Mar. 3, 2023
March 3, 2023 Long time reader, first time writer. As a current SEC staffer working on, inter alia, rule making, I understand how tedious it can be to wade through anonymous comment letters filled with hyperbole and exaggeration, while not even knowing whether the person composing the letter is a serious industry participant. In order to not face any type of retaliation from my managers and OHR, I am submitting this letter anonymously and keeping my PII (see below) confidential. I will be short and succinct in this letter so I will not summarize the proposal. Having spent approximately 5 minutes of my own personal time (not during Core Hours) reading the proposed rule, I have concluded that the proposal to outsource the automated reporting of transactions is a terrible idea for the five reasons listed below. First, OEC is ultimately responsible for safekeeping employees statements. Why would you want to outsource that to a third party and divert taxpayer money to a private company? OEC should, and must, shoulder this responsibility on its own. As an aside, government employees have seen the disastrous outsourcing of Thrift Savings Plan recordkeeping to Accenture Federal Services and Alight Solutions for the administration and recordkeeping of TSP. Once these outsourcing decisions are completed, there is no going back and the government agency (Federal Retirement Thrift Investment Board or FRTIB) that made the outsourcing decision will justify it despite the objectively horrendous job that the third parties are conducting. For example,these are recent news articles on the TSPs ill-fated decision to outsource its core recordkeeping functionality. https://federalnewsnetwork.com/tsp/2023/03/following-tumultuous-launch-tsp-contractor-promises-more-improvements-still-ahead/ and https:/ /www.washingtonpost.com/politics/2022/06/22/thrift-savings-plan-investors-problems-logins/. Second, does the OEC have legal authority to outsource a core function to a third party? What is the OGEs legal opinion cited on page 8 and why is that legal opinion not part of the proposal? We need to evaluate OGEs conclusion. If outsourcing is legal and constitutional, then why not outsource the entire OEC to FINRA, who has more experience with surveillance? In fact, why not outsource everyone in the SEC to a third party? Why keep government jobs? Third, what will happen when employees personal identifiable information is hacked and stolen? What will happen if an employee experiences financial loss? Will OGE and OEC cover these losses and what is the process for claiming and adjudicating the loss? Fourth, there needs to be an option of submitting statements manually like today. The proposal provides for some kind of exception, in exceptional circumstances but this should be a viable option. For the employees who are technology savvy and trusting of government / third party contractors, then they are free to automate their statements. For other employees like myself who do not trust government and third party contractors to handle PII data and have personally experienced the downgrade in core government services from outsourcing, we should have the option of submitting our statements manually (with redaction to account numbers) like we do today. Fifth, what is the cost of the outsourcing vis-a-vis in-house management? What is the benefit? Is it cheaper for the taxpayers to be paying for third parties instead of using existing government employees? Are you going to lay off or transfer existing OEC employees as a result of the outsourcing? How will you ensure that everyone at the third party contractors are located physically in the United States and that the data never leaves the United States and is not stored in a foreign jurisdiction? How will you ensure that there is no foreign ownership in the third party contractors? If the statements are ever stolen from third party contractors, it would open up SEC employees to possible blackmail from adversarial (foreign and domestic) actors. Have you considered the national security aspects? So I was going to make this short, but it ended up longer than expected. I recommend that you not move forward with this automation of statementsit makes no sense, it is dumb, it is expensive to contract a third party, outsourcing hurts government jobs, outsourcing is a form of wealth transfer from taxpayer money to government consultants and their mansions in McLean, and this is a solution in search of a problemnobody likes to manually submit their statements but it is not a hindrance to SEC core functions/hiring/retention. /s/ Anon SEC Staffer Anonymous SEC Staffer