The fiduciary rule will impact the investment advice obtained by 660,000 ERISA defined contribution plans and the about 102 million workers who participate in the plans.
A DOL spokesman did not immediately respond to a request for comment.
During his confirmation hearing last year, Scalia agreed that manipulation and falsification of public comments is a concern and said, “If confirmed, I would support the department’s staff in an effort to understand the scope and sources of this problem, and to devise solutions to protect the integrity of the public comment process.”
In 2019, the DOL’s Employee Benefits Security Administration told the General Accounting Office that it would improve its handling of commenter identity issues. “But to date, the GAO reports that the recommended actions have not been completed,” the senators noted.
The issue of fake comments also arose during the Securities and Exchange Commission’s rulemaking process on proxy advisor rules earlier this year, when the SEC referenced several letters from “retail investors” in support of greater regulation of proxy advice. The letters were later determined to be bogus, according to Kurt Schacht, managing director of the Standards and Financial Market Integrity division at the CFA Institute
“Everyone is entitled to their opinion on regulations. But when the regulator itself offers public comment letters to support the regulator’s view that turn out to be fake, there to ought be some explanation/accounting for that. Talk about destroying trust in our regulatory process,” Schacht said.
The senators also tasked Scalia with explaining why the DOL provided only 30-day comment periods on its fiduciary and environmental, social and governance (ESG) proposals. “In the future, does the Department intend to regularly deviate from the 60-day minimum comment period,” they wrote.
“We believe that the federal rulemaking process should ensure that the voices of Americans are reflected fairly and transparently—not in a manner than gives large financial institutions undue influence on industry,” the lawmakers said.