Labor Nominee’s Contract Studied

White House aide Alexis M. Herman, President Clinton’s nominee for Labor secretary, is facing scrutiny from a Senate panel over her private business dealings in the 1980s while she served as a top Democratic National Committee official, officials said Friday.

Herman, whose nomination has been put on hold indefinitely by the Senate Labor and Human Resources Committee, received a $600,000 contract in the early 1980s from the developer of a massive federal office complex on prime real estate on Pennsylvania Avenue in Washington.

Critics raised questions at the time about whether Herman’s ties to the DNC helped her to win the award and whether it was appropriate for a Democratic Party official to hold a private contract in a development that required congressional approval.

Construction of the building, the second largest government office structure after the Pentagon, dragged on for years as members of Congress battled over the budget and scope of the public-private project.

Sen. James M. Jeffords (R-Vt.), chairman of the Labor Committee, has yet to announce a hearing date for Herman and has declined to publicly outline his problems with her nomination. But an aide close to the committee said investigators have begun shifting their attention from Herman’s activities as director of the White House Office of Public Liaison, where she has served until recently, to her private business dealings.

Initially, GOP senators raised questions about Herman’s involvement in a coffee gathering at the White House that brought bankers, the nation’s top bank regulator and campaign fund-raisers together with the president. There are also questions, now being looked at by an independent agency, about whether Herman violated the Hatch Act by mixing her White House job with campaign politicking.

Now, the focus is moving toward A.M. Herman & Associates, Herman’s consulting firm.

When Herman took the White House job in 1983, she still owned the company, which provided corporations with advice on setting up affirmative action plans. Her contracts included work for Burger King, Levi Strauss, Procter & Gamble, Cincinnati Gas & Electric and KPMG Peat Marwick.

To avoid a potential conflict of interest with her presidential post, the White House counsel’s office recommended that Herman sell the firm. It took her eight months to find a buyer and receive the divestment papers, during which time she was both a businesswoman and a White House aide.

White House spokesman Joe Lockhart said Herman did not draw a salary from the firm while working at the White House and unloaded it to a buyer as quickly as she could. He said there was nothing improper about her working at the DNC and working on the federal building contract.

White House aides say they are confident that Herman will be able to adequately answer any concerns over her nomination if given a confirmation hearing in which to respond.

Rep. Sonny Callahan of Alabama, a Republican who is lobbying his Senate colleagues to schedule a date for Herman’s hearing, said this week that he remains confident that she will be confirmed.