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By Suzy Khimm

The federal watchdog for the Department of Labor is conducting a broad investigation into the Trump administration’s process for making regulatory changes, following allegations that officials are undoing worker protections without following the proper procedures, according to a letter obtained by NBC News.

The investigation will include the Labor Department’s effort to undo a child labor regulation affecting teenagers who work in hospitals and nursing homes, according to the Jan. 25 letter by the department’s inspector general, Scott Dahl.

Dahl sent the letter in response to congressional Democrats who had asked him to audit the administration’s move, and who provided NBC News with the letter.

Dahl wrote that his office would be incorporating its investigation of the child-labor rollback into “a broader review of the rule-making process at DOL.”

“The objective of this review is to determine how well DOL manages the issuance of regulations,” Dahl said in the letter, which also cited the independent watchdog’s efforts to examine “the integrity of the rule-making process” in the department’s worker health and safety division.

Dahl is already investigating the Labor Department’s handling of a proposal to allow restaurant managers and owners to take workers’ tips and place them in a tip-sharing pool that includes bosses. Bloomberg Law reported last year that the administration hid its own projection that the change would allow management to skim $640 million in gratuities. (The administration later backed off the change.)

The Labor Department is facing legal challenges over other deregulatory actions affecting workers. Last week, the department undid an Obama-era regulation requiring certain employers to submit detailed reports of workplace injuries electronically, arguing that it risked violating workers’ privacy. Last year, the department made it easier for small businesses and self-employed people to buy health insurance that does not comply with the Affordable Care Act. Both changes have spurred lawsuits alleging that officials failed to follow legally required procedures for rule-making.

Congressional Democrats who had asked the inspector general to investigate the child-labor rollback said they welcomed the watchdog’s more expansive probe.

“Inspector General Dahl’s response is a welcome step toward ensuring that the Department of Labor is truly acting in the interests of young workers in hospitals and nursing homes,” said Sen. Elizabeth Warren, D-Mass. “This is not the first time in recent memory that the department has tried to roll back workers’ rights on the basis of questionable or hidden evidence, so I am glad that the inspector general is taking a broad look at the department’s rule-making processes as well.”

Federal agencies must explain why the benefits of regulatory changes justify the costs when going through the formal rule-making process. They are prohibited from making “arbitrary and capricious” policy changes or risk facing legal challenges under the Administrative Procedure Act. The White House’s critics have regularly used such challenges to blunt the president’s deregulatory agenda in the courts.

“The office of inspector general’s decision to do a broader review of the Department’s entire rule-making process is an important step towards shedding light on this approach and restoring workers’ faith in the department charged with protecting their rights,” said Rep. Bobby Scott, D-Va., chairman of the House Committee on Education and Labor.

The Labor Department declined to comment on an open investigation, and referred questions about the injury-reporting lawsuit to the Justice Department, which also declined to comment. The administration is seeking to have the lawsuit over small-business health plans dismissed.

For months, worker-safety advocates have criticized the Labor Department for providing shoddy evidence to lift an Obama-era rule prohibiting 16- and 17-year-olds from operating power-driven patient lifts without supervision. They fear that allowing teenagers to operate the lifts on their own could endanger both young workers and vulnerable patients in nursing homes and hospitals.

The advocates, together with congressional Democrats, say the Trump administration officials relied on unscientific data to support the rollback, potentially violating the department’s own data quality guidelines and running afoul of federal rule-making laws. In its proposal to scrap the rule, the Trump administration referred to a 2012 survey of vocational schools, which said the regulation was imposing burdens on employers and forcing students to change jobs.

The National Employment Law Project, a left-leaning think tank in New York, obtained the underlying data for the survey, which had been collected through online tool SurveyMonkey. The group, along with Scott and other Democrats, says that the survey was flawed and that the findings cited by the Labor Department only reflected the views of a small handful of schools.

In a Dec. 4 letter to Scott, the Labor Department said it was not relying on the data in question “as part of any quantitative economic analysis” and drew information from many other stakeholders to support its child-labor rollback, including the Bureau of Labor Statistics. In its proposal to make the change, the administration said it would add more than 23,000 young workers to the health care system without endangering them.

Deborah Berkowitz, program director for worker health and safety for the National Employment Law Project, says the administration’s approach toward the child-labor rule reflects a broader problem.

“This is not a one-off situation — this is how they are conducting rollbacks of really important worker protections, and doing it with misleading information at best,” said Berkowitz, a former Labor Department official under President Barack Obama. “There’s clearly a pattern of the Department of Labor hiding information that is inconvenient and does not support the department’s position, in violation of well-known and established laws.”

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Herman Cain withdraws from consideration for Federal Reserve seat



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Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.

By Allan Smith

President Donald Trump tweeted Monday that he will not nominate businessman and 2012 Republican presidential candidate Herman Cain to a seat on the Federal Reserve.

“My friend Herman Cain, a truly wonderful man, has asked me not to nominate him for a seat on the Federal Reserve Board,” Trump wrote. “I will respect his wishes.”

In a blog post published later Monday, Cain explained his rationale for dropping out of consideration. Among them: The strict “ethical restrictions” that would constrain him from making money.

“I would have to let go of most of my business interests,” he wrote. “I could not serve on any boards. I could not do any paid speeches. I could not advocate on behalf of capitalism, host my radio show or make appearances on Fox Business.”

“Without getting too specific about how big a pay cut this would be, let’s just say I’m pretty confident that if your boss told you to take a similar pay cut, you’d tell him where to go,” he added, noting that he “did like the idea of serving on the Fed!”

Cain continued, saying that as recently as last week he told Trump he was “all in” and was making plans to visit Washington, D.C., and meet with senators who expressed skepticism about his nomination.

“But the cost of doing this started weighing on me over the weekend,” he said. “I also started wondering if I’d be giving up too much influence to get a little bit of policy impact.”

Weeks ago, Trump announced that he was planning to nominate Cain, saying he recommended him “highly for the Fed.”

“I’ve told my folks that that’s the man,” Trump added, noting that Cain was going through a background check “and I would imagine he would be in great shape.”

But the needed support for Cain’s possible nomination did not materialize in the Senate. Four Republicans — Sens. Kevin Cramer of North Dakota, Lisa Murkowski of Alaska, Mitt Romney of Utah and Cory Gardner of Colorado — indicated they were not in favor of his nomination, meaning that if all 47 Democrats were to vote no, Cain would not have the votes to be confirmed.

Cain made his name in the restaurant industry, where he ran the Nebraska-based Godfather’s Pizza franchise from 1986 to 1996 and has claimed his leadership saved the company from bankruptcy. He touted that experience as a conservative presidential candidate who was briefly the GOP front-runner in a crowded 2012 primary field.

But Cain ended his campaign after allegations surfaced that he had sexually harassed several women around the time he headed the National Restaurant Association from 1996 to 1999, and that he had an extramarital affair.

Cain has denied the allegations, and Trump called them an “unfair witch hunt.”

Earlier this month, Cain posted a video to Facebook signaling that he might not make it through the confirmation process.

“You better believe that the people who hate me, who do not like conservatism … are already digging up the negative stuff that are in stories from eight years ago,” he said.

But the administration continued to insist his nomination was on track. In an interview with “Fox News Sunday” this month, acting White House chief of staff Mick Mulvaney said Cain’s nomination was still alive and that he “would be a great member of the Fed.”

Cain told The Wall Street Journal last week that he wouldn’t withdraw his name from consideration.

Cain joined the Federal Reserve Bank of Kansas City in 1989, later becoming its deputy chairman and then chairman. In recent years, Cain tweeted favorably about raising interest rates — something Trump has repeatedly criticized the Fed for doing last year. Additionally, Cain has promoted a return to the “gold standard,” where U.S. currency would be backed by gold.

Cain’s withdrawal comes as Trump’s most recent Federal Reserve pick, Stephen Moore, has come under fire for reports about his back taxes and failing to make alimony payments to his ex-wife.

Trump has taken aim at the Fed over much of the past year, repeatedly criticizing the institution for its monetary policies and stewardship of the economy under Chairman Jerome Powell, whom Trump nominated in late 2017.

Soon after news of Cain’s withdrawal, Senate Minority Leader Chuck Schumer, D-N.Y., called on Senate Republicans to reject Moore as well.

“Herman Cain was woefully unqualified to be on the Federal Reserve and his failure to garner adequate support should not be used as a pathway by Senate Republicans to approve Stephen Moore, who is equally unqualified, and perhaps more political,” Schumer said. “Mr. Moore, like Mr. Cain, poses a danger to the economic stability of our country.”

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House Democratic leaders tell members to investigate Trump, not impeach him



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 / Updated 

By Rebecca Shabad, Frank Thorp V and Leigh Ann Caldwell

WASHINGTON — House Democratic leaders on Monday promised to pursue aggressive and extensive investigations into President Donald Trump — but would not commit to beginning impeachment proceedings.

During a conference call with rank-and-file members, House Speaker Nancy Pelosi, D-Calif., her leadership team and the chairs of major oversight committees outlined how Democrats would proceed in the wake of the public release of the redacted version of special counsel Robert Mueller’s report, according to two leadership aides on the call.

“We have to save our democracy. This isn’t about Democrats or Republicans. It’s about saving our democracy,” Pelosi said, according to a person on the call. “If it is what we need to do to honor our responsibility to the Constitution — if that’s the place the facts take us, that’s the place we have to go.”

“We don’t have to go to articles of impeachment to obtain the facts, the presentation of facts,” Pelosi added.

Pelosi said as much in a letter to her caucus released earlier Monday, writing that the “facts regarding holding the President accountable can be gained outside of impeachment hearings.”

At least two lawmakers, Reps. Val Demings of Florida and Jared Huffman of California, both spoke up in support of impeachment, according to the two sources on the call.

Huffman said he made the argument during the call that Democrats should no longer worry about impeachment further dividing the country. He said it’s not good for the country not to impeach.

“It’s bad for the country if Congress punts,” he said. “I think the script has flipped on political calculations. It’s far harder to defend inaction in the face of what we know.”

Demings said she believes Congress has enough evidence begin proceedings, her spokesman said.

House Financial Services Committee Chairwoman Maxine Waters, D-Calif., was the odd woman out among committee leaders during the call to make clear that she still supports impeachment.

“Everybody knows I’m for impeachment,” she said.

The House Democrats’ conference call occurred while lawmakers are on recess. As Democrats digested Mueller’s report late last week, some key members expressed support for impeachment proceedings.

On Friday, Massachusetts Sen. Elizabeth Warren became the first Democratic presidential contender to call on the House to start impeachment proceedings against Trump. Rep. Alexandria Ocasio-Cortez, D-N.Y., said she would sign onto an impeachment resolution introduced by Rep. Rashida Tlaib, D-Mich.

When asked whether Democrats might pursue impeachment, House Oversight Committee Chairman Elijah Cummings, D-Md., said Friday, “We may very well come to that very soon.”

House Judiciary Committee Chairman Jerrold Nadler, D-N.Y., whose panel would have the power to begin impeachment proceedings, also has not ruled that out. Asked if holding Trump accountable means impeachment, Nadler said last Thursday, “That’s one possibility — there are others.”

Nadler on Friday subpoenaed the Justice Department for the full, unredacted version of Mueller’s report as well as the underlying evidence, giving the DOJ until May 1 to comply.

On Monday, he issued a subpoena to the president’s former White House counsel, Don McGahn, for testimony and documents as part the panel’s investigation into possible obstruction of justice by the president and others.

Georgia Rep. Doug Collins, the ranking Republican on the House Judiciary Committee, spoke to reporters Monday after reading a less-redacted version of Mueller’s report at DOJ, saying that what he read did not change the findings of “no collusion.”

He also criticized Democratic leaders for rejecting Attorney General William Barr’s offer to view a less-redacted version of the report on a restricted basis, saying the Democrats were more interested in scoring political points than seeing additional information in the report.

“Nothing that I saw here today, at the end of the day, changed Mr. Mueller’s decision,” Collins said. “Nothing went any further except we had no collusion after a long and thorough investigation. We had no obstruction, no charge, there’s nothing there. Nothing today changes those results from last week.”

Senate Majority Leader Mitch McConnell said after an event in Owensboro, Ky., that the country should “move on.”

“Well, look, I think it’s time to move on,” the Kentucky Republican told reporters when asked about possible impeachment proceedings. “This investigation was about collusion, there’s no collusion, no charges brought against the president on anything else, and I think the American people have had quite enough of it, and it’s time to move on.”

Eileen Street contributed.

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Nadler subpoenas former White House counsel McGahn after Mueller report



Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.

By Rebecca Shabad

WASHINGTON — House Judiciary Committee Chairman Jerry Nadler, D-N.Y., issued a subpoena Monday to President Donald Trump’s former White House counsel Don McGahn for testimony and documents as part the panel’s investigation into possible obstruction of justice by the president and others.

Nadler said in a statement that special counsel Robert Mueller’s report indicates McGahn “is a critical witness to many of the alleged instances of obstruction of justice and other misconduct described in the Mueller report.”

“The Special Counsel’s report, even in redacted form, outlines substantial evidence that President Trump engaged in obstruction and other abuses,” Nadler said.

McGahn’s testimony to Congress would help “shed further light on the President’s attacks on the rule of law, and his attempts to cover up those actions by lying to the American people and requesting others do the same,” Nadler said.

Rep. Doug Collins, R-Ga., ranking member on the Judiciary Committee, blasted Nadler for “a stunning 36-item subpoena.”

“Instead of looking at material that Attorney General Barr has already made available, Democrats prefer to demand additional materials they know are subject to constitutional and common-law privileges and cannot be produced,” Collins said.

While Mueller opted not to charge Trump with obstruction of justice, he laid out efforts by the president to tamper with witnesses and affect the investigation. The report said, for example, that Trump ordered McGahn to tell Deputy Attorney General Rod Rosenstein that “Mueller has to go.”

“McGahn spoke with the President twice and understood the directive the same way both times, making it unlikely that he misheard or misinterpreted the President’s request. In response to that request, McGahn decided to quit,” the report said. “He called his lawyer, drove to the White House, packed up his office, prepared to submit a resignation letter with his chief of staff, (and) told (then-White House Chief of Staff Reince) Priebus that the President had asked him to ‘do crazy shit.’

“McGahn ultimately did not quit and the President did not follow up with McGahn on his request to have the Special Counsel removed,” the report said.

This is the second subpoena Nadler has issued in less than a week, with the last one being issued Friday for the full, unredacted Mueller report and its underlying documents.

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