Chairmen Jordan, McHenry, and Comer Inquire About SEC Chairman Gensler's Political Hiring Practices
September 10, 2024
WASHINGTON, D.C. – Today, House Judiciary Committee Chairman Jim Jordan (R-OH), House Financial Services Committee Chairman Patrick McHenry (R-NC), House Oversight Accountability Committee Chairman James Comer (R-KY) sent a letter to Securities and Exchange Commission (SEC) Chairman Gary Gensler requesting documents and communications after learning that the SEC may be hiring civil service employees based on their political affiliations.
According to email correspondence made public in a comment to an SEC rulemaking, the SEC's decision to hire Dr. Haoxiang Zhu, the SEC Director of Trading and Markets, may have been influenced by his political affiliation. Following a call Chairman Gensler held with Dr. Zhu to discuss his potential employment at the SEC, Dr. Zhu emailed Chairman Gensler to affirm his ideological suitability for employment under him. Chairman Gensler hired Dr. Zhu six months later.
As the correspondence suggests, the SEC appears to be unlawfully considering an applicant's political ideology when hiring bureaucrats, a conclusion only reinforced by the SEC's hiring of individuals from left-leaning organizations to fill senior roles at the SEC. If these allegations are true, the SEC may be violating the Civil Service Reform Act to fill the agency with employees who possess a particular ideology, which undermines the SEC's purported impartiality
Excerpts of the Letter to Chairman Gary Gensler:
According to email correspondence made public in a comment to an SEC rulemaking, the SEC's decision to hire Dr. Haoxiang Zhu, the SEC Director of Trading and Markets, may have been influenced by his political affiliation. Following a call Chairman Gensler held with Dr. Zhu to discuss his potential employment at the SEC, Dr. Zhu emailed Chairman Gensler to affirm his ideological suitability for employment under him. Chairman Gensler hired Dr. Zhu six months later.
As the correspondence suggests, the SEC appears to be unlawfully considering an applicant's political ideology when hiring bureaucrats, a conclusion only reinforced by the SEC's hiring of individuals from left-leaning organizations to fill senior roles at the SEC. If these allegations are true, the SEC may be violating the Civil Service Reform Act to fill the agency with employees who possess a particular ideology, which undermines the SEC's purported impartiality
Excerpts of the Letter to Chairman Gary Gensler:
"The Committees on the Judiciary, Financial Services, and Oversight and Accountability are continuing to conduct oversight of the Securities and Exchange Commission (SEC). Recently, the Committees learned that the SEC may be hiring civil service employees based on their political affiliations, which is a violation of the Civil Service Reform Act of 1978.3 We write to request relevant documents and information regarding these allegations.
"According to email correspondence made public in a comment to an SEC rulemaking, the SEC's decision to hire Dr. Haoxiang Zhu, the SEC Director of Trading and Markets, may have been influenced by his political affiliation. On May 18, 2021—following a call you held with Dr. Zhu to discuss his potential employment at the SEC—Dr. Zhu emailed you to affirm his ideological suitability for employment under you, stating, 'I believe I'm in the right place on the political spectrum, and I'm happy [to] provide as many details as needed so you feel comfortable.' The SEC hired Dr. Zhu six months later on November 19, 2021. As this correspondence suggests, the SEC appears to be unlawfully considering an applicant's political ideology when hiring bureaucrats, a conclusion only reinforced by the SEC's hiring of individuals from left-leaning organizations to fill senior roles at the SEC. If these allegations are true, the SEC is violating the Civil Service Reform Act to fill the agency with employees who possess a particular ideology, which undermines the SEC's purported impartiality.
"The Committees' oversight is essential to assess whether the SEC is appropriately complying with federal law in its hiring of civil servants and to determine the extent to which individuals' political affiliations have affected the SEC's personnel decisions. Therefore, to assist our oversight, we ask that you produce the following documents and information since April 17, 2021:
1. All documents and communications referring or relating to the SEC's decisions to hire, employ, terminate, or transfer any director or associate director of an SEC Division or Office, or a staff member in the Chair’s office; and
2. All documents and communications referring or relating to the SEC's consideration or evaluation of the political affiliations or political ideology of an applicant for employment with the SEC, including but not limited to Dr. Zhu."
Read the full letter to Chairman Gensler here.
"According to email correspondence made public in a comment to an SEC rulemaking, the SEC's decision to hire Dr. Haoxiang Zhu, the SEC Director of Trading and Markets, may have been influenced by his political affiliation. On May 18, 2021—following a call you held with Dr. Zhu to discuss his potential employment at the SEC—Dr. Zhu emailed you to affirm his ideological suitability for employment under you, stating, 'I believe I'm in the right place on the political spectrum, and I'm happy [to] provide as many details as needed so you feel comfortable.' The SEC hired Dr. Zhu six months later on November 19, 2021. As this correspondence suggests, the SEC appears to be unlawfully considering an applicant's political ideology when hiring bureaucrats, a conclusion only reinforced by the SEC's hiring of individuals from left-leaning organizations to fill senior roles at the SEC. If these allegations are true, the SEC is violating the Civil Service Reform Act to fill the agency with employees who possess a particular ideology, which undermines the SEC's purported impartiality.
"The Committees' oversight is essential to assess whether the SEC is appropriately complying with federal law in its hiring of civil servants and to determine the extent to which individuals' political affiliations have affected the SEC's personnel decisions. Therefore, to assist our oversight, we ask that you produce the following documents and information since April 17, 2021:
1. All documents and communications referring or relating to the SEC's decisions to hire, employ, terminate, or transfer any director or associate director of an SEC Division or Office, or a staff member in the Chair’s office; and
2. All documents and communications referring or relating to the SEC's consideration or evaluation of the political affiliations or political ideology of an applicant for employment with the SEC, including but not limited to Dr. Zhu."
Read the full letter to Chairman Gensler here.
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