Former Bush NAFTA Official, Covered by Diplomatic Immunity, Ducks Criminal Prosecution
Chairman Miller Asks Secretary Chao if Steps Have Been Taken to Ensure Justice

Thursday, April 17, 2008

WASHINGTON, DC -- A former high-ranking Bush political appointee is avoiding a potential criminal investigation into his misconduct while running a NAFTA-related agency because he has diplomatic immunity, according to a recent Inspector General report. U.S. Rep. George Miller (D-CA) today asked the Bush administration what it is doing to waive that immunity so that the IG’s investigation can proceed.

From 2004 until his resignation in 2006, the official, Mark Knouse, was the executive director of the secretariat for the Commission for Labor Cooperation, a three-nation panel created by NAFTA to examine labor issues and promote labor standards in the United States, Canada, and Mexico. Knouse, a Pennsylvania lobbyist, resigned amid allegations that he had used CLC funds – which come from taxpayers in the three countries – to fund his own outside lobbying activities, including meals with clients and trips to meetings.

U.S. Labor Secretary Elaine Chao appointed Knouse to the post. Knouse’s wife is an assistant in Chao’s executive office at the Labor Department.

Last week, the Inspector General at the U.S. Department of Labor issued an audit report in which it concluded that the CLC could not demonstrate that nearly $10,000 in travel expenditures incurred by Knouse and another CLC staffer actually “supported the CLC mission.” The IG also found that, under Knouse’s leadership, the CLC spent $1 million without demonstrating that “it actually received the goods or services for which it paid.”

The IG’s auditors were unable to refer the matter to the IG’s investigators – who would conduct a criminal investigation – because Knouse “was entitled to diplomatic immunity from prosecution, and the CLC did not respond to the OIG's request to waive this immunity.” The CLC’s Council of Ministers, which comprises the labor secretaries from the U.S., Canada, and Mexico and which forms the CLC’s leadership, has the authority to waive Knouse’s diplomatic immunity, but apparently has not done so.

Miller sent a letter to Chao today asking if the Council of Ministers had discussed the Knouse situation or taken any steps to respond to the IG’s request to waive Knouse’s immunity. Miller said the scandal shows that the Bush administration is not committed to improving labor standards under free trade agreements.

“Why was Mark Knouse using taxpayer money to wine and dine his lobbying clients? Why was Mark Knouse engaging in outside lobbying at all when we had a taxpayer-funded job to do? And most importantly, why hasn’t the Bush administration acted to strip Knouse of his diplomatic immunity so that he can be investigated and prosecuted? These are very serious questions, and they demand answers,” said Miller, chairman of the House Education and Labor Committee.

“The fact that Secretary Chao appointed a crony to lead a key labor commission under NAFTA shows that the Bush administration has no regard for the effect of trade agreements on the workers in the countries that are party to them,” said Miller. “The situation has been made even worse by the fact that Mark Knouse is getting away with these serious abuses of the public trust. Secretary Chao is opening herself to the perception that she is shielding an alleged criminal, to whom she has personal ties, from accountability under the law.”

The text of Miller’s letter to Chao is below. To see the IG’s audit report, click here: http://www.oig.dol.gov/public/reports/oa/2008/21-08-002-01-070.pdf.

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April 17, 2008

VIA FACSIMILE – XXX-XXX-XXXX

Dear Secretary Chao:

On April 7, 2008, the Office of the Inspector General (OIG) of the Department of Labor released a report detailing repeated and extensive unjustified use of taxpayer funds by the Secretariat of the Commission for Labor Cooperation (CLC). As you know, the CLC was created under a supplemental agreement to the North American Free Trade Agreement for the purpose of promoting labor standards and other labor-related cooperative activities among the three NAFTA countries.  The CLC’s Ministerial Council is composed of you and your counterparts in Mexico and Canada.

The OIG report indicates that the CLC has undermined its mission through ineffective oversight of its Secretariat staff. For example, the OIG report confirms that the CLC Secretariat could not demonstrate that expenses incurred by its executive director, Mark Knouse, supported the CLC’s mission. In addition, the Secretariat could not demonstrate that it ever received the goods or services for which it paid approximately $1 million.

As you are aware, I have been deeply concerned about abuses of the public trust by the Secretariat of the CLC since November 2006.  At that time, I wrote to you regarding my concerns over the allegations of questionable activities and the subsequent resignation of Mr. Knouse.

I am aware that the designees of the Council of Ministers, which comprises the CLC’s leadership, held a meeting on Monday, March 31, 2008 here in Washington, D.C.  I expect that the designees discussed the findings of the OIG report, and as such, I am requesting the following information:

The governments that enter into trade agreements have an obligation to do everything possible to ensure that those agreements benefit workers in their countries. The CLC plays a role in fulfilling that obligation to workers in the U.S., Canada, and Mexico. Waste, abuse, and corruption at the CLC must not be tolerated.

I request that your office respond to my inquiry by April 25, 2008. If you office has any questions, please do not hesitate to call Michael Zola, Chief Investigative Counsel, at (202) XXX-XXXX or Jody Calemine, Deputy Labor Policy Director, at (202) XXX-XXXX.

Sincerely,

FOR PRESS INQUIRIES
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