sided by a mail-in unionization vote in which 15% of the day-care providers (heavily pro-union) determined the employment status of the non-voting 85% of providers.

The rationale for Michigan's unionization of day-care workers (and for home health-care workers in several other states) is that users of such services often are receiving financial aid from the state. Michigan created a shell agency to facilitate the ruse of an employer-employee relationship in the industry (despite the sole-proprietorship nature of most day-care businesses) and then proceeded to siphon off millions of dollars of union dues from payments made to day-care providers.

It would be illegal for Michigan to directly transfer money into the coffers of the UAW or the American Federation of State, County and Municipal Employees. However, a shell government agency and a stealth unionization process in the day-care sector offered a way around an unethical or illegal money transfer scheme. (Technically, money laundering requires that the cash be obtained through criminal activities; in this case, Michigan's cash-strapped taxpayers are pinched for the funds that are earmarked for union payments.)

Messrs. Wright and Jahr describe similar arrangements in several other states where state and federal taxpayers pick up the tab. Not surprisingly, the Service Employees International Union is on the receiving end of many such payments.

It may turn out that the day-care and home health-care union sham violates state laws or the Constitution. Be that as it may, fleecing taxpayers to provide the revenues that pass quickly through the hands of small business owners (now designated as union employees) on their way into the pockets of unions that are closely connected to state governments is a process that fails to meet a basic smell test: In a state that has the highest unemployment rate in the nation, such a poor use of Michigan's resources certainly qualifies as disgraceful, if not criminal.