posed regulations for implementation in the Federal Register by July 1991. Over 2 years later, HUD has not yet met this deadline. Besides requiring HUD to develop a strategy, the Cranston-Gonzalez Act also required that HUD ensure that welfare hotels were eliminated by July 1992, a deadline later extended to July 1994. The subcommittee's hearing focused on the fact that HUD has not taken any steps to accomplish this mandate. One of the problems is that although HUD is mandated by Congress to eliminate the hotels, the Health and Human Services Department [HHS] is the main funding source. However, the two departments have not attempted to develop a joint plan.

b. Benefits. The hearing brought together for the first time the responsible Assistant Secretaries from HUD and HHS to testify concerning their plans to address the problem. One of the key witnesses, Andrew Cuomo, HUD Assistant Secretary for Community Planning and Development, agreed to complete the congressionally mandated plan for the elimination of welfare hotels by January 31, 1994, instead of HUD's target date of June 30, 1994.

Subcommittee Chairman Peterson and subcommittee member Representative Floyd H. Flake have drafted legislation that they plan to introduce in 1994 to address the problem of welfare hotels. The bill would permit States to use the Federal funds that currently subsidize welfare hotels for alternative housing approaches such as the rehabilitation, construction, rental, or purchase of permanent affordable housing or for rental assistance for homeless families. The bill is budget-neutral.

A second solution developed by Chairman Peterson and Representative Flake was included in the House Banking Committee's bill on multifamily property disposition that was approved by committee in November 1993. It would allow the use of funds that currently subsidize welfare hotels to be used by HUD-foreclosed, multifamily properties as a more cost-effective way to provide housing to homeless families. Over the next year, hundreds of HUD multifamily properties will become available. Many are located in the same general areas as the welfare hotels. They will need subsidies and could be used as permanent, low-income housing.

c. Hearings. A hearing was held on November 19, 1993, in Washington, DC, entitled "Welfare Hotels: A Waste of Federal Funds, Harmful to Homeless Families."

8. Negative Impact of Proposed Labor Market Pilot Program on Young U.S. Scientists and Engineers.

a. Summary. The 1990 Immigration Reform Act required the Labor Department to establish a pilot program which provided for a determination of labor shortages or surpluses in up to 10 defined occupational classifications in the United States. If a labor shortage in one or more of these classifications was found, a labor certification allowing the hiring of foreign workers would be deemed to be issued. If there was a labor surplus, no certifications could be issued except upon the receipt by the Labor Department of evidence of "extensive recruitment effects."

On March 19, 1993, the Labor Department proposed a regulation certifying shortages in certain States for several occupations, such as computer science, chemistry, and mechanical, materials and

chemical engineering, in which U.S. workers were already fighting layoffs and poor job prospects. The underlying methodology for choosing the occupations was unclear, and its author admitted that "critical" factors were missing from his study because of the short timeframe. Moreover, employers would be allowed to go overseas for employees without looking outside of their home States for applicants for professional positions which are often advertised nationwide. No surpluses were proposed because of an alleged "administrative burden." Labor set only a 30-day comment period. This was too short for interested professional organizations, who had not been otherwise notified, to meet and approve comments for submission. Subcommittee Chairman Peterson and Representative Gary Condit, Chairman of the Information, Justice, Transportation, and Agriculture Subcommittee, submitted comments opposing the regulation and requesting additional time for other interested groups and persons to comment. Several professional organizations also requested additional time.

As a result of the subcommittees' letter, the Labor Department extended the comment period for another 30 days. During that time, approximately 500 comments were received, almost all of them in opposition to the proposed regulation. Labor subsequently removed most of the occupations from the list of shortages and has begun to look at all of its professional labor certification programs to make sure that they do not disadvantage U.S. workers.

b. Benefits.-Young science and engineering professionals face an increasingly difficult job market because of cutbacks in corporate research and development and defense industry restructuring. The subcommittees' actions helped to preserve these jobs for U.S. workers and the Nation's investment in its young people.

c. Hearings.-None.

9. Questionable Trade-Related Job Loss Projections by the U.S. Trade Representative.

a. Summary. In May 1993, the U.S. Trade Representative testified before a Senate committee that 400,000 U.S. jobs would be lost if the North American Free Trade Agreement [NAFTA] was not passed. For several weeks, the number was widely repeated. The subcommittee contacted the Office of the USTR to determine the source of these projections. In interviews with the USTR's economist, it was determined that the number was obtained by reducing the volume of current United States exports to Mexico by 23 percent. USTR could not provide any basis for the projected high level of export reduction, particularly since most corporations projected little or no change in their business if NAFTA did not pass. b. Benefits.-USTR stopped using the projection.

c. Hearings.-None.

10. Attempt of U.S. Trade Representative to Establish Illegal Grassroots Lobbying Organization.

a. Summary. On May 1, 1993, Mickey Kantor, the U.S. Trade Representative [USTR], announced in a press release on the letterhead of the Office of the USTR the formation of the "leadership group of Elected Officials for NAFTA, a bipartisan group of highly respected State and local leaders. . [who] will work to gen

erate support for the NAFTA [North American Free Trade Agreement]." Three employees of the USTR were listed as contact per

sons.

A preliminary subcommittee inquiry indicated that the group was conceived of and organized in USTR's intergovernmental section and that future members would come from elected officials who contacted USTR or those who received an invitation from Ambassador Kantor. Because Federal law forbids government_funds from being expended to organize grassroots groups to influence Congress, Subcommittee Chairman Peterson requested an investigation by the General Accounting Office [GAO].

GAO's investigation confirmed the prior subcommittee work. USTR had identified the officials it wanted to join and “vetted" them with the White House and the Democratic National Committee. The White House counsel approved USTR plans to ask elected officials to join the group. The names of 17 potential co-chairs were also sent to the White House and the DNC for review. Although the purpose of the group was to build support in Congress for NAFTA, GAO found no evidence of a direct request by UŠTR officials to group members to lobby Congress. USTR had, however, planned a visit to the Hill by the State and local officials. This plan was reported to the White House. After the chairman's letter to GAO was sent, Ambassador Kantor stopped the USTR activities, but its lists of members and contacts were given to USA*NAFTA, a private lobbying group.

b. Benefits. The subcommittee's quick response to USTR's press release brought a potentially serious issue to the attention of both USTR and the White House and pointed out the ethical responsibilities of government employees to newly appointed administration officials who were still operating in a campaign mode. GAO also identified recordkeeping problems at USTR.

c. Hearings.-None.

11. Conflicts of Interest at Occupational Safety and Health Review Commission Training Conference.

a. Summary. The subcommittee learned that the Occupational Safety and Health Review Commission [OSHRC), an independent agency established to hear appeals from OSHA administrative decisions, planned to hold a training conference for its administrative law judges and commissioners in Scottsdale, AZ, to which private attorneys and labor union representatives were invited in addition to OSHRC and State health and safety officials. The program and the attendees, however, were dominated by attorneys who represent management in practice before OSHRČ.

The subcommittee wrote to OSHRC chairman Edwin G. Foulke, Jr. stating that: "For the Commission to host a conference for the bar that appears before it to discuss pending policy and legal issues with the Commission members and the ALJs [administrative law judges] is highly irregular. . ." The out-of-town conference appeared especially inappropriate in view of a serious shortage in OSHRC's budget. The Labor Department solicitor declined to participate or allow his staff to attend the meeting on similar grounds. b. Benefits. Although the subcommittee wrote on August 16 and the conference was scheduled to begin on August 31, OSHRC nev

ertheless canceled the public portion and eliminated all nongovernment personnel "so as to avoid even a perception of impropriety." Hopefully, any future conferences will be handled on a more professional basis.

c. Hearings.-None.

12. Sexual Harassment Allegations at the Merit Systems Protection Board.

a. Summary. In February 1993, an allegation of sexual harassment was made against a board member of the Merit Systems Protection Board [MSPB] by a member of his staff. The board member had previously given the staffer, a schedule C appointee, a 30-day notice. Shortly after the board member learned of the allegation, he fired the staffer and had her escorted out of the office. Within 30 days, the MSPB had settled the complaint by reinstating the staffer, transferring her to another office and paying her $17,500. The settlement was sealed, and the parties were ordered not to discuss

it.

Charges of sexual harassment and retaliatory firing are serious allegations against any Presidential appointee, but were even more significant in this case. The board members adjudicate appeals of complaints of improper actions, which include sexual harassment and retaliatory firing, against Federal employees. Significant questions of impartiality can be raised concerning a board member who has settled similar allegations.

A 6-month investigation by the subcommittee revealed that the process by which the MSPB responded to and settled the allegations was seriously flawed. First, it pointed out the difficulty of staff investigating agency heads. Staff charged with investigating the allegations recused themselves because of fear of intimidation. The inspector general declined to initiate an inquiry because he was told the complaint was settled. A suggestion by the board chairman for an outside independent investigation not surprisingly did not receive the board consensus required to go forward. The board's general counsel negotiated the settlement without even reviewing the records of interviews with the complainant and the board member.

Presidential appointees at the MSPB can be removed from office only for malfeasance. On November 22, 1993, the chairman and six other members of the subcommittee sent a letter to President Clinton requesting an independent investigation of the allegations and the settlement so that further action, if so indicated by the results, can be considered at that time.

b. Benefits. It is critical that Presidential appointees, particularly those who function in a judicial capacity, be able to make decisions in an unbiased manner and avoid all appearances of impropriety. An independent investigation of this matter which includes findings of fact will permit the MSPB to resolve this matter in an appropriate and credible manner.

c. Hearings.-None.