[Congressional Record Volume 143, Number 44 (Tuesday, April 15, 1997)]
[House]
[Pages H1508-H1510]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NOMINATION OF ALEXIS HERMAN AS SECRETARY OF DEPARTMENT OF LABOR
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Tennessee [Mr. Duncan] is recognized for 5 minutes.
Mr. DUNCAN. Mr. Speaker, very soon the other body will vote to
confirm Alexis Herman as Secretary of Labor. I am sure that the
Senators will vote almost unanimously for her because no one has been
asking the tough questions that need to be asked about this nomination,
yet the liberal magazine, The New Republic, has a scorching article
about Ms. Herman in its current issue.
The New Republic would ordinarily be one of the strongest supporters
for someone like Ms. Herman, but listen to what The New Republic has to
say about her. ``It would not be quite accurate to say that Herman's
political career has been tainted by cronyism. Her political career is
cronyism. For Herman, it seems government has meant little more than a
way to enrich herself and her friends.''
The President should reconsider this nomination in light of all of
the reports in The New Republic, The Washington Times, and other
publications concerning questionable financial dealings. It appears
that Ms. Herman has spent her career doing political wheeling and
dealing at great expense to the American taxpayer. Let me mention just
two examples.
Ms. Herman was paid $600,000 simply for advising on hiring minority
firms for construction of the Federal Triangle project in Washington,
DC. Six hundred thousand dollars is an unbelievably exorbitant fee for
this type of work. Then the project was criticized for its very poor
job in hiring minority firms, the very thing for which Ms. Herman was
being paid. The Senate should have subpoenaed Ms. Herman and her
records and questioned her in great detail about exactly what she did
to get all of this money. This project, with interest, financing and
all of the sweetheart deals, is going to cost $2 billion, according to
the GAO, and be the most expensive Federal building project in history.
Then there is the Market Square project, also in Washington, DC.
According to The Washington Times, Ms. Herman was reportedly given a 1-
percent ownership primarily because of her connections to Washington,
DC Mayor Marion Barry. This 1-percent interest may now be worth as much
as $500,000, which she got to be a minority partner, even though she
never invested any of her own money.
There are other examples, Mr. Speaker, and every Member of the other
body should read this article in the current issue of The New Republic
before they vote to confirm Ms. Herman. The title of the article is
``Dishonest Labor.'' I will be sending every Member of the other body a
copy of this article tomorrow.
I have no illusions, Mr. Speaker. I know she will be overwhelmingly
confirmed, but the Senate should not confirm someone who has gotten
rich for very little work or investment at great expense to the
taxpayer. No one should be put in charge of a major department of the
Federal Government who has such a cavalier disregard for the taxpayer.
At the very least, Mr. Speaker, I certainly hope that when she is
confirmed that she stops all of this cronyism and political and
financial wheeling and dealing while she is in office. Also, I hope the
national news media will stay on guard and closely question every
single contract the Department of Labor enters into under her
leadership. Is she going to give all the contracts to her friends and
pals and political buddies?
I close, Mr. Speaker, by repeating the words from The New Republic,
not my words, but theirs. ``It would not be quite accurate to say that
Herman's political career has been tainted by cronyism. Her political
career is cronyism. For Herman, it seems government has meant little
more than a way to enrich herself and her friends.'' Not my words, Mr.
Speaker, but those of The New Republic. Surely we can do better for one
of the highest offices in our land.
[From The New Republic, April 28, 1997]
Dishonest Labor
(By Jonathan Chait)
Richard Shelby has distinguished himself in the United
States Senate mainly by his passionate and oft-professed
hatred for the Clinton administration. Indeed, he has made a
career out of Clinton-hating, once proclaiming gleefully that
his animosity for the president formed the basis of his
popularity in his home state of Alabama. In February 1993,
before other Democrats had even polished off the leftover
champagne from Clinton's inauguration, Shelby attacked the
White House for raising taxes. Clinton retaliated by moving
ninety NASA jobs out of Alabama. The relationship went
downhill from there. Just after the 1994 elections, Shelby
shed his last Democratic vestiges and joined the Republican
Party. Like Strom Thurmond and other Dixiecrat-turned-
Republicans, Shelby took to the GOP faith with more fervor
than most lifetime believers. As a reward, his new party
handed him the chairmanship of the Intelligence Committee,
from which Shelby resumed his antipathetic ways: over the
last two months he almost single-handedly harangued Anthony
Lake into forsaking his nomination for CIA director.
On March 19, still basking in the afterglow of Lake's
demise, Shelby spoke before the Senate Labor and Human
Resources Committee, which had gathered to decide the fate of
another controversial Clinton nominee, Labor Secretary-
designate Alexis Herman. On this occasion, however, Shelby
came to praise, not bury, a Clinton nominee. In proud, almost
pious tones, he introduced Herman as if she were a
conservative convert. ``She's worked in the vineyards,'' he
declared. ``She's worked in the Democratic Party. She's
worked in the White House. She has earned her way the hard
way: by hard work.'' Shelby wasn't the only senator
[[Page H1509]]
cooing. Other, normally belligerent Republicans burbled equal
goodwill. Their few forays into the known areas of
controversy regarding Herman were so polite as to be almost
apologetic. The four-and-a-half-hour love-in ended in smiles
and mutual praise, the prelude to an expected overwhelming
confirmation by the Senate.
How striking is the contrast between Herman's cruise to
confirmation and the experiences of other Clinton appointees.
Nomination struggles have plagued Clinton from the beginning,
Lake's ordeal providing only the most recent example. To be
sure, the Senate has given a bye to a few Clinton nominees.
But those exceptions, like Madeleine Albright or William
Cohen, arrived with impressive resumes, untainted by scandal.
Herman, by marked contrast, is perhaps the least qualified--
and certainly the most scandal-plagued--nominee that Clinton
has put forth over the course of his presidency. Her
harmonious confirmation is not merely curious, but perverse:
the intellectual and ethical debasements that ought to have
disqualified Herman are the very things that have saved her.
It would not be quite accurate to say that Herman's
political career has been tainted by cronyism. Her political
career is cronyism. For Herman, it seems, government has
meant little more than a way to enrich herself and her
friends. Herman's Washington career dates back to the Carter
administration, where she headed the Women's Bureau of the
Department of Labor. There she linked up with Little Rock
civil rights pioneer and Clinton friend Ernest Green, who ran
the department's Employment and Training Administration (and
who is currently playing a supporting role in the Clinton
fundraising scandals). Following the 1980 presidential
election, the department frantically shoveled millions of
dollars in grant money out the door before the Reagan
administration could take over. The largest grants went to
two sources: a training program that employed Green and
Herman before their Labor tenure, and a youth training
program run by Jesse Jackson, a close Herman friend. In 1981,
Green and Herman formed a diversity consulting firm, Green-
Herman & Associates Inc., which got a quick boost from
Jackson. In those years, the reverend frequently threatened
boycotts of companies he deemed insufficiently diverse. When
Jackson's targets sued for peace, according to media
accounts, he recommended that they hire Green-Herman &
Associates.
The diversity consulting business proved lucrative for
Green & Herman. Corporations hire diversity consultants
mainly to avoid lawsuits. Thus, the two enjoyed a particular
advantage: as consultants, they could sell advice on
complying with the affirmative action laws that, as
government officials, they had enforced.
One way to comply with those laws, it turned out, was to
give Alexis Herman a great deal of money. Bob Mendelsohn, a
real-estate developer who had met Herman while he was working
for the Interior Department under Carter, quickly figured
this out. In 1986, he gave her a 3.34 percent stake in his
venture to build a complex of offices and condominiums in
downtown Washington. Herman sold part of her holding and
recently valued the rest at somewhere between $500,000 and $1
million, a strong return for an investment of zero dollars.
Mendelsohn handed out similar deals to two other limited
partners, bringing the minority ownership to 10 percent, in
order to comply with federal affirmative action guidelines.
Mendelsohn could have bestowed this windfall upon any number
of more needy black Washingtonians. But Herman had something
that escaped her less fortunate cohabitants: a tight
relationship with Washington Mayor Marion Barry, who held
considerable sway over which firms received building
contracts in the district. Mendelsohn later insisted that
Herman's clout played no part in his decision.
In 1989, Herman became chief of staff at the Democratic
National Committee, working directly under another mentor,
Ron Brown, then party chair, later secretary of Commerce. Her
firm, now A.H. Herman & Associates (Green had gone into
investment banking), remained under her control. The next
year Mendelsohn hired her firm to help him win an even bigger
contract. For $600,000, A.H. Herman designed Mendelsohn's
affirmative action plan. Mendelsohn won the fiercely
contested contract, although his company had been underbid by
hundreds of millions of dollars and had given what one
knowledgeable insider described as a vastly inferior
proposal. Mendelsohn claims that Herman's post at the DNC
played no role in either his decision to hire her or the
government's decision to award the contract to Mendelsohn.
Later, the Mendelsohn-Herman building deal came under fire
in Congress--because, ironically, some congressmen thought
its affirmative action program was not aggressive enough.
According to numerous press accounts at the time, Herman took
her DNC clout to the Hill to lobby for continued funding, a
move widely criticized as a conflict of interest. Herman
recently wrote to the Senate Labor Committee that she has
``no recollection of lobbying either Members of Congress or
their staffs.'' Her spokesman, Joe Lockhart, has denied
outright that she lobbied for Mendelsohn. But, according to a
1990 article in The Washington Business Journal, ``sources at
the House Government Operations Committee'' maintained that
Herman ``did not hesitate to appear at meetings between
legislative aides and the Delta Team [Mendelsohn's group].''
The article reported that Mendelsohn had ``said he had asked
Herman to go to the Hill to address concerns about minority
participation in the project because she had written the
plan.'' Mendelsohn now denies having asked Herman to lobby
and insists the 1990 article ``got a lot of things wrong.''
Despite the alleged conflict of interest, Herman's
political stock continued to rise. With Ron Brown devoting
much of his time to fund-raising, Herman ran the day-to-day
operations of the 1992 convention. It was not unrewarded
labor. A U.S. News & World Report story the following year
reported that she enjoyed frequent limousine service--over
$6,000 worth during one two-week stretch alone--and $3,500-
per-month rent, all on the party's dime.
In late 1993, after becoming White House director of public
liaison, Herman sold her firm to longtime friend Vanessa
Weaver. Then, while working at the Office of Public Liaison,
Herman recommended--as she later admitted in a written
response to the Senate Labor Committee--that both Weaver and
Weaver's sister be included on a trade mission to Mexico. The
sisters were so included, and later donated $25,000 apiece to
the DNC.
But the business relationship between Herman and the Weaver
sisters apparently goes back even further. According to
payroll documents, the DNC paid Weaver $15,000 in consulting
fees during the 1992 convention run by Herman. Neither
several former convention staffers nor Lockhart were able to
say, when asked, what precisely Weaver did to earn her money.
According to the 1992 DNC Employee Handbook, Herman had
responsibility for reviewing all contracts, meaning that, at
minimum, she approved hiring Weaver. Why does this matter?
Because it appears to contradict her written responses to
questions posed by the Senate Labor Committee. When asked if
she had ``extend[ed] any courtesy or provide[d] any benefit''
to Weaver before or after the selling of A.H. Herman &
Associates, Herman replied that she had not. Lockhart,
questions, argued that it didn't matter if Herman had
misstated the truth to the Senate. ``If you contract someone
and they do the work,'' he said, ``I don't see how that's a
benefit.'' Herman declined, through Lockhart, to be
interviewed prior to confirmation.
Herman won the nomination for secretary of Labor from
Clinton at least in part for the same reason she got her
first big deal from Mendelssohn: the president needed to fill
a quota. Ron Brown's unexpected death in April 1996, and the
departure of Hazel O'Leary and Mike Espy, had left the
Clinton Cabinet with just one African American, and no black
women. But, as in her building deal, Herman and more than her
sex and race going for her. She benefited, once against, from
political cronyism. In this instance, her old friend and
consulting ally Jesse Jackson lobbied Clinton to pick her.
Herman's nomination represents a marked ideological shit in
the administration's economic thinking. During the first
term, Labor Secretary Robert Reich's liberalism
counterbalanced the moderate Wall Street impulses of Treasury
Secretary Robert Rubin. Reich's influence stemmed from both
his academic heft and from his long-standing relationship
with Clinton. Herman, with neither, could not dream of
challenging Rubin. ``It's like the New York Yankees against
`Farm Team To Be Determined.' '' laughs an administration
official.
Its seat at the table sacrificed for the sake of diversity,
organized labor went through the classic stages of grievous
loss. First, denial. Labor leaders, refusing to accept the
finality of Clinton's choice, preferred former Pennsylvania
Senator Harris Wofford as an alternative. When Wofford didn't
fly, labor threw its support, in quick succession, behind
Esteban Edward Torres and Alan Wheat, both minorities with
pro-union records in Congress. These progressively more
humiliating failures hastened the second stage: anger. ``The
not-for-attribution comments of labor leaders I talked to the
day of Herman's appointment ranged from rage to--well,
rage,'' wrote liberal columnist Harold Meyerson in The
Sacramento Bee. The third stage: bargaining. AFL-CIO
President John Sweeney met with Jackson and Clinton. Though
none could confirm it, several labor officials privately
expressed a belief that the administration had granted
Sweeney more say in staffing lower-level jobs at Labor. This
led, at last, to: acceptance. ``Once it became clear that the
administration chose Herman, there was no point in opposing
her,'' sighs one labor official. AFL-CIO officials now
maintain, somewhat ahistorically, that their support for
Wofford are based on a big misunderstanding: they would have
picked Herman first if only they had known she wanted the
job.
With the Democratic coalition in line, Herman's fate now
rested with the Senate. Nominally, her key hurdle was the
Senate Labor Committee, chaired by Jim Jeffords of Vermont.
In reality, it was up to Majority Leader Trent Lott, who
initially resisted granting the chairmanship to the moderate
Jeffords. Jeffords won the chair, which he had earned by
seniority, only by agreeing to defer to the leadership's
wishes on any important matters. In February, Lott bottled up
Herman's nomination in order to force Democrats to allow a
vote on a ``comp time'' bill that would permit employers to
substitute extra vacations for overtime pay.
Seeking a pretext for delaying Herman's hearings, Lott
ruminated publicly over her
[[Page H1510]]
role in organizing White House coffee sessions with potential
donors. Many of those donors were black. When a reporter
questioned McCurry about this, he pounced: ``I can't believe
the majority leader would suggest she's disqualified from
serving as secretary of Labor because she attempted to
encourage African Americans to participate in the political
life of this nation.'' Lott, who had suggested nothing of the
sort, fumed. But the White House had Lott where it wanted
him. The Herman nomination became a civil rights issue. They
had thrust Lott into his nightmare role of George Wallace,
blocking the doorway of the Labor Department. African
American and feminist organizations rushed to the White House
to attack Republican delays. Even the AFL-CIO chimed in,
demanding ``immediate hearings on the nomination of this
African American woman.''
Republicans, it turns out, were all too happy to oblige.
And here lies the true perversity of Herman's nomination:
Congress, in the position of helping to select its foe, wants
a pathetic Labor secretary. The previous one, Reich, helped
Clinton push through a higher minimum wage, which most
Republicans consider the low point of their last Congress.
Reich's successor will be charged with fighting Republican
efforts to pass legislation limiting unions' powers to
negotiate in the workplace and organize politically.
Therefore, the worse the secretary, the more scandal-plagued
and the less policy-focused, the better. Herman's lack of
qualifications became, ironically, her strongest
qualification. ``She will be an ineffective Labor
secretary,'' explains a conservative activist who works
closely with Senate Republicans. ``There's just a general
view that `What damage can she do us? If we put somebody else
in there who's effective, it'll be a much bigger headache.'
''
Indeed, Republicans are happy to support Herman's sort of
liberalism because it restricts government largesse to ever
fewer, ever less-deserving beneficiaries. It costs much less
to enrich a tiny coterie of well-connected African Americans
than to improve ordinary black lives. Clinton's relegation of
Reich's chair to a quota slot is itself an act of Hermanism.
The Labor Department won't do much for the working poor, but
it will at least do well by Alexis Herman.
____________________