[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.

                          ____________________