>In a letter to DoL Secretary Elaine Chao released publicly, House Education & the Workforce Committee Chairman Representative John Boehner (R-Ohio) and Employer-Employee Relations Subcommittee Chairman Representative Sam Johnson (R-Texas) asserted that such a probe should focus on whether federal labor and pension laws were violated by what the lawmakers said were union efforts to pressure financial firms and brokerage houses to oppose Bush’s plan.
>The lawmakers said media reports had indicated that both Waddell & Reed Financial Inc.and Edward D. Jones & Co. have withdrawn their backing for the Bush plan “in the face of concerted union pressure tactics. These tactics have included public protest and picketing of the target firms, as well as tacit and/or explicit notice to these firms that if they support the President’s proposal, the union will withdraw its assets and invest through brokerages they find more politically palatable.”
>Boehner and Johnson said that the AFL-CIO has similarly targeted:
- J.P. Morgan Chase & Co.
- Morgan Stanley
- Merrill Lynch & Co.
- Barclay Global Investors N.A.
- T. Rowe Price Group Inc.
- State Street Corp.
- Charles Schwab.
>According to the letter, AFL-CIO lobbyists have threatened that the union has “no intention of letting any of these companies get away with this [supporting the President’s proposal] while they manage our workers funds.”
“The activities recounted in these reports raise serious questions as to their legality under a variety of federal laws…,” Boehner and Johnson wrote. ” Perhaps more troubling are the questions these activities raise with respect to the fiduciary duties owed to union members by their leadership, and to union pension plan participants by their plans’ trustees….When union leaders and pension plan trustees base investment decisions on politics, we question how they can do so lawfully in the face of statutory requirements that such decisions be based on the economic and fiduciary best interests of beneficiaries and participants.”