Chao ‘Crony’ Using Diplomatic Cover to Avoid Criminal Probe

by James Parks, Apr 18, 2008

Rep. George Miller (D-Calif.) is demanding that Labor Secretary Elaine Chao and the Bush administration waive diplomatic immunity for Mark Knouse, the former executive director of the NAFTA Commission for Labor Cooperation (CLC). Knouse was asked to resign after charges that he improperly used CLC funds (from the taxpayers of the United States, Canada and Mexico) to promote his lobbying business while he worked for the trinational commission.

From 2004 until his resignation in 2006, Knouse headed the secretariat for the CLC, a panel created under the North American Free Trade Agreement (NAFTA) to examine labor issues and promote labor standards in the United States, Canada and Mexico.

A Pennsylvania business lobbyist, Knouse resigned after he was accused of using commission funds to finance his outside lobbying activities, including meals with clients and trips to meetings.

Chao appointed Knouse to the post, despite his lack of background in labor or international issues. Knouse’s wife is an assistant in Chao’s executive office. Because the CLC is an international body,  Knouse received diplomatic immunity for his actions while in office. 

Miller, whose Education and Labor Committee oversees the Labor Department, wrote to Chao asking: 

Why was Mark Knouse using taxpayer money to wine and dine his lobbying clients? Why was Mark Knouse engaging in outside lobbying at all when [h]we had a taxpayer-funded job to do? And most importantly, why hasn’t the Bush administration acted to strip Knouse of his diplomatic immunity so that he can be investigated and prosecuted? These are very serious questions, and they demand answers. 

Last week, the Labor Department’s Office of the Inspector General (OIG) released an audit report questioning $10,000 in travel expenses for Knouse and another commission staff member. The audit also found that during Knouse’s tenure, the CLC spent $1 million without demonstrating “it actually received the goods or services for which it paid.” 

Yet Knouse cannot be investigated for any possible criminal [actions] because he is “entitled to diplomatic immunity from prosecution, and the [commission] did not respond to the OIG’s request to waive this immunity.”  

The only group that can waive Knouse’s diplomatic immunity is the CLC’s Council of Ministers, which includes Chao and the labor secretaries from Canada and Mexico.  

Miller said the scandal shows the Bush administration is not committed to improving labor standards under free trade agreements. 

The fact that Secretary Chao appointed a crony to lead a key labor commission under NAFTA shows that the Bush administration has no regard for the effect of trade agreements on the workers in the countries that are party to them. 

The situation has been made even worse by the fact that Mark Knouse is getting away with these serious abuses of the public trust. Secretary Chao is opening herself to the perception that she is shielding an alleged criminal, to whom she has personal ties, from accountability under the law. 

To read the inspector general’s audit report, click here.

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