WASHINGTON (Reuters) - A prominent Brookings Institution fellow resigned on Tuesday, after Massachusetts Senator Elizabeth Warren accused him of failing to fully disclose industry funding tied to a study that criticized the U.S. Labor Department’s plan to regulate brokerages.
The resignation of Robert Litan came just one day after Warren, a Democrat, sent Brookings’ president a letter demanding to know more about the think tank’s policies on financial conflicts and details about the communications between Litan and Capital Group, an investment firm that funded his research paper.
“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 a study that Litan and researcher Hal Singer jointly conducted which examined a controversial plan by the Labor Department to try and 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 U.S. 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, Inc., 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 over 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.
Reporting by Sarah N. Lynch; Editing by Cynthia Osterman