In a new proposal for 2008, the Laborers' International Union of North America is asking for greater board monitoring of companies' relationships with Moody's and other credit rating agencies.

So far, the Laborers have filed the proposal at two firms, Citigroup and Indymac Bancorp, both of whose stock was hit hard by rating downgrades after the subprime mortgage crisis.

The proposal asks the boards to delegate new duties to the audit committee, including selecting and monitoring all credit rating agencies the company uses, and disclosing to shareholders all services provided by rating firms and any fees paid.

The resolution also stipulates that the company should not employ anyone who worked at a credit rating firm in the past year. Internal audits should be conducted every year to see that these policies are being followed, the Laborers state in the proposal.

A separate Laborers proposal--also new this year--asks rating agencies themselves to examine their relationships with client companies to minimize conflicts of interest.

The union quotes a Wall Street Journal article from August in its supporting statement, saying that "[t]he scope of [the subprime] crisis is not the only similarity to the Enron-era scandals. They also share root causes that include conflicts of interest, a lack of accountability … Then, these symptoms were found among a key group of gatekeepers--auditors. Now, they are found in an equally critical gatekeeper--the credit ratings agencies."

The resolution, filed so far at Moody's and Standard & Poor's, asks ratings firms to rotate lead analysts every five years, and to conduct internal reviews to ensure that the audit committee is managing potential conflicts of interest. The proposal also asks the credit rating firms not to hire anyone who worked for a client company in the past year.