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Trump’s Labor Secretary Quits Amidst Creepy Sex Scandal

July 13, 2019

By Steve Wishnia

US Labor Secretary Alexander Acosta.

WASHINGTON—Secretary of Labor Alexander Acosta resigned July 12, three days after the indictment of multimillionaire Jeffrey Epstein on charges of sexually abusing scores of underage girls drew renewed scrutiny to the lenient plea deal Acosta gave him as a federal prosecutor in Miami in 2008.

President Donald Trump said that Deputy Secretary of Labor Patrick Pizzella would move up to acting head of the department when Acosta’s resignation becomes effective on July 19. 

“We welcome his resignation,” the Communications Workers of America said in a statement. “It is the job of the Labor Department to enforce laws that protect all workers. The facts that have emerged about Alex Acosta’s role in reducing Jeffrey Epstein’s sentence for his vile crimes have made it clear that he thinks there is one set of rules for the rich and powerful, and another set for everyone else. This double standard has no role in the Labor Department or any other part of our government.”

Acosta’s proposed budget for the 2020 fiscal year would reduce funding for the department’s International Labor Affairs Bureau—the branch that enforces laws against child labor and forced labor, including the sex trafficking of minors—by 80%, from $68 million last year to $18.5 million. 

The resignation may not be good news for labor, however. Several news reports over the last few months have indicated that Trump and other administration officials felt Acosta was not aggressive enough about pursuing anti-union policies. “Your well of support is not going to be deep if you’re not going to support the President’s agenda,” a senior White House official told CNN.

“The pace of change has not been sufficient,” a source close to Trump told Axios in May, when the White House forced Acosta’s chief of staff, Nick Geale, to resign. “[Acosta] tends to be fairly fearful of taking hardline positions. He tends to be solicitous of the unions, often making the argument that that’s what the president wants.” 

Under Acosta, the department decided that gig-economy workers are independent contractors not entitled to minimum wage, overtime pay, or the right to join a union; in May, the National Labor Relations Board’s general counsel issued a memo in May stating that it would no longer issue unfair-labor-practice complaints against such companies. But the NLRB’s attempts to roll back Obama-era rulings expanding when companies can be considered “joint employers” responsible for indirectly employed workers, a top Trump priority, have been stymied by conflict-of-interest charges against two of Trump’s appointees—the kind of legalistic restrictions that rile Trump’s bullheaded instincts. In June, NLRB chair John Ring filed a formal complaint intended to oust agency Inspector General David Berry, who had raised the conflict-of-interest charges that got the board’s 2017 decision reversing the joint-employer rule voided.

In contrast, Pizzella in the 1990s worked with later-imprisoned lobbyist Jack Abramoff to ensure that Congress kept the Northern Marianas Islands commonwealth safe for sweatshops, a place exempt from U.S. minimum-wage laws where goods produced could be labeled “Made in the U.S.A.” 

The Marianas, a 14-island archipelago about 1,600 miles east of the Philippines, were liberated from Japanese occupation after the battle of Saipan in 1944. In 1975, they decided to become a U.S. commonwealth, the same status as Puerto Rico. Exempted from U.S. immigration laws, the commonwealth established a guest-worker program that garment manufacturers exploited. By the 1990s, more than 90% of its private-sector workforce were indentured foreign workers, mostly from Bangladesh, China, and the Philippines, who lived in barracks and signed one-year contracts forbidding them to quit, get married, or participate in political activity. 

In 1995, after the Senate passed a bill to end the islands’ exemption from the minimum wage, Abramoff and Pizzella sprang into action. They ferried more than 100 members of Congress and other Washington figures to the islands, including future Trump adviser Kellyanne Conway and, more importantly, House Majority Whip Tom DeLay (R-Tex.), who blocked any effort to repeal the minimum-wage exemption. The anti-regulation Competitive Enterprise Institute, in a 1996 report partially edited by Pizzella, called the commonwealth a “center of policy innovation” and “laboratory of liberty,” Mother Jones magazine reported.

Congress eventually repealed the islands’ wage and immigration exemptions in 2007 and 2008, around the time Abramoff was being convicted on felony corruption charges. 

But this past February, after the AFL-CIO decided to hold off on demanding that Acosta resign over the Epstein plea deal, Bloomberg Law reported that one concern was that some federation officials worried that Pizzella would be worse. 

July 13, 2019

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