WASHINGTON, D.C. [08/14/20]—Alarmed by the fact that much remains unknown about the rash of fake critical comments that flooded the public comment period for a key federal consumer protection rule for retirement savers in 2015, U.S. Senators Tina Smith (D-Minn.), Elizabeth Warren (D-Mass.) and Patty Murray (D-Wash.) sent a letter pressing Secretary of Labor Eugene Scalia to outline the actions he’s taken to prevent it from happening again.
The Senators told Scalia that a Wall Street Journal analysis found that in the case of the 2015 rule on retirement investment advice, “40% of respondents didn’t write the comments attributed to them,” and that most of the 345 fraudulent comments analyzed were slanted in favor of financial industry views, raising the question of whether powerful financial interests may have submitted industry-favored fake comments.
The three lawmakers, all members of the Senate Health, Education, Labor, and Pensions Committee, said their questions about the integrity of public comments are important now as the Department of Labor reviews comments on two new rules governing the operation of retirement plans.
They told Scalia that protecting the integrity of the comment process is critical to ensuring all Americans, not just well-connected industry lobbyists, have a fair opportunity make their voices heard with in the crafting of federal rules.
“We believe that the federal rulemaking process should ensure that the voices of Americans are reflected fairly and transparently – not in a manner than gives large financial institutions undue influence on industry regulations,” wrote the Senators. “Preventing industry-favored fake comments would be an important step to restoring Americans’ confidence that federal regulators are on their side.”
It’s standard practice for the federal rulemaking process to include a comment period, where the public can share their thoughts on the proposed rule. But in 2015, after the Obama Administration proposed strengthening rules to prevent conflicts of interest in retirement advice, the Department of Labor was flooded with comments, including many later taking financial services industry-backed positions, while falsely claiming to be written by ordinary retirement savers.
With the Department of Labor recently releasing two new rule proposals for comment this summer, the Senators are seeking to ensure that a repeat of fake comments does not occur again. Further, the Senators ask Scalia to explain the decision to provide shorter 30-day comment periods for recent rules—despite requests for an extension—and press to ensure that the comment periods in the future provide sufficient time for the public to provide meaningful input on the proposed rules.
You can read a copy of the letter here.