Draining the Swamp: How the FMCS Shutdown Exposed Bureaucratic Rot

The Federal Mediation and Conciliation Service (FMCS) is, at first glance, an unassuming bureaucracy. Established in 1947 under the Labor-Management Relations Act, its ostensible purpose was to provide voluntary mediation between unions and employers to avert labor disputes. Yet, as is often the case with government agencies founded under noble pretenses, it did not take long for FMCS to become a study in the dangers of unchecked bureaucracy, financial mismanagement, and unaccountability. With its dissolution under the Department of Government Efficiency’s (DOGE) mandate, we have an opportunity to reflect on what its closure reveals about the broader state of the administrative state.

A common argument in defense of FMCS was that it played a vital role in resolving labor disputes and preventing economically disruptive strikes. But was this actually true? Even a cursory review of its effectiveness suggests otherwise. The agency did not hold any binding authority over labor negotiations, nor was it an indispensable player in the mediation process. Private-sector mediators, arbitration firms, and direct negotiation strategies routinely fulfilled the same function without burdening taxpayers with an unnecessary bureaucracy. In practice, FMCS existed more as a vestigial organ of a bygone labor-management era than as an essential mechanism for modern labor relations.

But the real scandal of FMCS was not just its redundancy—it was the egregious waste of taxpayer money. The agency operated out of an expansive, nine-story building in Washington, D.C., despite employing a mere 60 people at its headquarters. This physical presence alone was a grotesque misuse of resources, with office space far exceeding actual staffing needs. Worse still, lavish accommodations such as private gyms, executive lounges, and absurdly expensive artwork (including commissioned portraits of its own bureaucrats) dotted the premises, all paid for with taxpayer dollars. At a time when ordinary Americans were forced to tighten their belts, FMCS operated with the unchecked indulgence of a medieval court.

The financial improprieties extended far beyond real estate excesses. Employees routinely abused government-issued purchase cards, circumventing fraud-prevention restrictions to charge personal expenses to the agency’s accounts. Among the more flagrant examples: one official used government funds to pay for his wife’s cell phone bill; another leased a luxury BMW under the pretext of ‘business necessity.’ Such behavior was not the result of a few bad actors but a systemic culture of entitlement and graft, shielded by the bureaucratic opacity that defines so many independent agencies.

It is worth asking how FMCS was able to persist in such blatant inefficiency and self-dealing for so long. The answer lies in its status as an independent agency—nominally accountable to the executive branch but, in practice, answerable to no one. Unlike cabinet-level departments subject to frequent political oversight, FMCS operated in the shadows, its budget rubber-stamped by congressional inertia. When internal auditors and whistleblowers attempted to expose its abuses, they were met not with reform but with retaliation. This is the predictable outcome of bureaucratic isolation: an agency more concerned with its own survival than with serving the public interest.

The predictable outcry against FMCS’s dissolution from entrenched interests underscores just how little the agency was about mediation and how much it was about maintaining a cushy sinecure for its employees. Critics argued that its closure represented an attack on labor rights, a claim that wilfully ignored the fact that private mediation services exist in abundance, often with greater efficiency and flexibility than their public counterpart. In reality, the opposition stemmed from a far more mundane source: those who had grown comfortable in their government sinecures were loath to see the gravy train come to an end.

The FMCS case study is not an isolated incident but a microcosm of the fundamental problem with the modern administrative state. Agencies like FMCS continue to exist not because they serve an indispensable function but because they benefit from bureaucratic inertia. Once created, federal entities become self-perpetuating, with every incentive to expand their budgets, justify their own necessity, and resist any attempts at reform. The question, then, is not just why FMCS was shut down but why so many similar agencies remain untouched.

The dissolution of FMCS under President Trump’s Department of Government Efficiency was a rare moment of rational governance—a recognition that the mere existence of an agency does not justify its continued operation. The standard for any government function should not be whether it has a noble-sounding mission statement but whether it provides a tangible, irreplaceable benefit to the American people. By that measure, FMCS failed spectacularly. It was not merely redundant but actively harmful to the principles of good governance and responsible stewardship of public funds.

If the elimination of FMCS is to serve as more than a symbolic gesture, it must be a precedent rather than an exception. The administrative state is rife with similar agencies—obscure, unaccountable, and operating under the radar of public scrutiny. The FMCS model of bureaucratic excess is hardly unique; it is simply one of the more egregious examples to come to light. If we are serious about limiting government to its proper functions, then FMCS should be the first of many agencies to be sent to the dustbin of history.

The lesson of FMCS is clear: government, left unchecked, will expand endlessly, accruing waste, inefficiency, and corruption along the way. It is the duty of an engaged citizenry and a principled executive to ensure that public institutions serve the public—not themselves. In shutting down FMCS, the Department of Government Efficiency has taken a step toward fulfilling that duty. The only question that remains is whether we have the will to continue the work.

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