DOL's Office of Inspector General Issues Semiannual Report to Congress

The Department of Labor’s Office of Inspector General (OIG) has issued its Semiannual Report to Congress, (pdf) outlining its significant accomplishments made during the six-month period ending September 30, 2010 and making a number of legislative recommendations.  The OIG conducts audits and evaluations to review the effectiveness, efficiency, economy, and integrity of all DOL programs and operations, including those performed by its contractors and grantees. In addition, the OIG is responsible for conducting criminal investigations regarding labor union racketeering and organized crime. According to the report, during the six-month period, the OIG’s investigations resulted in 175 indictments, 158 convictions, 190 cases referred for prosecution, 83 cases referred for administrative/civil action, and $85 million in investigative recoveries, cost-efficiencies, restitutions, fines and penalties, forfeitures, and civil monetary actions.

The report was particularly critical of the Occupational Safety and Health Administration (OSHA). The OIG explains that the agency has been remiss in effectively using its resources and measuring the impact of its enforcement efforts. Among other things, the OIG criticized OSHA’s failure to properly evaluate the effectiveness of reducing penalties for employers as an incentive to improve workplace safety and health. The report claims that “up to $127 million in penalty reductions may have been inappropriate.” To remedy this perceived problem, the OIG recommended that “OSHA implement controls to oversee and monitor investigations and caseloads, develop specific performance measures, update the Whistleblower Investigations Manual, and designate subject matter experts with technical competencies in specific whistleblower statutes.”

Regarding investigations of labor racketeering and/or organized crime, the OIG report highlighted a number of its success stories, including an investigation that resulted in the sentencing of the former national president of the Brotherhood of Locomotive Engineers and Trainmen and former president of the International Brotherhood of Teamsters Rail Division to 18 months’ incarceration. Following a separate investigation, the report notes that an investment advisor was ordered to serve more than nine years of imprisonment and pay restitution of more than $26 million to several union-sponsored pension funds after pleading guilty to charges of embezzlement and wire fraud.

After detailing the OIG’s investigation and audit efforts, the report lays out a number of legislative recommendations, including the following:

  • Allow DOL Access to Wage Records. According to the OIG, Congress needs to enact legislation giving the DOL and OIG the authority to “easily and expeditiously” access state unemployment insurance wage records, SSA wage records, and employment information from the National Directory of New Hires, which is maintained by the Department of Health and Human services. The stated purpose of doing so would be to reduce overpayments in employee benefit programs.
  • Amend Pension Protection Laws. The OIG claims that legislative changes to ERISA and criminal penalties would enhance the protection of assets in pension plans. To accomplish this aim, the OIG suggests enacting legislation to expand the authority of EBSA to correct substandard benefit plan audits and ensure that auditors with poor records do not perform additional plan audits; repeal ERISA’s limited-scope audit exemption; require direct reporting of ERISA violations to the DOL; and strengthen criminal penalties in Title 18 of the U.S. Code.
  • Provide Authority to Enhance the Integrity of the Foreign Labor Certification Process. According to the OIG, in order for the DOL to have a meaningful role in the H-1B specialty occupations foreign labor certification process, it must have the statutory authority to ensure the integrity of that process, including the ability to verify the accuracy of information provided on labor condition applications.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.