President Donald Trump’s administration moved in 2025 to sharply reduce the Federal Mediation and Conciliation Service (FMCS) as part of a broader effort targeting seven small agencies, placing most staff on administrative leave and closing field offices. The push has been challenged in court, while earlier investigative reporting from 2013 and 2025 described extensive misuse of funds and lax oversight inside the little-known labor mediation agency.
The Federal Mediation and Conciliation Service (FMCS)—a small, independent federal agency created in 1947 to help resolve labor-management disputes—was targeted for a dramatic reduction in operations under a March 14, 2025 executive order that directed FMCS and six other agencies to shrink “to the minimum presence and function required by law.”
FMCS’s footprint was quickly curtailed. Court filings and public reporting described a sweeping staff reduction—more than 90% of employees placed on administrative leave—and the closure of field offices nationwide. The agency also announced it would sharply limit when it assigns mediators, including setting minimum worker thresholds in some cases. Those changes triggered lawsuits by labor unions and a coalition of states, and federal judges later issued rulings blocking or limiting the administration’s attempt to effectively dismantle FMCS while litigation proceeded.
Separately, the agency has long been associated with a high-profile spending and management scandal documented in a 2013 Washington Examiner investigative series by reporter Luke Rosiak, which Rosiak later revisited in a 2025 report republished by The Daily Wire. That reporting described a pattern of questionable expenditures and weak internal controls, including a nine-story office lease on K Street in Washington that was largely empty relative to the agency’s headcount.
Among the allegations detailed in the 2013 Examiner series and later reporting were luxury office buildouts for senior officials, agency-funded commissioned portraits, and purchases charged to government “purchase cards” that appeared to include personal expenses. The reporting also described a “recreation and reception fund” used by then-FMCS director George H. Cohen for items such as champagne and high-end office accessories, including coasters, and for purchasing artwork painted by Cohen’s wife.
The reporting further alleged that FMCS staff “unblocked” controls on government cards and then used them to pay for items that included cable television and a personal cell phone plan, as well as a storage unit used to keep personal belongings. One cited audit finding said a departing employee destroyed purchase-card records. Another case described in the reporting involved payments routed to a newly formed company after an employee retired, with the charge described as a “call center service.”
The earlier reporting also described personnel and contracting practices that critics said favored insiders, including hiring friends and relatives and steering work to favored contractors. In one example cited, a senior official was described as listing an out-of-state “duty station” in order to receive travel and living reimbursements for working in Washington.
In the 2013 series, a whistleblower accountant, Carol Booth, was described as having alerted the General Services Administration to purchase-card concerns and then being pressured by senior FMCS leadership to submit a retraction email. The Examiner published internal email exchanges it said showed agency leaders helping craft the retraction language.
The reporting said an inspector general referral was made to the FBI but did not result in prosecutions. It also noted that Cohen, who was appointed during the Obama administration, later retired from the agency after the scandal.
The Trump administration’s effort to scale back FMCS has been defended as part of a broader push to reduce the size of government, while unions and state officials have argued the agency’s statutory duties require it to provide broad mediation services and that an executive order cannot effectively eliminate a congressionally created agency. The legal battles have left FMCS’s long-term future uncertain, even as the old spending allegations have again become part of the public debate over whether the agency should exist and what oversight it needs.
