OPM's IG and TSP's Board Nominees Pledge to be Impartial in Roles
President Biden’s pick to chair the Federal Retirement Thrift Investment Board became the latest in a string of nominees to apologize to senators for past tweets about Republican lawmakers.
Nominees to run the Office of Personnel Management’s watchdog agency and the federal government’s 401(k)-style retirement savings program assured senators Thursday that, if confirmed, they would serve in a nonpartisan manner.
The Senate Homeland Security and Governmental Affairs Committee held a confirmation hearing for President Biden’s pick to be the OPM inspector general, Krista Boyd, and his nominees to serve on the Federal Retirement Thrift Investment Board, which administers the Thrift Savings Plan: Javier Saade, Leona Bridges, Michael Gerber, Stacie Olivares and current board member Dana Bilyeu. If confirmed, Saade would be the board’s chairman.
But Saade was grilled by Republican senators over his past social media use. On his Twitter account, Saade reportedly suggested that GOP leaders were “fascists” and “dinosaurs.”
“In light of these posts, I have concerns about your judgment, discretion and ability to perform your fiduciary duty to uphold the best interests of participants,” said Sen. Rob Portman, R-Ohio. “It’s not a political job in any sense. There’s no room for partisanship in investments.”
Saade said he “regretted” the tone and content of some of his social media posts, saying he could have been “more respectful and nuanced.” But he insisted that he does not let his personal opinions get in the way of his day job, which is maximizing investors’ financial return.
“We all come with opinions to any job, and I cannot overstate that my personal beliefs have never clouded my responsibilities at any job that I’ve held over the last 30 years, and I’m not about to start now,” he said. “I’ve worked with people across the political spectrum and of every ideology, and all of them would describe me as easy to work with, a good listener, and a pragmatist. If confirmed, I commit to you and the 6.5 million participants in the plan we’re all invested in, that I will discharge my fiduciary duties as I have in other organizations: impartially, objectively, and divorced from political considerations of any sort.”
Saade also came under scrutiny for articles he penned praising efforts by investment firms like BlackRock to explore environmentally sustainable funds that omit fossil fuel investments. Sen. James Lankford, R-Okla., accused BlackRock, who manages most of the Thrift Savings Plan’s assets, of being an “activist investment group” and seemingly complained about the amount of Big Tech companies represented in TSP funds, and asked how Saade would vote on issues related to fossil fuel investments.
“If there’s a recommendation to take on an oil and gas stock, that says that’s a wise investment for federal employees, would you agree to do it?” Lankford asked.
Saade noted that the TSP is legally constrained from making individual investment decisions on its core funds.
“It’s worth a little bit of explanation of how these funds actually work: they’re passively managed,” he said. “So they represent the economy as a whole in whatever asset class you’re exposed to. If you look at the constituent part of the C Fund, for example, when it was first set up in the 1980s it was made up of the biggest companies at the time. Most of the biggest companies now didn’t even exist in the 80s and 90s.”
“I am aware, but it’s a straightforward question,” Lankford said. “Would you invest in a fund that includes oil and gas?”
“The TSP is a fiduciary, and being exposed to every part of our economy including oil and gas is the right thing to do, and which is what the C Fund does today, so yes,” Saade said.
Boyd, who is in the running for a position that has lacked a Senate-confirmed permanent appointee for six years, said she would work with Office of the Inspector General staff to ensure OPM’s feet are held to the fire on its numerous outstanding inspector general and Government Accountability Office recommendations, particularly on issues like strategic human capital management, IT modernization and the retirement backlog.
“Strategic human capital is a really critical issue, and it’s been on GAO’s High Risk List for an extremely long time,” she said. “It’s something I have previously worked with GAO on [as a House Oversight and Reform Committee staffer], and I understand that it’s a serious issue that needs to be addressed. Because it’s been on the list for so long, I think it may be an issue that agencies just accept as a systemic problem, and it needs more attention. If confirmed, I will work with staff to identify whether there are areas that the OIG could add value to the work GAO has already done.”