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Mike Elk

Mike Elk is a labor journalist and staff writer for In These Times

February 26th, 2011 12:54 PM

Why Should Firms That Spied on Unions Keep Government Contracts?

Earlier this month, Lee Fang of Think Progress wrote an investigative piece on how the Chamber of Commerce had hired a private security firm to spy on union leaders and their families.

Lee discovered through emails obtained by ThinkProgress that the Chamber had hired the law firm Hunton & Williams in October 2010. Hunton & Williams then solicited bids from several companies to illegally spy on unions and other opponents of the Chamber of Commerce. As part of the bidding process, the law firm paid the firms to conduct initial spying on union leaders, their families and even their children.

Several of the firms involved in the spying had in the past received government contracts. As investigative reporter Justin Eliot of Salon dug up, one of the firms, HBGary, had won $3.3 million dollars worth of federal contracts for various federal agencies since 2004. Likewise, investigative reporter Marcy Wheeler of FireDogLake found that another of the firms involved, Palantir, had received $6.6 million in federal contracts since 2009.

This led Wheeler to wonder whether Palantir might be worried about losing their government contracts for spying on federal workers. Indeed, laws do exist on the books that prohibit contractors who break the law from receiving government contracts. So will the companies that spied on union leaders in violation of federal lose their government contracts?

“Very unlikely,” says federal contracting expert David Madland, director of the American Worker Project at the Center for American Progress. “Look at BP. They cause massive environmental damage, kill workers all the time with their poor safety records, but yet they are still getting government contracts. While there are laws on the books to prevent companies like BP and others who break the law from getting government contracts, the government lacks the tools and the appropriate standards to enforce these laws.”

According to testimony before Congress by the Project on Government Oversight, only a handful of major corporations that have committed major crimes have been suspended from receiving government contracts since the mid 1990s: “General Electric (for a period of five days); now defunct companies Worldcom, Enron, and Arthur Anderson; Boeing (which received multiple waivers to receive new contracts during its suspension); and IBM (for a period of eight days in 2008).”

Not receiving government contracts could serve as a major deterrent to corporations that violate labor, safety and environmental laws in ways that adversely affect workers. The key is fixing the laws through executive order that we already have on the book.

Madland explains:

The current process for ensuring that the government only does business with responsible companies has been a failure for several reasons. Debarment—the process by which the government bans irresponsible firms from doing business with it—is rarely used, is too slow a process, and occurs after the fact.

And responsibility review—the government’s tool to pre-screen every company’s legal record on a case-by-case basis before it does business with it—is weak and inadequate. An enhanced responsibility review based on thorough information and rigorous analysis.

Many administrative enforcement changes could be made right now, without legislative approval, which would prevent many corporations that break the law from receiving contracts. For starters, Preident Barack Obama could reinstate President Bill Clinton’s “contractor responsibility rule,” which would have created guidelines to prevent bad actor corporations from receiving government contracts. The Bush Administration stopped the implementation of the rule. 

Also, improved databases and more government contract officers are needed so those government contract officers are not overwhelmed when they try to shift through the mountainous legal history of big corporations. Likewise, this information should be provided publicly so that independent watchdogs can ensure that proper standards are being followed when determining whether or not a big corporation should receive a government contract.

So the question is: Why hasn’t President Obama enacted the rule changes that would limit corporations that break the law from getting government contracts? Implementating such rules would greatly discourage unionbusting and help workers organize. It looks like this is another issue where Obama says in public he’s for unions, but in private shows that he is really on the side of big corporations.

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