By Pam Martens and Russ Martens: December 13, 2016
Whistleblowers certainly haven’t enjoyed halcyon days under either Presidents Obama or George W. Bush (see related article below) but President-elect Donald Trump’s cabinet could actually produce an upsurge in corporate corruption by making whistleblowers fearful of coming forward at all.
Now that Trump has announced his intention to put Big Oil in charge of the State Department; an executive opposed to the new overtime pay laws at the helm of the “Labor” Department; and the vampire squid Goldman Sachs’ alumni in charge of “anything that smells like money,” it seems safe to say this isn’t exactly the populist President the working class had in mind. In fact, it looks very much like a corporate coup d’état with three military generals thrown in to the mix as the Praetorian Guard in case the sold-out laborers grab their pitchforks.
Trump’s nominee for Labor Secretary, Andy Puzder, is particularly problematic. Puzder is the CEO of CKE Restaurants, a fast food chain famous for its ads of scantily clad women. We don’t know if that’s what attracted Trump to him or if it was the book Puzder co-authored with David Newton titled: Job Creation: How It Really Works And Why Government Doesn’t Understand It. The book carries this analysis of what it will take to jump-start the economy from the doldrums left from the Great Recession:
“A sustainable recovery requires strong corporate profits, a balanced budget with drastically reduced government spending, reduced business regulation, and across-the-board lower individual and corporate taxes. These will release the U.S. free enterprise system’s dynamic energy for growth, incentivize entrepreneurship, and lead to robust job creation – THE key indicator of any economic recovery.”
Puzder apparently hasn’t read the dozens of books or the official report from the Financial Crisis Inquiry Commission which places his cure of reduced regulation as the key culprit of the greatest financial crash in 2008 since the Great Depression, which then took down the rest of the U.S. economy. Attempting to deregulate our way out of an epic deregulation catastrophe only makes sense to CEOs who get filthy rich from deregulation.
In May, Puzder had this to say about the new overtime pay law in an opinion piece at Forbes:
“Today the Labor Department released its new overtime rule requiring that employers pay overtime to salaried managers who earn less than $47,500 per year, doubling the previous threshold of $23,660. Labor Secretary Tom Perez is promoting it as a means to increase middle-class wages claiming that ‘the overtime rule could… help millions of workers get back into the middle class.’ As with the Obama Administration’s other efforts to regulate their way to economic prosperity, it will not deliver as promised.”
Puzder ends his opinion piece with a dig at progressives and a salute to the preaching of Charles Koch, writing:
“One can only wonder when the advocates of progressive economics will realize that, despite their best efforts, you cannot regulate your way to economic prosperity.”
The U.S. Department of Labor that Puzder will head includes OSHA, the Occupational Safety and Health Administration, which administers more than 20 whistleblower protection laws, including the laws which protect whistleblowers from retaliation for filing a claim. In addition, any employee who works for a company traded on a stock exchange or over-the-counter is protected by OSHA from retaliation for reporting “mail, wire, bank or securities fraud; violations of SEC rules or regulations of the SEC; or violations of federal laws relating to fraud against shareholders.”
That’s how it’s supposed to work anyway. According to a report by Ann Marsh, for Financial Planning on December 9, “protections for whistleblowers have broken down at the Labor Department.” Marsh cites examples of OSHA investigators looking into whistleblower claims at politically powerful financial firms like JPMorgan Chase and Wells Fargo, only to find themselves fired by OSHA.
That sounds incredibly similar to what happened to Gary Aguirre, an SEC attorney, and Carmen Segarra, an attorney and a bank examiner at the Federal Reserve Bank of New York. Segarra says she was fired by the New York Fed for refusing to change her negative bank examination of Goldman Sachs, after being bullied by her colleagues to do so. After the Senate’s shaming her boss, Bill Dudley, in a hearing, the whole matter was quickly forgotten by Congress and Dudley has gone on his merry way as President of the New York Fed, delivering a series of hypocritical speeches on what it will take to change the bad culture on Wall Street.
When George W. Bush was president, there was the case of Gary Aguirre, an SEC attorney who tangled with the powerful John Mack, a former official at Morgan Stanley. Aguirre wanted to serve a subpoena on Mack and take testimony about Mack’s potential involvement in an insider trading case. Aguirre was fired just three days after contacting the Office of Special Counsel to discuss how the SEC was protecting Mack.
Given the history of the crony SEC, the last place one would expect to find an Office of the Whistleblower is at the SEC. But under the Dodd-Frank financial reform legislation that was passed in 2010, the SEC was forced to create one.
It’s long past the time for Congress to apply common sense to the concept of whistleblowing and move the whistleblower offices out of both the Labor Department and the SEC and into a completely independent agency. If not, Trump can look forward to an epic increase in corporate corruption scandals on his watch.