The Massachusetts senator accused Robert Litan of failing to fully disclose industry funding for a study criticizing a government plan to regulate brokerages

This article is more than 4 years old

This article is more than 4 years old

The Massachusetts senator Elizabeth Warren has prompted the resignation of a high-profile Brookings Institution fellow after accusing him of failing to fully disclose industry funding tied to a study that criticized the US Labor Department’s plan to regulate brokerages.

Tuesday’s resignation of Robert Litan came just one day after Warren, a Democrat, sent Brookings’ president a letter demanding to know more about the thinktank’s policies on financial conflicts and details about the communications between Litan and Capital Group, an investment firm that funded his research paper.

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“He has acknowledged that he made a mistake in not following Brookings regulations designed to uphold the independence of the institution,” Brookings’ president, Strobe Talbott, said in a statement provided to Reuters.

Warren’s concerns center on a study that Litan and researcher Hal Singer jointly conducted which examined a controversial plan by the Labor Department to try to rein in conflicts posed by brokers who offer retirement advice.

The proposal has garnered fierce opposition from Wall Street, and Litan’s study concluded that the plan could harm consumers.

Litan testified about the study’s findings in a July hearing before a US Senate panel, in which he represented himself as a fellow at Brookings.

The study was conducted by Litan and Singer in their capacity as staffers for Economists Incorporated, a consulting firm.

Although his testimony and his study did disclose that Capital Group provided funding, Warren said that she later learned this was not the full story.

In a series of follow-up questions Warren sent to Litan after the hearing, she said he disclosed that Capital Group also provided feedback and editorial comments on a draft.

This, she said, ran counter to his claim at the hearing that he and Singer were “solely responsible” for the study’s conclusions.

In addition, he disclosed that Capital Group had paid Economists Inc $85,000 for the study, and his share was $38,800.

In her letter to Brookings, Warren said the lack of disclosure raises “significant questions about the impartiality of the study and its conclusions”.

Litan, a former top official in the Clinton administration, did not respond to an email seeking comment.

He is a well-known economics expert in Washington who has authored or co-authored more than 25 books.

“We greatly appreciate all the good work Bob has done for Brookings over the 40-plus years he has been connected to this institution,” Talbott said.