House committee subpoenas agency head amid probe of $127M paid to Teamsters’ pension fund with dead participants
The House Education and Workforce Committee subpoenaed the head of a federal agency on Tuesday for impeding an investigation into $127 million in payments made to a Teamsters’ pension plan that included dead participants.
House Education and Workforce Committee chairwoman Virginia Foxx (R-NC) hit Pension Benefit Guaranty Corporation Director Gordon Hartogensis with the subpoena after “twice seeking information about overpayments” for 3,479 deceased members of the Central States Pension Fund — and being rebuffed.
PBGC’s Office of Inspector General found in November that the International Brotherhood of Teamsters’ pension plan made the wrongful payments after getting $35.8 billion in federal funding from the American Rescue Plan, which was signed into law by President Biden.
“As the Committee noted in its February 26 letter, the information it is seeking is necessary for consideration of H.R. 7135, the Ghost Handouts and Overpayments Stop Today Act (GHOST Act), or similar legislation to ensure PBGC meets its obligation to reclaim the full amount of any overpayment it made in the SFA program,” Foxx wrote in her letter to Hartogensis.
“PBGC’s failure to provide responsive materials is unacceptable, and as a result, the Committee must now resort to compulsory process,” she added, giving the agency an April 9 deadline to hand over documents related to the payments.
PBGC’s Office of Inspector General found in November that the International Brotherhood of Teamsters’ pension plan made the wrongful payments after getting $35.8 billion from the American Rescue Plan.
The office noted that the agency did not consult the Social Security Administration’s Full Death Master File before funding the Teamsters’ pension plan, which includes 350,000 participants and is one of the largest multiemployer plans in the nation.
On Tuesday, the Government Accountability Office released another report showing $236 billion in improper payments across 14 federal agencies — not including PBGC — in fiscal year 2023.
The House Education and Workforce Committee had asked PBGC several times to explain the overpayments, and the Department of Labor announced earlier this month that the funds must be recovered.
“At PBGC’s request, the Committee provided two extensions to permit PBGC more time to produce responsive materials. Unfortunately, PBGC’s responses have left significant gaps. What is more, the responses show a complete and total lack of respect for hardworking taxpayers’ dollars,” Foxx said in her letter.
“The Department of Labor’s (DOL) subsequent statement on March 14 that multiemployer pension plans are obligated to repay these overpayments comes at the 11th hour and does not explain the months of wasted resources and delay that PBGC perpetrated; nor does DOL’s statement shed light on PBGC’s reasoning for its position.”
In a November Senate Health, Education, Labor and Pensions Committee hearing, International Brotherhood of Teamsters president Sean O’Brien called on the agency to “refund” the payments.
Hartogensis also appeared for a March 20 hearing with the panel but his answers “failed to satisfy” inquiries related to the Teamsters’ pension funding, Foxx added.
“For several months, PBGC has been coordinating with PBGC’s Office of the Inspector General, the Civil Division of the Department of Justice, and Central States to finalize the terms of an agreement that will include repayment of the $127 million from Central States,” a spokesperson for the agency said in a statement.
“In testimony last week before the House Subcommittee on Health, Employment, Labor, and Pensions, PBGC Director Gordon Hartogensis gave a full accounting of how PBGC has fixed the problem and that PBGC will recover any funds attributable to deceased participants from the plans.”
