When Assistant Labor Secretary Ernie Green returned to the Labor Department in November after seven weeks off as a paid consultant to the Carter-Mondale presidential campaign committee, he began churning out millions of dollars in post-election job training grants.
Many went to labor unions and civil rights groups. Some went to individuals and groups that supported President Carter. Some even went to Green's former firm, RTP Inc.
As assistant secretary for employment and training, Green had jurisdiction over the Comprehensive Employment and Training Act program (CETA). Most of CETA's $8 billion budget goes to state and local governments for large areawide projects, but there are a few hundred million dollars in "discretionary funds" that can be used for small individual grants in such areas as job training and placement, or for studies and experiments by community-based organizations.
Green had control over this money and in the next few months, he or aides worked assiduously at cranking out funding commitments.
Even on Friday Jan. 16, and then again on Monday Jan. 19, the day before President Reagan was sworn in, they were still at their desks sending out commitments.
Some of these grant commitments are now under review by the new administration and will be investigated by Senate Labor Committee Chairman Orrin G. Hatch (R-Utah). Green, however, said in an interview that "I did not do anything illegal," improper or even irregular. "I've got nothing to hide on it. I'd love to see anybody who's interested raise the questions."
Green said with regard to the last-minute nature of the approvals: "My view of the job was to see that these organizations could continue to operate long after we left office," because it was clear to him that the philosophy of the new administration was "not one of support" for the kinds of training and job programs that minorities need.
Documents obtained by The Washington Post under the Freedom of Information Act show that among recipients were many, like Jesse Jackson, the AFL-CIO, and the Steelworkers, Food and Commercial Workers and United Auto Workers unions, that had strongly backed the Carter-Mondale ticket in the 1980 campaign. Others, like the Martin Luther King Center for Social Change, the National Urban League and the National Council of Negro Women, involved people and groups with whom Green, the first black graduate of Arkansas' famed Little Rock High, was familiar from his days as civil rights activist.
The documents show that in the last few weeks before Reagan took office, tens of millions of dollars in "discretionary fund" contracts were executed, including one for $8.6 million on Dec. 31 to Green's former firm, RTP Inc., and $2 million on Dec. 31 to Jesse Jackson's PUSH. On Jan. 16 and 19 alone, numerous contracts' involving millions of dollars were executed.
In many cases where no contract had been negotiated, Green aides sent out a virtual blizzard of last-minute telegrams informing various applicants their requests for new funds or project renewals would be granted and they were permitted to spend a portion of the money until a contract could be negotiated and signed.
Labor Department officials said the normal way of granting money is to examine the project, negotiate a contract and then sign it and that the volume of last-minute telegram commitments sent out just before Green, aide Lamond Godwin and others left office is unprecedented.
Here are examples of grants on which notices of approval went out in the last few days before Reagan took office:
Telegram commitments effective Jan. 12, $199,200 to Athletes for Better Education and $800,000 to the National Urban League; telegrams on Jan. 19, $200,000 to Atlanta Junior College, $175,000 to Benson Penick, $102,000 to Black Music Association, $99,903 to Delta Sigma Theta, $304,775 to National Council of Negro Women, $700,000 to National Urban Coalition, $423,767 to Headrest Inc., $250,000 to National Council of Negro Women. And there are many more.
From November to Jan. 19, according to the records, at least 70 telegram commitments were made, totaling many millions of dollars. In the case of the Martin Luther King Center, according to an official, a request for $200,000 was made. Officials said they would allow $40,000 but no more until added documents justifying the project were submitted, but then without any further submissions a telegram was sent out approving the whole $200,000. Similarly, officials now reviewing the PUSH contract consider that the documentation was too weak to support approval without substantial further study.
According to Labor Department records and current program directors, the many telegram commitments, coupled with contracts that were granted without having been included in the spending plans drafted earlier by the department, added up to more, by the time Green left office, than all the discretionary funds available for the entire fiscal year, which ends next Sept. 30.Normally, only about 80 percent of the funds are committed in the first few months of the fiscal year, officials said.
As of Jan. 22 the entire $137 million allocation available for CETA Title III discretionary funds was used up and an additional $7 million committed, according to one memorandum obtained under the Freedom of Information Act. On Title IV youth project funds, it appeared from the records that the planned $165 million had been overcommitted by about $25 million, about half to two-thirds as a result of the last-minute activities, officials said.
Records obtained under the information act also show that during the years Green was assistant secretary and in charge of CETA, fiscal 1978 to 1981, the New York firm he headed before coming to the department obtained about $36.5 million in contracts or commitments from CETA to help place minority youths in construction training slots. The total includes about $16 million for fiscal 1981, far more than any previous year and about quadruple what it had been getting in fiscal 1976.
Rumors about the flurry of last-minute telegrams and the large grants to RTP reached the Reagan transition team for the Department of Labor, were passed on to the new Secretary Ray Donovan and also were heard on Capital Hill. The Labor Department is considering whether to cancel or renegotiate some of the commitments. Donovan, in a statement to The Washington Post, said, "We have been reviewing the situation. If there are violations of statutes, we will refer them to the U.S. attorney general."
Green, however, said all the approvals were for projects that had been previously okayed at least in concept by a special departmental committee consisting of himself and several other aides to then-secretary Ray Marshall. cMoreover, he said there was full documentation to justify all approvals and if current officials say it was lacking in various places, "then they tore up the justfication."
As for the grants to RTP, Green said, first, that since leaving it he has not had any financial connection to the nonprofit group, and, second, that department officers who had reviewed RTP's work judged "they were competent, doing an outstanding job." He also said all the RTP grants were cleared by the review committee. He said that other similar groups like the National Urban League, National Council of Negro Women and OIC Inc. had also received substantially increased grants over the years of the Carter administration because "we did pursue an effort to bring community-based organizations into the targeting."
"There was no conflict, no impropriety. . . . I don't have anything to do with RTP. RTP was doing contract work with the Labor Department when I got the appointment. They can stand or fall on their merits."
On the Jackson contract, Green said, "If anybody thinks the grant money to PUSH-Excel is a political payoff, he's crazy." He said the project, to teach minority youngsters how to seek jobs, was a two-year continuation of smaller grants given two years ago (which totaled about $500,000).
Finally, he asserted and the Labor Department confirmed that when he left the department to work for the Carter campaign in New York for seven weeks, for which the Carter-Mondale committee paid him $5,086, it was on the strength of a ruling by the solicitor and Justice Department that such a leave would be legal as long as he did not keep his government salary during the period. He produced canceled checks showing he had reimbursed the government for salary it had paid him during the leave period.