On Tuesday morning, the Washington Postreported that Sen. Elizabeth Warren wrote a letter to the Brookings Institution, a prestigious Washington think tank, over a study that criticized a proposed Labor Department regulation on financial advisors.

Warren wrote that the report’s co-author Robert Litan — who was commissioned nearly $40,000 by an investment firm that also reviewed the report — was “highly compensated and editorially compromised work on behalf of an industry player seeking a specific conclusion.’’

On Tuesday afternoon, The Hillreported that Litan, Brookings’ nonresident senior economic fellow, will resign.

The study predicted unexpected costs for a proposed Labor Department rule backed by Warren and President Barack Obama that would put in place disclosure requirements to inform consumers of possible conflicts of interest held by their financial advisors.


It was also funded by the Capital Group, a investment firm that manages $1.4 trillion in American funds and had “made opposition to Labor’s rule one of its top priorities,’’ according to the Post.

“Families and small investors deserve access to unbiased advice about their finances and financial decisions,’’ Warren wrote in the letter Tuesday, per The Boston Globe, “and it is equally important that the Department of Labor also relies on unbiased input from experts.’’

The letter came after Litan had testified before the Senate Committee on Health, Education, Labor and Pensions this summer that the rule would cost investors as much as $80 billion.

Introduced to the Senate as a Brookings nonresident senior fellow, Litan was pushed during the hearing by Warren on how much money he was paid for the report. Litan said Capital Group provided $85,000 for the study, $38,800 of which went to him.

Though Litan said he disclosed the funding and that it did not influence the study, he admitted to the Post he made a mistake in associating his report with Brookings, in violation of a group rule (Brookings distanced itself from the report Tuesday).

“I think the Warren letter has created discomfort at Brookings,’’ Litan, a former economist for the Bill Clinton administration, told the Globe. “I don’t want to make people there feel any more uncomfortable than needed.’’


Litan had held various positions with Brookings since 1972, according to his curriculum vitae.

However, Tuesday’s event don’t exactly underline a win for Warren.

Last week 96 House Democrats joined Republicans in opposing the Obama/Warren-backed proposal, echoing the concerns raised by Litan. They argued, as has the finance industry, the rule would restrict access to financial advice for low- and middle-income families.