[Congressional Record Volume 145, Number 94 (Tuesday, June 29, 1999)]
[Extensions of Remarks]
[Pages E1426-E1427]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


THERE THEY GO AGAIN: MORE ON THE CLINTON-GORE SCHEME TO BLACKLIST U.S. 
                                  JOBS

                                 ______
                                 

                     HON. RANDY ``DUKE'' CUNNINGHAM

                             of california

                    in the house of representatives

                         Tuesday, June 29, 1999

  Mr. CUNNINGHAM. Mr. Speaker, I want to share with my colleagues the 
perspective of the Investor's Business Daily newspaper on the Clinton-
Gore scheme to blacklist certain U.S. employers, threaten the jobs of 
U.S. workers, and increase taxpayers' cost of the government buying 
goods and services.

                   Does Rule ``Blacklist'' Business?


           Contractors May Be Presumed Guilty Under Gore Plan

                            (By John Berlau)

       Al Gore's official campaign for president has just begun. 
     But he's already upholding a pledge to organized labor that 
     has business groups fuming.
       Gore made his promise when House Minority Leader Richard 
     Gephardt, D-MO--a union favorite--was considering a White 
     House run. In February 1997, Gore told the AFL-CIO Executive 
     Council that ``the Clinton administration will seek to bar 
     companies with poor labor records from receiving government 
     contracts.''
       If a company wants to do business with the Federal 
     Government, Gore said, it has to ``respect civil, human and 
     union rights.''
       Fearing that this promise could become a regulation that 
     favors organized labor, groups like the U.S. Chamber of 
     Commerce, the National Association of Manufacturers and the 
     Associated General Contractors of America have been worrying 
     ever since.
       Their fears may be justified. The rule is now circulating 
     around federal agencies and lawmakers' offices. It's expected 
     to be published in July.
       It would give bureaucrats power to deny government 
     contracts to companies that are merely accused of violating 
     labor, antitrust, health, consumer or environmental laws. The 
     charges don't have to be proved in court; allegations alone 
     may be enough.
       The rule could affect the $180 billion spent on federal 
     contracts with private companies each year. It's estimated 
     that companies doing at least some business with the Federal 
     Government employ more than 25 million people and account for 
     more than a fifth of the work force.
       The rule is ``much, much worse'' than expected, said labor 
     lawyer Hal Coxson, who's executive director of the National 
     Alliance Against Blacklisting, a coalition of business groups 
     opposed to the rule.
       ``This is huge,'' said Randy Johnson, vice president for 
     labor and employee benefits at the U.S. Chamber of Commerce.
       But Steven Kelman, head of the White House Office of 
     Federal Procurement Policy (OFPP) from 1993 to 1997, said the 
     rule represents ``a common sense point of view: If you 
     violate the law, you can't do business with the Federal 
     Government.'' Kelman says it's not that different from 
     existing rules contractors must obey.
       Gore spokesman Christopher Lehane told National Journal 
     that the vice president ``has paid a great deal of attention 
     to (the proposal) because it will help labor in its efforts 
     to continue organizing.''
       Attempts to get comments from Gore's campaign, his office 
     and OFPP were unsuccessful.
       A copy of the regulation obtained by Investor's Business 
     Daily shows how far it could reach.
       It says bureaucrats should deny a government contract if 
     there's ``persuasive evidence of the prospective contractor's 
     lack of compliance with tax laws, or substantial 
     noncompliance with labor and employment laws, environmental 
     laws, antitrust laws and other consumer protections.''
       In some cases, violations don't have to be proved. 
     According to the rule, ``final adjudication'' isn't needed if 
     the contracting officer finds ``persuasive evidence of 
     substantial noncompliance with a law or regulation.''
       A fact sheet White House officials provided to lawmakers 
     gives specific examples of

[[Page E1427]]

     when contracts could be denied. These include complaints 
     filed by:
       The Equal Employment Opportunity Commission involving 
     ``alleged employment discrimination.''
       The National Labor Relations Board for ``an alleged unfair 
     labor practice.''
       The Labor Department ``in a matter involving alleged 
     violations of OSHA (Occupational Safety and Health 
     Administration)'' rules.
       Because the government could deny contracts based on 
     suspicion and allegations, rather than proven charges, 
     critics call this the ``blacklisting regulation.''
       This could drive a wedge between Gore and one industry he 
     claims to champion--the high-tech sector.
       Nancy Saucier, manager of domestic policy for the [American 
     Electronics Association], high tech's biggest trade group, 
     said fighting this regulation is one of the [AEA]'s ``top 
     three'' issues this year.
       The Defense Department ``is the largest purchaser in the 
     world of high-tech products,'' Saucier said. ``If (companies 
     suddenly) found that they're winning only 50% of the 
     contracts that they won before, due to these arbitrary 
     determinations, it's going to affect their bottom lines 
     incredibly.'' The rule will probably affect companies' share 
     prices as well, she adds.
       Saucier and others worry the rule will give perverse 
     incentives for companies to dig up dirt on their rivals. 
     Coxson notes that consumer and environmental groups and 
     disgruntled employees could also present complaints to 
     agencies in order to deny companies contracts.
       Former OFPP head Kelman, now a professor of public 
     management at Harvard, said he thinks the power to bar 
     companies for suspected violations will only be used in 
     ``extremely egregious'' cases.
       He confidently predicted that ``a contracting officer, 
     given his lack of expertise, is going to be extremely 
     reluctant to make a determination that's not based on a final 
     adjudication.'' He also notes that companies can sue if they 
     feel they've been wrongly denied a contract.
       Attorney Karen Hastie Williams, head of OFPP under 
     President Carter, strongly disagrees. The rule ``can be the 
     camel's nose under the tent in terms of coming up with 
     arbitrary criteria to be used (against contractors),'' she 
     said.
       A company unfairly denied a contract would have to go 
     through costly lawsuits and still couldn't win back its bid, 
     Williams says. These delays would end up costing companies 
     and taxpayers.
       Williams, who now represents companies that have contracts 
     with the government, says contracting officers already have 
     the power to review a company's legal history if it's 
     relevant to the contract.
       But this rule would open the door to punishing technical 
     violations of complex rules, Williams says. In labor law, 
     companies are often found guilty when they haven't followed 
     procedures correctly. ``Often there hasn't been any harm to 
     anybody,'' she said.
       The White House and Kelman call this rule a clarification 
     of existing law. Williams and Coxson believe ti does much 
     more. They say the rule substantially amends procurement law 
     and other statutes by adding a new penalty--denying 
     contracts.
       Coxson notes that in the 1970s and 1980s, lawmakers 
     couldn't get provisions banning contracts for labor law 
     violations through a Democratic Congress.
       Prospects for getting this through a Republican Congress 
     are even lees likely. Rep. Charlie Norwood, R-Ga., who heads 
     a subcommittee of the House Education and Workforce 
     Committee, strongly opposes the rule.
       An aide says Norwood may try to get lawmakers to overturn 
     the rule.
       Coxson says it may be unconstitutional, because Congress 
     hasn't delegated this power to the White House. He and other 
     lawyers also say it could violate the Constitution's ``due 
     process'' provisions.
       Business groups also worry about a part of the rule saying 
     that contractors must have the ``necessary workplace 
     practices'' addressing ``worker retention.'' They say this 
     could bar contracts to companies that lay off workers or hire 
     striker replacements.
       ``Gore promised this,'' the Chamber's Johnson said. ``He 
     can tell organized labor he went forward, and then, if it 
     dies, he can blame the Republicans.''

     

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