Broken Trust: How the Biden-Harris DOL Leaked Confidential Information

When workforce protections will come to order, I note that a quorum is present. Without objection, the chair is authorized to call a recess at any time. Today's hearing will examine the Biden-Harris administration's use of common interest agreements to potentially channel confidential investigative information to outside parties, including private law firms and advocacy groups. The committee is pleased to welcome the Department of Labor, or DOL, Inspector General Anthony D'Esposito to discuss the findings and recommendations of the Office of the Office of Inspector Generals or the OIG, uh, and their investigation into this matter. When DOL agencies investigate potential violations of federal law, businesses and workers are required to turn over sensitive information, and they trust that the government will protect that information. However, in November of twenty twenty-four, the committee uncovered an incident involving the Biden-Harris administration's handling of an ERISA investigation that confirmed what many in the employee benefits community had long suspected. DOL was sharing confidential information with class action law firms to support private lawsuits. The committee immediately requested that the DOL OIG investigate this matter. Initially, the committee's concerns focused on the Employee Benefit Security Administration's use of common interest agreements. The OIG subsequently expanded its review to examine similar practices and missteps within wage and hour and the office of the solicitor. In June of twenty twenty-six, the OIG published its report, finding that the Biden-Harris DOL shared confidential information with outside lawyers to potentially skew court cases, raising serious questions about fairness and public trust. The report also found DOL failed to protect confidential investigative information, and couldn't even keep track of what was shared or with whom. In many cases, DOL shared sensitive investigative information with outside lawyers before lawsuits had even been filed. In other words, it shared information without written common interest agreements. The department lacked basic safeguards, failed to screen for conflict of interest, and allowed different offices to operate under different rules. The OIG's investigation and report were pro- prompted by the Education and Workforce Committee and I thank the chairman for leading those efforts. We found highly questionable activity by the Biden-Harris DOL, and demanded answers. The OIG has now confirmed serious failures. Government should protect the interests of the American people, not give special interest preferential treatment. I look forward to hearing from the Inspector General today about the OIG's important investigation and also his recommendations for moving forward. With that, I yield to the ranking member for his opening statement.

Thank you, Mr. Chairman. The Department of Labor has essential responsibilities, including uh protecting workers' rights, recovering unpaid wages, and lost retirement benefits, helping families with improperly denied health care claims, and much, much more. One legally permissible yet rarely used tool by the department during investigations and litigation, is called a common interest agreement. I understand today's hearing will focus on a recent Inspector General report on such agreements. How rare are they? Well, at a hearing last year, one witness testified that the department's Employee Benefits Security Administration, otherwise known as EBSA, only found twelve investigations where it it it where it entered into a common interest agreement over a fifteen year period. At that very same time, EPSA opened over thirty-one thousand investigations. So, there's only twelve investigations out of the thirty-one thousand investigations where this particular administration uh entered into a common interest agreement which is the issue at hand of this of this hearing. There were only seven common interest agreements identified at EPSA, and forty-one such agreements at the wage and hour division over the over the two and a half year scope of the inspector general's report. That represents an incredibly small fraction of the thousands investigations conducted by EPSA and wage and hour over the very same period. But we certainly appreciate the IG's work in identifying ways that the Department of Labor can improve its internal procedures and controls, related to the use of common interest agreements. The IG's report made eight process related recommendations. It is my understanding that the Department of Labor agreed with them and is working on implementation. Now this all seems very straightforward. However, based on the hyperbolic title of today's hearing, Committee Republicans regrettably remain obsessed with the former administration that left eighteen months ago. Perhaps that's because Committee Republicans don't want to look uh in the mirror and be accountable for their guided agenda that's failed working people. Actually, the Republicans' agenda hasn't just failed working people, it's actually caused them harm. In the year since President Trump and the congressional Republicans passed their big, ugly bill, Americans' lives have gotten more difficult and more and way more expensive. Uh, many continue to struggle to afford basic necessities such as groceries, housing, and gas, and workers' wages are failing to keep up with inflation. And due to Republican cuts, over eight million Americans have lost health care coverage in the past year, and over four million people have lost access to food assistance. Now, instead of crafting an agenda that meets the moment and helps working people who are struggling with the high cost of living, committee Republicans have consistently chosen the wrong priorities. Now, here's just one recent example. Many parts of the country have been experiencing relentless extreme heat this summer. OSHA has been working on a national rule to protect indoor and outdoor workers from this extreme heat. This is common sense and long overdue. Protecting workers in our nation's fields, warehouses, and factories from excessive heat is something that we all should support. Unfortunately, that's not the case. Yesterday, committee Republicans advanced a bill that would kill the rule and ban OSHA from ever using a similar one to protect workers from extreme heat. Mister Chairman, this is our last subcommittee hearing before Congress heads out for the August recess. For those keeping track, it is the second one that committee Republicans convened as Congress, touching on a rarely used Department of Labor practice. Rarely used, yet we're devoting all this time to uh to this obsession. Meanwhile, they've had zero hearings on the many urgent issues that working people in my district and across the district care about. There's not one single hearing focused on raising the minimum wage, not one single hearing focused on combating wage theft, not one hearing focused on strengthening our child labor laws. Finally, at the start of his second term, President Trump abruptly fired inspectors generals at many cabinet agencies including the Department of Labor. This was just one of the many unprecedented actions he's taken. This is the first time that the inspector general has

Pursuant to committee rule eight C, all members who wish to insert written statements into the record may do so by submitting them to the committee clerk electronically in Microsoft Word format by five p m fourteen days after this hearing. And without objection, the hearing record will remain open for fourteen days to allow such statements and other extraneous materials noted during the hearing to be submitted for the official hearing record. With that, we're going to turn to an introduction of our witness today. Uh, he is the Honorable Anthony P. Inspector General of the US Department of Labor. We want to thank you for being here today and we look forward to your testimony. Pursuant to committee rules, I ask that you limit your oral testimony to a three minute summary of the written testimony which you have provided. The clock will count down from three minutes as committee members ha may have many questions for you however pursuant to committee rule eight D and committee practice we will not cut off your testimony until you reach the five minute mark. I would also like to remind you that you have a responsibility to provide accurate information to the subcommittee. And with that, Inspector D'Esposito, you are recognized for your testimony.

Well, thank you very much and good morning. Uh, Chairman Wahlberg, Ranking Member Scott, Chairman McKenzie, the entire committee, thanks for having me back on the Hill. As Inspector General for the United States Department of Labor, my responsibility is to conduct independent oversight through audits and investigations that protect taxpayer dollars, combat fraud, waste, abuse, and corruption, safeguard American workers, and strengthen the public trust. I am honored to serve as the department's ninth Inspector General. My office initiated this audit after Congress and Acting Secretary Keith Sonderling raised concerns about the department's use of common interest agreements. Common interest agreements are intended to allow parties with a shared interest. I repeat, with a shared interest to exchange certain confidential information under limited circumstances. They were never intended to become a tool for the federal government to align itself with private plaintiff attorneys. Yet under the previous administration, the use of these agreements left them with the potential to be weaponized, deployed without meaningful oversight, without adequate safeguards, and in a manner that blurred the line between the public interest and private litigation. Here is what my office found. The Biden-Harris Department of Labor had no department-wide controls governing any of these common interest agreements. There were no written policies, no consistent approval processes, no centralized tracking. Some agreements were in writing, others amounted to a little more than a verbal handshake, In one case, an individual executed a common interest agreement without the authority to even do so. The department failed to adequately safeguard sensitive and confidential information. The office of the solicitor entered into agreements without notifying investigators in the Wage and Hour Division, or the Employee Benefit Security Administration, leaving them completely unaware that privileged information, connected to their own work, had been shared. When our auditors requested a complete inventory of these agreements, none existed. Agreements were scattered across emails, share drives, and case files. Officials initially identified forty-five agreements. Manual searches uncovered even more. That is not oversight. That is a system without accountability. Training and conflict of interest safeguards also fell short. Employees responsible for approving these agreements received little or no training on the associated risks, and the department was not consistently monitoring potential conflicts involving officials connected to outside organizations. Let me be very clear. Government attorneys represent the United States of America, not private plaintiffs' law firms. And under this administration, Acting Secretary Keith Sondling agrees. The Department of Labor exists to protect workers and enforce It should never create the appearance that government resources, privileged information, or taxpayer-funded personnel are being used to benefit private attorneys or increase their legal fees. This hearing is not about politics. It's about public trust. It's about protecting American workers. It's about ensuring that the Department of Labor works for the American people not outside interest. That is why we issued eight recommendations to strengthen oversight, improve coordination, establish centralized tracking, enhance conflict of interest monitoring, and require formal procedures and training. Under this administration, the department agreed with every single recommendation. Implementation is underway and my office will continue to monitor its progress and work with department leadership to ensure that this never happens again. These findings underscore why independent oversight matters. Weak controls erode the confidence in government. jeopardize confidential information and ultimately fail the American worker. Our work to protect Americans continues along Vice President J. D. Vance's fraud task force, as we tackle fraud in every corner, including H one B visas that have led to wage theft, been exploited, encourage human trafficking, fund criminal enterprises, and take American jobs away from American workers. Finally, I want to recognize the dedicated professionals of the Office of the Inspector General, whose integrity and relentless work made these findings possible. They understand this is not a political discussion, it's about doing the American, the right thing for the American people, the American taxpayers, and of course the integrity of the Department of Labor. Thank you for your opportunity to testify, and I look forward to answering all of your questions.

Under committee rule nine, we will now ask questions of the witness under the five-minute rule, and I will recognize myself first. Thank you, uh, Inspector General D'Esposito, for that testimony and for the work that you're doing on behalf of the American people and taxpayers to make sure that all of our resources that are supposed to be going to workers and individuals are actually being protected, and not diverted to law firms or special interest groups or somebody else along the way and we heard the downplaying of the number of cases in relation to the overall number of cases that are looked into, that somehow, if there are only twelve cases, that's somehow acceptable, which is an outlandish, outlandish, uh, statement because what we see is that when you have these cases that people become aware of it shakes confidence in the entire system and it makes it less likely that people are going to cooperate with the government and go after the bad actors who are supposed to be the targets, of these kind of investigations. So I would like to hear from you, uh, how the, uh, the work that the committee has done in contacting your office, how has that benefited or changed the way the common interest agreements are gonna be handled by EBSA? What is the, your office doing, uh, when looking into wage and hour, uh, division, and, uh, should they be audited? So tell us how it's starting to change the culture of these cases and how they're being handled within the department.

Well, thank you very much for the question, Mr. Chairman. Um, a- and like I mentioned, the - the fact is is that the Department of Labor, Office of Inspector General, after this audit, thanks to the notification from this committee and at the time, Chairwoman Fox, uh, made it very clear that there was a problem with common interest agreements. And, um, the issue is is whether it's one common interest agreement or one million common interest agreements, the fact is is that there was a potential uh for critical information to be leaked to plaintiffs' attorneys and the and the fact is is like I mentioned in my opening statement um the people that work at the Department of Labor uh they shouldn't be doing the work of plaintiffs' attorneys who are then billing their clients. Um the the information should be gathered in the correct manner uh and I know that the argument is going to be well under ERISA there is uh it's it's the legal opportunity of uh of the solicitor's office but the fact is is that there was no safeguards in place uh and my office has issued um eight recommendations all of which have been agreed to by the department of labor and are currently being implemented by acting secretary keith sonderling i know that one of the um the agencies are actually have their common interest agreements on pause until uh all eight are implemented so i think that the work that this committee did to sound the alarm with the potential of this information being utilized against the American worker and used for uh plaintiffs' attorneys will lead to change uh not only currently but in the future for the American people and for the Department of Labor.

Well that's important and we appreciate the eight recommendations you've offered and that they have been accepted by the Trump administration I think that's critically important to tighten up the controls uh that were abused in the last administration. taking confidential information, sharing it with outside stakeholders, uh, who should not have been in receipt of that kind of, uh, confidential information. Uh, it seems like an ethical breach, uh, pretty serious, one that again should not be downplayed by anybody. Uh, your report also found, uh, that there was a wage and hour staff member who entered into an agreement on behalf of that division but lacked the authority to do so. Can you provide additional details about that?

Sure. A uh a wage and hour division staff member uh who was assigned as an investigator executed a gr- an agreement that they did not have the authority to sign. Uh this happened because of no guardrails, the fact that nobody was watching, uh the fact that the common interest agreements with the potential clients seemed uh much more important to the last administration than the actual uh ethical use of them. Um That's exactly why we recommended establishing clearly defined roles and responsibilities for those who are going to sign or enter into these common interest agreements courts will often only find that the common interest protection applies to communications when counsel is either present, involved in, or directing such communications. And by not involving the solicitor in any attempt to share information under a common interest agreement the Department of Labor, risks waiving privilege, protecting information shared, uh, if it even applies in the first place. I mean, really what it comes down to is this is all pretty basic. When there's no guardrails in place, um, these are the kind of things that happen. And - and this individual, uh, did not have, uh, any authority to enter into a common interest agreement with any parties, uh, and he should have or she should have never signed the agreement in the first place.

Well, thank you again for raising this issue. Uh, and the recommendations that we can take to actually crack down on this kind of bad behavior. My time has expired, but I look forward to continuing this conversation not only throughout this hearing, but also as we move forward, not only with the safeguards that are going to be put in place, but those individuals and those actors that were party to these agreements figuring out uh if they need to be investigated further because uh fixing the system is the most important thing but also going after the individual bad actors that were beneficiaries of this is critically important as well. Next I will turn to uh the ranking member for his questions.

Yep. Thank you, Mr. Chairman. Thank you, Mr. Dispe- uh, Diasposito for being here. Uh, Mr. D- Diasposito, like, unlike a cabinet secretary, the inspector general of a government agency is required by law to be nonpartisan, apolitical, and independent. Um, why is it important that an inspector general be nonpolitical and independent?

Well, first of all, I'm I'm aware of the the rules and regulations of the Inspector General's Act, and I think that uh the independence in that act uh sig- not only uh outlines that the independence uh is clear when it comes to investigations that are within the department. I think that if you rewind back to the the beginning of the of the year and and my confirmation hearing I made it very clear uh I served an entire career in the NYPD never once did I respond to a nine one one call or a complainant and ask them if they were a Democrat or a Republican conducting audits and proper investigations uh can be done while still having uh your constitutional rights to believe uh and and to uh live your democracy.

So um I'll I'll note, Mister Desposito, your credibility with me is somewhat enhanced by the fact that you did investigate um the um actions of the the uh the the previous secretary of labor, um who was appointed by a Republican president, um that uh you carry that uh that very sort of investigative police mindset, um, that's apolitical. Um, but also you are aware at the beginning of the Trump administration, seventeen Inspector Generals, including uh the Inspector General at Labor were fired.

I'm well aware.

You are aware that. Uh, and the role of the Inspector General is to be outside of politics. The firing of IGs en masse is an unprecedented politicization of their role. And while the Trump administration claims that they're combating waste, fraud, and abuse, I and my colleagues have a deep concern about the firing, uh the very the firing is a very the very officials responsible for preventing fraud uh and inefficiency. I will point out you are a former Republican member of Congress, is that correct?

Sh

How many terms did you serve?

sure, one term.

One term, OK. Um ye- uh I just want your commitment, now I will note you did say in your opening comments you you gave made some comments about the Vice President, I've I've been a member of Congress and I've uh been a chairman a couple of terms of a committee. I've had IGs appear before me. I've never really heard an IG ever use language uh praising the efforts of the Vice President administration. There's kind of more neutral tone. I just want to point that out to you.

Well, I think that recognizing the fact that uh the President has

Uh

signed an executive order to root out fraud in the United States of America, where we're literally uh calming back billions of dollars into the treasury and

The That's all very well, that's all very, that's Reclaiming my time,

I think that recognizes the fact that other vice-president is doing a good job.

sir, it's all very uh very well implied. We don't have to be so defensive. There's no need to be so defensive. I'm just

I'm not being defensive, I'm just stating the facts.

W- um

There's never been a time in American history where where an administration has

Well, let me reclaim my time. Um Uh, let me re- sir, let me reclaim my time.

focused so much time on draining away fraud.

Mr. Chairman, I he took up twenty seconds of my time here. Uh, I I reclaimed my time twenty seconds ago. Now, can you commit to fulfilling the OIG's role as an independent office that prevents waste, fraud and abuse, while improving the, how the Department of Labor serves American people, as a fully, fully independent of the goals of the president?

I took the oath to serve as the Inspector General and I live that oath every day.

Thank you. That's a simple yes. Uh, you know, one office within the Department of Labor has particularly been beneficial, uh, is the, uh, is EBSA. It's a watchdog for the American people. It helps people receive their hard-earned benefits. Now what role does EPSA play in protecting workers' essential benefits like healthcare?

Well, the the role of EPSA is to, as was stated in my opening statement, to coordinate and investigate uh and to to work on agreements

So

litigating for the the the workers of the American

I- i- i- in fact, in fact, uh those uh people, those employees that are covered um by these health plans under EPSA, they can get help from EPSA uh if they have a

Absolutely.

Right? Um, so, you know, employer sponsored plans covered by EPSA are required to report data on claims payment policies and practices. But in two, twenty sixteen the OIG reported that EPSA lacks the ability to protect plan participants from claims and else, because it does not have the the necessary information to do so. Uh, and this, because of this, health plans are able to deny claims without explaining why. Currently the agency collects this information on just three percent um of the of the claims uh are you familiar with the oig twenty sixteen report on improving uh claims data reporting

i have not read the report from two thousand sixteen

ok so this harm is not imaginary ebsa administrators have gotten insurance claims approved for mothers who are facing cancer they have helped families who fear losing a loved one because their insurance will not pay for their lifesaving care um do you agree with your predecessor's assessment that the department of labor should revise the nineteen seventy five loophole that allow insurers not to disclose claim information.

I'd have to read the entire statute.

OK, I I would l- look forward to hearing that. Meanwhile, before I yield back, um, I just wanna tell everybody out there who's covered by an EBSA plan, if you have a health care claim that's been denied or you get your insurance through your employer, you can call one eight six six four four four EBSA, EBCA, or three two seven two or go online to ask ebsa dot dol dot gov for help. It's imperative that public servants at EBSA have all the information that they need to fight on your behalf and that's what I asked the secretary today. Thank you.

Thank you, sir, and I applaud this here, Sucker.

Bye.

Thank you. Next we'll go to the Chairman of the full committee, Mister Walbert.

Thank you, Mister Chairman, and it's good to see you back, Inspector General at DSP Zio.

Thank you, thank you, Chairman.

Thank you.

Um. In its review of the Biden DOL, uh the OIG identified roughly forty-eight common interest agreements.

Forty-eight.

However, your report found that, and I quote, "SOL did not track or maintain a centralized system or database for common interest agreements or shared information." And, continuing the quote, " Neither EBSA nor WHD tracked or monitored common interest agreements, Given the report's identification of these, uh, I call it deficiencies, uh, could there be additional common interest agreements which you were not able to identify and how confident are you that there were not additional agreements?

Well, thank you, Mr. Chairman. And absolutely, there could, uh, be additional agreements that we were not aware of because, as you mentioned, the Department of Labor under the last administration simply wasn't tracking them. Uh, and that's really the problem. There was no protocols or policies in place to track these common interest agreements. Uh, it's a significant risk of not having internal controls. If information was shared outside of the common interest agreement framework entirely, uh, we wouldn't know because the case files don't exist or they were taken with someone when they - when they left the office. Uh, and again, the absence of these robust controls uh, and formal guardrails creates an environment where improper or even nefarious sharing could absolutely occur.

Oops, no harm or foul. Uh, your report includes an example of an individual from a nongovernmental entity that entered into a common interest agreement with DOL in April of twenty twenty three. This person, interestingly enough, served as a senior counsel to then uh acting

Uh, absolutely, Mr. Chairman. Mr. Chairman. And - and quite frankly, uh, that agreement is the epitome of what it is that we're discussing and why we put - or made those eight recommendations to the secretary of labor. um it's the exact kind of blind spot that we're flagging thanks to the work of this committee and why uh we have recommended that staff participate in these agreements, be required to sign an affidavit affirming that they will abide by post-employment restrictions. The individual uh that um was involved in this agreement uh goes by the name of Munir Ahmad Uh, and as you mentioned, Mister Chairman, he served at the time as senior counselor to then acting secretary, Julie Hsu. The nongovernmental entity that he was sharing the information with was the Yale Law School Worker and Immigrant Rights. Now, shockingly or not shockingly, depending on how you look at it, Mister Munir Hamad is now, as of this morning on their website, is a professor at Yale Law with his focus and oversees the Yale Law School Worker and Immigrant Rights Division.

Interesting outcomes. Appreciate your work on that. It's also my understanding that many of the cases in which information was provided to outside parties remain open, enforcement actions. If DOL shares non-public information about a company with a law or advocacy group, like this gentleman, and these cases without following a unified procedure, could you discuss whether DOL should alert the company that it has shared this information?

Well, th- thank you, Chairman. I I think that um that's less of a call by the Inspector General and more of a policy decision by the Secretary of Labor. But what I will say is that uh I think it's important for the eight recommendations to be implemented uh so that there are disclosures in place that we can refer back to. The concern that we have of of notifying um of notifying anyone of any of these uh count uh law firms or um any of the entities is that if there is not uh information that's being shared incorrectly as part of the agreement it could tip off a potential investigation but I think that with the eight uh recommendations put in place by uh the secretary of labor, I believe that uh we have a real opportunity to change the way that these agreements are handled in the future uh and so that they could actually do the work of protecting American workers and that not lining the pockets of plaintiffs' attorneys

Thank you, my time has expired, I wish you well

Chairman, great to see you

You're back

Thank you, next we go to Mister Grothman

Uh could you just gi- give us give me in general the motives behind these agreements

Well, but I mean as a

I'll I'll legitimate it otherwise, I'll put it that way

I think the the motives have always been that, or as stated, is that it's when the Department of Labor and attorneys' offices could be beneficial to sharing information that one or the other has, uh, and makes it more expedient than perhaps going through subpoenas or using the FOIA mechanism.

OK. Do you notice any patterns between the the the ones that we were talking about today uh the eight common interest agreements that I guess kind of brings this topic to our attention.

I think that the the the patterns or the fact that they were entered into uh with with law firms or nongovernment entities uh that eventually ha seen uh relationships between the individuals who were signing them uh and the entity and the entities on the other side of it, much like I mentioned to the chairman when you have an individual signing a common interest agreement for Yale Law School worker and immigration rights and then later becomes the professor overseeing the Yale Law School, social worker and immigration rights.

So you think it's something that you kinda, you know, one hand washes the other and you set s- set yourself up perhaps for something in the future.

I think it's interesting and I think that's why this committee made the notification to the Inspector General's office to conduct the audit.

OK. Is it possible that Biden-Harris's uh Department of Labor's assistance to the plaintiffs' attorneys extended beyond secret sharing agreements to assisting with briefs or practicing for oral arguments in court?

So the Department of Labor told us directly that it doesn't provide that kind of assistance in matters where it isn't a party, though uh we had no way to independently verify that. since again none of these resources were tracked by the administration. Uh really the value uh the value for the plaintiff's attorneys lies in information that they probably otherwise couldn't access. Um we found no no evidence that uh the DOL attorneys were assisting with briefs or practicing arguments, but there is no question that the the some of the agreements um were executed to avoid FOIA and discovery.

OK. Is each secretary responsible for establishing guidelines for common interest agreements and can you further discuss whether there was evidence that, um, you further discussed whether there was evidence that there was non-public information shared at the direction of the leadership?

Department of Labor, uh, either the assistant secretary is in charge of those divisions or the solicitor of labor, uh, to work in coordination with the secretary of labor to come up with those policies. and implement them. Um, but I think that the - the real issue, and I - I just wanna quickly refer to one of our investigative files, is that there was no guardrails in place and that the people who were executing these common interest agreements weren't even sure as to what a common interest agreement was uh this was a question that was asked to someone who was interviewed uh if common agr- uh agreements were always in writing. And again, the answer was there's an in- that's an interesting question of what is a common interest agreement. It doesn't create rights, it reasserts commonality of interest. I suppose some people in certain situations might say that because the commonality is clear, we do not need to recite it, we can just go ahead and talk without entering into one. But there might be agreements as part of that, oral agreements not to um, not to use information for certain purposes, try to, but sometimes they're verbal. That just shows you that there was no policies or procedures in place, and the individuals who were actually executing and signing these common interest agreements didn't seem to understand them either.

OK. And it means that there were people maybe entering into common interest agreements, but there's no evidence in writing of that, right?

Right, cuz we don't have any of the files.

Right. Um, uh just in general, what's the propriety of a government agency designed to go along with provide an out an outside party information like this?

So I think uh the Department of Labor has the legal authority to share this information and doesn't matter who asks first uh common interest still has to exist. uh being asked really isn't the problem the problem is that the Department of Labor had no criteria for deciding when to say yes when to say no, and there was no real oversight in pro- in in uh place and without that the risk of improper sharing w- remained high through that throughout the administration and that's why uh the current secretary is implementing the eight recommendations.

Thank you very much and thanks for coming over here.

Thank you, sir. Great to see you as always.

Thank you. Next we'll go to Mister Mesmer.

Uh, thank you, Mister Chairman, and thank you, Mister Esposito for being here today. The June OIG report says the Biden-Harris administration clearly used questionable practices related to common interest agreements. Uh, your office has confirmed uh serious failures of accountability at the Biden-Harris Department of Labor, which led to the distinct possibility that enforcement information was used to advantage plaintiffs' attorneys in litigation. Clearly, these these tactics must never be repeated in the future. Uh that is why today I will be i- introducing the Ethical Investigations and Integrity Act, which would establish protocols before the DOL may share any confidential information with outside attorneys as part of any as part of a potential civil action related to any law enforced by the wage and hour division. This legislation applies many of the same reforms that were included in H R twenty nine fifty eight, the Balance the Scales Act, for practices under ERISA, and applies them to laws enforced by the wage and hour division. Uh, can you discuss whether the tactics outlined in your report, including information sharing with outside counsel by WHD, should be restricted?

Well, thank you, sir, for the question, and uh first and foremost with regards to the legislation, uh our office would be happy to provide any technical assistance that you need with that. Um, our the report's findings do not indicate um a definitive need to restrict the use of common interest agreements. Rather, the the report highlights the importance for establishing the appropriate guardrails, the oversight, and the internal controls to help ensure that these agreements are used consistently appropriately and in accordance with departmental policies, and of legal requirements.

Thank you. Um, the OIG's report uh found the officer of the solicitor's regional offices had different approaches in utilizing common instru- int- interest in- interest agreements including u- use of written versus oral agreements. And regional offices have varying opinions regarding who signed common interest agreements. Can you provide more information about which regions were particularly lax in, in their approach, and to the extent of informa- extent of information, uh, that was shared with outside entities?

Sure. So what I can tell you is, is that the pattern was real. Um, for example, the solicitor, uh, in our San Francisco office allowed oral common interest agreements and did not document anything related to the agreements that were being entered. Others used written agreements exclusively and the signatory pr- practices varied from region to region throughout the United States of America. That inconsistency, as reflected in our uh report, reflects a mismanagement uh and it also reflects a failure of the management that was in place. uh and it underscores the need for stronger controls. Uh and with regards to your question about uh the regions, I just wanna read, there was a question asked to one of someone being investigated and asked if he knows what what other offices in labor use common interest agreements. And this is the response, I quote, "Uh, I can say that the two offices I have worked in, the Plans Benefit Security Division and the New York Regional Solicitor's offices use them. I also know as a matter of public record that the S- San Francisco Regional Solicitor's Office's office has used them fairly extensively, and other offices I know as a revo- result of responses to FOIA has used them.

'Kay. Thank you. And, uh, appreciate your your testimony today, and I'll, my office will be glad to reach out to you for for i- i- uh, help on the bill.

Thank you, sir.

Thank you, and next we'll go to Mister Fein.

Thank you, Mr. Chairman, and it's good to see you today. Um, congratulations on the role.

Same here.

Thank you for for doing what you're doing. Um, I'm curi- what you described, the conduct you described is very troubling, and I wanna get into motives in your estimation in a few minutes. But my my first question is, are former Labor Department officials associated with the Biden-Harris administration or frankly, Democratic members of Congress, have any of them stated that they share your concern about what was clearly inappropriate conduct? Or is this a situation where only one group of people is troubled and the other group seems to turn their head?

The only concerns that I've heard is the fact that, um, from - from the committee and - and others on your side of the aisle that, um, there was a problem, a systemic problem within the common interest agreements, and that is why the audit was conducted, um, and why there have been recommendations given to the department. Uh, I don't agree with the premise that just because it was only a few, um, that there should - that should - it should be interesting.

That you've been able to uncover. You've been able to uncover,

We're

I mean,

Right.

you know, where there's one there's probably more. But it's not a broad, it's not generally accepted by everyone, this is a problem. So, my next question gets to motives. Why do you think this was done? Um, is it in co- I can come up with a few alternatives. It's sort of incompetence, self-dealing, or sort of helping sort of criminal kind of kickbacks to your buddies. Like why, why, this is conduct that never should have happened, so why did it happen? What w- what do you, what's your estimation on the motives and what's

Well, I - I would say that, um, based on the audit and the investigation and the individuals that were, uh, part of the investigation, I'll go back to you to - using the, uh, example that I gave to the chairman with, uh, Mister Munir Ahmad who was special counsel to Julie Hsu, uh, and signed off on a common interest agreement with, uh, the Yale school, Yale Law School worker and immigration rights, and then within six months, uh was working to overt

But Mister Ahmad, let me understand this, Mister Ahmad um cuts a deal with a future employer and then six months later is working for that employer. Is would that be illegal or is that is that just unethical, sleazebag behavior? I mean, what what i- what is is this just something we uncover or can we hold people like Mister Ahmad accountable for that?

I think that there should be accountability, but what comes first is making sure that these departments and the work that you guys are doing in this uh in this committee uh that those recommendations are implemented immediately and that this doesn't happen again, but uh to Chairman McKenzie's point, I think that there uh is an opportunity to go back and conduct further investigations into these common interest agreements to see uh if there was some sort of quid pro quo.

Is anybody who did any of this, we've got the example of Mister Ahmad who did something sleazy and then ended up with a job with the group he did the sleaziness for. OK. Um, are there people who did this sort of behavior, which you've now found is not appropriate, who still work for the Department of Labor? And if so, have they been held accountable for - for what they did?

I do not know of anyone who was mentioned in this investigation that still currently works at the Department of Labor.

And so I understand that the people who did this, were they political appointees or were they generally career? So political appointees you'd expect to generally leave, right? That we've got President Trump coming in, the the Biden people would leave, but the staff people you wouldn't think leave. So were the people who did this staff or political appointees?

Well, I know that uh Mister Ahmad was without a doubt a political appointee serving as counselor to Acting Secretary Julie Su. Um, and obviously the, or not obvious, I shouldn't say that, but the assistant secretaries in charge of the uh agencies that uh were affected by this uh those assistant secretaries would be uh appointed or nominated by the president uh and and probably went through a senate confirmation hearing.

So so these law firms that got this information, that they frankly never should have happened. Remember, let's understand the Biden-Harris administration is giving information to lawyers so they can go make money let's understand what happened here. Do we believe these these information sharing which never should have happened, was it sanctioned by Biden-Harris political leadership?

That wasn't uncovered in the in the audit. uh the audit was specific to the uh the past and present uh I put it in quotes " leadership" of the Department of Labor.

So look, I'd conclude by saying this, weaponization of government is real, sometimes it gets a lot of attention, sometimes it doesn't. But this is one of these examples where we can see nefarious actors who are looking out for an agenda not for the American people doing things that they never should have done. So I applaud you for uncovering this, and I hope you stay at it, cuz where there's one rotten egg there usually are many, many more. So keep up the good work and I yield back.

Good to see you.

Good to see you.

Thank you. Next we'll go to Mister Scott, Ranking Member of the full committee.

Thank you, Mister Chairman. Thank you and good to see you all. Good to see you again.

Yes, sir, Mr. Ranking Member.

Uh, you have um in talked about the independ- the importance of independence. Can we count on you to respond to questions posed to you by um myself as a Ranking Member of the committee or subcommittee members?

Absolutely.

Thank you. Uh, we've asked a question about the ERISA advisory committee. Um, it's not functioning. Is the uh Office of Attorney General uh Inspector General aware of this? And if so, what have you done?

Uh, well, we are in receipt of your letter. Um, I have uh made a notification to the acting secretary uh of labor. Obviously, as you know, he just went through his confirmation proc process. Um and from what I was told, he is working on uh putting policy and procedures in place uh for ERISA.

Thank you. Um another question we asked, it was asked to the secretary, the Woodland inspector general, when we asked the question, and that is according to public um reports, uh companies owned by Elon Musk are being investigated at the time by OSHA and NLRB. Um, when Doge was going through the Department of Labor, did they have access to the investigatory files of these investigations of his companies?

I was not the Inspector General at the time, uh, when Doge was President of the Department of Labor.

OK, and in your investigations of the former secretary, our interest is going forward, and have you put in place safeguards to make sure that such abuses don't take place in the future.

So, uh, Mister Ranking Member, there are some recommendations that have preliminarily been made to the department. Uh, but when the final report is issued, uh, there will certainly be a number of recommendations that our office will make to the Department of Labor to uh make sure that any of the allegations or accusations that were made against the former secretary, that we could avoid that happening again.

Thank you. Um, you've talked about the - the - the common interest agreements can be valuable. Y- y- according to your report, you have paused them, you haven't stopped them. Is that right?

I have not paused them. I've spoken to, uh, some of the assistant secretaries, uh, within the agencies that, uh, this has been a part of. who have said that they are putting a pause on them until uh the s- until the eight recommendations made by the Inspector General's office are implemented in full.

Uh but that um suggests that they will continue after that report. Uh you have gone into great detail about the problems that there were no procedures or controls under the uh Biden administration. Can we find the procedures and controls in previous administrations

The audit that was conducted by the Department of Labor Inspector General focused on a time frame within the Biden-Harris administration, uh, as it was requested by, at the time, Chairwoman Fox. Uh, so the the audit that was conducted and the investigation that was conducted would only uh provide information into that time frame.

Are you aware of any procedures or controls in previous administrations, when they were using the company

i am not aware but i will say that uh from reviewing the audit and the investigation uh there were not complaints in previous information of uh critical information being shared by the department with plaintiff's attorneys

but you're not aware of any procedures or or controls

i only started at the department of labor in january twenty twenty six and i can only uh give you the proper answer to what we found while conducting this audit and investigation.

Yeah, you've had a back and forth over an employee who was at the Department of Labor and then got a job at a place that was involved in a common interest agreement. Uh, what safeguards are there to prevent employees at the Department of Labor from getting jobs at any entity that they may have had oversight responsibilities on?

Currently?

Right.

I believe that I'm pretty confident that any political appointee, or at least those confirmed by the Senate, um fall into some restrictions of employment following their service.

Permanent?

I don't believe it's permanent. I think it's similar to members of Congress when you're leaving the Hill.

Thank you, Mr. Chairman.

Thank you. Well, thank you, uh, Inspector General.

Thank you, Mister Chairman, and once again thank you to the witness for joining us today.

Sure.

Uh, this subcommittee is charged with important responsibilities including ensuring that workers can come home, at the end of the day, healthy, whole, and fairly paid. Amidst the cost living crisis in this country, Congress needs to step up and make life easier for uh working Americans. Unfortunately, today's hearing marked yet another missed opportunity to offer solutions to real problems affecting workers and their families. This was the second hearing, this Congress, on a legal yet rarely used labor department practice of using common interest agreements. The IG report made uh process-focused recommendations I and I repeat, process focus recommendations and the the Labor Department is currently implementing them. This is rather straightforward stuff. We've heard a lot of talk about the Biden administration this that they haven't been in power for at least eighteen months. Perhaps committee Republicans are focusing too much on the former administration because they do not have a good story to tell as we prepare to head home for the August recess work period. Our constituents have been telling us that the economy isn't working for them. Yet, Republicans have responded by making things even harder by enacting legislation that caused over eight million folks to lose their health care coverage in the past year and caused over four million people to lose access to food assistance. That's certainly not a record that I'd want to talk about either. I hope that we can return from the August district work period with a renewed focused uh with a renewed focus and address urgent issues such as raising the minimum wage, improving workers' rights, and strengthening child labor laws. These uh these uh that focus will actually help the American people. Thank you, now yield back the balance of my time.

Thank you. This is by my count the fifteenth hearing that this subcommittee has held during this Congress, and we have discussed important issues such as wage laws, uh FICA, which is the Federal Employees' Compensation Act, can protect our injured federal workers and get them safely and healthily um back to a state where they can return to work. We have held two hearings on OSHA, one hearing on MSHA, a hearing focusing on innovative approaches to expanding paid leave, things uh have al- uh other hearings have also included ways that we can act per- provide increased access to health care providers. This subcommittee and all of our members in a bipartisan fashion have done a great job of discussing important issues for the American worker. And this hearing is no different to agreements, whether it was twelve or forty-eight or some unknown number because we didn't have a proper tracking system in place in the last administration, shake the confidence that people, the American people have in their Department of Labor to go out and do the work on their behalf to make sure that they are in safe, healthy work environment to a point where they can have a safe and secure retirement as well. So, making sure that we have the proper safeguards in place is critically important at the department. And then also, as we talked about, holding those bad actors accountable is another critically important step. And so I would like to thank the Inspector General again for being here today, to participate in this important hearing. And as this hearing has shown, during previous the previous administration, DOL failed to protect confidential investigative information, it did not screen for conflicts of interest by DOL personnel, and shared sensitive information with outside lawyers before lawsuits even began. That's not how government should operate and Americans deserve to have full confidence that their Department of Labor and their government will safeguard their sensitive information. So I would again like to thank uh the OIG, uh all of the employees there uh and the Inspector General himself for their report and their recommendations uh on how we can better improve the operations at the Department of Inf uh Labor and make much needed reforms as we move forward. With that, I'd like to thank everybody again and this meeting stands adjourned.