United States House Republicans have probed Securities and Exchange Commission Chair Gary Gensler, saying his agency could be hiring based on political affiliation, violating federal law.
In a Sept. 10 letter to Gensler — a Democrat — GOP lawmakers Jim Jordan, Patrick McHenry and James Comer accused the agency of hiring “individuals from left-leaning organizations to fill senior roles at the SEC.”
They claimed email correspondence made public in an SEC rulemaking comment may show that Gensler’s decision to hire the agency’s director of trading and markets, Dr Haoxiang Zhu, was “influenced by his political affiliation.”
The letter states the May 2021 emails show Zhu told Gensler that he was “in the right place on the political spectrum” and was hired six months later on Nov. 19, 2021.
A highlighted excerpt of the letter to Gensler claims evidence of a politically influenced hiring. Source: US Congress
“As this correspondence suggests, the SEC appears to be unlawfully considering an applicant’s political ideology when hiring bureaucrats,” the letter states.
“If these allegations are true, the SEC is violating the Civil Service Reform Act to fill the agency with employees who possess a particular ideology, which undermines the SEC’s purported impartiality,” it added.
Gensler has been asked to share all documents and communications from April 17, 2021, onward on the SEC’s hiring and staffing decisions in relation to director, associate director and Gensler staffer roles.
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He was also asked to turn over any information on the SEC’s evaluation of applicants’ political affiliations or political ideology.
Gensler has until 5:00 pm on Sept. 24 to produce the information for the House Judiciary Committee, of which Jordan is chairman.
The SEC did not immediately respond to Cointelegraph’s request for comment.
Gensler’s leadership as SEC Chair has been marked by increasing enforcement actions against crypto firms, reaching a 10-year high in 2023 with 46 enforcement actions against crypto firms, doubling from 2021.
Former President and Republican presidential bidder Donald Trump has promised to remove Gensler from the SEC on his first day in office if he wins the November presidential election.
Gensler was nominated by President Joe Biden for his role at the regulator, and it is typical for SEC chairs to resign if there’s a change in the White House during their term.
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