The partying has come to an end. President Donald Trump announced plans to shrink or dismantle seven small federal agencies, including the Federal Mediation and Conciliation Service (FMCS). The FMCS, an independent agency responsible for mediating labor disputes between unions and businesses, has long been plagued by allegations of financial mismanagement, ethical violations, and bureaucratic inefficiency.
Despite its relatively small workforce, the agency occupied an expansive nine-story office on Washington’s K Street, where reports indicated that many employees worked remotely even before the COVID-19 pandemic. Investigations uncovered widespread misuse of government resources, including instances where agency officials used taxpayer-funded credit cards for luxury accommodations, fine dining, and high-end vehicle leases, wrote to The Daily Wire. Some employees allegedly manipulated duty station records to inflate travel reimbursements, effectively turning government service into a conduit for personal financial gain.
FMCS is a 230-employee agency that exists to serve as a voluntary mediator between unions and businesses. As an “independent agency,” its director nominally reports to the president, but the agency is so small that in effect, there is no oversight at all — and it showed, becoming a real-life caricature of all the excesses that the Department of Government Efficiency has alleged take place in government.
FMCS seemed, quite clearly, to exist for the benefit of those on its payroll, and not much else. One employee told me: “Let me give you the honest truth: A lot of FMCS employees don’t do a hell of a lot, including myself. Personally, the reason that I’ve stayed is that I just don’t feel like working that hard, plus the location on K Street is great, plus we all have these oversized offices with windows, plus management doesn’t seem to care if we stay out at lunch a long time. Can you blame me?”
Top FMCS official George Cohen used a “recreation and reception fund” to order champagne and $200 coasters for his office, and to purchase artwork painted by his wife. The tiny agency commissioned paintings of its top employees — as one employee told me, “like they were reigning kings or something…I’ve never seen anything like it before.” It spent $2,402 retouching the portrait of someone who briefly held the top job in an acting capacity.
FMCS employees “unblocked” their government credit cards to turn off typical abuse protections, then used them to apparently fund personal expenses and simply bill anything they’d like to the government. One employee leased a BMW; another (IT director James Donnen) billed the government for his wife’s cell phone, cable TV at both his home and his vacation home, and even his subscription to USA Today.
Even agency’s primary mission—serving as a neutral arbitrator in labor disputes—was overshadowed by its internal dysfunction. Grants intended to promote labor-management relations were distributed with minimal oversight, with funds frequently directed to private entities that had tenuous links to the agency’s core objectives. Despite an internal audit prompting a referral to the FBI, no criminal charges were filed, and under the Obama administration, a key figure implicated in financial abuses was later nominated to lead the agency.
Trump’s decision to shutter FMCS represents the most significant effort to address systemic corruption within the agency. While supporters of FMCS argue that it plays an essential role in resolving labor disputes, critics contend that its history of financial mismanagement and lack of accountability rendered it obsolete. The move aligns with the administration’s broader push to eliminate inefficiencies and streamline federal operations.
[Read More:
