The politically appointed general counsel for the Office of Management and Budget (OMB) issued two conflict-of-interest waivers to U.S. Digital Service (USDS) administrator Mina Hsiang, covering nearly everything she owns. These extraordinary waivers cover at least 94% of her entire investment portfolio, and they authorize her to participate in government projects that directly and predictably affect her own financial interests. One waiver covers Ms. Hsiang’s approximately $950,000 investment in a hedge fund called MFN Partners. The other waiver covers her approximately $7.7 million investment in a holding company that her family established.
The waivers are flawed. One of them, MFN Partners waiver, is effectively a blank check because, as OMB admits in the waiver, the hedge fund “actively trades” — meaning OMB has no idea what the hedge fund holds now or will hold in the future. Ms. Hsiang has said she will try to divest her interest in this fund but does not promise to complete the divestiture before the next presidential election in 2024.
The other waiver, the holding company waiver, declares that the holding company’s interest in Google is not so substantial as to raise concerns about the integrity of Ms. Hsiang’s services. The problem here is that OMB is waiving Ms. Hsiang’s interest in the entire holding company, not just her interest in Google. In the waiver, OMB distinguishes between different types of technology companies in the holding company in an attempt to argue that Ms. Hsiang’s activities will not affect some of them. But the conflict of interest law is not concerned only with Ms. Hsiang’s own activities. The law is concerned more broadly with the effect that the government projects in which she participates will have on those companies. Even if her own activities do not affect those companies, the law will be triggered if any aspect of a project affects them. And, because Ms. Hsiang’s duties have governmentwide reach, OMB cannot predict the effects of projects at other agencies – particularly those that OMB is not even aware of yet.