Month: November 2016

The Trump Transition and Wage Theft

If Donald Trump really were a champion of the working class, one place you would expect to see it reflected would be in his plans for the Labor Department. The supposed champion of blue collar Americans should be making sure that the agency most concerned with the world of work is reoriented to their needs.

Given what we have learned about the Trump transition so far, it will come as no surprise to hear that things seem to be moving in a very different direction. The person put in charge of the DOL transition is J. Steven Hart, chairman of the firm of Williams & Jensen, which calls itself “Washington’s Lobbying Powerhouse.” Hart is a lawyer and an accountant who worked in the Reagan Administration but his firm now lobbies mainly on behalf of large corporations such as the health insurer Anthem and Smithfield Foods.

He may provide other services for big business.  In a 2007 article in The Washingtonian about DC’s top lobbyists, Hart was described as “the man corporations call when they are having trouble with labor unions.” There is not much in the public record on Hart’s activity as a union buster, which may mean only that he worked behind the scenes.

One thing that is known, according to the BNA Daily Labor Report, is that Hart has lobbied recently on behalf of the International Association of Amusement Parks and Attractions (IAAPA) on the rule formulated by the Labor Department to update overtime eligibility to thwart abusive employer practices. That association has made no secret of its strong opposition to the rule, which is scheduled to take effect on December 1. It put out a press release denouncing the rule as “burdensome” and vowing to work with other business interests to fight it.

The board of directors of the IAAPA includes a representative of the Walt Disney Company, which had has compliance problems with the Fair Labor Standards Act. For example, in 2010 Disney agreed to pay more than $433,000 in back wages to settle DOL allegations regarding off-the-clock work.

The overtime rule is a glaring example of the contradictions in the emerging Trump Administration. The rule would be of enormous benefit to many struggling lower-income workers who are denied overtime compensation under exemptions that were supposed to apply only to high-paid salaried employees. Their plight has amounted to a form of wage theft.

One group of employers that have frequently been implicated in overtime abuses are dollar store chains such as Family Dollar and Dollar Tree. These cases often involve assistant managers who are not really managers and are compelled to perform routine tasks in stores that are chronically understaffed. After losing an overtime lawsuit and hit with $36 million in damages, Family Dollar appealed the case all the way to the Supreme Court (and lost).

It’s likely that Trump supporters are a lot more familiar with dollar stores than those who voted for Clinton. Do they really want to make it easier for those corporations to engage in wage theft against relatives and friends?

A Mandate for Corporate Misconduct?

Many analysts of the presidential election are depicting it as a victory for workers, at least the disaffected white portion of the labor force. It remains to be seen whether Trump can deliver much in the way of concrete economic benefits for them.

Trump’s triumph may actually turn out to be a bigger boon for corporations. Although his candidacy was not actively supported by much of big business, which remains nervous about his posture on trade, Trump put forth other arguments that evoke less a populist uprising than the lobbying agenda of the U.S. Chamber of Commerce , which has just issued a statement embracing the election results for preserving “pro-business majorities” in the Senate and the House.

Trump’s position on big business has been difficult to pin down. He has often criticized crony capitalism but it has usually been part of attacks on Hillary Clinton or the Obama Administration. He has criticized some companies for sending jobs offshore yet has made tax proposals that would be a windfall for Corporate America.

One area in which Trump’s position has been unambiguously pro-corporate is the issue of regulation, where his stance has been indistinguishable from the Chamber and its allies. Trump has expressed a broad-brush condemnation of federal rules as job-killing, using the usual bogus numbers on their economic costs while ignoring the benefits. He has vowed both to eliminate many of the Obama Administration’s initiatives and to put a moratorium on most new rules. Trump has called for slashing the budget of the Environmental Protection Agency and for repealing much of Dodd-Frank, which could mean the demise of the Consumer Financial Protection Bureau.

Trump’s embrace of traditional Republican regulation bashing is all the more troubling as it comes at a time when corporate misconduct remains rampant. It is remarkable that so little attention was paid during the campaign to the scandals involving companies such as Volkswagen, whose emissions fraud has been pursued by the EPA, and Wells Fargo, which was fined $100 million by the CFPB for creating millions of bogus accounts. By threatening these agencies , Trump is undermining future cases against other corporate miscreants.

It’s possible that Trump’s attacks on regulation are nothing more than campaign rhetoric, but he is now allied with those pro-business majorities in Congress that are dead serious about dismantling as much of the federal regulatory framework as possible. Corporate lobbyists must be salivating at what lies ahead.

Is that what Trump supporters signed up for? Do residents of oil and gas states whose water supplies have been contaminated want the EPA to dwindle? Do blue collar workers confronted by predatory lending practices want the CFPB to disappear? Do families with serious health problems want to go back to a system in which insurance companies can discontinue their coverage? Do victims of wage theft want to see funding cut for the Wage & Hour Division of the Labor Department?

Trump has promised to drain the swamp in Washington, yet when it comes to regulation at least he has jumped into the muck feet first and is already becoming part of the problem rather than the solution.

Note: For a reminder of the myriad ways in which the Trump Organization itself has run afoul of federal, state and local regulations, see my Corporate Rap Sheet on the company.

Corporate Criminals and Public Office

Donald Trump’s candidacy is based to a great extent on the notion that a successful businessman would make an effective President. Democrats have shot holes in Trump’s claims of success, but they have not done enough to attack the underlying claim that private sector talents are applicable to the public realm.

The conflation of business and government acumen is all the more dangerous at a time when the norm in the corporate world is increasingly corrupt. The observation by Bernie Sanders during the primaries that “the business model of Wall Street is fraud” applies well beyond the realm of investment banking. Have those calling for government to operate more like business been paying attention to Wells Fargo, Volkswagen and EpiPen-producer Mylan?

It used to be that the main threat was that unscrupulous corporations would use investments in the political and legislative process to bend policymaking to favor their interests. Trump has shown that a corporate miscreant can use a pseudo-populist platform to try to take office directly.

Trump is not unique in this regard. Take the case of West Virginia, where a controversial billionaire coal operator is leading the polls in the state’s gubernatorial race. Jim Justice brags that he is a “career businessman” not a career politician, yet that career includes racking up some $5 million in fines imposed by the Mine Safety and Health Administration, according to Violation Tracker. To make matters worse, NPR and Mine Safety News reported in 2014 that Justice resisted paying these fines. An NPR update says that $2.6 million in MSHA fines and delinquency penalties remain unpaid even as the Justice mining operations continue to get hit with more safety violations.

On top of this, NPR estimates that the Justice companies face more than $10 million in federal, state and county liens for unpaid corporate income, property and minerals taxes. About one-third of the total is owed to poor West Virginia counties. Like Donald Trump, Justice has failed to follow through on charitable commitments yet has managed to pump several million dollars into his campaign.

Did I mention that Justice is the Democratic candidate?  He is not, however, supporting Hillary Clinton though he is tight with conservative Democrat Sen. Joe Manchin. Justice’s Republican opponent is state senate president Bill Cole, whose super PAC received a $100,000 contribution from a super PAC funded by the Koch brothers. This was after Cole spoke at the Koch’s private conservative donors conference in Palm Springs last February, reportedly using his remarks to emphasize his commitment to getting a “right to work” law passed in West Virginia. While in the legislature Cole has also been cozy with the American Legislative Exchange Council and has pushed the crackpot supply-side economic prescriptions of Arthur Laffer. Cole is also an enthusiastic supporter of Trump.

It is difficult to know which is worse: a candidate in the pocket of unscrupulous corporate special interests or one who is himself one of those corporate miscreants. It is troubling to think that our elections increasingly come down to such an untenable choice.