Labor Unions Bemoan Suspension of Last-Minute Clinton Rule

By Christine Hall | July 7, 2008 | 8:27 PM EDT

( - The Bush Administration recently suspended another of Bill Clinton''s last minute regulations that would have withheld government contracts from companies not in compliance with certain federal and state laws.

Labor unions cried foul, accusing Bush of letting polluters and labor law violators off the hook. But critics of the rule insist its goal was never to bring errant companies in compliance with the law.

The Clinton administration regulation would have denied federal contracts to companies that had run afoul of foreign labor, employment, tax, environmental, antitrust, and "consumer protection" laws and regulations during the preceding three years.

However, business groups said the law would have allowed unions or business competitors to challenge a company''s bid for a federal contract based on charges brought against that company, even for relatively minor "paper" violations.

In suspending the rule, the Bush administration opened it up to a 60-day public comment period. The notice, published in the Federal Register, suspends the rule for nine months, during which time the rule could be repealed.

"These rules stand for the simple, common sense proposition that the government should look at a company's track record of complying with the law before giving that company a federal contract," said AFL-CIO Executive Vice President Linda Chavez-Thompson.

"American taxpayers will be outraged to learn that, thanks to the Bush administration, their tax dollars will be going to fund lucrative federal contracts for companies that routinely violate environmental, civil rights, worker protection, consumer, and other important laws," said Chavez-Thompson.

"President Bush''s action threatens our air and water," added Sierra Club Executive Director Carl Pope.

Business groups, which viewed the regulation as a political give-away to unions, argued that labor leaders would be able to use it to block companies they didn''t like from obtaining federal contracts.

In lobbying against the rule, businesses formed a coalition called the "National Alliance Against Blacklisting."

"The 'blacklisting regulation' clearly invites abuse from disgruntled employees, labor unions, competitors and others," said the president of the Associated Builders and Contractors (ABC), Henry Kelly.

"Their (the unions') complaint was that federal contracting dollars were going to companies that they had arguments with," added Charley Maresca, director of legal and regulatory affairs for ABC. "It was a solution in search of a problem.

"There is in fact a system in place that deals with making sure that the government is not dealing with chronic lawbreakers," said Maresca. "There''s a requirement within the federal acquisition regulation ... that any federal contractor have good business ethics, etc. There''s also provisions for disqualifying a contractor that has demonstrated in the past that they are either not capable of performing the contract or have been bad actors.

"Not a single federal agency was complaining that [existing regulations] were inadequate," said Maresca.

Vice President Al Gore originally promised the regulation to the AFL-CIO back in February 1997, but it was not until the day before Clinton left office that the promise was fulfilled.