U.S. Department of Labor
Eugene Scalia, Secretary of Labor, and Chair, PBGC Board of Directors
Patrick Pizzella, Deputy Secretary of Labor
Jeanne Klinefelter Wilson, Acting Assistant Secretary, Employee Benefits Security Administration
Andrew Kilberg, Counselor to the Secretary
Brett Swearingen, Counselor to the Deputy Secretary
Tim Cummings, Chief of Staff, Employee Benefits Security Administration
Rebecca Cole, Senior Policy Advisor, Employee Benefits Security Administration
Monica McGuire, Senior Policy Advisor, Employee Benefits Security Administration
Nicole Swift, Senior Employee Benefits Law Specialist, Employee Benefits Security Administration
U.S. Department of the Treasury
Steven Mnuchin, Secretary of the Treasury
Mike Faulkender, Assistant Secretary
Philip Quinn, Senior Financial Analyst, Office of Financial Institutions Policy
Aharon Friedman, Senior Advisor to the Assistant Secretary for Tax Policy
U.S. Department of Commerce
Wilbur Ross, Secretary of Commerce
Tom Gilman, Chief Financial Officer and Assistant Secretary of Commerce for Administration (CFO/ASA)
Pension Benefit Guaranty Corporation
Gordon Hartogensis, Director, Pension Benefit Guaranty Corporation
Paul Chalmers, Acting General Counsel and Secretary to the Board
Kristin Chapman, Chief of Staff
Andy Banducci, Chief Policy Officer
Ted Goldman, Director, Policy, Research, and Analysis Department
Michael Rae, Deputy Chief Policy Officer
John Greenberg, Chief Investment Officer
Patricia Kelley, Chief Financial Officer
Tyler Hernandez, Senior Advisor, Office of Policy and External Affairs
Robert Scherer, Chief Information Officer
Adi Berger, Director, Corporate Finance & Restructuring Department
David Foley, Chief of Benefits Administration
Alice Maroni - Chief Management Officer
Karen Morris, Chief of Negotiations and Restructuring
Anne Henderson, Senior Advisor for External Affairs, Office of Policy and External Affairs
Ted Winter, Director, Financial Operations Department
PBGC Office of Inspector General
Nick Novak, Acting Inspector General
PBGC Office of the Participant and Plan Sponsor Advocate
Camille Castro, Senior Associate Participant and Plan Sponsor Advocate
The Chair called the telephonic meeting to order at 1:30 pm and welcomed the attendees. The
chair asked for approval of the minutes from the September 14, 2020 meeting, which the Board
then approved by voice vote. The meeting then proceeded in accordance with the established
agenda.
The Chair recognized PBGC Director Gordon Hartogensis. Director Hartogensis reported that
PBGC released its Fiscal 2020 Annual Report on December 9 and briefed Congress on the report
on December 10. He stated that, as the Annual Report reflects, PBGC’s two insurance programs
are in dramatically different financial positions. The Single-Employer Insurance Program
continues to improve, due in part to the Corporation’s investment policy, but the Multiemployer
Insurance Program is highly likely to become insolvent in 2026.
He also described PBGC’s responses to the COVID-19 pandemic. PBGC has remained
operational and performed its mission during the crisis while maintaining the safety of its
workforce. PBGC also extended due dates for premium filings and other filing requirements in
order to assist employers during the pandemic. He described highlights in PBGC’s performance
during the fiscal year, particularly customer service, its first facilitated merger of multiemployer
plans, providing greater transparency as to guidance, and ongoing IT modernization projects.
Finally, Director Hartogensis stated that in response to his request, PBGC’s Office of the
Inspector General issued its audit report on PBGC’s procurement practices, and he commended
OIG’s efforts.
The Chair thanked Director Hartogensis for his report and commended him and PBGC staff for
all of their efforts this past year. He also stated he is glad that Director Hartogensis is focusing
on taking steps to improve the procurement program. Finally, he stated his agreement with
concerns over the Multiemployer Insurance Program and that it is important this program be
addressed.
The Chair then recognized Acting Inspector General Nick Novak. The Acting Inspector General
discussed highlights of the Fiscal 2020 audit. This was the 28th consecutive clean opinion on
PBGC’s financial statements, but he and the auditors remain concerned over the stability of the
Multiemployer Insurance Program. The audit identified new recommendations that resulted in
modifications to the two existing significant deficiencies. PBGC management concurred with
the auditors’ recommendations for addressing these deficiencies.
The Acting Inspector next gave a status report on several fraud and identity theft cases, and then
provided an update on the criminal proceedings involving PBGC’s former Procurement Director,
Jeff Donahue, and his co-conspirators. He reported that sentencing for the second Forcewave
employee who had pled guilty to charges of bribing a federal official will occur in September
2021. This individual is the final criminal defendant in the matter, and his sentencing will close
out the criminal case.
Next, Acting Inspector General Novak reported on OIG’s audit of PBGC’s procurement
practices. The objective was to determine how Donahue was able to steer contracts to his
preferred vendor and identify any additional suspect contracts. OIG determined that PBGC’s
Procurement Department evaded or ignored requirements for review of procurement actions by
PBGC’s Office of General Counsel. OIG identified five other contracts that lacked proper
justification. OGC identified problems on these contracts, but its concerns were ignored. Acting
Inspector General Novak stated that OIG made several recommendations to improve controls,
particularly to make sure that actions receive legal review.
Finally, Acting Inspector General Novak reported on its findings about a PBGC employee who
engaged in time theft. The employee resigned before he could be disciplined.
The Board engaged in discussion with Director Hartogensis and Acting Inspector General
regarding the procurement practices audit and recommendations. The Chair stated that he was
disturbed that there were red flags on the contracts involved in the criminal matter and that OGC
was raising objections to contracts that were being ignored. However, the Board expressed
concern that if the threshold for legal review is too low, the lawyers will be overwhelmed.
Acting Inspector General Novak noted that the audit report did not make specific
recommendations in this regard as it is a management matter. Director Hartogensis noted that
the OIG report found the highest risk seems to rest with the Procurement Department’s own
services contracts, so that is where much of the attention will focus. The Chair suggested
examining the procurement processes at other agencies to identify best practices.
With that, the chair adjourned the meeting.