Thomas Perez is the nation's newest Secretary of Labor. And given his track record of political radicalism, this ought to be more than a little troubling. Perez insists he will be even-handed in his enforcement of the law. That commitment is getting an early test. On July 23, the day of Perez's swearing-in ceremony, two key House Republicans, John Kline (Minn.) and Phil Roe (Tenn.), wrote Perez a letter asking him to clarify the legal status of nonprofit 'worker centers' that are proliferating throughout the country. Because these nonunion organizations mimic the behavior of unions, the letter stated, they ought to be subject to laws that govern unions, especially with respect to financial disclosure.
Thomas Perez embodies ethnic identity radicalism. Whether the U.S. Senate has the courage to challenge him is yet unknown. President Obama today nominated Perez for Secretary of Labor. As the Department of Justice's assistant attorney general for civil rights since October 2009, Perez has promoted a hard-charging egalitarianism that goes even beyond that of first-term Obama Labor Secretary Hilda Solis, who resigned in January. His "Third World First, America Last" worldview comes with hefty baggage. He's persuaded the Justice Department to dismiss its case against Black Panther members accused of menacing white voters and poll watchers in Philadelphia on Election Day 2008.
A presidential re-election typically triggers a cabinet reshuffling. The U.S. Department of Labor now can be considered part of the process. Yesterday afternoon, January 9, Labor Secretary Hilda Solis announced her resignation. Solis, previously a four-term Democratic congresswoman from California, had won the job on the strength of her aggressive championing of union interests. In a statement issued shortly thereafter, President Obama lauded Solis as "a tireless champion for working families," adding that "her efforts have helped train workers for the jobs of the future, protect workers' health and safety and put millions of Americans back to work."
Political spending can be seen as consisting of the kind that goes recognized and the kind that doesn't. And when the money comes from unions, the gap between the two can be enormous in favor of the latter. On July 10, the Wall Street Journal published an article by reporters Tom McGinty and Brody Mullins, "Political Spending by Unions Far Exceeds Direct Donations," concluding that organized labor during 2005-11 spent $4.4 billion on federal election campaigns and lobbying. Only $1.1 billion of that represented sums reported to the Federal Election Commission (FEC) and Congress.
Labor leaders don't like it when they have to open their books to public inspection. Those in Canada apparently aren't much different from the ones in this country. Canadian lawmakers currently are considering private legislation, Public Financial Disclosure for Labour Organizations, to include unions as among the organizations required to furnish financial data. Sponsors say the measure, alternately known as C-377, is needed to combat corruption and foster transparency. Union leaders insist that compliance would be unjustifiably costly and time-consuming. If this sounds familiar, it should.
It has the raw material for a movie. The plot, so far, is incomplete. Over the last few months the Screen Actors Guild (SAG) has been rocked by public allegations by a former benefits executive that top officials of SAG-sponsored benefit plans, including CEO Bruce Dow, looted between $5 million and $10 million. The whistleblower, Craig Simmons, who had been fired a half-year before, this September filed a complaint with the U.S. Department of Labor requesting that DOL conduct criminal and civil probes. Simmons also alleges that Dow instructed him to deceive trustees and authorities about the losses. The Labor Department has yet to comment on whether it has begun an investigation. Lawyers for the SAG, which controls about $2.5 billion in plan assets, are denying all charges. Yet significantly, the union hired an investigator to conduct a review, which since has been completed.
The consultants who advise employers on how to avert union organizing or collective bargaining demands soon may have to reveal a good deal more about themselves and their operations. This past Tuesday, June 21, the U.S. Department of Labor (DOL), to the delight of labor officials, published a proposal in the Federal Register to expand the circumstances forcing companies to disclose information about their advisers. Because the rule change would not apply to union consultants, it appears to be motivated heavily by politics.
If Department of Labor Secretary Hilda Solis and Solicitor M. Patricia Smith are pushing the limits of radical advocacy, Leon Rodriguez might just be the person to push them further. Rodriguez, for nearly a year the chief of staff at the Justice Department's Civil Rights Division, is President Obama's presumptive nominee for administrator of DOL's Wage and Hour Division. The president announced on December 2 his intent to name him to the long-vacant post. But like the previous (unsuccessful) nominee, Lorelei Boylan, Rodriguez, an experienced prosecutor, has an expressed belief that what counts is equality of result, not equality under the law - even if employers have to pay the toll. If Obama is genuine about his recently stated desire to promote business development, he should find another candidate.
When Department of Labor Solicitor M. Patricia "Trisha" Smith testified at a Senate confirmation hearing more than a year and a half ago, her track record as New York State Commissioner of Labor, and her comments about it, prompted leading Republicans to postpone action for several months. Their fears in hindsight appear well-founded. An article appearing in last Friday's Wall Street Journal reported that DOL staff, under Smith's supervision, a couple months earlier had issued a draft "operating plan" to dramatically step up enforcement against private-sector employers likely to have committed unfair labor practices. The details of the now-adopted plan indicate Smith, like her boss, Labor Secretary Hilda Solis, views the department's relationship with business as necessarily highly adversarial.
The abrupt departure by Andrew Stern this spring as president of the Service Employees International Union (SEIU), after 14 years on the job, blindsided a lot of observers. After all, he was a shadow cabinet member of the Obama administration. Reported ongoing federal investigations into two unrelated, and possibly illegal, financial arrangements may shed light on his motives. The Associated Press and the Los Angeles Times each ran stories last Tuesday stating the FBI and the Department of Labor have been interviewing persons potentially knowledgeable about the possibility that Stern: 1) received unauthorized funds from a book he'd authored several years ago; and 2) approved the disbursement of funds to pay for a Southern California SEIU local official's no-show job who eventually was convicted in an unrelated kickback scheme. Stern denies his involvement in these activities and indeed even the fact of an investigation.