The Inspector General of the US Department of Labour, Anthony D'Esposito, on Wednesday, 22 July told lawmakers that the Biden-Harris administration failed to put in place basic safeguards governing the sharing of confidential investigative information with outside lawyers. Testifying before the House Education and Workforce Subcommittee on Workforce Protections in Washington, D'Esposito warned that weak oversight created the potential for sensitive government information to be exploited in private litigation.

What the Audit Found

The audit — initiated following concerns raised by Congress and Acting Labour Secretary Keith Sonderling — centred on so-called common interest agreements, which permit parties with shared legal interests to exchange confidential information under limited circumstances. D'Esposito told the subcommittee that the department had no department-wide controls governing such agreements during the Biden-Harris years.

'The Biden-Harris Department of Labour had no department-wide controls governing any of these common interest agreements,' D'Esposito said. 'There were no written policies, no consistent approval processes, no centralised tracking.'

Investigators found that some agreements were documented in writing while others, according to D'Esposito, 'amounted to a little more than a verbal handshake.' In at least one case, an individual reportedly executed a common interest agreement without the authority to do so.

Scale of the Accountability Gap

When auditors requested a complete inventory of the agreements, none existed. Records were scattered across emails, shared drives, and case files. Officials initially identified 45 agreements; manual searches uncovered additional ones beyond that count.

'That is not oversight. That is a system without accountability,' D'Esposito said. He stressed that government lawyers 'represent the United States of America, not private plaintiffs' law firms,' adding that the arrangements should never create the appearance that government resources or taxpayer-funded personnel are being used to benefit private attorneys.

Republican and Democratic Reactions

Subcommittee Chairman Ryan Mackenzie said the report confirmed 'serious failures of accountability' and praised the inspector general's eight recommendations to tighten oversight. House Republicans argued the findings revealed a breakdown in public trust, emphasising that the core problem was not the volume of agreements but the absence of safeguards around them.

Democrats, however, pushed back. Ranking Member Mark Takano argued that Republicans were overstating the issue, noting that common interest agreements represented only a tiny fraction of the department's investigations and that the inspector general's report was primarily making 'process-related recommendations.' Takano criticised the focus on what he called 'a legal, yet rarely used Labour Department practice' at the expense of discussions on wages, worker protections, and child labour enforcement.

Department Response and What Comes Next

D'Esposito confirmed that the Department of Labour accepted all eight recommendations issued in the Office of Inspector General's June report, and that implementation was already under way. The recommendations include formal written procedures, centralised tracking of agreements, conflict-of-interest monitoring, and mandatory staff training.

Separately, D'Esposito noted that his office was also working with the administration's anti-fraud efforts, including schemes involving H-1B visas that, according to his testimony, had 'led to wage theft, been exploited, encouraged human trafficking, funded criminal enterprises and taken American jobs away from American workers.' With all eight recommendations accepted, the central question now is how swiftly and rigorously the department implements structural change.