Welcome back to Human Capital! Sen. Patty Murray, D-Wash., ranking member on the Senate Health, Education, Labor and Pensions (HELP) Committee, is fired up over the Labor Department’s “hasty” move to reorganize its Employee Benefits Security Administration — the unit in charge of a new fiduciary rulemaking — after she said to hold off. She’s also “disappointed” that Labor offered a “woefully inadequate response” to her previous grilling on why an EBSA reorg was needed.
The reorg took hold on Oct. 1, a day after Eugene Scalia was sworn in as Labor secretary and Rachel Mondi, Labor’s deputy solicitor and Scalia’s former protégé at Gibson Dunn, was named Labor’s chief of staff.
EBSA Head Rutledge in Senate Panel’s Crosshairs
Murray and Rep. Bobby Scott, D-Va., chairman of the House Committee on Education and Labor, pressed Rutledge in late September to delay the EBSA reorg and explain the rationale for the move.
The lawmakers asked Rutledge to answer a bevy of questions. Joe Wheeler, Labor’s deputy assistant secretary, did so on Sept. 3, but Murray said the responses were “evasive” and lacked any of the requested documents.
Wheeler told the lawmakers that the reorg changes the reporting structure for 13 EBSA directors. They will report to the new principal deputy assistant secretary position, which will be responsible for regional office programs and operations.
Tim Hauser, who’s been instrumental in crafting a Labor Department fiduciary rule (the vacated Obama-era rule as well as the anticipated new one to align with the Securities and Exchange Commission’s Regulation Best Interest), was tapped for that role.
Murray pressed Rutledge again in an Oct. 8 letter to explain why he orchestrated a “hasty, murky reorganization” of EBSA. Labor, she said, “only offered information that was already publicly available without addressing the substantive questions raised in our letter.”
She added: “Millions of retirees, families, and workers that rely on EBSA for health care and retirement security deserve an explanation for this reorganization considering how it could impact them.”
Along with her previous questions, Murray pressed Rutledge to answer a host of new ones by Oct. 25.
Reports say the reorg will give the regional offices “a greater voice in the National Office and help ensure that enforcement activities are consistent nationwide,” Murray said. She requested examples of how this has not been occurring, and where enforcement activities were inconsistent across regional offices.
Another question: “Why were EBSA career staff not consulted about the reorganization?”