News: CJ Exclusives

BLS: Perdue Violated Agreement On Jobs Data

Governor revealed embargoed information before allowed date

Gov. Bev Perdue violated a cooperative agreement between the federal Bureau of Labor Statistics and the state of North Carolina Aug. 18 when she told the Rotary Club of Asheville that the state lost 11,000 public-sector jobs in July.

The job loss figures were supposed to be protected by an embargo until 10 a.m. Aug. 19; she made her remarks roughly 12 hours before the embargo was lifted.

According to BLS officials, Betty McGrath, director of the Labor Market Information Division for the state’s Division of Employment Security (then known as the Employment Security Commission), reported the violation to the BLS regional office in Atlanta after seeing media reports of the Perdue comments.

BLS Regional Director Janet Rankin confirmed to Carolina Journal that a violation occurred. She followed up with interviews of ESC officials, including director Lynn Holmes. Rankin did not say if any further action was taken.

It’s unclear whether Perdue’s error not only violated the cooperative agreement BLS enters with DES and its counterparts in every other state but also broke a federal law protecting the confidentiality of employment data. Rankin would not say if leaking information that’s protected by an embargo carries any legal consequences, though BLS regulations spelling out what is covered by the law suggest that embargoed data is considered confidential until the embargo is lifted.

Meantime, the Perdue administration still claims that there’s nothing inappropriate about officials outside the LMI unit viewing embargoed information early, hinting that the practice will continue.

Confidential data

The Confidential Information Protection and Statistical Efficiency Act of 2002 protects the privacy of data provided to the federal government for statistical purposes. Violating it carries a fine of up to $250,000, up to five years in prison, or both. A BLS Commissioner’s Order from 2006 (No. 01-06) says “confidential information includes … pre-release economic data” and “embargoed data,” including “the Employment Situation” — that is, the monthly employment reports issued by BLS and state employment agencies.

Data integrity guidelines by BLS say that data collected or maintained by BLS under a pledge of confidentiality “will be accessible only to authorized persons. Pre-release economic series data prepared for release to the public will not be disclosed or used in an unauthorized manner before they have been cleared for release, and will be accessible only to authorized persons.”

In late December, Rankin told CJ that states are expected to develop their own procedures for handling embargoed and confidential data. But in an earlier email, she said, “BLS does not support the release of employment and unemployment data before the established dates and times.” She notes that states are required to publish the dates they will release employment data by Dec. 31 of the previous year and follow that schedule.

CJ asked DES spokesman Larry Parker for the procedures on sharing embargoed data and a list of the people who can see that information. In an email, Parker said, “Our process at this time is to go through our legal department and it doesn’t look as though we will make your deadline. …”

As CJ began reporting that DES personnel, Perdue’s press office, and other administration officials were sharing embargoed job data, CJ has learned that officials in Alabama and some other states apparently do the same. BLS officials admit that the sharing of data that’s supposed to be protected is a problem, but they have not clarified whether breaking the embargo (and violating the cooperative agreement) also breaks the law. Rankin said this was an issue worth additional discussion.

Spinning job reports

Perdue’s press office has gotten an advance look at embargoed data since January 2011, and perhaps before then. Documents and correspondence obtained by CJ show that Perdue’s staff received the information at least 24 hours before the embargo ended. The governor’s staff used its early access to massage the monthly employment press release that reported jobs data to the public.

The DES sent a draft of the press release each month to Perdue’s press office. The governor’s spokesmen typically rewrote the text and added a positive spin, even if the data did not support Perdue’s talking points.

The glowing quotes were attributed to Holmes, but documents show the quotes were approved and probably written by a Perdue press aide, either Chrissy Pearson or Mark Johnson.

In several instances, DES spokesman Parker cautioned Pearson or Johnson against using extraneous or unverifiable information to boost Perdue’s image. At times, the Perdue communications team would push back, and the release would undergo several revisions before final publication.

The statewide employment report typically is released the third Friday of each month at 10 a.m.

Former Gov. Mike Easley’s administration received an early briefing on the employment reports from ESC staff for several months in 2003 and 2004, if not longer. CJ learned of and reported on them in 2004.

Perdue and her staff may not receive formal briefings, but Parker told CJ in September that he shares the jobs report with Perdue’s staff roughly 24 hours before the embargo was lifted. Emails obtained by CJ involving Parker, Pearson, Johnson, and in one instance Department of Commerce spokesman Tim Crowley, show officials discussing the data more than 48 hours in advance of the embargo.

Crowley was press secretary for Perdue’s 2008 campaign for governor and joined her administration as press secretary after her inauguration.

To review email exchanges over several months in 2011 between Perdue officials and Parker, visit here (PDF download).

Don Carrington is executive editor of Carolina Journal. Prior to joining The John Locke Foundation, he was deputy director of ESC’s Labor Market Information Division. CJ Managing Editor Rick Henderson contributed additional reporting to this story.