Eugene Scalia testifies before the Senate HELP Committee during his confirmation hearing to become Labor secretary. (Photo: Diego Radzinschi/ALM)
Eugene Scalia, President Trump's nominee to head the Labor Department, said Thursday that he would, if confirmed, "seek guidance from the designated ethics official" at Labor as to his ability to participate in crafting a fiduciary rule.
Sen. Patty Murray, D-Wash., ranking member of the Senate Health Education Labor and Pensions (HELP) Committee, stated to Scalia during the Thursday nomination hearing that he's "had a lot of work in overturning the [now vacated Obama administration fiduciary] rule." She then asked Scalia: "Would you recuse yourself from participating in DOL's forthcoming revised fiduciary rule because of that?"
Scalia responded: "As you know, there are federal ethics rules that will govern what matters that I can work on, when I'm at the department, where there might have been some prior connection on my part or the part of my firm or a client. So in the case of the fiduciary rule, I would seek guidance from the designated agency ethics official at the Department of Labor regarding what my ability to participate would be."
Murray also probed Scalia on whether he believed retirees were entitled to unconflicted advice, stating that the Obama administration "worked to help retirement savers to get retirement advice that was free of conflicts of interest…You've been an outspoken critic" of the fiduciary rule, and "you fought to get it overturned," Murray said.
"Do you think families seeking professional investment advice about their retirement savings deserve advice that is in their best interest?" Murray asked Scalia.
Scalia responded: "I do think they should be able to seek that advice."
Murray interrupted: "And know when they get it it's in their interest and not the person advising them?"
Said Scalia: "I think that that should be available and they should be informed of the nature of the advice they're receiving and if there are conflicts. This is a case where, as the chairman and I were discussing earlier, I was retained by clients to address a rule; it was a controversial rule. Thankfully, the Securities and Exchange Commission has stepped in and itself adopted what's called a best-interest standard with respect to broker-dealers who are folks that ordinarily are regulated directly by the SEC, rather than by the Department of Labor. Again, having worked at the department before, I'm very mindful of this special role that the department has in protecting pensions and workers' retirements."
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
