Labor secretary nominee addresses conflicts of interest
Labor secretary nominee addresses conflicts of interest
By LAURIE KELLMAN and STEPHEN BRAUN
Feb. 09, 2017
WASHINGTON (AP) — President Donald Trump's nominee for secretary of labor has proposed avoiding conflicts of interest by resigning as CEO of his fast food empire, selling off hundreds of holdings and recusing himself from government decisions in which he has a financial interest, according to his ethics filings with the government.
"I will not participate personally and substantially in any particular matter in which I know that I have a financial interest directly and predictably affected by the matter" without a waiver from government ethics officials, Andrew Puzder wrote in the nine-page filing, dated Tuesday and obtained by The Associated Press. Puzder is CEO of CKE Restaurants Inc., which owns such chains as Hardee's and Carl's Jr.
Asked on a separate Senate questionnaire obtained Thursday whether he would "sever all connections with (his) present employer" if confirmed, Puzder answered, "Yes."
A spokesperson for Tennessee GOP Sen. Lamar Alexander, whose committee will handle Puzder's confirmation hearing, confirmed that the panel had received the agreement with the Office of Government Ethics required of all presidential Cabinet nominees. The hearing was set for Feb. 16.
Democrats are questioning how well Puzder could advocate for American workers atop the agency charged with enforcing protections, given his business empire. They are publicizing several unflattering stories from current and former employees of Puzder's company, and his hearing has been postponed several times. Puzder has said he opposes a big minimum wage hike, rules on overtime pay and other labor priorities.
Puzder said on the questionnaire that from 2014 through 2016, he personally lobbied lawmakers and their staffers "to advocate on behalf of issues that are of importance to the restaurant industry." Puzder cited his firm's interest in menu labeling, franchise regulations, the Affordable Care Act and an Obama administration labor ruling that companies can be held responsible for labor violations committed by their contractors.
Although not listed on the committee's questionnaire, Congressional lobbying disclosures show that Puzder's company, CKE Restaurant Holdings Inc., spent $220,000 on lobbyists who contacted legislators and federal officials on workplace, agriculture and franchise regulation issues.
Puzder is facing confirmation in a Senate atmosphere that has become corrosive with opposition to some of Trump's nominees.
Like several of the wealthy corporate figures who have joined Trump's Cabinet and agreed to sell off their vast assets to eliminate possible conflicts of interest, Puzder promised in his ethics agreement that he would sell off his CKE Restaurant Holdings partnership stock shares to his company. Puzder estimated the worth of those stock holdings at between $10 million and $50 million, according to his financial disclosures.
Unlike the OGE-approved agreements of several other Trump Cabinet nominees, notably Secretary of State Rex Tillerson's, Puzder's does not include language that would place his sold-off holdings in a trust administered by an independent trustee. Such "blind trusts" are frequently used to wall off top federal officials from decisions made about their financial holdings.
Instead, the government appears to be allowing Puzder to use an alternate route of insulating himself from his holdings by converting them into "non-conflicting assets" approved by ethics officials, such as government bonds or diversified mutual funds.
Puzder said he was due a promised 2016 bonus, which he estimated in his disclosure to be worth between $1 million and $5 million, and said he hoped it would be paid "before I assume the duties of the position of secretary." But Puzder said he would forfeit that bonus if his company did not pay it to him before he took office.
Puzder's agreement indicated that he sought extra time to sell off some of his assets and that government ethics officials gave him only cautious allowances to do so. Puzder said he expected to be able to sell more than 200 stocks, bonds and mutual fund holdings within 90 days but warned that more than a dozen other investment funds with multiple underlying assets could take longer to sell.
Puzder said selling off those investment funds could take up to a half-year and his agreement indicated that Labor Department ethics officials might give him up to two months more but only if he shows "substantial progress" toward completing the divestiture of all of these entities within a half-year. Two of those complicated investment funds are vehicles run by Solamere Capital, an investment team headed by former Republican presidential candidate Mitt Romney and his son, Tagg. Puzder said he held up to $1 million in one of those funds, Solamere Capital Fund ll LLP.
Puzder promised to work with government ethics officials "to develop an effective recusal mechanism" for any decisions affecting those corporate entities.
The AP obtained the documents from a government official who was not authorized to release them before they are made public.
Puzder has acknowledged having employed a housekeeper who was not authorized to work in the U.S. A spokesman later confirmed that the nominee fired her when he discovered her status, about five years ago, and then paid her taxes after Trump nominated him to the Cabinet on Dec. 9. Democrats and a few Republicans on the Senate committee, including Sens. Johnny Isakson of Georgia and Susan Collins of Maine, say they want to hear more about his explanation.