Watchdog calls on White House to rescind USDS administrator’s ethics waivers

A government ethics watchdog has written to the White House’s Office of Management and Budget, calling on the agency to rescind multiple ethics waivers granted to U.S. Digital Service Administrator Mina Hsiang.

In an open letter published Wednesday, the Project on Government Oversight (POGO) called on OMB Acting Director Shalanda Young to rescind the exceptions and take action to mitigate her conflicts of interest.

“Ms. Hsiang’s significant ongoing investments in tech companies do real harm to the American people by exposing government projects to the influence of an official who may have financial interests in them,” said the watchdog, which is led by former Director of Office of Government Ethics Walter Shaub.

According to the nonprofit’s analysis, Hsiang was granted waivers that exempt nearly all of her investments from a criminal conflict-of-interest law, as well as a waiver for an unspecified $950,000 hedge fund investment.

POGO in its letter also challenged the technique used by OMB to assess a financial interest held by Hsiang in her family’s holding company and raised concerns over the sale of a stake she held in artificial intelligence defense contractor Rebellion Defense after starting the new role in government.

It raised also concerns that the ethics waivers were granted by a politically appointed official.

“Rather than fixing this ethical problem, OMB has papered it over with ethics waivers, claiming her interests are not so substantial as to be likely to affect her services,” said the watchdog. It added: “The waivers themselves are legally flawed, and they are not the only issue. OMB’s approach to assets not covered by the waivers may already have caused problems. Urgent action is needed.”

Mina Hsiang was appointed as administrator of the U.S. Digital Service in September, taking over from Matt Cutts who left the White House’s digital tech surge team earlier in the year.

The agency in recent months has gained plaudits in its work assisting with the rollout of significant citizen-facing government websites, including the launch of COVIDtests.gov in January and Childtaxcredit.gov earlier this month.

Hsiang is the first woman and first Asian-American to lead USDS, and before rejoining the service worked in leadership roles with Devoted Health, a health care startup focused on seniors. She then served on the Biden-Harris transition as part of the agency review team at HHS before rejoining USDS as senior adviser for delivery, focused specifically on COVID-19 response and the rollout of the Vaccines.gov. She also served during the Obama administration as a senior adviser on health care and health data as part of USDS before founding an offshoot of the team within the Centers for Medicare and Medicaid Services

Biden administration officials are understood to stand by the waivers granted to Hsiang and that the measures were granted only following consultation with the Office of Government Ethics.