Inside Information at NLRB Converted for Private Benefit of Former Members, says NLRB Inspector General
WASHINGTON – Rep. George Miller (D-CA), the senior Democrat on the House Education and the Workforce Committee, wrote the Attorney General today asking him to consider evidence resulting from an investigation by the National Labor Relations Board Inspector General, which found that current Board Member Terence Flynn, when serving as a chief counsel, provided confidential information to former Board Members Peter Kirsanow and Peter Schaumber for their private benefit.
“As the senior Democratic member of the U.S. House Committee on Education and the Workforce, I have been deeply concerned about a number of developments over the last year that have threatened to undermine the integrity of the adjudication and rulemaking processes at the National Labor Relations Board,” wrote Miller to Attorney General Eric Holder. “The Inspector General’s findings about the conversions of sensitive government information for private gain should not go without further scrutiny. In short, such actions threaten the integrity of the Board’s most vital operations.”
Miller forwarded the report to U.S. Attorney General Eric Holder urging him to carefully consider information contained in the Inspector General’s report as well as information the Attorney General has received pursuant to the Inspector General Act.
According to the Inspector General report, the deliberative, pre-decisional information included “lead case lists, pre-decisional votes and positions of the members, the identity of counsel assigned to a case, the status of cases, the researching issues in cases, the deliberation of the former Chairman in [a case], the desire of two members to press forward in [a case], and the analysis of the Board’s resolution on” a pending rulemaking.
“In addition to the improper assistance provided, the report raises questions regarding the actions of the outside parties, including the extent to which any inside information was used for their or their clients’ private benefit,” Miller wrote.
This investigation comes on the heels of an earlier investigation by the Inspector General into whether Board Member Brian Hayes received improper inducements to resign his position on the NLRB. In that case, the Inspector General found that Member Hayes engaged in employment discussions with a law firm with business before the agency. During that time, some had been calling on Hayes to resign in order to incapacitate the NLRB, preventing it from issuing case decisions or new rules, including a rule to reform union elections. Hayes' resignation would have denied the NLRB a quorum, stopping any action to advance the election rule, among other things. In light of that Inspector General report, Miller asked the Department of Justice to investigate possible enticement involving Hayes and the private law firm.
Read the Inspector General report on Member Flynn
The full text of the letter from Rep. Miller to Attorney General Holder appears below.
March 23, 2012
The Honorable Eric H. Holder, Jr.
Attorney General
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Attorney General Holder:
As the Senior Democratic Member of the U.S. House Committee on Education and the Workforce, I have been deeply concerned about a number of developments over the last year that have threatened to undermine the integrity of the adjudication and rulemaking processes at the National Labor Relations Board (“NLRB” or “Board”). Less than two months ago, I asked the Department of Justice to investigate possible enticement involving a Member of the Board and a private law firm with business before the NLRB. My referral was based in part on evidence included in a January 23, 2012, NLRB Inspector General Report of Investigation. I write today because the Inspector General has once again informed the Committee that additional improper conduct may have occurred at the Board involving another sitting Board Member and two former Board members.
NLRB Inspector General David Berry transmitted this latest Report of Investigation to the Committee earlier this week. For convenience, I have attached a copy of that report to this letter. Also, I understand that, as part of this investigation, the Inspector General has in fact fulfilled his statutory requirement to report to you information about possible criminal activity. To ensure the integrity of this important independent government agency upon which both employers and employees rely for the fair administration of their rights, I urge you to carefully consider the information that the Inspector General has provided to you.
According to the Report, current Board Member Terence Flynn, “while serving as a Chief Counsel, violated the Standards of Ethical Conduct for Employees of the Executive Branch” because among other actions, he provided “deliberative, pre-decisional information that was protected from disclosure” as well as “attorney-client information…protected from disclosure” variously to former Board Member Peter Kirsanow, former Board Member Peter Schaumber, and others. The deliberative, pre-decisional information at issue included “lead case lists, pre-decisional votes and positions of the members, the identity of counsel assigned to a case, the status of cases, the researching issues in cases, the deliberation of the former Chairman in [a case], the desire of two members to press forward in [a case], and the analysis of the Board’s resolution on” a pending rulemaking.
The Inspector General found that Mr. Flynn’s “improper disclosure of information to former Members Kirsanow and Schaumber amounted to a conversion of the information for the private benefit of former Member Kirsanow and his client, the National Association of Manufacturers, and former Member Schaumber’s labor relations consulting and/or legal practice.”
The investigation uncovered an electronic file named “Schaumber business plan.doc” stating: “My practice will be developed in part by leveraging my Agency connections and focusing the attention of senior management on the likely priorities of the Obama Board and strategies to respond to them.” Another file named “Schaumber SuppBusPlan.doc” indicated that former Member Schaumber would “serve as a liaison for the firm on matters requiring high level intervention at the National Labor Relations Board and other Government agencies.” The Inspector General describes Mr. Schaumber as having a “labor relations consulting and/or legal practice” and notes a September 12, 2011, announcement that Mr. Schaumber “would serve as a co-chair” of a “Labor Policy Advisory Group” for a candidate for the Republican nomination for President.
The investigation noted that Mr. Kirsanow represented the National Association of Manufacturers in litigation against the National Labor Relations Board. According to the report, an email from Mr. Flynn to Mr. Kirsanow in the midst of that litigation revealed attorney-client information belonging to the Board related to that litigation.
It is not clear from the Report whether the Inspector General uncovered the sum total of improper assistance provided to these outside parties. The Inspector General notes that, “in general, we were only able to review e-mail records from May 2011 forward that remained on the NLRB e-mail server through the period of this investigation.”
In addition to the improper assistance provided, the Report raises questions regarding the actions of the outside parties, including the extent to which any inside information was used for their or their clients’ private benefit.
In closing, the Inspector General’s findings about the conversions of sensitive government information for private gain should not go without further scrutiny. The information that was shared is the kind of information that is sacrosanct to the effective operations of the NLRB and the due process rights of the parties appearing before the Board. Disclosure of such information “could have a chilling effect on the operation of the Board and may prejudice the due process rights of the parties in pending and future cases.” In short, such actions threaten the integrity of the Board’s most vital operations.
If you have questions regarding this letter, please contact me or direct your staff to contact the Committee’s minority General Counsel, Megan O’Reilly, who may be reached at (202) 225-3725. I appreciate your attention to this matter.
Sincerely,
GEORGE MILLER
Senior Democratic Member
cc: John Kline, Chairman, Committee on Education and the Workforce
David P. Berry, Inspector General, National Labor Relations Board
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