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Printed from the Charlotte Observer - www.CharlotteObserver.com
Posted: Sunday, Oct. 05, 2008

For donors to Berry, breaks on fines are larger

By Ames Alexander and David Ingram
Published in: A Section
  • N.C. officials often reduce OSHA penalties if companies cooperate with inspectors and quickly correct safety problems. Most fine reductions occur during informal conferences between company representatives and an OSHA supervisor. Employers can also contest fines by requesting hearings before an independent body called the Safety and Health Review Board. Often, that board approves settlements hammered out between OSHA and the companies it cites.


  • For this story, the Observer reviewed all publicly disclosed campaign contributions to N.C. Labor Commissioner Cherie Berry and her competitor, Mary Fant Donnan, in the current election cycle. Reporters used available records to determine how many contributions came from managers and executives of companies that have been inspected by the N.C. Labor Department since 2001, when Berry entered office. For such companies, the Observer compared the fines initially proposed by OSHA inspectors to the penalties companies were actually ordered to pay following settlement negotiations. Reporters compared the overall rate of reduction in those cases to the rate of reduction for all of the more than 35,000 OSHA inspections conducted since 2001.


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    In her quest for re-election, N.C. Labor Commissioner Cherie Berry has collected at least half of her campaign contributions from executives and managers of companies that have been inspected by her department, an Observer analysis found.

    While the Labor Department routinely reduces fines for workplace safety violations, Berry's contributors have usually gotten bigger-than-average breaks.

    More than 20 employees of McGee Brothers, a large masonry business based in Monroe, made contributions to Berry last year as part of a company-sponsored fundraiser. The firm's employees and spouses have contributed more than $9,300 to Berry's re-election campaigns.

    The Labor Department, which is charged with overseeing the safety of workers, has cited McGee Brothers for more than 40 OSHA violations since Berry took office in 2001. Inspectors proposed total fines of about $32,000, but the penalties were cut to $4,150.

    Those elected to run state agencies have long relied on contributions from companies they regulate, but the N.C. General Assembly has begun to reduce the influence of such money. Lawmakers last year made public funding available to candidates in races for auditor, insurance commissioner and superintendent of public instruction. Berry and company officials say there's no connection between campaign donations and fines. “Contributions have nothing to do with decisions at the Department of Labor,” she said.

    Berry, a Republican running for her third term, said she has participated in settlement negotiations regarding fines just once during her eight-year tenure. N.C. OSHA officials don't consult with her about reducing fines, she said.

    “I never wanted anybody to ever be able to say I was showing favoritism,” she said. “… That is not what should be done in government.”

    But Bob Hall, director of the campaign finance reform group Democracy North Carolina, said he was disturbed by the Observer's findings.

    “It raises questions about whether people think they'll get special treatment – and may in fact get special treatment – because of their political contributions,” he said. “It's something that should be examined and explained.”

    Berry's Democratic opponent, Mary Fant Donnan, also accepted campaign donations from companies she would regulate as labor commissioners, but far fewer of them than Berry. Still, she was critical of Berry.

    “There's no faster way to lose the public's confidence in an executive office than to muddle campaign contributions and regulatory oversight,” she said.

    Violators lend a hand

    Through the end of June, the last reporting period, Berry had raised about $59,000 from individuals. At least half of that came from executives and managers of companies that have been inspected by the Labor Department since 2001, the Observer found.

    Collectively, the proposed fines in those inspections were cut by more than 70 percent. Overall, N.C. OSHA penalties are cut by about 42 percent. Publicly available documents don't make clear why officials agreed to larger fine reductions for Berry's contributors.

    Berry has also raised about $17,000 from political action committees, including the N.C Home Builders Association and the N.C. Construction Industry PAC. Most of the PACS represent industries that are accustomed to Labor Department inspections.

    Donnan has collected less money from company managers and executives. As of June 30, Donnan had raised about $46,000 from individuals – about a quarter of it in contributions of $100 or less. Much of the rest has come from lawyers, people who work for non-profits and residents of her hometown, Winston-Salem. Less than 15 percent of the money she collected from individuals has been donated by managers or executives – and most of those companies haven't been inspected by N.C. OSHA in recent years.

    Donnan, who previously served as director of research and policy for the state Labor Department, now works as a program officer for the Z. Smith Reynolds Foundation.

    Among the companies whose executives have contributed to Berry:

    R.N. Rouse and Co. Since 2005, five managers and executives of this construction company have given $2,750 to Berry's campaign. All but one of the contributions came on the same day in 2007, about the time the firm hosted a reception for Berry. N.C. OSHA has cited Rouse for nine serious violations since Berry entered office, and the total proposed fines – $4,100 – were cut to $613.

    House of Raeford. Executives and managers of this N.C. poultry company have contributed at least $15,000 to Berry's campaigns. Since 2001, N.C. OSHA has cited the firm for more than 60 serious violations – some following chemical accidents that killed one worker and sent 17 others to the hospital. Inspectors proposed about $117,000 in fines, but the fines were reduced to $26,500.

    Pike Electric. Employees, along with the company's political action committee, gave about $60,000 to Berry's campaign in 2000 – more than a third of her total donations that year. At the time, a significant OSHA case was pending against Pike. That case was settled in 2002, and the proposed fines – totaling $56,700 – were cut to $3,200.

    In all, Pike employees have contributed nearly $80,000 to Berry's three campaigns. Other OSHA fines proposed since 2001 – totaling about $25,000 – have been cut to $6,300.

    One Pike worker, 45-year-old Telesforo Lomeli, died in 2001 after he was struck by a falling tree while operating an excavator at a Raleigh construction site. Inspectors concluded Pike failed to remove dead trees that posed a safety hazard. They proposed an $18,900 fine, but the penalty was cut to $6,300. Pike officials declined to be interviewed. House of Raeford officials did not respond to e-mails requesting comment, but they've previously said they strive to protect workers.

    Janet Sumner, a Rouse executive who was among Berry's donors, said she doesn't think campaign contributions have affected decisions at the Labor Department. “These are career people,” she said, referring to the department's inspectors and their supervisors. “They are not political.”

    Sumner, Rouse's vice president for risk management, said Berry's emphasis on training matches the company's own philosophy. Rouse has won state Labor Department safety awards, she said.

    ‘A cooperative effort'

    At McGee Brothers' Monroe headquarters, president Sam McGee bought $550 worth of food on May 17, 2007, to welcome Berry and a group of local contributors. Twenty-one McGee employees wrote checks, campaign records show. About a dozen other business leaders and area residents contributed as well. Berry, who spoke to the group, collected about $7,000 for her campaign that day.

    McGee said his colleagues liked Berry's common sense, her grasp of the issues and her willingness to work with employees and businesses.

    “Her attitude seemed to be that she wanted to have a cooperative effort all the way through, which is what we've always seen out of her,” said McGee, whose firm employs more than 1,000 workers.

    Inspectors have repeatedly cited the company for safety hazards that could leave workers vulnerable to falls from dangerous heights. But in negotiations, OSHA agreed to throw out many of those citations. McGee said managers “work very diligently to keep people from hurting themselves.”

    Berry, he said, never involved herself in the inspections. Asked whether he thought or hoped the contributions would have any effect on OSHA inspections, McGee said: “Only to the extent that if Cherie Berry was elected, she would be leading the organization with common sense.”

    Berry said she played no role in reducing the fines. She said many corporate executives have donated to her campaign because “they consider it an investment in their future and being able to do business in North Carolina.”

    By helping to reduce workplace injury rates, she said, the Labor Department has also helped companies trim their workers compensation costs.

    Some candidates are becoming less reliant on donors who may benefit from decisions made by public officials. The new N.C. law allows candidates for auditor, insurance commissioner and superintendent of public instruction to collect up to $300,000 in public money if they agree to spending limits and raise small amounts from 750 registered voters. Most of this year's candidates for those races are participating.

    Campaign reform advocates hope eventually to make public funding available to candidates for labor commissioner and other races. Donnan supports the idea, but Berry opposes it.

    “I think public financing of political campaigns is like welfare for politicians,” Berry said. “… You need to get out there and do your job as a person seeking office, touch as many people as you can. And public financing just makes it too easy.”

    Staff Database Editor Ted Mellnik and researcher Marion Paynter contributed.

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