Inspector General Nominee Commits to Portman to Work on Bipartisan Basis to Address Waste, Fraud and Abuse at OPM

Portman Also Questions Separate Nominee on Previous Partisan and Inflammatory Tweets Against Republican Party

WASHINGTON, DC – This morning, U.S. Senator Rob Portman (R-OH), Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, received a commitment from the nominee to be Inspector General in the Office of Personnel Management (OPM), Krista Boyd, that if confirmed she would work with members on both sides of the aisle in pursuing waste, fraud and abuse and efficiency efforts at the agency. She also committed to work even-handedly with the House of Representatives and the Senate in all oversight matters concerning OPM. 

In addition, Portman also questioned a nominee to be a Member and Chairman of the Federal Retirement Thrift Investment Board, Javier Saade, on his past partisan and inflammatory tweets against the Republican Party. Portman expressed his concern about Mr. Saade’s judgment and discretion and whether he would be able to uphold his fiduciary duty, if confirmed, to act in the best interests of Thrift Savings Plan participants, particularly since this role is completely nonpartisan. 

A transcript of his opening statement can be found below and a video can be found here. 

 

Portman: “I appreciate the testimony today, and I’m going to start with an opening statement, since I was not here at the beginning to be able to do that, given another scheduling problem, which seems to be a busy day. So I want to start by saying that I appreciate all of you stepping forward to serve. Krista Boyd to be Inspector General, Office of Personnel Management, and then, of course, our five nominations to the Federal Retirement Thrift Investment Board. OPM is really a critical agency, as you know. They play an important role managing personnel policies. They act as the federal government’s chief human resources officer. They direct employment management services. 

“Of course, retirement benefits for the federal agencies and the OPM Inspector General, which is open right now, of course, plays a crucial role in terms of oversight and investigations. The audits and investigations, as well as recommendations for changes to the agency’s structure and process is something that this Committee takes very seriously, and we look forward to having a chance to talk to you, Ms. Boyd, more about that. You do have good experience, in my view, in terms of the congressional side of this, because you have not just been a counsel to various members, but you’ve been part of the House Oversight and Reform Committee I once served on. And your experience there, I think, is helpful in terms of the oversight role. On the Thrift Savings Plan and the Federal Retirement Thrift Investment Board that we’re talking about adding folks to today, again, really important. 

“The Thrift Savings Plan is now the largest defined benefit plan in the world, and it’s one that, of course, because it manages almost $800 billion in assets, is incredibly important to the six and a half million people who participate in it. The members of the board have to be committed to making investment decisions solely in the best interest of Thrift Savings Plan participants, period. And this is something that I think most members of the Committee, I hope, feel very strongly about. Personal preferences or personal policy choices or partisan preferences cannot play a role. Politics cannot be involved. Further, members must have the substantive experience to be able to take on this task because it is such an enormous investment. So the experience, the training and the expertise in the management of financial investments and pension benefit plans is really important to me. 

“So with that, let me just ask a couple of questions of our nominees and Ms. Boyd, start with you. Again, I’ve served on the House Committee on Oversight and Reform. It’s an important Committee. It’s also one of the most partisan committees I’ve found in the United States Congress. I think you would probably agree with that. Do you believe it will be a challenge for you to move from your role at the Oversight and Reform Committee to being IG if confirmed?” 

Krista Boyd, Nominee to be Inspector General in the Office of Personnel Management: “Thank you, Senator, for the opportunity to address my background. I do not think it will be a problem at all. I am committed to serving in an independent and objective manner. I have extensive bipartisan work, including hundreds of bipartisan investigations that have gone across administrations. I have been dedicated to uncovering waste, fraud, and abuse, and my North Star is finding the facts. I also have extensive bipartisan policy work, and I think all of that background will enable me and help me in serving independently. I also have worked extensively with Inspectors General, and I understand very well the role that Inspectors General play in serving independently to really conduct strong oversight, and that oversight is especially needed at OPM. So I commit to serving independently.” 

Portman: “Well, let me follow up on that. You mentioned the important role the IGs play, and I agree with you, in preventing waste, fraud, and abuse. I would like your commitment today that if confirmed, you will be willing to, and eager to even, work with members of both sides of the aisle in pursuing these waste, fraud and abuse and efficiency efforts.” 

Ms. Boyd: “Yes, Senator, I do commit to do that. The communications with Congress is something that should be done by IGs in a nonpartisan manner, and I intend, if confirmed, to communicate with, to be as transparent and accountable as I can. The reporting role to Congress is extremely important, and it’s an important protection of the independence of IGs. So I absolutely commit to communicating with Congress in a nonpartisan manner.” 

Portman: “Forget partisanship. As one of my colleagues used to say, the other party are our adversaries. The Senate is our enemy. I don’t believe that. But in terms of your background on the House versus the Senate, this is the Senate Committee that is confirming you, if you are successful. Do you also make a commitment that you will be even-handed in your work with the House and the Senate?” 

Ms. Boyd: “Yes, Senator. I started my career in this building working for Senator Max Cleland. I will not be partial between the House and the Senate, and particularly this Committee as the Committee of jurisdiction for both OPM and the Inspector General Act. So I expect to have a very constructive relationship with this Committee.” 

Portman: “Good. In your response to the Committee’s pre-hearing questionnaire, you talked about IT issues are among your top concerns, and I think that’s important. As you know, GAO has a number of recommendations in terms of information technology that you’re probably aware of at OPM. In light of recent events and the ever increasing number of cyber threats to the United States, what steps can you take to ensure that an event like the 2015 hack of OPM personnel records does not happen again?” 

Ms. Boyd: “Thank you, Senator, for the opportunity to address what is a priority area for oversight for me, if I am confirmed. It’s really important that the OIG stay on top of OPM efforts to protect its information. There are a number of outstanding open recommendations from the OIG now that have been uncovered during FISMA audits. And it’s really important for OPM to address those open recommendations. If confirmed, I would make it very clear from the beginning with the OPM Director that I expect those open recommendations to be a priority, particularly the ones related to cyber and especially as OPM is implementing modernization efforts. It’s really important that the agency be leading first with security. And so that’s something I would want to work with the OIG, if confirmed, to ensure that there’s strong oversight happening of OPM’s efforts to ensure that they are leading first with security.” 

Portman: “Yeah, I think it’s important. I think it should be an example for other agencies. And as you know, we’re going through a FISMA reform process right now in Congress to try to deal with the unfortunate reality that most agencies are not up to speed and that their cyber hygiene, as I said, is inadequate. And it’s really scary for people because their personal information could be accessible, as it was in 2015. By the way, there’s also open recommendations from GAO that I hope you also look at. 

“In terms of the Thrift Savings nominees today. We have, again, a lot of people with good experience. I appreciate that. Mr. Saade, as you know, and this won’t surprise you, I share the concerns other Committee members have expressed about your social media activity. I do acknowledge a letter that you sent to Senator Peters and myself, which I received today, where you expressed regret for the content and the tone of your tweets. But these are concerning and really partisan. And as an example, one of your tweets includes a meme that equates Republicans with fascists. Another refers to Republicans in the House as ‘dinosaurs that will be thrown into the trash bin of history.’ And there are, unfortunately, numerous others. In light of these, I have concerns about your judgment and discretion and whether you would be able to uphold your fiduciary duty, if confirmed, to act in the best interests of TSP participants. And as I said earlier, this is not a political job in any sense. There’s no room for partisanship or politics in terms of investments. In my view, that ought to be sacrosanct, and I hope this Committee would uphold that. 

“So in light of your statements, can you tell us how both members of the Congress here can feel sure that you’re going to honor this fiduciary responsibility?” 

Javier Saade, Nominee to be a Member of the Federal Retirement Thrift Investment Board: “Thank you, Senator Portman. As you mentioned, the Thrift Board is nonpartisan and has always been and will continue to be because it is a fiduciary. It was in the wisdom of Congress that would set it up in 1986 that there is no room for partisan actions of any sort, and that independence and fiduciary focus prescribed by statute, and defines the board’s activities. I do want to address any concerns with my past use of Twitter. I regret tweets and retweets that contain statements characterizing others in partisan or other unkind terms. And I recognize that there have been instances where my social media use could have been more respectful and nuanced. But we all come with opinions to any job, and I cannot overstate that my personal beliefs or views have never clouded my responsibilities and any job I’ve held over the last 30 years. And I’m not about to start now across all my experiences and as you know, the vast majority of my 30 years, except for the time I spent in the Obama administration, I’ve been in the private sector, where I work with people across the political spectrum, every ideology. All of them would describe me as easy to work with, a good listener, a pragmatist. And, if confirmed, I commit to you, to the entire Committee, to all members of Congress, and more importantly, to the six and a half million participants of which we’re all in, is that I will discharge my fiduciary duties, as I have in other organizations, impartially, objectively, and divorced from any political considerations of any sort. Thank you for the question.” 

Portman: “Thank you. Mr. Saade. We talked in the phone call that we had regarding another part of the fiduciary responsibility, which is that this is a job where I hope all of you agree your responsibility is to increase the investments for people’s retirement and that maximizing those gains is the role and not advancing social goals. In March 2017, you had a blog post on Huffington Post. I’m sure you’re aware of this. You suggested that large institutional investors should look beyond shareholder value and work instead to increase social good. You specifically praise BlackRock and its ESG goals because the top priority would not be maximizing gains for those TSP participants. This could result in reduced growth for Americans who rely on these TSP funds for their retirement. How do you ensure that any ESG activity within TSP will maximize returns?” 

Mr. Saade: “The only thing that drives the Board is exactly what you said, which is to maximize returns, minimize risk, and do it at the lowest cost possible. The way that Thrift does that is through the broadly indexed Long Term Horizon funds. In terms of what you brought up that I wrote, and I’ve written several things in that spirit. The way I would describe to you how I think about things is that democracy, for example, I believe, is the best form of governance for a people. And I also believe that the best way to organize an economy of any economic system is capitalism. Those things evolve. Capitalism has evolved over centuries, as has capitalism. And one of the questions we always should ask, as fiduciaries is to be aware of what’s happening. A lot of the private sector is looking at these things, but a lot of the taxonomies, reporting structures, disclosures, they, I believe, are in the early stages. So I don’t believe there’s any room for activism or active management of the funds because it is literally impossible the way the funds are structured by statute.” 

Portman: “Okay, well, thank you very much for those responses. It is a concern, as you know, to the other members. The other nominees who have stepped up to serve, thank you. I again appreciate your experience and your qualifications, Ms. Bilyeu, Ms. Bridges, Ms. Olivares, and Mr. Gerber. I’m now going to turn to my colleague and others may have questions as well but again, I appreciate your willingness to step forward to serve in a really important role for our federal employees and for our economy.” 

###