Kochs Oppose Rule Protecting The Same Retirement Investors They Claim To Assist

This week the Department of Labor codified an assumption shared by all working Americans: that financial professionals providing advice on retirement savings and investments should have your best interests in mind. This new fiduciary rule will require advisers to recommend the best investment options for their clients rather than merely “suitable” options.

The Competitive Enterprise Institute–a group with ties to tobacco disinformation campaigns, climate change denial, and mountain top removal–put forward strong opposition to the new rule. In a surprise to no one, the Kochs’ political network joined CEI in calling on congressional leaders to kill the proposed rules.

The Koch brothers have attempted to put a starkly different public relations spin on their positions regarding financial planning. The LIBRE Institute has hosted highly-publicized financial planning and tax seminars across the country.

Opposition to new fiduciary protections is a perfect illustration of David and Charles Koch’s dangerous duplicity. Their public relations arm, through LIBRE, asks, “Do you want to change your financial life?” At the same time, the Kochs are funding a group seeking to dismantle regulations that will make that desire a reality for millions of Americans.

Background:

Cato Institute Senior Fellow Walter Olson: It’s Unsettling That Sen. Elizabeth Warren Has Called On “The Securities And Exchange Commission To Investigate Several Critics Of The Department Of Labor’s Fiduciary Rule, Claiming They Misled Investors Through Duplicitous Statements.” According to a blog post by Cato Institute senior fellow Walter Olson for Cato’s At Liberty Blog, “Sen. Elizabeth Warren (D-Mass.), as the business press reports, ‘is calling on the Securities and Exchange Commission to investigate several critics of the Department of Labor’s fiduciary rule, claiming they misled investors through duplicitous statements.’ It seems several large financial businesses have decried the pending rule as unworkable and seriously harmful to the retirement industry, but have also, in conference calls with investors, said they expected continued growth and profitability even if the rules go through. In a typically aggressive move, Warren cited by name four companies she wanted investigated for these statements, and wrote: ‘Corporate interests have become accustomed to saying whatever they want about Washington policy debates, with little accountability when their predictions prove to be inaccurate.’ It’s unsettling, to start with – as critics were prompt to note – that a powerful Senator should seek legal consequences for private actors whose ‘predictions’ in Washington policy debates ‘prove to be inaccurate.’ Predictions about effects are the standard way of arguing about public policy – one side predicts, say, that a certain change in policy will cause a slowdown in business or make some good more costly, the other side predicts it won’t, and eventually we find out who was wrong. Pundits, social scientists, and Senators themselves regularly offer predictions that prove wildly inaccurate, yet ordinarily without legal as distinct from reputational consequences.” [Cato.org/blog, 4/7/16]

The Competitive Enterprise Institute Authored A Letter To Speaker John Boehner And Sen. Mitch McConnell Urging Congress To “Freeze Funding” For The Department Of Labor’s Proposed Fiduciary Rule. According to a Competitive Enterprise Institute letter to Speaker John Boehner and Sen. Mitch McConnell, “Dear Speaker Boehner and Majority Leader McConnell: […] We urge you to freeze funding in any spending bill for the Department of Labor’s (DOL) proposed fiduciary rule until the DOL withdraws such rule. Under the fiduciary rule, the DOL claims authority never granted by Congress to greatly restrict investment choices for 401(k)s, individual retirement accounts (IRAs) and other saving vehicles.” [Competitive Enterprise Institute, 10/22/15]

The Letter Was Signed By Executives From 32 Organizations, Including Americans For Prosperity, American Commitment, Center For Individual Freedom, 60 Plus Association, And The Taxpayers Protection Alliance. According to a Competitive Enterprise Institute letter to Speaker John Boehner and Sen. Mitch McConnell, “Dear Speaker Boehner and Majority Leader McConnell: […] We urge you to freeze funding in any spending bill for the Department of Labor’s (DOL) proposed fiduciary rule until the DOL withdraws such rule. […] Sincerely, Gregory Conko, Executive Director, Competitive Enterprise Institute[;] Grover Norquist, President, Americans for Tax Reform[;] Carrie Lukas, Managing Director, Independent Women’s Forum[;] Heather Higgins, President & CEO, Independent Women’s Voice[;] Phil Kerpen, President, American Commitment[;] Coley Jackson, President, Americans for Competitive Enterprise[;] Brent Gardner, Vice President of Government Affairs, Americans for Prosperity[;] Dan Weber, CEO, Association of Mature American Citizens[;] Richard and Susan Falknor, Publishers, Blue Ridge Forum[;] Norman Singleton, Senior Vice President, Campaign for Liberty[;] Linwood Bragan, Executive Director, CapStand Council for Policy and Ethics[;] Andrew Quinlan, President, Center for Freedom and Prosperity[;] Timothy Lee, Senior Vice President, Center for Individual Freedom[;] Star Parker, President, Center for Urban Renewal and Education[;] Wayne Brough, Chief Economist & Vice President for Research, FreedomWorks Foundation[;] George Landrith, President, Frontiers of Freedom[;] Andresen Blom, Executive Director, Grassroot Hawaii Action, Inc[;] Andrew Langer, President, Institute for Liberty[;] Seton Motley, President, Less Government[;] Gregory T. Angelo, President, Log Cabin Republicans[;] Dee Hodges, President, Maryland Taxpayers Association[;] Amy Ridenour, President , National Center for Public Policy Research[;] Pamela Villarreal, Senior Fellow, National Center for Policy Analysis[;] Willes K. Lee, Executive Vice President, National Federation of Republican Assemblies[;] Lewis Uhler, President, National Tax Limitation Committee[;] Pete Sepp, President, National Taxpayers Union[;] Dave Wallace, Founder, Restore America’s Mission[;] Matthew Kandrach, Vice President, 60 Plus Association[;] Karen Kerrigan, President & CEO, Small Business & Entrepreneurship Council[;] David Williams, President, Taxpayers Protection Alliance[;] Jenny Beth Martin, CEO & Co -Founder, Tea Party Patriots[;] Lisa Miller, Founder, Tea Party WDC[;] Kevin L. Kearns, President, U.S. Business and Industry Council” [Competitive Enterprise Institute, 10/22/15]

CEI Criticized The Department Of Labor’s Proposed Fiduciary Rule For Arguing That Some Americans Cannot “Prudently Manage Retirement Assets On Their Own,” And Called The Rule Paternalistic. According to a Competitive Enterprise Institute letter to Speaker John Boehner and Sen. Mitch McConnell, “We urge you to freeze funding in any spending bill for the Department of Labor’s (DOL) proposed fiduciary rule until the DOL withdraws such rule. […] In the proposed regulation, referred to by many as ‘Obamacare for your IRA,’ the DOL doesn’t even bother to hid its contempt for the intelligence of American savers. It says most Americans can’t ‘prudently manage retirement assets on their own.’ Based on paternalism, the administration mandates that investment professionals – even if they are serving self-directed investors – must adhere to the government’s one-size-fits-all definition of ‘best interest’ for the investment products they offer.” [Competitive Enterprise Institute, 10/22/15]

CEI Wrote That The Department Of Labor “Doesn’t Even Bother To Hid Its Contempt For The Intelligence Of American Savers.” According to a Competitive Enterprise Institute letter to Speaker John Boehner and Sen. Mitch McConnell, “We urge you to freeze funding in any spending bill for the Department of Labor’s (DOL) proposed fiduciary rule until the DOL withdraws such rule. […] In the proposed regulation, referred to by many as ‘Obamacare for your IRA,’ the DOL doesn’t even bother to hid its contempt for the intelligence of American savers. It says most Americans can’t ‘prudently manage retirement assets on their own.’” [Competitive Enterprise Institute, 10/22/15]

CEI Wrote That While The “Federal Government Should Vigorously Prosecute Actual Fraud By Financial Professionals,” Savers Should Otherwise Be “Free To Seek Guidance And Make Investment Choices They Deem In Their Own Best Interests.” According to a Competitive Enterprise Institute letter to Speaker John Boehner and Sen. Mitch McConnell, “We believe the federal government should vigorously prosecute actual fraud by financial professionals, but otherwise leave savers free to seek guidance and make investment choices they deem in their own best interests, taking account of their own individual circumstances and preferences. We urge Congress to do everything it can, in spending bills and otherwise, to defeat the DOL’s destructive fiduciary rule.”