The chairman of a House panel studying the health of the nation's $1.7 trillion pension system praised a Labor Department proposal designed to crack down on fraud and abuse in the system. Rep. Tom Lantos, D-Calif., who is chairman of the House Government Operations employment and housing subcommittee, called Labor Secretary Elizabeth Dole's plan ``prompt and inclusive.'' In the past, members of Congress have criticized the way the Labor Department policed the nation's pension system and suggested that fraud and abuse could rival the savings and loan crisis. The Labor Department's proposal, outlined last week in a letter to Lantos' panel, increases fines for fraudulent transactions and makes it easier for employees to bring lawsuits against pension fund trustees who mismanage assets. It also provides rewards for people who inform the government of fund violations. Some of the changes stemmed from recommendations from acting Labor Department Inspector General Raymond Maria, who has been feuding with the agency over the way it investigates pension fraud. ``They went twice as far as we thought they would,'' Lisa Phillips, an aide to Lantos' subcommittee, said Friday. Phillips predicted some lawmakers would try to go farther by adding provisions to provide greater protection of pension payments when companies terminate plans to capture their surplus assets. Labor Department spokeswoman Johanna Schneider said the agency would have to review further changes before taking a position. Under the department's plan, employees who win suits against trustees who mismanaged pension plans would have their legal fees paid by the trustees personally rather than through pension assets. In addition, the plan lets Mrs. Dole pay a ``bounty'' to informers of as much as 10 percent of any fines collected by the government for pension violations. Penalties for illegal transactions would increase to 10 percent of the amount of the transaction. Fines are now 5 percent of the transaction. The agency's plan also implements new audit procedures that require accountants to do a full audit of pension plans on their own rather than relying on the statements of state examiners. Mrs. Dole already has asked Congress to add 100 enforcement officers to the department's Pension and Welfare Benefits Administration. The Labor proposal does not include Maria's recommendation that the inspector general's office be allowed to pursue criminal investigations of pension and welfare fund violations. Maria wanted Congress to in effect overturn a Justice Department ruling that prohibited inspectors general from conducting criminal investigations. Phillips said the House subcommittee was not likely to go against the Labor Department on the issue because lawmakers considered it a ``turf war'' between the Justice Department and inspectors general. Maria had known he was not going to be named to the post permanently; President Bush last week nominated Julian De La Rosa, executive secretary of the St. Louis police board, as his replacement.
