Alexander Acosta resigned Friday as labor secretary, following fallout from his handling of plea deal negotiations with billionaire sex offender Jeffrey Epstein in 2007-’08.
The announcement, made outside the White House alongside President Donald Trump, comes two days after Mr. Acosta held a press conference defending his conduct during his time as U.S. attorney for Southern Florida.
Mr. Acosta said his resignation is effective July 19. Mr. Trump said Patrick Pizzella, the agency’s deputy secretary, will serve as acting secretary.
Mr. Pizzella, who previously served as assistant secretary of labor for administration and management at the department from 2001 to 2009 during the President George W. Bush administration, is regarded as more business-friendly, said an attorney who asked not to be named due to the political sensitivities of the resignation.
“Will someone who’s more aggressively deregulatory ... change (the Labor Department’s) pace in getting out advisory opinions?” the attorney said of Mr. Pizzella. “Does a more aggressive acting secretary clamp down on enforcement?”
Labor Department enforcement actions were up significantly under Mr. Acosta last fiscal year while guidance has been almost nonexistent. Under the current administration, the agency has filed three advisory opinions in nearly 30 months. In the proceeding eight years under President Barack Obama, 28 advisory opinions were issued, while under Mr. Bush, Labor filed 102 advisory opinions in eight years.
Sources said they expect the Labor Department’s regulatory agenda to continue as planned, including movement on a proposal that would narrowly expand the use of open multiple-employer plans and the unveiling of a new fiduciary rule. The department intends to revisit the fiduciary rule by December after an earlier version, which would have required brokers to act in the best interests of their clients in retirement accounts, was struck down in court in 2018.
“The resignation of Secretary Acosta may slow down the process a bit, but I don’t envision full stoppage or any significant delay,” said Will Hansen, chief governmental affairs officer at the American Retirement Association, a retirement industry trade group in Washington.
Jason Hammersla, vice president of communications for the American Benefits Council in Washington, echoed similar sentiments. “Most of the pending employee benefit regulatory issues have been under way for some time, or will be a result of changes in the law or executive orders,” he said. “The (Employee Benefits Security Administration) team – both the political leaders and the career staff – are experienced and dedicated, so Secretary Acosta’s departure is therefore unlikely to lead to a dramatic change of course. If Congress is able to pass retirement reform legislation this year, DOL will have a lot more work to do.”
At this point in an administration, with a presidential election looming next year, it’s unlikely that any new regulatory efforts will be unveiled, the attorney said. Moreover, because of the time it will take for the White House to nominate a new secretary and for that person to receive Senate confirmation, it’s probable that Mr. Pizzella will lead the Labor Department into next year, the attorney added.
“Pizzella is already there. He knows or should know what’s going on largely,” the attorney said. “I don’t think it’s a huge road bump. The rest of the EBSA infrastructure stays the same.”
Mr. Trump, who has publicly backed Mr. Acosta in recent days, said he did not call on Mr. Acosta to resign and applauded the job he’s done as labor secretary. “He’s doing this not for himself, he’s doing this for the administration,” Mr. Trump said Friday.
Mr. Epstein sexually abused more than 30 girls from about 1999 to 2007 at his home in Palm Beach, Fla., according to court documents. Following the plea deal in Florida, Mr. Epstein served 13 months in jail and registered as a sex offender.
Mr. Acosta has been widely criticized for his role in the negotiations, which has been called a “sweetheart deal” by many.
“I don’t think it is right and fair for this administration and Labor Department to have Epstein as a focus rather than the incredible economy that we have today,” Mr. Acosta said Friday. “And so I called the president this morning, I told him that I thought the right thing was to step aside. Cabinet positions are temporary trusts; it would be selfish for me to stay in this position and continue talking about a case that’s 12 years old rather than about the amazing economy we have right now.”
On July 6, Mr. Epstein was arrested and charged with sex trafficking of minors and conspiracy to commit sex trafficking of minors. The indictment, unsealed Monday, alleges that, from 2002 through 2005, Mr. Epstein sexually exploited and abused dozens of underage girls by enticing them to engage in sex acts with him in exchange for money, according to the U.S. attorney’s office for the Southern District of New York.
In February, U.S. District Judge Kenneth A. Marra ruled that the federal prosecutors did not adequately keep Mr. Epstein’s victims informed about the plea deal negotiations while they were ongoing in Florida.
Also in February, the Department of Justice’s office of professional responsibility opened an investigation into allegations that DOJ attorneys, including Mr. Acosta, might have committed professional misconduct for the manner in which Mr. Epstein’s criminal matter was resolved.
Dozens of Democrats in Congress called for Mr. Acosta’s resignation prior to Friday. “Given the serious questions about his handling of the Epstein case and his failure to take responsibility for his conduct, Mr. Acosta was no longer entitled to public confidence,” said Bobby Scott, D-Va., House Education and Labor Committee chairman, in a statement. “Accordingly, he made the appropriate decision to step down.”
