Warren criticism leads to Brookings economist’s exit

By Daniel Strauss, Politico 9/29/15

Robert Litan, a top economist at the Brookings Institution, resigned Tuesday after Sen. Elizabeth Warren accused him of publishing “highly compensated and editorially compromised work on behalf of an industry player seeking a specific conclusion.”

“It is with regret that I have accepted [Robert] Litan’s resignation today as a nonresident senior fellow,” Brookings President Strobe Talbott said in a statement. “He is a well-known, highly respected researcher, who has spent most of his life either as a government servant or as a public policy analyst. He has acknowledged that he made a mistake in not following Brookings regulations designed to uphold the independence of the institution.”

Litan’s resignation came after Warren sent a letter to the think tank accusing Litan of failing to properly disclose financial-industry funding behind a study examining how the Labor Department planned to regulate financial advisers — specifically, how the Labor Department sought to help investors seeking retirement fund advice, a Warren-backed initiative.

Litan’s study cast a critical light on the plan, arguing it was dangerous to consumers, and he used the findings as the basis for his testimony before a Senate committee in July.

The study was commissioned by Economists, Inc, a consultancy that does work on behalf of trade groups, legal counsel, and government agencies. But the study listed Litan’s Brookings affiliation, violating the think tank’s rules on how its name can be used.

Researcher Hal Singer conducted the study along with Litan, both as staffers for Economists, Inc. Litan had previously worked as an associate director for the Office of Management and Budget and Singer as a senior fellow at the Progressive Policy Institute.

Warren, in her letter, argued that the report’s disclosure of funding from Capital Group, a mutual fund manager, was insufficient: “broad — but vague.”

In response to Warren’s questions, Litan said that Capital Group paid Economists Inc. $85,000 for the study and Litan got $38,800 of that. Warren argued that Litan’s failure to disclose that information upfront raised “significant questions about the impartiality of the study and its conclusions.”

Warren also said Litan told her “the study was funded entirely by the Capital Group and that the Capital Group provided ‘feedback on our initial outline and some editorial comments’ on the study.”

Litan denied that the Capital Group had influenced his findings, but told The Wall Street Journal that the letter Warren sent “created some discomfort” and that he “thought it would be best for the institution if I went elsewhere.”