Thursday, May 05, 2005

Bush Administration Tries to Intimidate AFL-CIO over Social Security

In a letter on Tuesday to the A.F.L.-C.I.O., the Department of Labor said it was "very concerned" that pension plans might be spending workers' money to "advocate a particular result in the current Social Security debate."
The Labor Department also warned the federation that pension plans could be violating their fiduciary responsibilities by suggesting that they might take their investment business away from Wall Street firms that support Mr. Bush's plans.
The department did not cite any specific instances and it stopped short of any formal accusations. But the letter came after a well-orchestrated campaign by the A.F.L.-C.I.O. to criticize investment firms that appeared to be supporting Mr. Bush's proposal for private investment accounts. "A fiduciary may never increase a plan's expenses, sacrifice the security of promised benefits, or reduce the return on plan assets, in order to promote its views on Social Security or any other broad policy issue," the letter said.
Damon Silvers, associate general counsel for the A.F.L.-C.I.O., described the warning as mostly a matter of "tone" rather than substance, and said union officials agreed with the Labor Department's main principles about fiduciary responsibility.

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