- Associated Press - Monday, September 17, 2012

The top lawyer at the National Labor Relations Board violated federal ethics rules by helping investigate a case involving Wal-Mart Stores Inc., despite holding a financial interest in the company, the board’s inspector general has found.

NLRB Inspector General David Berry issued a report Thursday that general counsel Lafe Solomon took part in discussions about whether Wal-Mart’s social media policy violated the law even though Mr. Solomon owned about $18,000 worth of Wal-Mart stock.

President Obama named Mr. Solomon acting general counsel of the board in June 2010.

Federal rules prohibit government officials from participating “substantially” in cases if they own stock worth $15,000 or more and the matter affects the official’s financial interest “in any measurable way.”

The report was released late Friday by two GOP-led House committees, the Oversight & Government Reform Committee and the Education & the Workforce Committee.

Mr. Solomon’s attorney, William Taylor III, has denied the allegations. In a letter to the inspector general Friday, Mr. Taylor said Mr. Solomon “did not commit even a technical violation of the applicable ethics rules.”

The report said Mr. Solomon sought a waiver of the ethics rules Jan. 30, but only after he attended an initial meeting about the Wal-Mart case a week earlier. The waiver was denied and Mr. Solomon later sold his shares in the company.

During the initial meeting, Mr. Solomon directed board staff to contact Wal-Mart in an effort to get the company to change its social media policy so the board would not have to issue a formal complaint, the report said. NLRB attorneys had concluded that Wal-Mart’s policy restricting what workers could say on social media was overly restrictive.

Mr. Taylor said the report greatly overstates Mr. Solomon’s role in a 10-minute meeting and that he was simply outlining the board’s options. But Mr. Taylor also said that, in hindsight, Mr. Solomon acknowledges the best course would have been for him to have had no involvement in the Wal-Mart case at all.

Wal-Mart ultimately changed its policy and the board never filed a complaint.

The inspector general’s report found no evidence that Mr. Solomon acted with intent to enrich himself. In a prepared statement, Mr. Solomon said he did “everything I could to follow the rules and regulations so that I could fulfill my duties free of any perceived conflict.”

House oversight panel Chairman Darrell E. Issa, who has tangled with Mr. Solomon over NLRB policy previously, said the report “calls into question his integrity and that of the agency.”

The report will be forwarded to the Justice Department, which will decide whether to pursue further action.

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