Lafe Solomon, appointed by President Obama to serve as Acting General Counsel for the National Labor Relations Board, violated ethics rules by intervening in a case on behalf of a company in which he owns stock, the inspector general reported.

The inspector general, concluding that Solomon’s behavior amounted to a “complete failure of the NLRB’s ethics program,” announced his error after investigating his efforts to prevent a National Labor Relations Act complaint from being filed against Wal-Mart.

“We find that Mr. Solomon did in fact participate personally and substantially, as then Acting General Counsel, in the case involving Wal-Mart’s social media policy knowing that he owned Wal-Mart stock valued at $15,000.00 or more, and that the case involving Wal-Mart’s social media policy would have a direct and predictable effect on that financial interest,” the IG concluded.

The report allowed that Solomon was not trying to “enrich himself,” but rather hoped to keep the government from getting into a legal battle with such a major employer.

“We did, however, find a complete failure of the NLRB’s ethics program with regard tothe operations of the Office of the General Counsel and that the environment at the NLRB in which this violation occurred was dysfunctional and adversarial,” the watchdog said.

In January, with the NLRB about to charge “that Wal-Mart’s social media rules are unlawful by prohibiting employees
from presenting persons or the employer in a bad light,” Solomon intervened even though he admittedly might not be allowed to work on the case because of his financial stake in the company. In his initial email on the matter, he held up the complaint because “the Employer is Wal-Mart . . . [and] the reaction to this case will be huge (and especially the negative reaction), and I want to make sure that we are prepared.”

According to the inspector general, Solomon told his subordinates that “he wanted to resolve the matter without a decision to issue a complaint being made public” and to attempt to get Wal-Mart to change its policy quietly rather than go through a legal process.

“The participation by Mr. Solomon, while not resulting in a decision to authorize the issuance of a complaint, did result in a determination of how to bring to bear upon Wal-Mart the authority of the Federal Government to effect a change in a policy that affects each of Wal-Mart’s employees and was, by its very nature, intended to be determinative of the outcome,” the report states.

Solomon engaged in this activity even while acknowledging that he could not make rule on the case without a waiver of the conflict of interest to decide the case if a complaint was filed. His request for such a waiver was denied by the Director of Administration/DAEO,  in part because the deputy general counsel was available to work the case.

The inspector general’s report may prompt further investigation from the House Oversight and Government Reform Committee.

“As a general counsel and career attorney, Mr. Solomon should know federal statute well enough to know when to recuse himself from a possible conflict of interest between his own finances and his work,” said Committee chairman Darrell Issa, R-Calif. Following a string of questionable decisions, including jeopardizing thousands of Boeing jobs in South Carolina at a new manufacturing facility; this is one more example of Mr. Solomon further tarnishing NLRB’s reputation.”