Labor Secretary Eugene Scalia, the former Gibson Dunn attorney who helped torpedo the Obama-era fiduciary rule by representing the brokerage industry in a lawsuit against it, will be allow to participate in crafting a new one, the Labor Department’s ethics office has ruled.
“The new rulemaking is not a ‘particular matter involving specific parties’ and litigation related to a prior rule which the secretary handled while in private practice has ended,” Kate O’Scannlain, the department’s solicitor, said in a statement. She said the Office of Government Ethics concurred with the department’s analysis.
Labor’s career ethics attorneys determined “that neither applicable ethics rules nor the Trump administration’s ethics pledge required Mr. Scalia’s recusal.”
Micah Hauptman, financial services counsel for the Consumer Federation of America, called the ruling “a totally unacceptable decision that will taint this rulemaking thoroughly.”
In a statement, he continued: “The fact of the matter is he can’t separate his prior work doing the industry’s bidding and the sensitive information about his clients that he learned in his role as their advocate from a future rulemaking that would involve the same issues and clients.”