6 Takeaways From Hearing for Biden’s Controversial Pick for Currency Chief
Fred Lucas /
President Joe Biden’s nominee for comptroller of the currency spent much of her time Thursday before the Senate Banking Committee explaining what she really meant in past comments and writings.
Cornell Law School professor Saule Omarova wrote in an October 2020 policy paper, titled “The People’s Ledger,” that the nation should “fully replace” private bank deposits and allow the Federal Reserve System to control “systemically important prices” for products such as fuel and food as well as home prices and wages.
Still, at several points in the hearing on her nomination for the Treasury Department post, Omarova talked about how her family suffered under the communist regime in her native Kazakhstan, part of the Soviet Union at the time.
“There is no record of me actually ever participating in any Marxist or communist discussions of any kind,” she said at one such moment.
Omarova previously was a professor at the University of North Carolina, in private practice as a lawyer in New York, and a special adviser for regulatory policy at the Treasury Department from 2006 to 2007.
On top of her academic writing, Fox News first reported Wednesday on a police report from 1995 that says Omarova was arrested and charged with shoplifting $214 worth of items at a TJ Maxx store in Madison, Wisconsin.
The matter did not come up during the Senate hearing, however.
Omarova, 55, came to the confirmation hearing with a steep hill to climb.
Most Senate Republicans have expressed opposition to her nomination, as have most community banking organizations.
Politico reported that as many as seven Senate Democrats had “reservations” about her nomination. They include Banking Committee members Mark Warner of Virginia, Jon Tester of Montana, Kyrsten Sinema of Arizona, and Raphael Warnock of Georgia.
Here are six big moments from Omarova’s Senate hearing.
1. A ‘Chilling’ and ‘Radical’ Ideology
Omarova told the committee’s ranking member, Sen. Pat Toomey, R-Pa., that she wasn’t fully advocating the positions she wrote about as recently as this year.
“When you use words like ‘advocate’ and you talk about the proposal and you talk about the preferred option, it sounds like that’s what you are for. Are you no longer for those things?” Toomey asked.
The nominee responded that it’s all part of academic writing:
Senator, being an academic, there is a particular way we write our ideas. Unlike economists, for example, we cannot simply claim it’s an assumption and there is a model. So having said that, I just want to clarify. My job as an academic was to expand the boundaries of academic debate and outline potential options for Congress to consider. This is entirely up to Congress whether or not to go that route.
Toomey noted that she expanded the debate in only one direction.
“It doesn’t seem to be a coincidence that every one of these thought experiments or academic ideas, every one of them involved dramatic expansion in the power and control of the central government to allocate resources, to control banking, and of course the diminution in the freedom of individual Americans and institutions,” Toomey said.
“That’s the common theme that comes up again and again and again,” the Pennsylvania Republican said. “To suggest now that, well, maybe you’re not really for these things, it’s just hard to believe this.”
The head of the Office of the Comptroller of the Currency, which has about 3,500 employees, exercises authority over rules governing bank accounts and what kind of loans may be offered. The comptroller has a seat on the Financial Stability Oversight Council, which regulates “systemically important” risks for financial institutions.
“The opportunity to exercise a radical ideology through the powers of the comptroller of the currency are chilling,” Toomey said.
Toomey asked Omarova to provide a copy of her thesis, “Karl Marx’s Economic Analysis and the Theory of Revolution in The Capital.”
Omarova has not yet complied with the request, and said at the hearing that she can’t locate it. But she said she didn’t believe in communism and that college students in America wrote what they had to to graduate.
2. ‘Trumpism Meets McCarthyism’
The Banking Committee chairman, Sen. Sherrod Brown, D-Ohio, generally provided soft questions, allowing Omarova to assert that her writings that are perceived as radical were about digital currency.
Brown then lit into Republicans.
“They have a formula. Start with a passing and inaccurate reference to your academic work. Distort the substance beyond recognition. Mix in [the] words Marx, Lenin, communism,” Brown said. “End with insinuations about Professor Omarova’s loyalties to her chosen country. That’s how Republicans turn a qualified woman into a Marxist boogeyman.”
The Ohio Democrat also referenced her life story, in which she lived under actual communism until moving to the United States in 1991.
“We know that some people in Washington have been calling their political opponents socialists and communists for years. I’ll let Professor Omarova tell her own story, but I venture to guess those words ring a little differently to those who have experienced communist oppression firsthand,” Brown said.
According to The Wall Street Journal, though, Omarova didn’t flee a communist regime, but arrived in the U.S. by chance when her school, Moscow State University, had an exchange program with the University of Wisconsin-Madison in the waning days of the Soviet Union. During her semester at Wisconsin, that communist regime collapsed, and she remained in America.
Omarova told MSNBC last year: “So there I was, a student without anywhere to go back.”
Although MSNBC is a left-leaning media outlet, Brown blamed “radical, right-wing news sites” for disparaging stories about Omarova.
“We know that a shadowy political group funded by former Trump staff has been fomenting these personal attacks and pushing radical, right-wing news sites to spread misinformation,” Brown said. “These inflammatory insinuations continue to stoke the unhinged rhetoric that has poisoned our politics. Now we know what happens when Trumpism meets McCarthyism.”
Brown was referring to former Sen. Joe McCarthy, R-Wis., who was censured by colleagues in the Senate after his zeal in alleging communists in the United States.
3. ‘Professor or Comrade’?
The often-colorful Sen. John Kennedy, R-La., opened his questioning about Omarova’s past membership in the group Young Communists. She responded that every child in Kazakhstan was a member of that organization while going to school during the Soviet era.
“That was a part of normal progress in school,” she said.
Kennedy followed by asking, “Have you resigned?”
Omarova responded: “You grow out of it with age automatically.”
Kennedy: “Did you send them a letter resigning?”
Omarova: “This was many, many years ago; as far as I remember how the Soviet Union worked, at a certain age you automatically stop being a member.”
Brown interrupted to say: “She renounced her Soviet citizenship.”
Kennedy resumed his questioning by talking about some of the same writings other senators had talked about. He then said:
In 2019 you joined a Facebook group, a Marxist Facebook group, to discuss socialist and anti-capitalist views. That’s what I see from your record. You have the right to believe every one of these things. This is America. But—I don’t mean any disrespect—I don’t know whether to call you ‘Professor’ or ‘Comrade.’
Omarova gave a strong response to the Louisiana Republican.
“I’m not a communist. I do not subscribe to that ideology. I could not choose where I was born. I do not remember joining any Facebook group that subscribes to that ideology. I would never knowingly join such a group,” she said, adding:
There is no record of me actually ever participating in any Marxist or communist discussions of any kind. My family suffered under the communist regime. I grew up without knowing half of my family. My grandmother, herself, escaped death twice under the Stalin regime.
This is what seared in my mind. That’s who I am. I remember that history. I came to this country. I am proud to be an American. This is why I am here today, Senator. I’m here today because I am ready for public service.
4. ‘Sexism, Racism … Red Scare’
Sen. Elizabeteh Warren, D-Mass., said that opposition to Biden’s nominee is based partly on racism and sexism, but also because of pressure from major banks.
“I know the giant banks object to your willingness to keep our system safe and that you may cut into big bank profits. So they and their Republican buddies have declared war on you,” Warren said.
“The attacks on your nomination have been vicious and personal,” she said. “We’ve just seen them: sexism, racism, pages straight out of Joe McCarthy’s 1950s red scare tactics. It is all there on full display. Welcome to Washington in 2021.”
Warren went on to ask: “Does the OCC [Office of the Comptroller of the Currency] have the power to end private banking and to move all consumer deposits to a public ledger?”
Omarova answered: “Absolutely not.”
Warren: “If the OCC did have that power, is that something you would support?”
Omarova: “Absolutely not.”
Warren: “Are you a capitalist who believes in free markets?”
Omarova: “Yes. I am.”
5. ‘Nothing You Can Say Today’
Sen. Tim Scott, R-S.C., laid out a methodical case describing Omarova’s record in recent years. Primarily, Scott took on the stated view of Brown and other Democrats that her writings and comments were mischaracterized.
“I cannot think of a nominee more poorly suited to be the comptroller of the currency based solely on your public positions, statements, and the weight of your writings than you are,” Scott said.
The South Carolina Republican noted that Omarova had proposed taking economic and climate policymaking away from Congress and creating a new federal bureaucracy called the National Investment Authority.
“In a roundtable this year, you pushed to make the NIA the dedicated institutional platform at the federal level for really being the kind of fighting muscle of the Green New Deal,” Scott said.
He also brought up a comment she made earlier this year, reading her words: “Imagine what it would be like if instead of just a public option for deposit banking, this would be actually the full transition. In other words, there would be no more private bank deposit accounts and all of the deposit accounts will be held directly at the Fed.”
Scott wrapped up by saying, “I don’t have any questions for you because there is nothing you can say today to undo what you said for years, including this year.”
6. ‘Misspoke’ on Energy
Several senators quoted Omarova as saying of fossil fuel companies, “We want them to go bankrupt if we want to tackle climate change.”
Sen. Bill Hagerty, R-Tenn., noted that when Biden took office in January, the average price for regular unleaded gas was $2.10, but that today the price is $3.40.
“Do you think higher gas prices are good for America or bad for America?” Hagerty asked.
Omarova responded: “That’s a tricky question.”
The Tennessee Republican asked again. This time she answered: “It’s probably bad. It’s not my expertise.”
Hagerty followed by asking: “Do you want lower gas prices, which would help prevent Americans from going bankrupt, or do you want to use the authority of the OCC or comptroller to bankrupt oil and gas industries, as you’ve stated in the past?”
Omarova responded: “Senator, I have never stated that the OCC should use the bank regulator to bankrupt oil and gas companies.”
Later in the hearing, Sen. Steve Daines, R-Mont., asked about her comment, and Omarova explained what she said she really meant.
“What I was actually saying in that comment is the opposite,” Omarova said. “We need to find new ways of helping small energy companies get over and get through the hard times so that their workers do not lose their jobs.”
Daines, appearing puzzled, said: “You said you want them to go bankrupt.”
Omarova replied, “I am sorry I misspoke.”
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