Lawmakers Demand Investigation of DOL Alts Rule’s Alleged Fake Commenters
The Department of Labor’s inspector general was also urged to audit the agency’s public comment process.
Three congressional leaders called on the Department of Justice and FBI, Thursday, to conduct a criminal investigation, following reports earlier last week alleging that nearly 12,000 potentially fraudulent public comments were submitted in support of the Department of Labor’s proposed rule on a fiduciary safe harbor for including alternative investments in 401(k) plans.
House Committee on Education and Workforce Ranking Member Bobby Scott, D-Virginia, House Judiciary Committee Ranking Member Jamie Raskin, D-Maryland, and Senate Health, Education, Labor and Pensions Committee Ranking Member Bernie Sanders, I-Vermont, sent a letter to Attorney General Todd Blanche and FBI Director Kash Patel requesting an immediate federal investigation into reports that public comments supporting the proposal may have been submitted using unverifiable or stolen identities.
Reports last week said the comments in question lacked personalized information such as signatures, physical addresses or email addresses. Some individuals whose names appeared on comments reportedly denied submitting them, and other named individuals were allegedly deceased.
“It is imperative to find out whether federal law was violated in this case and, if it was, ensure that those who broke the law are held accountable,” the lawmakers wrote.
Separately, Scott and Sanders asked DOL Inspector General Anthony D’Esposito to conduct an audit of the agency’s public comment process. In their letter, the lawmakers said the reports warrant a review and argued that public confidence in the integrity of the rulemaking process is at stake.
Scott also sent a letter to Acting Secretary of Labor Keith Sonderling urging the DOL to conduct its own investigation and answer a series of questions by October 1. Among other things, Scott asked the department to determine the extent to which comments were submitted using unverifiable or stolen identities, also whether similar activity occurred in other DOL rulemakings during the Trump administration and what safeguards could be implemented to prevent fraudulent submissions in the future.
The allegations, according to Scott, “raise legitimate questions about whether DOL’s public comment process for agency rulemakings has been corrupted” and additionally “magnif[y] the lack of verifiable public support” for the proposal.
The Democratic lawmakers have previously criticized the proposal. In June, Scott, Sanders and Senate Banking Committee Ranking Member Elizabeth Warren urged the DOL to withdraw the rule, arguing that private equity, digital assets, private credit and other alternative investments carry higher costs, and more complexity and volatility, than do traditional investments commonly available in defined contribution plans.
PLANADVISER reached out to the DOL and DOJ and is awaiting their comment.