Hearing Recap: Pension Fraud Edition
WASHINGTON, D.C.,
March 20, 2024
Today’s Health, Employment, Labor, and Pensions Subcommittee hearing covered the gross mismanagement of taxpayer dollars by the Pension Benefit Guaranty Corporation (PBGC). The hearing featured a lone witness, PBGC Director Gordon Hartogensis.
Chairman Bob Good (R-VA) led the hearing with a strong rebuke of PBGC’s mismanagement of taxpayer dollars. He did not mince words, saying, “Mr. Hartogensis, your time at PBGC has been marked by waste, fraud, and neglect.” In questioning, Republicans echoed Chairman Good’s condemnation by highlighting a litany of PBGC abuses, including, above all, sending money to plans for dead pension participants. Rep. Tim Walberg (R-MI) kicked off the Q&A. Rep. Walberg said, “We in Congress are charged with being responsible stewards of taxpayer money.” He then added, “So learning that the PBGC issued Central States a $127 million dollar overpayment based on data that included dead participants—data that the PBGC did not double check—I consider that negligence.” Moreover, only after the Committee applied pressure to PBGC did it decide to claw back that $127 million in taxpayer dollars. To many on the Committee, this neglectful behavior struck a nerve. Chairwoman Virginia Foxx (R-NC) expressed her frustration: “I’m really deeply disappointed that it took dogged work from Chairman Good and me to get you and the Department of Labor to see reason and to recover the federal payments for dead people. It’s outrageous that this took any time whatsoever.” She added, “You say you’ve paid out 62 plans. Did you follow the rules on those other 62 plans that were in place that you failed to follow on the Central States?” Mr. Hartogensis claimed, “We are going to get the money back on all of them.” His answer is a tentative win secured by the Committee for the American taxpayer … if it holds true. However, the question remains, why were best practices not followed in the first place? Rep. Jim Banks (R-IN) expressed concern with PBGC’s precedent of neglect. He asked, “What would be your message to taxpayers—why that’s fair?” At least Mr. Hartogensis met the minimum bar for a satisfactory response, saying that “taxpayers have a right to expect us to do that [not send money to plans for dead people].” While words are good, action is much better. Finally, Rep. Bob Good (R-VA) uncorked a line of questioning that got to a more general issue with unelected, unaccountable bureaucrats. Mr. Hartogensis: “I’d say that’s a small percentage.” Rep. Good: “What percentage would you say have agreements to work remotely?” Mr. Hartogensis: “I would say the vast majority of them.” Rep. Good: “How about yourself?” Mr. Hartogensis: “I am in the office, on average, every other week.” COVID ended two years ago, but apparently PBGC seems plenty content coasting on old telework policies. Rep. Good ended the exchange with a list of plan sponsor complaints with the agency, ranging from case review delays and absence of oversight and management to communication lapses and overall lack of transparency. If bureaucrats truly served the American people, perhaps they would show up to work more often, do their job well, and stop allocating money for dead people. The greater truth is this: waste, fraud, and abuse are baked into the incentive structure of bloated bureaucracies. Our federal bureaucracy has grown to an unwieldy army of three million, so the Committee is charged with pushing back against it on behalf of the American people. Bottom Line: The Committee is committed to cutting all waste, fraud, and abuse in its jurisdiction, including at PBGC. |